published Friday, June 21st, 2013

SCT Yarns pension fraudster sentenced

A federal judge noted circular history in a sentencing hearing Thursday, drawing references to famed Teamsters leader Jimmy Hoffa while deciding how long a man involved in a local company pension fraud would spend in prison.

U.S. District Judge Curtis Collier, sitting in the same courtroom where Hoffa was convicted here in 1964 for attempted bribery of a grand juror, noted that charges against Hoffa at the time included control of the Teamsters' pension fund that funneled money to mobsters.

The defrauding of that fund led to the creation of federal laws governing private pensions and the backup system that helps pay pensions, somewhat similar to Thursday's case.

Roderick Askew, a 62-year-old United Kingdom citizen, pleaded guilty earlier this year to money laundering for his part in a three-person fraud scheme that bilked money from the Standard Coosa Thatcher Yarn Co. here in the late 1990s.

Collier sentenced him to three years for money laundering but gave him 10 months credit toward the sentence for time served.

Employee-turned-company-President Kenneth Combs and his business partner, Dan Geiger, were also charged in the fraud scheme. Geiger went on trial, was found guilty and has since served his nine-year sentence and is on probation.

Combs pleaded guilty but killed himself before he was sentenced.

Askew left the United States near the time the indictment was issued. He was detained in Spain in 2011 where he fought extradition for 10 months.

Combs took over an estimated $20 million pension fund when he began running the company and lost millions of it in bad investments with Geiger, Collier recounted from the 2004 trial.

Some of the investments included $6.7 million taken from the fund and put into USA Mining, Geiger's Mariposa, Calif.-company that controlled about 500 defunct gold mines.

At that point, Combs took the remaining $10 million and, with Askew's help through a New York bank, transferred the money to 30-year Treasury bonds.

"He just saw it as a means to put money in his pocket," Collier said.

Except $800,000 didn't make it to the bonds and instead was split between Combs, Geiger and Askew.

In court documents Askew noted his $290,000 was a "fair fee" for the transaction.

Though Askew's attorney, Ashley Ownby of Cleveland, Tenn., argued that interest on the Treasury bonds paid back to the pension what was taken, prosecutor Jay Woods said the bond portion was supposed to be temporary and Combs planned to move the money to Thailand, borrow double the amount on the cash to purchase other property and pay back what was taken from the fund.

But that never happened and the pension fund was cut in half.

The Pension Benefit Guaranty Corporation is a federal program that backs failed pensions, but the program has been overburdened by defrauded and bankrupted pensions in recent years, Collier said.

Workers get much less in pension payments than they paid into the fund, he said.

Ownby said his client played a minor role and asked for the lower end of the sentence, which he got. Askew faced nearly four years.

But even the time he was sentenced to may not matter, Collier noted.

Based on a treaty between the United States and Great Britain, Askew can serve his time in his home country, which can release him as soon as he is transferred.

Collier clarified that with Woods.

"So you're telling the court that regardless of what sentence I impose ... Mr. Askew could be in his own country and released?" Collier asked.

"Yes, judge," Woods said.

Contact staff writer Todd South at tsouth@timesfreepress.com or 423-757-6347. Follow him on Twitter @tsouthCTFP.

about Todd South...

Todd South covers courts, poverty, technology, military and veterans for the Times Free Press. He has worked at the paper since 2008 and previously covered crime and safety in Southeast Tennessee and North Georgia. Todd’s hometown is Dodge City, Kan. He served five years in the U.S. Marine Corps and deployed to Iraq before returning to school for his journalism degree from the University of Georgia. Todd previously worked at the Anniston (Ala.) Star. Contact ...

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