FOR IMMEDIATE RELEASE:
WEDNESDAY - September 29, 2010
FAYETTEVILLE ENERGY BROKER INDICTED
FOR BANK FRAUD, WIRE FRAUD AND MONEY LAUNDERING
RALEIGH - The United States Attorney’s Office announces that on September 23, 2010, a Federal Grand Jury in Wilmington, North Carolina, returned an 11-count Criminal Indictment charging a 50-year-old Fayetteville man for his activities while owner and President of National Gas Distributors (NGD). The Indictment alleges that the defendant obtained fraudulent loans from financial institutions of approximately $45,000,000. PAUL DEWEY LAWING, JR., was charged with three counts of Bank Fraud, in violation of Title 18, United States Code, Section 1344; five counts of Wire Fraud, in violation of Title 18, United States Code, Section 1343; and three counts of Money Laundering, in violation of Title 18, United States Code, Section 1957.
Court documents describe LAWING as an energy broker, who arranged for the purchase and delivery of natural gas from gas companies to end users. Customers included governmental entities, manufacturing facilities, and other private businesses predominantely in the Eastern counties of North Carolina. From its creation in February, 2001, through December, 2005, the need for NGD to borrow short-term capital credit grew significantly. NGD and LAWING relied primarily on Branch Banking and Trust Company, First Citizens Bank & Trust Company, and Wachovia Bank for this capital. The monies were purportedly used by NGD for working capital necessary for it’s operations. In addition, there were commercial loans from a private investment group lender trading as Chatham Capital, L.L.C., with offices in Atlanta, Georgia.
According to the Indictment, from January, 2005, to January, 2006, LAWING, engaged in a scheme to defraud these three federally insured financial institutions by obtaining moneys, funds, and other things of value, by means of materially false and fraudulent pretenses, representations, and promises, in loan related documents. It was a part of the scheme that LAWING falsely overstated NGD’s accounts receivable and prepaid gas supplies and prepared false invoices to conceal NGD’s true financial condition. The Indictment further charges that LAWING used a similar scheme to defraud Chatham Capital and its investors, by making materially false and fraudulent representations, and promises, using false information transmitted by wire and radio communications, writings, such as emails, wire transfers, and facsimile transmissions. The Indictment further charges that in January, 2006, a North Carolina state court granted Chatham Capital’s motion to put NGD into a receivership. On January 20, 2006, NGD filed for protection under Chapter 11 of the United States Bankruptcy Code. At the time of its bankruptcy filing, Wachovia’s loans had been fully paid, BB&T was owed in excess of $600,000, First Citizens was owed in excess of $15 million, and Chatham Capital’s investors were owed in excess of $17 million
For each charge of bank fraud, LAWING faces up to 30 years’ imprisonment followed by up to five years’ of supervised release and a fine of up to $1,000,000. For each charge of wire fraud, LAWING faces up to 20 years’ imprisonment followed by up to three years’ supervised release and a fine of up to $250,000. For each money laundering charge, LAWING faces up to 10 years’ supervised release followed by up to three years’ supervised release and a fine of up to $250,000.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
Investigation of this case was conducted by the Federal Bureau of Investigation and assisted by the Internal Revenue Service, Criminal Investigation Division. Assistant United States Attorneys J. Gaston B. Williams and Dennis M. Duffy represent 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.