White Collar Crime is Alive and Well in South Carolina – 1st Week of February Results!

February 11, 2008

From February 1st thru February 6th there were four folks who were sentenced, indicted or convicted of white collar crime in South Carolina.

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Atlanta Man Sentenced: Charles Mahaffey, age 41, of Atlanta, Georgia, was sentenced to 40 months imprisonment for conspiracy to pass counterfeit traveler’s checks. Mahaffey was arrested in a drugstore parking lot after passing several counterfeit Visa $100 traveler’s checks at various Florence businesses. Recovered from his car were 11 additional counterfeit traveler’s checks, each bearing the same serial number. Federal investigators have since discovered that an additional 122 identical checks were successfully passed in 11 states just prior to Mahaffey’s arrest.

Guess here, but since other frauds have been discovered, my educated guess is that Mahaffey will be facing more time.

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Florence, SC Woman Sentenced: Susan Celeste Edwards, age 33, of Florence, South Carolina, was sentenced to 31 months in federal prison for using company credit cards to steal from her employer, Carolinas Refrigeration of Florence. Now…that is bad – but not that unusual. Here’s where the story takes a twist. This wasn’t her first time in prison!
Carolinas Refrigeration hired Edwards as a bookkeeper, unaware of her recent release from federal prison for embezzling from Advance America from 2000-2002. While working in the employee benefits section of that company, Edwards stole more than $243,000.00 from that scheme in which she filed insurance claims for fictitious employees, collecting insurance
payments which she spent for herself. Edwards served 37 months on that conviction.
Edwards admitted in court that from February 2006 to August 2006, she stole company funds and used her employer’s credit cards to make purchases for her personal use. By the time her thefts were detected, she had embezzled approximately $150,000.00.

So much for a background check! While not all people who have committed white collar crime will repeat that offense, it clearly illustrates some simple truths – use internal controls to avoid the likelyhood of abuse.

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Easley, SC Man Guilty: Charles E. Atwell, age 57, of Easley, was found guilty by a jury yesterday in federal court in Anderson of four counts of tax evasion and one count of making false statements in a bankruptcy petition.

Evidence presented at trial revealed that from 2000 to 2003, Atwell made
more than $2,000,000.00 in commissions as a financial planner selling insurance policies, annuities, and mutual funds. Atwell did not file tax returns or pay any income taxes during any of these years. In fact, evidence at the trial revealed that Atwell had not filed personal tax returns since 1995, and that the only tax returns attributed to Atwell during this period were bogus documents he presented when applying for loans. The evidence also showed that Atwell used bank accounts of several entities that he controlled, such as Professional Planning Inc., of Greenville, T and E Associates, and the Atwell Family Trust, to divert income for his personal use.

Evidence was also introduced that Atwell signed and filed a bankruptcy
petition claiming that his income in 2001 was only approximately $17,000.00 dollars, when in fact it was approximately $800,000.00. The petition further stated that his 2002 income was approximately $41,000.00, when in fact it was approximately $400,000.00.

Unlike the Wesley Snipes trial, Atwell could not claim he didn’t know the rules or law. Perhaps an actor could be that ignorant of the law, but a financial planner earning that amount couldn’t claim ignorance as an excuse!

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Chester, SC Woman indicted: Michelle Waters Dawkins, age 37, of Chester, South Carolina, was indicted for embezzling money from First Citizens Bank. The Indictment alleges that while employed at First Citizens between January and June 2007, Dawkins stole more than $1,000 from the bank. Get this…the maximum penalty Michelle Dawkins could receive is a fine of $1 million and imprisonment for 30 years.

Comments: As a business ethics and white collar crime speaker, (www.chuckgallagher.com) I see the effects of choices that are made. Generally when frauds like those mentioned above are effected there are three components: (1) need; (2) opportunity and (3) rationalization. Regardless of what motivates white collar crime, the outcome is always a negative consequence. Every choice has a consequence.

Your comments are welcome!