The Case of Orlando Carter

The following is an exhaustive explanation of the injustice in the federal government’s case against Orlando Carter:

Part 1: https://www.youtube.com/watch?v=7woOofvRqJc

Part 2: https://www.youtube.com/watch?v=GgDdqxrVvp0

Part 3: https://www.youtube.com/watch?v=_S5PcfukgFw

Part 4: https://www.youtube.com/watch?v=-Llmv6ch2P8

Online White House Petition for the exoneration of Orlando Carter:

https://wh.gov/itFAp

Players:

DYNUS INC. – an Ohio corporation;

Orlando Carter – CEO and owner of DYNUS;

CBST Acquisitions LLC – a subsidiary of DYNUS;

CBS Technologies LLC – an entity referred to by the federal government that had no association with Carter or DYNUS (the Federal Government conveniently used the initials CBST);

Jim Smith – Employee for CBST Acquisitions LLC;

Tony Schweier – a CPA and a partner with Clark, Shaffer & Hackett, was the Auditor for DYNUS;

Vince Rinaldi – CEO of PNC Bank in Ohio;

Ralph Martinez – COO of PNC Bank in Ohio;

Thomas Barnhart – Attorney for PNC Bank;

Richard Chema – Assistant United States Attorney;

Kevin Gormley – FBI Agent;

Sandra Beckwith – Federal Judge;

Sean McAllister – Underwriter for PNC Bank;

Clinton Taylor – Employee of PNC Bank;

Autumn Drdek – Records Custodian, PNC Bank;

Benjamin Glassman – Assistant United States Attorney;

Accusation:

The United States Federal Government alleged that DYNUS and Orlando Carter failed to disclose a purported $4 million obligation between PNC Bank and CBST Acquisition LLC, a Dynus subsidiary. The Federal Government alleged that Carter committed fraud simply because FBI Agent Gormley and Assistant United States Attorney Chema believed the $4 million loan – which did not exist – was concealed from the auditor who submitted a required annual financial statement on behalf of DYNUS to 5th/3rd Bank and the Small Business Administration.

DYNUS Background:

In 2004, DYNUS was a multi-million dollar corporation that operated in five states. The company offered fiber optics, engineering design and installation, real estate development and logistics. DYNUS had 60 employees and, with targeted acquisitions, had projections to add 500 more employees. Orlando Carter, who has 2 engineering degrees and an MBA degree from Duke University, owned DYNUS. The company’s customer base included AT&T, Verizon, the State of Ohio, Nationwide Insurance, Sara Lee, UPS, and over 1,000 small businesses in 50 states. Furthermore, DYNUS was the recipient of a CLEC (local exchange license) for the State of Ohio, which positioned the company for phenomenal growth. With this coveted opportunity, DYNUS was able to compete with AT&T, Verizon and SPRINT, as it was poised to offer telecom, internet, data, and mobile services.

Business Relationship with Butler County, Ohio:

DYNUS contracted with Butler County, Ohio to create and maintain a fiber optics wireless network which required installation of telecommunications equipment. To fund this project, Butler County sought financing through PNC Bank. DYNUS and CBST Acquisition LLC were a vendors for Butler County.

Officials at PNC Bank discussed the financing of the project with Kay Rogers, the Butler County Auditor. Rogers, who knew she had no authority concerning funding, directed PNC Bank officials to speak with the County Commissioners. As a result, PNC Bank executives spoke with Mike Fox, himself a Commissioner, who told PNC that the paperwork for the financing had not yet been completed.

In order to fund the project by the end of the year, PNC executive Vince Rinaldi created an alleged “$4 million loan guaranty” that Jim Smith signed. Smith had no authority to sign on behalf of DYNUS or CBST Acquisition LLC. Rinaldi, as revealed with his eventual admission, did not even know the name of the owner/President of DYNUS at the time he decided to issue the funding. He never sought a corporate resolution that would have authorized any loan or loan guaranty. Such a practice is fundamental in the world of banking.

