FOR IMMEDIATE RELEASE:
Tuesday - November 9, 2004
ELIZABETH CITY - United States Attorney Frank D. Whitney announced that FRANK W. BALLANCE, JR. pled guilty in federal court in Elizabeth City, N. C., on Tuesday, November 9, 2004, pursuant to a plea agreement. U. S. District Judge Terrence W. Boyle accepted BALLANCE's plea of guilty to one count of conspiracy to commit honest services mail fraud, mail fraud of money, and money laundering.
BALLANCE, 62, of Warrenton, N. C., could receive a maximum sentence of five years imprisonment, a fine of $250,000.00, and three years of supervised release. His actual sentence will be determined by the court using the United States Sentencing Guidelines. A sentencing date has not been set. In accordance with the terms of his plea agreement, BALLANCE also has agreed to make restitution to the State of North Carolina in the amount of $61,917.25 and to forfeit all funds in the escrow account at Wachovia Bank in the name of the John A. Hyman Memorial Youth Foundation, Inc.
BALLANCE was indicted by a federal grand jury in Raleigh on September 2, 2004, following an investigation of the John A. Hyman Memorial Youth Foundation, Inc.
The criminal investigation began as a result of a review by the Office of State Auditor Ralph Campbell, Jr., completed in October, 2003. That review identified several irregularities in the use of state appropriations by the Hyman Foundation for the time period from July 1, 2000, through April 30, 2003.
According to the indictment and evidence presented in court, FRANK BALLANCE, while serving as a state senator, defrauded the state of North Carolina and its citizens of their right to his honest services by using his office to obtain over two million dollars in appropriations for the Hyman Foundation, which he controlled, knowing that more than one hundred thousand dollars in Hyman Foundation funds were going to the personal benefit of FRANK BALLANCE, members of his family, and the church where he served as Chairman of the Board of Deacons. As part of the scheme, the indictment alleges that FRANK BALLANCE forged or caused to be forged the notarized signature of the Executive Director of the Hyman Foundation on 10 official disbursement requests to the State of North Carolina, as well as a statement of conflict of interest policy submitted to the state. The indictment further alleges that the Hyman Foundation, organized for charitable purposes, was defrauded by FRANK BALLANCE's diversion of money for the personal benefit of himself and his family. Finally, the indictment alleges that FRANK BALLANCE used financial transactions to conceal the proceeds of these fraudulent schemes.
The criminal investigation is being conducted jointly by the Internal Revenue Service-Criminal Investigation Division, the Federal Bureau of Investigation, and the North Carolina State Bureau of Investigation, in conjunction with the United States Attorney's Office and the Office of Wake County District Attorney C. Colon Willoughby, Jr. Assistant U. S. Attorney Dennis M. Duffy and Executive Assistant U. S. Attorney John Stuart Bruce are prosecuting the case for the United States.
News releases are available on the U. S. Attorney's web page at www.usdoj.gov/usao/nce within 48 hours of release.