Houston Trial Ends in Six Guilty Verdicts
|March 15, 2012|
HOUSTON – A federal jury hearing the case of a North Carolina man involved in bank fraud and identity theft has returned its verdicts, United States Attorney Kenneth Magidson announced today. Grady Davis, of Cornelius, N.C., has been found guilty of six counts of bank fraud after three days of trial and two and a half hours of deliberation.
At trial, the government provided evidence that Davis owned a company known as Davis Exotics or Davis Auto Broker and that it was run out of a back room in his house. It was through that so called business he met Igor Dukhin, of Houston, and Gentry Wilson, now deceased, who had already been previously involved with other fraud schemes. This basic scheme involved obtaining a corporate credit card, charging thousands of dollars…then simply walk away.
“Mr. Davis turned his business into an ATM for fraudsters,” said Assistant United States Attorney (AUSA) F. Andino Reynal in his opening statement.
In 2008, Dukhin filled out and submitted an application for a corporate American Express card. However, American Express does not allow cash advances, only the purchase of goods and services. In fact, cash refunds are not even allowed. So, according to the evidence, they found someone to run the card for cash in exchange for a cut of the money – that was Davis. According to testimony, Davis suggested using tractor trailers instead of the types of cars in his business due to the possible suspicious appearance. In December 2008, Davis applied for and received a merchant account with American Express and on Dec. 22, he swiped the card for the first time in the amount of $99,999. American Express called to authorize the amount, at which time, Dukhin or Wilson approved the charges. Once the money was received, a portion was eventually sent to Dukhin and Wilson, while Davis kept a percentage for himself.
Evidence was presented including bank records, credit statements, bills of sale and other documents related to the trucking industry demonstrating, among other things, that similar transactions occurred over the course of the next three months. Davis also sent a bill of sale for a 2002 Kenworth tractor to prove he actually sold them something, but, in fact, that was a forgery. Over the course of the scheme, no products ever changed hands, only money. Wilson and Dukhin also made a payment in order to prolong the life of the cards, according to trial testimony. In late February 2009, the account was suspended and an investigation soon followed during which time Wilson and Dukhin confirmed they had received the trucks, while Davis contended he sold them. Davis continued to tell a similar story throughout the investigation until the federal indictment was returned in September 2010.
At that time, Davis began to contend he never actually sold the trucks - that each deal was cancelled before finalized and he was simply refunding the deposit money minus a restocking fee. However, testimony and evidence indicated that people he claimed to have dealt with in obtaining the trucks had never heard of him.
After hearing the evidence, the jury found Davis guilty on six counts of bank fraud.
Dukhin pleaded guilty in advance of trial and testified. Wilson also previously pleaded guilty.
A convictions for bank fraud carries a possible terms of imprisonment of up to 30 years and a $1 million fine on each count. U.S. District Court Judge Judge Melinda Harmon, who presided over the trial, has set sentencing for June 15, 2012. Davis has been and will remain in custody pending that hearing. Dukhin is set for sentencing on May 4, 2012, and he has been permitted to remain on bond until that hearing.
The case was investigated by the United States Secret Service and prosecuted by AUSAs F. Andino Reynal and Julie Searle.