Meanwhile, Chuck Furmon, a Republican and one of the Butler County Commissioners, had a long and tumultuous political relationship with Rogers, also a Republican. They did not get along. Rogers is on record in the press saying that Furmon sought to destroy everything she did. Presumably, Furmon had a grudge against Rogers, dating to the time she exposed his infidelity in his marriage. Furmon saw the PNC/Butler County/DYNUS nexus as a means to exact retribution against Rogers. Rogers, who went to prison for her “role” with the $4 million loan guaranty, was a victim of Furmon’s machinations. Furmon used FBI Agent Gormley to build a case against Rogers and Carter that should never have been.

So Chuck Furman frustrated the transaction between Butler County and DYNUS in the name of politics. In the aftermath of Furmon’s efforts, DYNUS returned 31 pallets of telecommunications equipment to PNC Bank, the very equipment purchased with funds that Butler County received from PNC Bank.

Furmon never acknowledged that he blocked the equipment from being installed for a wireless network, which would have been an asset for the county.

Investigation:

FBI Agent Kevin Gormley began an investigation into alleged criminal conduct by DYNUS/Carter based upon a Suspicious Activity Report (SAR) submitted by PNC Bank, which claimed that DYNUS had a $4 million obligation. Gormley, who obviously had no training with high level financial transactions, never requested certified bank records from PNC Bank that would have proved whether Carter and DYNUS had a pecuniary liability. Gormley simply and wrongly presumed, based upon accusations from PNC and Furmon, that the $4 million loan existed.

Gormley gratuitously asserted that the loan/guaranty should have been disclosed by Carter to DYNUS’ Auditor, Tony Schweier. As a result of Gormley’s inferior investigation, Carter was accused of tendering a 2004 Audited Financial Statement, prepared by Schweier, that was “materially false” when submitted to both 5th/3rd Bank and the Small Business Administration. In Gormley’s limited and unskilled estimation, since the $4 million liability was not on the DYNUS financial documents, the financials were false.

Noteworthy, Rinaldi and Martinez submitted the SAR in order to deflect attention away from the internal banking violations associated with the funding of the Butler County transaction. From the very beginning of the Butler County transaction, PNC Bank never acquired the appropriate paperwork. Consequently, PNC Bank used DYNUS as a scapegoat. DYNUS employee, Jim Smith, who was motivated solely to receive a commission from the Butler County transaction by the end of the year, was complicit in PNC’s deceit. Pointedly, without the SAR, there would have been no investigation of either DYNUS or Carter.

As a result of the imaginary $4 million loan, 5th/3rd Bank closed DYNUS. Like a domino effect, 5th/3rd Bank wrongfully believed that Carter owed PNC Bank $4 million. Carter was compelled to file for bankruptcy protection. Notably, although Carter told 5th/3rd Bank executives that the $4 million obligation did not exist, they closed his business nonetheless.

Assistant United States Attorney Richard Chema used the imaginary $4 million loan as evidence over 72 times during  a federal trial that led to Carter’s conviction for bank fraud. Noteworthy, Chema, as with Gormley, failed to request or secure certified records from PNC Bank. Chema deliberately misled a federal judge and jury into believing that DYNUS and Carter had a liability to PNC Bank and, therefore, filed false documents with other institutions.

Unfortunately, Mary Rogers became a victim of Gormley’s investigation. She was indicted and charged. Rather than face a trial, she accepted a plea of guilt. It is alleged in government files that Rogers assisted Smith take out the $4 million loan guaranty on behalf of DYNUS. The government claimed that DYNUS paid Rogers $9,500 for her help. The government alleged she told bank officials that she had authority to approve the financing and contracts.

However, bank officials (Sean McAllister) told Gormley that Rogers did not tell them to fund the project. It is notable that neither Rogers nor the attorneys for DYNUS or Carter ever met prior to Rogers acceptance of a plea offer. She accepted a plea out of fear and because she did not have the resources to fight. She has always maintained her innocence.

