FOR IMMEDIATE RELEASE:
Thursday - September 2, 2004
RALEIGH - Frank D. Whitney, United States Attorney for the Eastern District of North Carolina, announced today the indictment of FRANK W. BALLANCE, JR., 62, of Warrenton, N. C., and his son, GAREY M. BALLANCE, 34, of Norlina, N. C., on charges related to an investigation of the John A. Hyman Memorial Youth Foundation, Inc. A federal grand jury sitting here returned the two-count indictment on Thursday, September 2, 2004.
FRANK W. BALLANCE, JR. is charged with one count of conspiracy to commit honest services mail fraud, mail fraud of money, and money laundering. This charge is a felony punishable by a maximum of five years imprisonment. (See attached penalty sheet.) If convicted, FRANK BALLANCE's actual sentence will be determined by the court using the United States Sentencing Guidelines.
GAREY M. BALLANCE is charged
with failure to file his federal income tax return for the year 2000.
This charge is a Class A misdemeanor punishable by a maximum of one year
imprisonment. (See attached penalty
sheet.) If convicted, GAREY BALLANCE's actual sentence
also would be determined by the court using the Guidelines.
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. 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. Senior Assistant U. S. Attorney Dennis M. Duffy and Executive Assistant U. S. Attorney John Stuart Bruce are handling the case for the government.
In summary, the indictment alleges that 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.
As detailed in the indictment, GAREY BALLANCE received $20,000.00 in Hyman Foundation funds in February, 2000, which he used to purchase a 2000 Lincoln Navigator. The $20,000.00 should have been reported on his 2000 income tax return. That return, which was due on August 15, 2001, was not filed until June, 2003, omitting the $20,000.00. GAREY BALLANCE filed an amended return in October, 2003, belatedly reporting the $20,000.00. GAREY BALLANCE is currently employed as a North Carolina State District Judge for Judicial District 9A, a position he has held since January 6, 2001.
U. S. Attorney Whitney stated, "Our office, working with other federal agencies and state authorities, remains committed to rooting out corruption at all levels of government. This indictment reflects the hard work and cooperation of those agencies." The investigation will continue.
An indictment is only a charge and is not evidence of guilt. The defendants are entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt. A trial date has not been scheduled.
News releases are available on the U. S. Attorney's web page at www.usdoj.gov/usao/nce within 48 hours of release.