Riverside Village investor indicted in wire fraud, money laundering
NORTH AUGUSTA, S.C. (WRDW/WAGT) - A Riverside Village investor has been indicted by the United States Attorney’s Office for wire fraud and money laundering, according to a news release.
According to the United States Attorney’s Office, Dwayne Davis, 54, has been indicted by a federal grand jury in connection with a scheme to defraud his business partner, Government Employees Insurance Company (GEICO), of more than $5 million.
“Davis occupied a position of trust in his relationship with his business partner and allegedly abused that trust to facilitate and conceal his fraudulent conduct,” said U.S. Attorney Ryan K. Buchanan. “His alleged diversion of his business partner’s funds to pay personal expenses has resulted in Davis potentially facing decades in federal prison.”
According to the indictment, GEICO was the majority owner and Davis was the minority owner of a limited partnership called PIS QOZ Fund 2018-A, LP.
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In November 2018, GEICO contributed $26 million to the partnership as an investment in Riverside Village in North Augusta, according to the United States Attorney’s Office.
In April 2021, GEICO agreed to contribute another $5.91 million to the partnership to resolve a multiparty dispute involving unpaid taxes, a construction lawsuit, and foreclosure proceedings.
The United States Attorney’s Office says GEICO wire transferred the $5.91 million to the partnership’s account — an account that Davis controlled — with the understanding that Davis would use the money solely to pay the taxes, settle the lawsuit, and stop the foreclosure proceedings.
GEICO did not authorize Davis to use the money for any other purpose, according to the United States Attorney’s Office.
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The United States Attorney’s Office says almost immediately after taking control of the $5.91 million, Davis allegedly began moving money from the partnership’s account and secretly transferring it to accounts that he controlled at other banks.
Davis transferred $5,898,000 out of the partnership’s account, according to the United States Attorney’s Office. Those transfers served no legitimate partnership purpose and were allegedly made with the intent to defraud GEICO and the partnership.
Officials say Davis did use some of the diverted money to pay taxes owed by the partnership, but he never made the payments to settle the lawsuit or stop the foreclosure proceedings. Instead, the release says Davis used the remaining money to pay his personal debts and expenses and to pay expenses related to business ventures that did not involve the partnership or GEICO.
Davis was indicted by a federal grand jury on Tuesday.
The case is being investigated by the Federal Bureau of Investigation.
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