Frank Graham Farrier Jr., one of two Giles County investment advisers charged in a fraud scheme that cost clients millions of dollars

Frank Graham Farrier Jr., one of two Giles County investment advisers charged in a fraud scheme that cost clients millions of dollars, switched his plea to guilty Friday in federal court in Roanoke.Farrier, 64, of Newport was one of two principals in Mountain Investments and Dogwood Farms, two companies that prosecutors say were nothing more than a Ponzi scheme, using investors' money to pay earlier investors as well as the men's personal expenses.Prosecutors have not been able to determine exactly how much money investors lost because the companies' activities extended beyond the period of time that records must be kept.The other defendant named in last year's 42-count indictment is Ted James Johnson Jr., 58, a former Giles County commissioner of the revenue and circuit court clerk who has maintained his innocence. Farrier's plea was a reversal of not guilty pleas that he had entered in August.In court Friday, Farrier pleaded guilty to six charges, apologized to those he had hurt, and pointed to Johnson as the more active partner in the swindle.<br />Taking the witness stand, Farrier testified he was the bookkeeper in the scheme and that Johnson made the commodity trades that lost investors' money. He said that Mountain Investments never turned a profit.Farrier said he and Johnson would woo potential investors by bringing them to a "trading room" in Johnson's house, showing off computer monitors that seemed to show trading activity.The charges to which Farrier pleaded were two counts of mail fraud, securities fraud, conspiracy to launder money, being an unregistered commodity pool operator, and an agreement to forfeit property.The maximum penalties for the charges total decades in prison and more than a million dollars in fines.In exchange for Farrier's plea, prosecutors agreed to drop remaining fraud and other charges when he is sentenced. Prosecutors said they may ask for a lighter sentence than federal guidelines call for if Farrier assists their case. U.S. District Court Judge Samuel Wilson directed the federal probation office to prepare a pre-sentencing report that will lay out a recommended penalty for Farrier.The indictment said that since 1992, more than 80 people invested money with Johnson and Farrier, who promised rates of return of 17 percent to 25 percent or more. Neither of the men nor their company was properly registered to conduct the sorts of transactions they told investors they would carry out, the indictment said.The Virginia State Corporation Commission began investigating Farrier and Johnson in 2001 after receiving a complaint about a newspaper advertisement that promised a 14 percent to 17 percent yield on investments.<br />In 2004, Johnson, Farrier and Dogwood Farms declared bankruptcy, listing debts to investors of more than $8 million. The SCC said its attempts to make them repay investors had failed and a federal investigation began.

Frank Graham Farrier Jr., one of two Giles County investment advisers charged in a fraud scheme that cost clients millions of dollars

Frank Graham Farrier Jr., one of two Giles County investment advisers charged in a fraud scheme that cost clients millions of dollars, switc...

Read more »