ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Friday, September 27, 1996 TAG: 9609270060
SECTION: VIRGINIA PAGE: B-1 EDITION: METRO
SOURCE: JAN VERTEFEUILLE STAFF WRITER
MEMO: ***CORRECTION***
Published correction ran on September 28, 1996.
A headline in Friday's paper incorrectly identified the former
director of radiology at Carilion Roanoke Community Hospital as a
radiologist.
The former director of radiology at Carilion Roanoke Community Hospital pleaded guilty Thursday to defrauding friends and co-workers through nonexistent business ventures in which they lost up to $1 million.
Billy L. Ferguson, 54, of Salem persuaded friends, colleagues and even his boss to give him money. He told them he would use the money to, among other things, buy used X-ray film and reclaim the silver to sell, and refurbish used medical equipment and resell it, according to the government.
He pleaded guilty in federal court in Roanoke to wire fraud and to filing a false tax return by not reporting $1.8 million income from the scheme in 1989.
But he indicated to U.S. District Judge James Turk that he did not agree with the government's version of events.
His attorney characterized the $3.1 million given to him by friends from 1985 to 1990 as "loans" rather than investments. The IRS documented that Ferguson repaid at least $2.06 million of that, and there were additional cash payments that cannot be documented.
"I don't think there was any intent on anyone's part to set up a business," Will Lindsey said. "Billy's contention is that any money given to him by participants, he signed a note to repay them with interest."
By 1990, investors were hounding Ferguson for their money, Assistant U.S. Attorney Jennie Waering said.
The IRS puts the victims' losses at between $350,000 and $1 million. Ferguson's plea agreement says the government will hold him responsible for no more than a $500,000 loss, for which he faces 15 to 21 months in prison when he is sentenced in December.
The government contends Ferguson traded on his professional reputation at Community Hospital and the Imaging Center of Southwest Virginia to persuade people to invest, promising them returns of 16 percent to 20 percent. He would make interest payments initially and encourage them to leave the principal in the investment.
IRS Special Agent Glenn Phillips testified that he could never document any expenditures for X-ray film or medical equipment. He said Ferguson bought $99,000 worth of silver bars to show his investors periodically and used the bars to repay some of the investors.
Phillips said Ferguson, who made between $42,000 and $54,000 a year, had more than that amount in credit card debt when he began the scheme in 1985. But he said that while Ferguson lived beyond his means, he did not lead an extravagant lifestyle. It is unclear where all of the missing money may have been spent.
Ferguson lost his job and was forced to declare bankruptcy in 1992, after investors sued him. He is now unemployed.
LENGTH: Medium: 60 linesby CNB