CHARLOTTE, NC-Charles Devernie Harrison, 53,of Charlotte, has been sentenced to a term of imprisonment of 14 years and ordered to pay restitution of more than $13 million in connection with an investment scheme in which he participated based on a business known as "BAB Productions." The sentence was imposed by U.S. District Judge Martin Reidinger in U.S.
District Court in Charlotte on Monday.
Today's announcement is made by U.S. Attorney Edward R. Ryan, North Carolina Secretary of State Elaine F. Marshall, and Owen D. Harris, Special Agent in Charge of FBI Operations in North Carolina.
Harrison pled guilty in October 2008 to (1) conspiring to commit mail fraud and securities fraud by causing more than 200 investors to invest more than $11 million with his company; (2) securities fraud, and (3) conspiracy to commit money laundering.
According to a Bill of Information, Harrison, of Charlotte, in 2003 and 2004 participated in a conspiracy to defraud investors by inducing them to invest with "BAB Productions." The investors were often elderly people who put their money into BAB Productions-often money that had been saved for their retirement. More than 200 investors put more than $11 million into BAB Productions. Harrison and his co-conspirators made false and fraudulent representations to their potential investors to induce them to invest their money, omitting material facts and telling deceptive half-truths. For example, Harrison advised that investor funds were guaranteed to return 10% per quarter, when BAB Productions was generating no significant independent revenue. Further, Harrison advised that investor funds would be used to fund concerts for nonprofits such as churches, colleges, and universities, when in reality, the investor funds were diverted back to other investors in Ponzi-fashion. While investors believed their funds were being used to fund the concerts based on Harrison's representations, the funds were also being diverted by a co-conspirator to a day-trading account at Ameritrade, where approximately $400,000 was lost through unwise trading. At the same time, investor funds were also being diverted to other business ventures and were being used to pay the personal expenses of the conspirators for things such as clothing, travel, and personal entertainment. Investors were also advised that BAB Productions would be covered by the Securities Investors Protection Corporation, when in reality none of the entities associated with BAB Productions were SIPC member firms nor were eligible for such coverage.
Based on the advisory U.S. Sentencing Guidelines, Harrison faced a sentence of between 135 and 168 months in prison. During the sentencing hearing, U.S. District Judge Martin
Reidinger stated, "It is not just stealing money, it is stealing security. It is stealing from people their understanding of how they will navigate this world, and that is a serious thing that needs to be deterred."
"Today's sentence is a major victory for North Carolina's investing public," North Carolina Secretary of State Elaine F. Marshall said. "Our investigators worked closely with federal prosecutors from the U.S. Attorney's Office in bringing this case to a successful conclusion. We are sending a clear message that North Carolina will not tolerate financial crime and that we will put financial criminals behind bars."
Defendant Harrison was ordered into the custody of the U.S. Marshals Service at the close of the hearing. Federal sentences are served without the possibility of parole.