NEWS RELEASE
UNITED STATES ATTORNEY'S OFFICE
WESTERN DISTRICT OF VIRGINIA
John L. Brownlee
United States Attorney
Heidi Coy
Media Contact
Thomas B. Mason Building
105 Franklin Rd., S.W.
Roanoke, Virginia 24011
(540) 857-2250
FAX (540) 857-2180
June 23, 2005
LYNCHBURG AREA MEN INDICTED ON TAX CHARGES
United States Attorney John L. Brownlee announced today that Charles Gilman Lowry, age 73, of Lynchburg, Virginia, and Charles Monroe Grooms Jr., age 45, of Madison Heights, Virginia, were indicted by a federal Grand Jury sitting in Roanoke, Virginia.
Lowry and Grooms are charged in an 14 count indictment with conspiracy to commit wire fraud, aiding and abetting, failure to report foreign financial transactions, health care fraud, failure to file tax returns, food stamp fraud, making false and fraudulent statements, as well as forfeiture of assets.
According to the indictment, beginning in 1999, Lowry and Grooms conspired to and convinced several people to invest approximately one million dollars with their company, High Yield, Inc. The investors were promised returns of 5%, 15%, or 25% per month on their money. The investors were also promised their money would remain safe and secure in attorney trust accounts, when in fact, it was transferred to other accounts without the investors knowledge.
The investors money was traced to several accounts in the West Indies. Neither Lowry nor Grooms notified the Internal Revenue Service that each had control over bank accounts located in a foreign country. Over time, when investors demanded that their money be returned Lowry and Grooms promised it would be returned soon. When Lowry and Grooms did repay money to some of the investors, the money repaid was not the promised return on their investments. Other investors have not had their money returned.
Lowry and Grooms played upon the investors Christian faith in order to lure them to invest. Lowry and Grooms also filed false tax returns and provided false information to keep their conspiracy from being discovered, and to impair and impede the IRS.
Beginning in 1999 and continuing through 2004, Grooms filed false applications for Medicaid benefits by stating the Grooms family did not have any cash in the bank and that the family did not receive any type of money from interest, dividends, or loans.
In February 1999, Grooms filed a false application for food stamps by withholding information about funds held in an offshore account and income received through the use of an offshore credit card.
"Mr. Lowry and Mr. Grooms used religion to take advantage of their victims," said United States Attorney John Brownlee. "They must be held accountable for their actions."
If convicted on all counts, the maximum penalty faced by Lowry is 61 years imprisonment and/or a fine of $1,750,000. If convicted on all counts, the maximum penalty faced by Grooms is 83 years in prison and/or a fine of $2,250,000.
The investigation of the case was conducted by Mark McKizer for the FBI, Karen Deer for the Internal Revenue Service, and Jeff Overbeck for the Department of Health and Human services. Assistant United States Attorneys C. Patrick Hogeboom and Thomas Eckert will prosecute the case.
