Tyson v. United States
| Decision Date | 31 October 2018 |
| Docket Number | 3:12-cr-239-GCM-DCK-14,3:18-cv-175-GCM |
| Parties | JAMES TYSON, JR., Petitioner, v. UNITED STATES OF AMERICA, Respondent. |
| Court | U.S. District Court — Western District of North Carolina |
THIS MATTER is before the Court on Petitioner's Motion to Vacate, Set Aside or Correct Sentence under 28 U.S.C. § 2255, (Doc. No. 1).
From 2006 through 2012, Petitioner James Tyson, Jr. was one of four leaders of an enterprise that stole more than $75 million from investors, financial institutions, and lenders. (Crim. Case No. 3:12cr239-GCM-DCK-14, Doc. No. 945 at ¶¶ 7, 9, 11: PSR). Other leaders in the investment-fraud conspiracy included Carrie Tyson (Petitioner's mother), Victoria Hunt, and Vonetta Tyson Barnes (Petitioner's sister). (Id. at ¶ 39). Petitioner targeted professional athletes and doctors, as well as his personal and professional acquaintances. (Id.). If a victim did not have money to invest, Petitioner induced the victim to borrow from financial institutions and to sign the loan proceeds over to him and the racketeering enterprise for purported investment. (Id. at ¶ 40). Through these investment fraud operations, the enterprise induced more than 50 investor victims to invest over $27 million. (Id. at ¶ 41).
Petitioner began his investment-fraud activities with a sham corporation named Brighton Developers. (Id. at ¶ 42). During the Brighton Developers phase of the investment-fraud scheme, Petitioner and others would present the potential investor-victim with a promissory note that would represent the amount of investment and the amount of return to be paid. (Id. at ¶ 43). To induce these investments, Petitioner and his co-conspirators made false and misleading statements, including, for example, that (a) investor funds would be invested in a real-estate project in Kannapolis, North Carolina, or in a real-estate project in Bristol, Tennessee; (b) the investments would be secured by lots in the Fisher Lake Farm subdivision in Kannapolis, North Carolina, or lots in the Bristol Trace subdivision in Bristol, Tennessee; and (c) the investment opportunity promised a return on the principal investment plus, depending on the investor, either 75% or 100% interest within 90 days. (Id. at ¶ 44).
While Petitioner represented that the monies were invested in real estate, in reality he and his co-conspirators used the money for their benefit, including (a) to fund the enterprise's mortgage fraud transactions; (b) to support lavish personal lifestyles that included expensive cars, luxury vacations, or throwing extravagant dinners and parties; (c) to invest in other sham businesses or other purported investments, without disclosing such purported change in investment to the victim; and (d) to pay back portions of the investments made by others, in Ponzi-scheme fashion. (Id. at ¶ 46). When investor-victims began demanding the return of their investment money, the Brighton Developers phase of the investment-fraud scheme began to collapse. (Id. at ¶ 64).
In an effort to maintain their enterprise and personal lifestyle, Petitioner and his co-conspirators created another sham corporation, Sovereign Equity. (Id.). With the creation of Sovereign Equity, Petitioner and his co-conspirators switched from "Promissory Notes" to"Master Loan Agreements," which would represent the amount invested and promise certain returns to be paid out for a term of one year. (Id. at ¶ 65). Investor-victims were generally told that they would be investing in real estate, sports/entertainment, and/or business acquisitions. (Id. at ¶ 66). Again, however, Petitioner and his co-conspirators did not invest the money for the purposes represented to the victims and instead used the money to benefit themselves. (Id. at ¶ 70).
When the Sovereign Equity phase of the investment-fraud scheme started to collapse, in order to continue the activities of the enterprise, Petitioner and his co-conspirators used the money they had fraudulently induced victim B.B. to invest in Sovereign Equity to create a third sham corporation, Prestige, so they could continue to solicit and steal money from investor victims. (Id. at ¶¶ 101-06). The pattern repeated itself again, with Prestige collapsing, and Petitioner and his co-conspirators creating yet another sham corporation, PEI, to defraud even more victims. (Id. at ¶ 123).