Significantly, in July of 2016, Carter wrote to AUSA Benjamin Glassman and requested under the Freedom Of Information Act (FOIA) that he provide proof which substantiated that payment was made to Rogers. Glassman has yet to respond.

Something is Rotten in Denmark:

Both Vince Rinaldi and Ralph Martinez claim that they sent a DEMAND LETTER to Smith (DYNUS) (Government exhibit 3.19), in an attempt to collect on the $4 million obligation. However, FBI reports show that PNC created “unusual” documents regarding the Butler County transaction. In the trial against Carter, both Rinaldi and Martinez testified that the $4 million dollar obligation existed. Yet, in an internal email from PNC Bank, Sean McAllister, a bank underwriter, said that PNC Bank documents concerning the “loan guaranty” had loan “i[m]proprieties.”

The DEMAND LETTER was invented by PNC Bank attorney Thomas Barnhart. Barnhart deliberately furthered the appearance that DYNUS had a $4 million loan. The DEMAND LETTER was allegedly tied to the document (paragraph) that Smith signed. (Government exhibit 3.6.) Chema used exhibits 3.6 and 3.19 to unduly influence the jury.

Meanwhile, Sean McAlister told Gormley the documents that the bank created were unusual. In fact, an internal bank email addressed to Rinaldi shows that PNC Bank executives were attempting to cover-up their wrongdoing.

Defense Attorneys:

Wende Cross, Martin Pinales and Candace Crouse were Carter’s defense attorneys. They admitted under oath during a 2255 proceeding that they never challenged the purported $4 million obligation. However, before the criminal trial, they informed Carter otherwise. They stated that they had CONFIRMED the financial liability with PNC Bank.

Noteworthy, even though Judge Beckwith called the $4 million obligation the “centerpiece” of the alleged fraud, she ruled that Cross, Pinales and Crouse were not ineffective for failing to investigate the supposed loan obligation before trial. In fact, rather than properly investigate the government’s specious claim, they pushed Carter to “plea to anything” to make the issue disappear. This was their strategy.

Closing Argument:

For added emphasis, Chema referred to the imaginary $4 million obligation over 11 times in his closing argument to the jury.

Black Ministers Association:

Reverends Dock Foster and James Chisley, along with fifteen other ministers, came to sentencing. Foster stated to the Cincinnati Enquirer that all of the information did not come out in the trial.

Developments while in Prison:

Independent Audit: Auditor Theodore Johnson conducted a financial audit. He concluded that:

1) The DYNUS Financial Statements tendered to 5th/3rd Bank were not materially false as claimed by the United States Department of Justice. Johnson concluded that DYNUS never had a $4 million liability to PNC. As such, the SAR submitted by PNC Bank was a grossly negligent error, if not a criminal act.

2) The Department of Justice relied upon documents that did not even have the legal name of DYNUS or CBST Acquisition LLC on them. As such, these documents were effectively bogus. The DOJ used documents that had the name CBS Technologies, an entity that had nothing to do with Carter or DYNUS.

PNC Bank Responds: In July 2015, in response to Carter’s requests, PNC bank employee, Clinton Taylor, sent a letter stating there were no records reflecting a $4 million obligation owed by DYNUS.

Certified Bank Records: On September 15, 2015, in response to a subpoena, Autumn Ddrek provided Carter with 59 certified bank records which confirmed that no $4 million liability existed. These documents substantiate that Chema used fake evidence during the trial. Indisputably, Chema never sought PNC Bank certified records to confirm whether this financial liability existed.

Warden’s Seller Letter: On December 17, 2017, the  prison warden sent a SELLERS LETTER to the Federal Probation Office regarding the false information of a financial liability used in the Pre-Sentencing Report. The SELLERS LETTER attacks the entire conviction simply because the $4 million loan never existed. As such, the false information – the imaginary $4 million loan – was used to not only convict Carter, but to ensure that he received more time than the base charge.

