Man pleads guilty in SCT pension case

Man pleads guilty in SCT pension case

March 14th, 2013 by Joan Garrett McClane in Business Around the Region

The British investor caught in Spain last year and brought to Chattanooga to face charges of allegedly pillaging employee pension plans at the now-defunct Standard-Coosa-Thatcher Yarns Inc., pleaded guilty on Wednesday.

U.S. Magistrate Judge Susan K. Lee accepted Roderick Askew's guilty plea to a single charge of conspiracy to commit money laundering. All other charges were dropped. Askew now faces deportation, a 20-year prison sentence and fines up to $500,000, according to court documents.

The sentence will be decided by U.S. District Judge Curtis Collier on June 20.

Askew was one of three men in the conspiracy who faced prosecution. In 2005, Dan Geiger was sentenced to nine years in prison for taking $6.7 million in pension funds. Geiger was also forced to give up his personal residence, which was bought with pension funds, and to forfeit equipment and vehicles. He was found guilty of wire fraud, graft, money laundering conspiracy and conducting unlawful monetary transactions.

Kenneth Combs, president of SCT, pleaded guilty to 31 counts of mail fraud, embezzlement, graft, conspiracy to commit money laundering and money laundering. He commited suicide the day before his sentencing.

Prosecutors say their plot, which endangered the pensions of 1,300 Standard-Coosa-Thatcher workers, started in 1999 when Geiger started paying Combs to siphon money from the pension plan. The money was invested in Geiger's company, USA Mining, which owned 500 defunct gold mines in the area of Mariposa, Calif.

When the money exchanged hands, each skimmed some from the top.

USA Mining agreed "to borrow $3.5 million of pension money in return for a promise to repay $4.5 million with a payment of $315,000 to the pension plans as prepaid interest," according to the indictment.

In 2000, Combs wired $1.97 million of pension plan money to be distributed to USA Mining.

In total, Geiger withdrew $1.75 million for personal use, court documents show.

Askew's role, according to prosecutors, was to conduct a fraudulent wire transfer of $10 million from a bank account in New York to the bank account of either Combs or Geiger.

The money was supposed to be used to buy 30-year Treasury bonds to support the pension fund. Instead, part of it was divided among the three men for their personal use, prosecutors said.

At his plea deal, the mood in the courtroom was chipper.

Assistant U.S. Attorney Perry Piper told the judge that the government wouldn't pursue forfeiture of property.

After court, Piper approached Askew in the hallway to talk to him about his British accent and what types of television he watches.

The two were friendly.

"Thank you," said Askew as they walked down opposite ends of the hallway.