As part of the investment-fraud scheme, Petitioner and his co-conspirators also purported to run car dealerships and used these car dealerships to induce victims of the investment-fraud scheme to take loans out of financial institutions and sign that money over to them. (Id. at ¶¶ 129-31). Petitioner and his co-conspirators misled investor-victims by representing that (a) the investor would receive a guaranteed monthly return on his or her investment; (b) the enterprise would make all loan payments for the investor; (c) the loans were personal loans, not car loans, but nonetheless would be secured by cars; (d) credit cards taken out in the investors' names would be used for business purchases, including to purchase vehicles; and (e) the enterprise would make the investors' credit card payments. (Id. at ¶ 130). Petitioner and his co-conspirators, however, used most of these loans to purchase cars, which they rarely provided tothe individuals who unwittingly had actually paid for them. (Id. at ¶ 131). And, instead of attempting to sell the cars, as promised, Petitioner and his-conspirators used the luxury cars for their personal benefit and as a show of wealth in an effort to induce victims to invest in their various sham corporations. (Id.).
Between 2005 and 2007, Petitioner also led a mortgage-fraud scheme. (Id. at ¶ 144). The mortgage-fraud scheme was generally conducted in the following manner: (a) Petitioner or a co-conspirator agreed with a builder or owner to purchase a property at a set price (the "true price"); (b) they recruited a buyer to purchase the property at an inflated price, which was usually between $200,000 and $800,000 above the true price; (c) the buyer agreed to purchase the property in his or her own name and sign whatever documents were necessary in exchange for a hidden kickback; (d) the builder sold the property at the inflated price; (e) the lender issued a mortgage loan on the basis of the inflated price; and (f) the difference between the inflated price and the true price was extracted at closing and distributed among Petitioner and his co-conspirators. (Id. at ¶ 145). Petitioner served as a promoter, recruiting straw buyers, arranging fraudulent transactions, providing down-payment money through straw companies, and receiving millions of dollars in fraudulent proceeds, often through sham companies used to disguise that he was receiving the kickbacks. (Id. at ¶¶ 10-18).
To induce lenders to make mortgage loans, Petitioner and his co-conspirators caused loan packages to be prepared and submitted to lenders that contained false and misleading statements, including a misrepresentation of the true sales price and an inflation of the straw buyer's assets. (Id. at ¶ 146). Petitioner and his co-conspirators also caused the HUD-1 Settlement Statements associated with fraudulent transactions to contain numerous false and misleading statements,enabling entities controlled by members of the racketeering enterprise to receive disbursements and the buyer to receive a portion of the mortgage-loan proceeds. (Id. at ¶ 147).
For example, Petitioner provided the down-payment money for co-conspirator and straw purchaser George Moore's fraudulent purchase of 6510 Pembry Links Circle in Charlotte, North Carolina, through two transfers from his Brighton Developers account. (Id. at ¶¶ 161-63). Petitioner then received a hidden kickback of approximately $125,000, following the closing, through his Brighton Developers account. (Id. at ¶ 164).
Petitioner also provided down-payment money for co-conspirator Mary Vaughn's fraudulent purchase of 1040 Spyglass in Marvin, North Carolina. (Id. at ¶ 176). Rather than Vaughn occupying the property as had been represented to the lender, Petitioner and his family moved into the Spyglass property and used it as a show of wealth to further their investment-fraud operations. (Id. at ¶ 177).
As a final example, Petitioner provided down-payment money for straw purchaser N.M.'s fraudulent purchase of 9215 Woodhall Lake Drive in Waxhaw, North Carolina, again using checks from Brighton Developers, which were funded by the proceeds of Petitioner's investment fraud activities. (Id. at ¶¶ 196-98). Following the closing on 9215 Woodhall Lake Drive, Petitioner received a hidden kickback of more than $400,000, again through his Brighton Developers account. (Id. at ¶ 199). This fraudulent kickback was falsely listed on the HUD-1 Settlement Statement as if it were payment to Brighton Developers for work done on the property, when in reality it was simply a kickback to Petitioner for his role in the transaction. (Id. at ¶ 198).
In addition to investment- and mortgage-fraud activities, between 2005 and 2010, Petitioner and his co-conspirators transported truckloads of marijuana from Texas to North Carolina and elsewhere. (Id. at ¶ 242). Petitioner leased a truck to bring in shipments, and he boasted that he was running a marijuana operation. (Id. at ¶ 243). Petitioner directed co-conspirator Melvin Moye to deliver between 50 and 100 pounds of marijuana on four or five separate occasions. (Id. at ¶ 244).
In August and September 2007, Petitioner and his co-conspirators bribed bank employees to cash checks received from fraudulent mortgage transactions, to deposit these checks in a manner designed to conceal the true distribution of the proceeds, and to supply false letters of credit. (Id. at ¶¶ 246-48). For...
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