Timeline: 

06/2003: Carter formed the DYNUS Corporation as an S-Corp for the purposes of holding and acquiring companies.

12/2003: Carter formed CBST Acquisitions LLC as a subsidiary of DYNUS.

05/2004:  Carter met Jim Smith through DYNUS Vice-President of Sales.

08/2004: Carter allowed Smith to be hired into the sales department without Human Resources doing the standard background check. Smith was already indirectly working with the VP of Sales, although not directly with DYNUS.

09/2004: DYNUS was a vendor to PNC Bank. DYNUS never had a loan with PNC Bank. Chema used the term “loan” so that it would be easier for the jury to understand. At times they called it a “loan,” other times it was a “loan guaranty”.  PNC Bank had a lease with Butler County. PNC Bank purchased product from DYNUS that was used in the Butler County project.

09/2004: DYNUS contracted with Butler County on the first transaction for $2.5 million. National City Bank, now known as PNC Bank, financed the transaction without an Opinion of Counsel letter (OC) from Butler County. DYNUS received equipment as a vendor of PNC Bank, as PNC leased the equipment to Butler County.

12/2004: The second transaction between DYNUS and Butler County was for $5.3 million. These funds were necessary to expand the fiber optic ring and provide wireless capabilities for the project. PNC Bank financed the project, but NOW required an Opinion of Counsel letter. Why? There was a mistake with the first loan. PNC attempted to correct its mistake regarding the first lease by linking it to the second lease. DYNUS was still a vendor to PNC. It was at this point that Smith, who had no authority to act on behalf of DYNUS, signed a purported $4 million “guaranty.”

12/2004: The first $2.5 million was entered by PNC Bank as a commercial lease. However, Butler County is a government entity; the transaction should have been booked as a “municipal lease”. With a commercial lease, no Opinion of Counsel letter was required. With the second lease ($5.3 million), PNC wanted to correct the entry of the first lease and put both leases together. PNC now sought an Opinion of Counsel letter from Butler County. Smith, who was motivated by receiving a commission, said he would help get the letter. However, DYNUS was not required to help. To keep the transaction viable in hopes of correcting their mistake, Rinaldi and Martinez asked Smith to sign a “guaranty” the size of a paper napkin. This “guaranty” was ostensibly for the $4 million liability. In essence, PNC executives intended to withhold the balance of $5.3 million as leverage for Smith’s signature. When Furmon involved himself into the situation, PNC Bank claimed that the document Smith signed was an obligation of DYNUS, which was legally impossible.

The guaranty (Government exhibit 3.6) that Smith signed did not conform to Ohio law or banking regulations. PNC never asked for a corporate resolution from DYNUS to ensure that Smith had authority to sign on behalf of DYNUS. A corporate resolution is required to ensure those who sign are authorized to bind the company. Smith was not authorized to do so.

02/2005: PNC sent a Demand Letter to DYNUS through Smith for the $4 million. DYNUS never got the letter, as Smith hid it.

09/2005: PNC Claims DYNUS owed $4 million.

09/2005: Butler County officials attempted to contact the local PNC branch in Cincinnati. However, both Rinaldi and Martinez would not respond. So Butler County officials contacted PNC Bank headquarters in Cleveland. An attorney from PNC Bank in Cleveland sent an email to Brenda Kenny, the executive assistant to Rinaldi and Martinez. The email referred to the improprieties related to the fraudulent documents used by PNC Bank to create the appearance that Butler County and DYNUS had an outstanding loan. Noteworthy, PNC Bank never sued BC or DYNUS for the return of the funds.

10/2005: 5th/3rd Bank claimed that DYNUS breached its bank covenants by taking out a $4 million loan with PNC.  As a result, 5th/3rd Bank closed DYNUS via receivership and began to sell its assets.

