RALEIGH – United States Attorney Thomas Walker announced that yesterday in federal court, DAVID THOMAS STEPHENSON, III, 68, of Lumberton, NC, waived indictment and pled guilty to a Criminal Information charging him with structuring transactions to evade reporting requirements and aiding and abetting the same.
Structuring is the breaking up of a single cash transaction of more than $10,000 into two or more separate transactions for the purpose of evading the federal reporting requirement. Federal law requires banks and other financial institutions to file Currency Transaction Reports with the U.S. Treasury Department for all cash transactions that exceed $10,000. According to the Criminal Information filed on January 26, 2015, and information presented in open court, STEPHENSON was a tobacco warehouseman in Lumberton, NC and former board member for the Golden Leaf Foundation. He operated a tobacco warehouse/tobacco receiving station under the name of S & P 2 Tobacco Marketing.
STEPHENSON also operated as an independent tobacco broker, buying and selling tobacco on his own. On his tax returns, STEPHENSON failed to report all of his tobacco purchases and sales. Between 2009 and 2012, STEPHENSON converted tobacco checks made payable to him and others (third party checks) to cash by withholding cash from deposits, exchanging tobacco checks for cashier’s checks, mainly in amounts less than $10,000, that were subsequently cashed or converted to additional cashier’s checks that were cashed, and by making cash withdrawals after tobacco checks and cashier’s checks were deposited.
During that same time frame, STEPHENSON structured $382,562.37 in financial transactions to evade the $10,000 trigger for the filing of currency transaction reports. He did so at three domestic financial institutions. STEPHENSON structured the transactions as part of a pattern of illegal activity involving more than $100,000 in a 12-month period.
Between September 2011 and January 2012, he structured just over $150,000, with transactions in varying amounts such as $9,500; $9,600; and $9,700. At sentencing, set for the June 15, 2015, term of court, STEPHENSON faces up to 10 years imprisonment followed by up to 3 years of supervised release and a fine of $500,000.
This case 3 is part of the ongoing investigation of crop insurance fraud in the Eastern District of North Carolina. The criminal investigation of this case was conducted by United States Department of Agriculture – Office of the Inspector General – Investigations, the United States Department of Agriculture – Risk Management Agency – Special Investigations Branch, and the Internal Revenue Service – Criminal Investigations.
Assistant United States Attorney Banumathi Rangarajan is handling the prosecution on behalf of the Eastern District of North Carolina.
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