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2 Ethanol Investors Convicted in Bribery Scheme

June 02, 2009

RALEIGH, N.C. --- Two former investors in an ethanol company pleaded guilty June 1 to conspiring to give nearly $200,000 in cash and consulting fees to a then-state employee to expedite an air-quality permit required for an ethanol plant.

According to the Associated Press, David Lee Brady of Raleigh and James Albert Perry of Wake Forest accepted a plea agreement in U.S. District Court to one count each after they had been indicted on multiple counts last October. The count is punishable by up to five years in prison and a $250,000 fine.

Perry, a former mayor of Wake Forest, and Brady pleaded guilty to conspiring to commit extortion by agreeing to give $196,000 to a government employee, former state environmental regulator Boyce Allen Hudson. Hudson pleaded guilty last year to extortion and money-laundering and received a 40-month prison sentence, AP reported.

The pair of investors each held a one-third share in Agri-Ethanol Products LLC and worked with Hudson in 2004 to get permits accelerated for a plant the company proposed in Beaufort County, Assistant U.S. Attorney Dennis Duffy told Judge Boyle. According to last fall's indictment, Brady, a retired businessman, reached the agreement with Hudson, while Perry was aware of the arrangement, AP reported.

Hudson, a former senior government affairs employee for the Department of Environment and Natural Resources, used his clout to get the permit for the $220 million plant completed in 29 days by telling department workers that legislators wanted the project moved forward, prosecutors argued.

As it turned out, Hudson only received $20,000 of what was promised -- $15,000 of which came from an undercover agent posing as an investor, Duffy said. Another unidentified potential investor who met with Brady earlier had gone to the FBI and later agreed to record conversations with company officials, he added.

The ethanol project never got off the ground. For one thing, the location wasn't close to a natural gas line that could provide energy to create the ethanol. What's more, the project never had the required capital, Duffy said.

Boyle called it a "Ponzi-like scheme."


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