01/2006: 5th/3rd Bank filed a $5.8 million judgment against Carter for his personal guaranty. This unwarranted action prompted Carter to file for bankruptcy protection.

Up to 05/2008: Carter heard nothing from the banks or government. Carter was not even aware that he was being investigated.

05/2008: Carter was indicted for bank, mortgage, bankruptcy fraud (11 Counts). The primary allegation was the concealment of the $4 million obligation from 5th/3rd Bank.

05/2008: Carter was charged with bank fraud simply for the fact that FBI Agent Gormley grossly concluded Carter’s financials were materially false. Why? Carter’s “failure” to account for the purported $4 million. Consequently, when Carter bought his home, he supposedly committed mortgage fraud. The bank fraud is directly tied to the financial statements that DYNUS provided to 5th/3rd Bank. The bankruptcy fraud claim is based on Carter filing a bankruptcy petition to get rid of the purported bank fraud. Carter was charged with one count for every financial application he submitted on behalf of DYNUS to 5th/3rd Bank.

Up to 08/2008: Carter rejected 3 plea offers by the government. The last plea offer, as stated by his defense lawyers, was a “plea to anything”, i.e., tax fraud. His attorneys assured him that he would likely on receive probation and no prison time. This offer was made on the eve of Carter’s trial. Carter rejected the offer.

08/2009: Schweier, a CPA and a partner with Clark, Shaffer & Hackett, was the Auditor for DYNUS. He wrote a letter to 5th/3rd Bank claiming that a $4 million obligation was not on the DYNUS financial statement. He relied upon the representations of PNC Bank and, therefore, never requested certified bank records to validate the existence of the loan. Schweier’s letter is what executives at 5th/3rd Bank used to conclude that Carter breached bank covenants. It was then that bank executives at 5th/3rd Bank decided to shut down DYNUS.

Schweier testified as a witness at trial that the $4 million loan guaranty existed. He confirmed government exhibits 3.6 and 3.19 in front of the jury. As it turns out, after further forensic examination, Schweier failed to conduct the audit pursuant to the Generally Accepted Auditing Standards. Since he failed as an auditor, he was not without liability, which is the very reason he testified falsely. This was the easy way out for his negligence and any lawsuit.

07/31/2009: A seventeen day trial began. Key government witnesses Vince Rinaldi (PNC), Ralph Martinez (PNC), Anthony Schweier (Auditor/CPA) and; Jim Smith (Dynus) helped the government assert its claim that the $4 million obligation existed. Chema made this representation at least 72 times during the trial.

08/17/09: Carter was convicted.

06/2010: Carter was sentenced to 15 years in prison.

07/2010: Carter self-surrendered to a federal prison in Lexington. His son, Nathan, was six months old.

05/2012: Carter’s direct appeal was denied.

11/2012: The United States Supreme Court denied Carter’s writ of certiorari.

09/2013: Carter submitted a motion for a new trial based upon new evidence. The new evidence was a RELEASE Document from PNC Bank. PNC Bank released Butler County from any financial liability. Despite an independent forensics auditor saying otherwise, Beckwith claimed the RELEASE from PNC did not apply to DYNUS. She denied Carter’s motion.

PNC granted a “Release” of any and all outstanding funds after Butler County shut down the project with DYNUS. The bank sought no funds from either Butler County or DYNUS. PNC Bank supposedly walked away from $6.5 million. Judge Beckwith concluded that the Release was only for Butler County. She gave no reason for her conclusion, other than to say that DYNUS was not an agent of Butler County.

11/2013: Carter filed his 2255 motion (Habeas Corpus), which addresses the claim of ineffective assistance of defense counsel.

03/2014: Carter’s defense attorneys admitted under oath that they never challenged the existence of the $4 million obligation. As such, they could not have properly cross-examined PNC Bank executives.

08/2014: Beckwith denied the 2255 Motion. She continued to call the concealment of the imaginary loan the “centerpiece” of the case.

