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FOR IMMEDIATE RELEASE:

Wednesday - June 18, 2003

RALEIGH - United States Attorney Frank D. Whitney announced that CAPE FEAR MUSIC COMPANY, INC., GARLAND BENNETT GARRETT, JR., and GARLAND BENNETT GARRETT III, a/k/a Trey Garrett, were sentenced in federal court in Raleigh on Wednesday, June 18, 2003, by Chief U. S. District Judge Terrence W. Boyle, for participating in an illegal gambling business.

CAPE FEAR MUSIC COMPANY, INC., of 1208 South Third Street, Wilmington, N. C., (jointly and severally with GARLAND BENNETT GARRETT, JR.) will forfeit to the United States the sum of $750,000.00, along with certain assets specified in the plea agreement, including a lease, a purchase agreement, and a tract of property. Also, the company will pay a special assessment of $400.00.

GARLAND BENNETT GARRETT, JR., of Kure Beach, N. C., received a sentence of 10 months imprisonment, a fine of $5,000.00, a supervised release term of two years, and a special assessment of $100.00. Also, he (jointly and severally with CAPE FEAR MUSIC COMPANY, INC.) will forfeit to the United States the sum of $750,000.00, along with certain assets specified in the plea agreement, including a lease and a purchase agreement.

GARLAND BENNETT GARRETT III, a/k/a Trey Garrett, also of Kure Beach, N. C., received a sentence of two years probation and a special assessment of $100.00. In addition, he was ordered to perform 120 hours of community service during the first year of his probation.

According to the Indictment, from January, 1988, to March 31, 2000, CAPE FEAR MUSIC COMPANY, INC., GARLAND BENNETT GARRETT, SR., and GARLAND BENNETT GARRETT, JR. conspired to and did conduct, finance, manage, supervise, direct, and own a part of an illegal gambling business, which involved video poker gaming machines that were placed on premises either owned and operated by themselves or by other conspirators and operated in violation of North Carolina General Statutes *(See Note). The Indictment alleges that the video poker machines were placed in various establishments in the Wilmington, N. C., area and operated in such a fashion that they would generate profits for the defendants and their co-conspirators, which they would divide among themselves.

The Indictment further alleges that the defendants conspired to and did conduct financial transactions affecting interstate commerce by depositing funds into and withdrawing funds from bank accounts in a manner which would conceal the proceeds of and promote their illegal gambling business.

CAPE FEAR MUSIC COMPANY, INC., and GARLAND BENNETT GARRETT, JR. pled guilty to Count Two of the Indictment on September 12, 2002, pursuant to a plea agreement with the United States Attorney's Office. The remaining counts were dismissed at sentencing. On December 18, 2001, GARLAND BENNETT GARRETT III, a/k/a Trey Garrett, pled guilty to a one-count Criminal Information that charged him with participating in an illegal gambling business and agreed to cooperate with the government's investigation, pursuant to a plea agreement with the United States Attorney's Office. All charges against GARLAND BENNETT GARRETT, SR. were dismissed in June 2002 due to his advanced age and poor health, and his inability to understand the charges against him.

Investigation of the case was conducted by the Federal Bureau of Investigation, the North Carolina Division of Alcohol Law Enforcement, and the Small Business Administration's Office of Inspector General. Assistant U. S. Attorney Peter W. Kellen handled the case for the government.

News releases are available on the U. S. Attorney's web page at www.usdoj.gov/usao/nce within 48 hours of release.
*Note: When a gambling business is illegal under the laws of the state in which it is operating, it becomes a violation of federal law whenever (1) it involves five or more persons conducting the business, and (2) it operates for a period of more than 30 daysor has gross revenue of $2,000.00 or more in any single day. See Title 18, United States Code, Section 1955(a).

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