Last of accused in SCT Yarns fraud to plead guilty

Last of accused in SCT Yarns fraud to plead guilty

February 16th, 2013 by Todd South in Business Around the Region

The last man federal prosecutors charged with bilking the pension fund of workers at Standard Coosa Thatcher Yarns Inc. has signed a plea agreement.

Federal agents captured Roderick Askew in Spain on Oct. 4, 2011, nearly a decade after a grand jury indicted him, Dan Geiger and SCT Yarn President Kenneth Combs on charges of money laundering and wire fraud.

The scheme that he and two other men used to siphon money from the pension fund endangered the retirement money for 1,300 SCT workers.

The plant closed in 2003 for reasons unrelated to the pension problem.

Combs pleaded guilty in 2004 but committed suicide by a self-inflicted gunshot to the chest alongside railroad tracks near Thrasher Pike and U.S. Highway 27. Geiger went to trial and was found guilty of four counts of wire fraud, three counts of graft, one count of money laundering conspiracy and six counts of conducting unlawful monetary transactions.

He was sentenced to nine years in prison and had to forfeit most of his property, which included land in California, vehicles and excavation equipment, personal firearms and computer equipment. Geiger was released from prison on June 15, 2012.

Then-federal prosecutor Gary Humble told the Times Free Press in 2004 that Combs had "got hooked up in this netherworld of con men. [Geiger and Askew] thought they had hit the mother lode because they found a guy who had access to money to invest in these fraudulent business ventures."

Askew signed an agreement on Feb. 7 to plead guilty to one count of conspiracy to commit money laundering. He faces up to 20 years in prison, but prosecutors agreed not to fight a request for downward departure. That means he'll likely be sentenced to less than the maximum.

He does not yet have a sentencing date scheduled.

Combs acquired controlling interest in SCT in 1996 and took over the pension fund in 1998. A year later he met Geiger through a broker and soon began a loan scheme between his company and Geiger's.

Geiger owned USA Mining, which consisted of 500 defunct gold mines in the area of Mariposa, Calif. Ostensibly, Geiger took loans totaling more than $6.7 million from the SCT pension fund through Combs to restart mining operations.

But the men took personal withdrawals from the loans for their own use while moving the money between companies, according to court documents.

Over the two-year period, Geiger withdrew $1.75 million for personal use, according to court documents.

USA mining was ordered to repay $4.73 million to the SCT pension fund in 2007.

Askew was a third defendant named in the conspiracy. Prosecutors allege he conducted a fraudulent wire transfer of $10 million from an account at Custody First, a Rochester, N.Y., bank to a bank account of either Geiger or Combs.

The money was supposed to be used to buy 30-year treasury bonds to support the pension fund.

Once the money was transferred, Askew used only $9.2 million toward buying the bonds. He took the remaining $800,000 and divided it into personal accounts for him, Combs and Geiger.

Askew sent $450,000 to offshore bank accounts and the rest of the money in different amounts to accounts in the United States and other nations, according to court documents.

In the plea agreement Askew disputes the $800,000 figure. He argues it is a lower amount but the documents don't specify how much he claims was taken.