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Woman pleads guilty to $20.5 million fraud
Twin Sister Commits Suicide</font size></center>
The State
By CLIF LeBLANC -
cleblanc@thestate.com
Fri, Aug. 17, 2007
A Lexington County businesswoman admitted in court Thursday she bilked U.S. taxpayers for $20.5 million in shipping costs for Pentagon supplies, a crime that also led her twin sister to commit suicide.
Charlene Corley, 46, pleaded guilty to a nine-year fraud that included charging the Pentagon $998,798.38 for shipping two 19-cent bolt washers.
Corley and her sister Darlene Wooten created companies to launder the money, then bought four beach homes, 10 luxury cars, boats and jewelry and took expensive vacations, federal prosecutors said.
The company Corley and Wooten owned, C & D Distributors on Augusta Highway, also received $445,640.75 for shipping an $8.75 plumbing tube elbow and $492,096.99 for a $10.99 threaded machine plug, according to the charges.
Pentagon records show C & D received $455,009 to ship three machine screws costing $1.31 each to Marines in Habbaniyah, Iraq and $293,451 to ship an 89-cent split washer to Patrick Air Force Base in Cape Canaveral, Bloomberg news service reported.
Altogether, C & D submitted invoices to the Defense Department for shipping costs that totaled $71,611,296.12, according to the charges released for the first time Thursday.
The sisters are members of well-known Lexington County families — Corley, Roof, Shuler and Sox — that were among the first settlers of the Midlands in the mid-1700s. Relatives are known in banking, retail and land development circles.
Corley remained calm and controlled in court. She said little beyond answering the judge’s questions and declined comment afterward.
Corley faces up to 40 years and $750,000 in fines, plus forfeiture of the Edisto Beach-area homes, cars and other properties the government said she acquired. She is free until her next court appearance, but is being monitored by the federal probation office. A sentencing date has not been set.
Her lawyer, Greg Harris, said Corley did not submit any invoices and knew little about what Wooten was doing.
“She realizes now that perhaps she turned a blind eye to the activities of her sister,” Harris said. “There were a lot of assets that her sister accumulated ... that she did not know about.”
Harris said Wooten’s Oct. 2 suicide note instructs Corley on how to gain electronic access to the bank accounts that held their profits. Corley already had access at the bank.
He said Wooten told Defense Department investigators on the day she shot herself: “This is my problem. My sister didn’t have anything to do with this.”
But prosecutors said they can show Corley knew the shipping costs, worked with local suppliers to get equipment for the Pentagon, corresponded with the Defense Department and was a contact on the computerized forms used to bid on the contracts.
They called Corley’s role, at minimum, “willful blindness.”
“These twin sisters split these assets,” federal prosecutor Kevin McDonald said. “Charlene Corley and Darlene Wooten equally shared in the proceeds of this fraud.”
The U.S. Attorney’s office said the investigation is not over.
C & D had about five employees, Harris said. Court records show the sisters had five businesses, and six accounts at First Community Bank.
Their businesses date to 1991, when they made and distributed business signs, then began delivering appliances for contractors building new homes, Harris said.
The government said they began defrauding taxpayers by November 1997 and continued until September 2006.
A computer flagged a $968,949.38 cost for shipping two additional 19-cent washers because that expense required a separate authorization that had not been granted, prosecutor Winston Holliday said.
That led to an audit that turned into an investigation.
Holliday said the women had created two shell companies, Industrial Building Materials and United Tech, to launder their profits and pay their personal expenses.
Besides the beach houses, they bought three 2007 Mercedes S and SL models; a 2007 BMW 550i; five slightly older Lexus models, ranging from the flagship LS430 to SUVs and a two-seater.
Their shopping spree extended to a 23-foot outboard Suntracker and a 10-foot inboard Kawaski jet ski.
Prosecutors did not itemize jewelry they said was bought in New York and elsewhere.
The sisters also took a vacation to Alaska, but details were unavailable.
Family members identified Corley as the niece of Jimmy Roof, a former Springdale tire dealer who pleaded guilty in another federal fraud case in 2002.
Roof admitted then he conspired to defraud investors and plotted to launder their investments through offshore bank accounts for an Atlanta-based car-title loan company called Cash 4 Titles.
Federal investigators at the time called it the biggest pyramid scheme in the history of the Security and Exchange Commission.
Friends and relatives thought the sisters were well-respected and hard-working.
Ted Stambolitis, Lexington town councilman and the sisters’ landlord when they ran Nestle Tollhouse Cafe at the Shoppes at Flight Deck, had heard rumors about the federal charges.
Yet, “I thought they were running a legitimate, successful business,” he said.
Robin Bowers, former owner of Tiddlywinks Toys, a neighbor of Nestle Tollhouse Cafe, said she was shocked to hear of the charges.
“They’re well thought of in the community, are well-established in the community,” Bowers said.
Raymond Caughman, a retired local banker, is a first cousin of Corley and Wooten’s mother.
“They were very outgoing people, very forthcoming; had good personalities, good ambitions and business ability.”
Staff writers Tim Flach and Lezlie Patterson contributed. Reach LeBlanc at (803) 771-8664.
http://www.thestate.com/news/story/148373.html
