Jill Westmoreland Rose, acting U.S. attorney for the Western District of North Carolina announced that five of the 11 defendants in a case related to the development of Seven Falls, a golf course and luxury residential community in Henderson County, were sentenced.
Avery Ted “Buck” Cashion, III, 61, of Lake Luke and Raymond M. “”Ray” Chapman, 68, of Brevard were both sentenced to 36 months in prison and three years of supervised release by U.S. District Judge Martin Reidinger. Thomas E. “Ted” Durham, Jr., 60, of Fletcher was also sentenced to 30 months of imprisonment and three years of supervised release. Whereas, Aaron Ollis, 68, was sentenced to two years of probation, that included 12 months and 1 day of home detention. Durham is the former president of Pisgah Community Bank that failed recently. Aaron Ollis is a former licensed real estate appraiser. All four of them pleaded guilty to conspiracy to defraud the United States. Cashion was ordered to pay $14,266,256.47 in restitution, Chapman, $14,266,256.47, Durham, $ 6,237,453.37 and Ollis $10,199,106.87.
Sixty year old George M. Gabler, of Fletcher was also convicted of one count of willfully failing to report misconduct related to two Seven Falls lot loans in March 2010. Gabler admitted in court documents that he withheld documents from a federal grand jury despite being aware that the documents were related to the fraudulent loans taken out for conspirator Keith Vinson. Gabler is a former certified public accountant. He was sentenced to two years of probation that includes 500 hours of community service as well as a $5,000 fine. Keith Vinson will be sentenced on June 25, 2015, in Asheville. He was convicted in October 2013 of conspiracy, bank fraud, wire fraud, and money laundering.
According to court documents, the defendants conspired and started to borrow money from several banks through straw borrowers to help Vinson in his failing development of Seven Falls in 2008. A straw borrower is someone whose name is used to obtain a loan from a bank but the actual borrower is somebody else. The bank was not aware of the actual circumstances of the loans and thus failed to assess the risk of making such loans.
Vinson, Chapman and Cashion then recruited George Gorden “Buddy” Greenwood and Ted Durham to advance the scheme. Greenwood was president of the Bank of Asheville and Durham was the president of Pisgah Community Bank.
Additional straw borrowers were recruited when the bank officials reached their legal lending limits for some of the straw borrowers. It was also necessary to have more straw borrower loans to keep loans current, something that is known as “loan kiting”. Loan kiting was also required because the conspirators were not able to repay the loans made earlier in the scheme. Soon Seven Falls and Queens Gap, the other luxury residential gold development by Vinson, failed. Bank of Asheville and Pisgah Community Bank too failed soon after and FDIC took over the banks.