04/2015:  Carter sent a certified letter to PNC Bank Chairman for certified and authenticated documents regarding the $4 million loan.

05/2015: Clinton Taylor, a PNC Bank employee, responded that there was no information regarding a $4 million obligation.

09/2015: Pursuant to a subpoena, PNC’s Record Custodian, Autumn Drdek, provided under penalty of perjury – ALL the certified records for DYNUS. There were NO records indicating a $4 million obligation. The only financial obligation reflected in the records was a $250,000.00 note, which was a legitimate DYNUS liability.

12/2015: After reviewing Carter’s records, Mr. Hanson, Warden of the prison, sent what is called a Sellers Letter to the Probation Officer and Court challenging the validity of the $4 million obligation that was used in the Pre-sentencing Investigation Report. To date, the Court has not responded to the Sellers Letter. Rather, Beckwith sent Carter’s request to the 6th Circuit Court of Appeals – as she claims a 2244 Motion (Claim of Innocence) would have to be filed in order to re-establish jurisdiction, which would allow her to potentially correct the error.

02/2016: Carter sent US Attorney Glassman a FOIA Request for documents that verified the government had credible evidence that Carter had a $4 million loan.

02/2016: Carter received certified mail confirmation that Glassman received the FOIA request.

03/2016: Carter filed an action in the US Bankruptcy Court to request that PNC be removed as a “Creditor”.

04/2016: Bankruptcy Judge Humphrey issued an order allowing for the removal of PNC as a creditor in Carter’s bankruptcy. SInce PNC Bank  could not provide a valid proof of claim, it could not be a creditor.

05/2016: Carter filed a lawsuit against the government for its failure to respond to his FOIA request.

06/2016: Carter sent his Declaration of Orlando Carter as support of his lawsuit.

06/2016: Carter received an affidavit from a government attorney that frustrated his FOIA request.

06/2016: Glassman submitted a Motion to Dismiss Carter’s FOIA suit.

06/2016: Carter submitted a Supplemental Declaration to his FOIA suit.

06/2016: In a separate action, Carter filed motion for a Temporary Restraining Order/Preliminary junction to prevent the government from using the false claim that a $4 million obligation existed between PNC and DYNUS.

06/2016: Carter sent a letter to Judge Beckwith requesting that she reinstate bond for Carter’s release pending any and all decisions.

08/2016: Concerning Carter’s FOIA lawsuit, A judge issued an unfavorable Report and Recommendation for the presiding judge based upon all documentation.

09/2016: Carter filed a response to the Report and Recommendation finding.

07/10/2016: CBST Acquisition LLC filed a Tort claim with the federal government.

07/26/2016: Carter continued to wait for rulings by Judge Barrett and the 6th Circuit Court of appeals.

08/26/16: Carter, on behalf of CBST Acquisition LLC, filed a complaint with the Office of the Comptroller of the Currency, which regulates and provides oversight of national banks.

09/2016: Carter sent a subpoena to Glassman for certified PNC Bank Documents for CBST Acquisition LLC.

09/28/2016: PNC Bank responded to the OCC complaint by stating that it would not respond to Carter through the mail, but would deal with a Durable Power of Attorney or through other legal means.

10/04/2016: Cater notified the OCC that the response from PNC Bank was inadequate.

10/27/2016: Carter appointed a Power of Attorney to act on behalf of CBST Acquisition LLC.

11/08/2016: PNC Bank attorney David Ziv spoke with the POA and stated during the conversation that he questioned the merits for a complaint with the OCC since there was no $4 million loan or guaranty and there was no Demand Letter. Ziv stated the truth as it was at the beginning of the federal government’s case. No loan, guaranty or Demand Letter ever existed between PNC Bank and Carter/DYNUS/CBST Acquisitions LLC.

11/14/2016: PNC Bank submitted its response to the OCC.

 

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