Freedom Industries’ Gary Southern charged with federal fraud crimes

The US Justice Department and the FBI are charging former president, COO and board member of Freedom Industries, Gary Southern, with criminal fraud for lying under oath about his long standing role in the company.  Through various investigations, including Freedom’s bankruptcy case and federal OSHA investigation, Southern portrayed himself as a part-time consultant who was not responsible for the disaster Freedom created.

The FBI is claiming otherwise, as noted in today’s Charleston Gazette story:

Southern is charged with bankruptcy fraud, false oath in a bankruptcy case and wire fraud, according to a criminal complaint filed Monday in federal court. The complaint was unsealed Monday after it was determined that he had been arrested.

In a sworn affidavit, FBI Special Agent James F. Lafferty II said that Southern’s scheme began shortly after the spill was detected on Jan. 9. Southern allegedly wanted to deflect blame for the spill that contaminated the tap water for 300,000 people and protect himself from lawsuits.

He allegedly engaged in a pattern of deceitful behavior, including making numerous false statements about his role at Freedom, his knowledge about conditions at the Etowah River Terminal, where the MCHM chemical leak originated, and his role in the sale of Freedom to Chemstream on Dec. 6 of 2013, according to the affidavit.

The document lists several occasions when Southern allegedly made false comments about his role at the company.
It says that Southern gave false testimony while under oath at the Jan. 21 hearing in Freedom’s bankruptcy case about his role with Freedom before Chemstream purchased it.

According to a transcript of his testimony in the affidavit, Southern said that before being appointed president in late December of 2013, he did not work for Freedom but served as a “part-time, financial type consultant to help [Freedom’s owners] get their finances and systems kind of back on track.”

In actuality, he started serving as Freedom’s Chief Operating Officer around May of 2009, and served on Freedom’s board of directors from March 2010 until October 2013, the document says.

The transcript also shows Southern said he was only “superficially” involved in the purchase of Freedom.

“In fact, and as Southern then and there well knew, Southern played a key role in the negotiations leading up to the closing of the sale, as he provided information about Freedom to Chemstream, and assisted in negotiating the amount of money that would be placed in escrow for repairs to be made to the Etowah Facility,” Lafferty wrote.

Southern is charged with bankruptcy fraud, false oath in a bankruptcy case and wire fraud, according to a criminal complaint filed Monday in federal court. The complaint was unsealed Monday after it was determined that he had been arrested.

Criminal fraud is often difficult to prove, because most statutes require that prosecutors show evidence of deliberate intent to deceive on the part of the accused.  The fact that federal prosecutors have filed these charges as criminal fraud indicates that they have strong evidence of Mr. Southern’s intent to deceive both federal officials and the public.

In a sworn affidavit, FBI Special Agent James F. Lafferty II said that Southern’s scheme began shortly after the spill was detected on Jan. 9. Southern allegedly wanted to deflect blame for the spill that contaminated the tap water for 300,000 people and protect himself from lawsuits.

He allegedly engaged in a pattern of deceitful behavior, including making numerous false statements about his role at Freedom, his knowledge about conditions at the Etowah River Terminal, where the MCHM chemical leak originated, and his role in the sale of Freedom to Chemstream on Dec. 6 of 2013, according to the affidavit.

The document lists several occasions when Southern allegedly made false comments about his role at the company.

It says that Southern gave false testimony while under oath at the Jan. 21 hearing in Freedom’s bankruptcy case about his role with Freedom before Chemstream purchased it.

According to a transcript of his testimony in the affidavit, Southern said that before being appointed president in late December of 2013, he did not work for Freedom but served as a “part-time, financial type consultant to help [Freedom’s owners] get their finances and systems kind of back on track.”

In actuality, he started serving as Freedom’s Chief Operating Officer around May of 2009, and served on Freedom’s board of directors from March 2010 until October 2013, the document says.

The transcript also shows Southern said he was only “superficially” involved in the purchase of Freedom.

