FOR IMMEDIATE RELEASE:
WEDNESDAY - November 2, 2011
ANOTHER DEFENDANT PLEADS GUILTY IN TOBACCO FRAUD SCHEME
RALEIGH - United States Attorney Thomas G. Walker announced that in federal court on October 31, 2011, STEVEN GENE RAPER, pled guilty before Chief United State District Judge James C. Dever III, to failure to file currency transaction reports, in violation of Title 31, United States Code, Sections 5313(a) and 5322(b) and Title 31, Code of Federal Regulations, Section 1010.311.
This case stems from the on-going crop insurance fraud investigation in the Eastern District of North Carolina. According to the Criminal Information filed on October 3, 2011, and information provided in open court, RAPER, operating as a domestic financial institution,provided check cashing services, engaging in transactions of over $10,000.00. He charged a three percent fee and allowed four people to cash checks that were made payable to other persons and/or entities, or in fictitious names. The four individuals include 2 unindicted persons associated with the Wainwright Warehouse and Wilson Tobacco Services as well as a previously convicted tobacco warehouseman (associated with Liberty Warehouse) and a previously convicted crop insurance agent. On behalf of those four individuals, RAPER cashed in excess of $3,900,000.00 worth of checks in a 3-year period. RAPER failed to file currency transaction reports as required for any transaction over $10,000.00. RAPER’s check cashing service involved more than $100,000.00 in a 12-month period. RAPER was the co-founder of Cornerstone Bank.
“I commend the law enforcement agents working hard in this district to ensure taxpayers are not footing the bill for fraudulent behavior,” stated United States Attorney Thomas G. Walker. “We will continue to pursue those who abuse the system in order to bring them to justice.”
Acting Special Agent in Charge, Kay B, Jernigan, IRS-Criminal Investigation stated, “Failing to file the required currency transaction reports is a criminal violation of federal law under the Bank Secrecy Act. Deliberately avoiding BSA requirements is a form of money laundering that will be vigorously investigated by IRS Criminal Investigation."
“Greed is a key element in the ongoing Federal Crop Insurance fraud cases. The main focus is obtaining cash for the schemes that are in place to defraud the program. It is imperative that financial institutions, including those businesses that are considered “check cashers”, perform their functions according to federal and state laws in order to prevent criminal behavior. We will hold everyone in these schemes accountable and work diligently with the United States Attorney’s Office and other law enforcement entities to prosecute all violators to the fullest extent of the law” said Karen Citizen-Wilcox, Special Agent-in-Charge for the Southeast Region of USDA’s Office of Inspector General.
At sentencing, RAPER faces up to 10 years’ imprisonment followed by up to three years’ supervised release. He also faces a fine of up to $500,000 or twice the value of the property involved in the transactions, whichever is greater.
Investigation of this case was conducted by the United States Department of Agriculture, Office of the Inspector General, Risk Management Agency, Special Investigations Branch, and the Internal Revenue Service, Criminal Investigation Division. Assistant United States Attorney Banumathi Rangarajan is serving 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.