Crime & Courts

Columbia businessman got investors to put $1 million-plus into phony luxury car deal

John Monk

For years, Columbia entrepreneur-developer Wade Caughman’s motto about success was “whatever it takes.”

Unknown to others, that included bilking investors out of more than $1 million.

After a three-hour hearing Wednesday, U.S. District Court Judge Cameron McGowan Currie sentenced Caughman to her version of “whatever it takes” — 33 months in a federal prison for fraud and money laundering.

“This was a very significant, long-running fraud scheme,” Currie told Caughman, rejecting an argument by his lawyer, Louis Lang, that the businessman had engaged in a relatively unsophisticated money-making hoax.

“There were no offshore banks,” Lang argued. “This was not a terribly complicated scheme.”

But Currie agreed with Assistant U.S. Attorney DeWayne Pearson, who told the court that Caughman devoted significant energy and ingenuity to creating counterfeit documents to hoodwink investors, at one point creating phony emails from a purported credit union president to bolster his credibility.

Caughman, 51, had pleaded guilty in August. But more details about the extent of his swindling effort emerged at Wednesday’s hearing.

For five years — from 2011 to 2016 — Caughman persuaded at least five local investors with deep pockets to put more than $1 million into a venture that he said would buy luxury cars, telling the investors they would make profits off the sales.

To carry out the fictitious business scheme, Caughman printed up phony sales documents, car insurance binders and a counterfeit financial letter. He also opened up multiple bank accounts. When his money ran low, he began “kiting” checks — writing a check from a bank account with insufficient funds and, then, quickly depositing another check to cover the overdraft from another bank account, also with insufficient funds.

Caughman used accounts at eight Columbia area banks — First Citizens Bank, Palmetto Citizens Federal Credit Union, Wells Fargo, Congaree State Bank, First Community Bank, Southern First Bank and the National Bank of South Carolina, according to court records.

Appearing at Caughman’s sentencing hearing were several dozen people, including some of those he swindled, who vouched for his good character and his work ethic, adding they had forgiven him.

“He has always been honest and forthright with me,” said Columbia attorney Chris Rogers. “I would ask the court for leniency.”

Caughman told the judge that, in the last year or two, he has become a changed man. He has gone to everyone he swindled, asked for forgiveness and started paying them back. He also said he has started a local chapter of Debtors Anonymous, a program for people plagued by debt.

Caughman said problems with alcohol exacerbated a mental condition that led him to deceive others.

When FBI and IRS agents showed up at his office in 2016 to question him about the fraud allegations, Caughman told the judge that he confessed and didn’t ask for a lawyer.

“I was wrong,” Caughman told Currie.

Caughman said he now is making money on his development deals, asking Judge Currie to let him stay out of prison so he can pay back those he swindled.

Prosecutor Pearson gave a less flattering picture.

Pearson told Judge Currie that Caughman had tried to convince one of the witnesses in his case to make a false statement earlier this year. Also, Pearson said, months after being indicted on the fraud charges, Caughman accepted nearly $200,000 to build a house. Caughman now is being sued over whether he did that work properly.

“How dare you do this,” Judge Currie told Caughman. “This does not indicate to me that you have come clean.”

Caughman actually is getting off easy with a 33-month sentence, the judge said. Most federal embezzlement cases involve only about $250,000 in stolen money; impact institutions, not vulnerable individuals; and do not involve the complexity that Caughman’s scheme had, she said.

Caughman has paid off more than $200,000 to the investors who he cheated, according to statements read in court Wednesday. But he still owes five people amounts ranging from $364,216 to $29,467 — a total of $846,229.

Caughman grew up in West Columbia and is a 1986 graduate of Airport High School.

A 2005 profile in The State noted his business ups and downs, including a high-profile failure that left him owing investors hundreds of thousands of dollars.

Charges were filed in connection with a $1 billion Medicare care fraud scheme, announced the U.S. Attorney’s Office during a press conference in Miami, Florida on July 22. Federal prosecutors said it was the biggest Medicare fraud scheme in the na

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