FOR IMMEDIATE RELEASE:
WEDNESDAY - May 6, 2009
TOBACCO BROKER SENTENCED IN SCHEME TO DEFRAUD
CROP INSURANCE COMPANIES
RALEIGH - United States Attorney George E.B. Holding announced that in federal court yesterday United States District Judge James C. Dever, III, sentenced KENNETH GENE KELLY, 47, of Lucama, North Carolina, to 48 months’ imprisonment followed by three years supervised release. The Court also imposed a fine of $25,000.00.
A Criminal Information was filed on June 17, 2008. On June 23, 2008, KELLY pled guilty to conspiring to launder money. KELLY, along with other tobacco growers, engaged in a scheme to defraud crop insurance companies of funds ultimately reimbursed by the United States of America and to launder the proceeds of the underlying fraud. KELLY, a tobacco broker in Wilson, North Carolina, conspired with six others, Roland D. McCoy, Jr.; Joseph Edward Williams, of Zebulon, North Carolina; Robert Thomas Veasey, of Durham, North Carolina; David C. Harrison, of Snow Hill, North Carolina; and William Earl Dawson along with his son, Robert Lemuel Dawson, to sell their tobacco in the names of other men in a fashion that worked to obscure the farmer's true tobacco production.
Mr. Holding commented, “At the heart of this case is an effort to defraud the U.S. taxpayers. These defendants developed a complex scheme to obtain taxpayer money by lying to crop insurance companies ultimately backed by the United States Government. Thus, we applaud the Court’s sentence and hope it will act as a deterrent to others who might engage in this type of crime.”
Jeannine A. Hammett, Special Agent In Charge with the Internal Revenue Service, Criminal Investigations commented, "IRS-CI has the financial investigators and expertise that is critical to locating the money and prosecuting the offenders.Money laundering is not a victimless crime.”
Each of the other six co-conspirators have pled guilty and their sentencings are scheduled in the upcoming months.
Investigation of the case was conducted by the Internal Revenue Service, Criminal Investigation and the United States Department of Agriculture, Office of Inspector General. Assistant United States Attorney Banu Rangarajan served as prosecutor 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.