“In fact, and as Southern then and there well knew, Southern played a key role in the negotiations leading up to the closing of the sale, as he provided information about Freedom to Chemstream, and assisted in negotiating the amount of money that would be placed in escrow for repairs to be made to the Etowah Facility,” Lafferty wrote.

- See more at: http://www.wvgazette.com/article/20141208/GZ01/141209252/1419#sthash.AkAJdWBg.dpuf

Southern is charged with bankruptcy fraud, false oath in a bankruptcy case and wire fraud, according to a criminal complaint filed Monday in federal court. The complaint was unsealed Monday after it was determined that he had been arrested.

In a sworn affidavit, FBI Special Agent James F. Lafferty II said that Southern’s scheme began shortly after the spill was detected on Jan. 9. Southern allegedly wanted to deflect blame for the spill that contaminated the tap water for 300,000 people and protect himself from lawsuits.

He allegedly engaged in a pattern of deceitful behavior, including making numerous false statements about his role at Freedom, his knowledge about conditions at the Etowah River Terminal, where the MCHM chemical leak originated, and his role in the sale of Freedom to Chemstream on Dec. 6 of 2013, according to the affidavit.

The document lists several occasions when Southern allegedly made false comments about his role at the company.

It says that Southern gave false testimony while under oath at the Jan. 21 hearing in Freedom’s bankruptcy case about his role with Freedom before Chemstream purchased it.

According to a transcript of his testimony in the affidavit, Southern said that before being appointed president in late December of 2013, he did not work for Freedom but served as a “part-time, financial type consultant to help [Freedom’s owners] get their finances and systems kind of back on track.”

In actuality, he started serving as Freedom’s Chief Operating Officer around May of 2009, and served on Freedom’s board of directors from March 2010 until October 2013, the document says.

The transcript also shows Southern said he was only “superficially” involved in the purchase of Freedom.

“In fact, and as Southern then and there well knew, Southern played a key role in the negotiations leading up to the closing of the sale, as he provided information about Freedom to Chemstream, and assisted in negotiating the amount of money that would be placed in escrow for repairs to be made to the Etowah Facility,” Lafferty wrote.

- See more at: http://www.wvgazette.com/article/20141208/GZ01/141209252/1419#sthash.AkAJdWBg.dpufSouthern is charged with bankruptcy fraud, false oath in a bankruptcy case and wire fraud, according to a criminal complaint filed Monday in federal court. The complaint was unsealed Monday after it was determined that he had been arrested.

In a sworn affidavit, FBI Special Agent James F. Lafferty II said that Southern’s scheme began shortly after the spill was detected on Jan. 9. Southern allegedly wanted to deflect blame for the spill that contaminated the tap water for 300,000 people and protect himself from lawsuits.

He allegedly engaged in a pattern of deceitful behavior, including making numerous false statements about his role at Freedom, his knowledge about conditions at the Etowah River Terminal, where the MCHM chemical leak originated, and his role in the sale of Freedom to Chemstream on Dec. 6 of 2013, according to the affidavit.

The document lists several occasions when Southern allegedly made false comments about his role at the company.

It says that Southern gave false testimony while under oath at the Jan. 21 hearing in Freedom’s bankruptcy case about his role with Freedom before Chemstream purchased it.

According to a transcript of his testimony in the affidavit, Southern said that before being appointed president in late December of 2013, he did not work for Freedom but served as a “part-time, financial type consultant to help [Freedom’s owners] get their finances and systems kind of back on track.”

In actuality, he started serving as Freedom’s Chief Operating Officer around May of 2009, and served on Freedom’s board of directors from March 2010 until October 2013, the document says.

The transcript also shows Southern said he was only “superficially” involved in the purchase of Freedom.

“In fact, and as Southern then and there well knew, Southern played a key role in the negotiations leading up to the closing of the sale, as he provided information about Freedom to Chemstream, and assisted in negotiating the amount of money that would be placed in escrow for repairs to be made to the Etowah Facility,” Lafferty wrote.
- See more at: http://www.wvgazette.com/article/20141208/GZ01/141209252/1419#sthash.AkAJdWBg.dpuf

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