News and Press Releases

tobacco broker pleads guilty

FOR IMMEDIATE RELEASE
OCTOBER 1, 2012

RALEIGH - United States Attorney Thomas G. Walker announced that in federal court today JOHN H. RAIFORD, 67, of Seven Springs, North Carolina, pled guilty before Chief United States District Court Judge James C. Dever III to conspiring to make false statements, to make material false statements, and to commit mail and wire fraud, all in violation of Title 18, United States Code, Section 371. 

According to the June 20, 2012, Criminal Information, RAIFORD, along with others, owned and operated Southern Leaf Trade, LLC, who, since 2005, was in the business of buying and selling tobacco.  From 2005, to 2009, RAIFORD conspired with others to profit through the filing of false and fictitious insurance claims, the sale of “hidden” tobacco, and to hide the criminal proceeds through the use of check-cashing facilities. 

The scheme consisted of a co-conspirator farmer taking out federal crop insurance policies, then filed false crop insurance claims, hiding some or all of his tobacco production by selling it in nominee names or for cash to a co-conspiring tobacco broker.  RAIFORD assisted co-conspirators in arranging the resale of the tobacco to Universal Leaf North America and obtained payments in nominee names.  RAIFORD then gave the checks in nominee names to another co-conspirator who made arrangements with a convenience store owner to cash the checks without properly verifying the identity of the payee.  The co-conspirator would then take the cash back to RAIFORD, who would pay the co-conspirator between $1,500 and $2,000 for each set of checks cashed.  RAIFORD then arranged for tobacco to be hauled from Wilson, North Carolina, to Mullins, South Carolina, to be sold and for the check from the sale of the tobacco to be transported back to RAIFORD.  The farmer profited because payment was received twice for each pound of tobacco.  Other co-conspirators profited through this double-sale scheme through the original insurance commission, collecting a share of the hidden tobacco’s second sale, or from profit margins derived from subsequent sales to larger tobacco companies.

Investigation of this case was conducted by the United States Department of Agriculture (USDA) -, Office of Inspector General - Investigations, USDA - Risk Management Agency - Special Investigations Branch, and the Internal Revenue Service - Criminal Investigation.  Assistant United States Attorney Banumathi Rangarajan is prosecuting the case.

 

 

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