Unusual Chapel Hill, N.C.-Area Fraud Case Set for Trial
Knight Ridder Tribune Business News 12.8.2003
By Richard Stradling
Two Wilmington brothers will appear in court next week to face charges that they swindled $5 million from a wealthy Chapel Hill Amway dealer.
State officials say the affair could be the largest case of fraud against a single victim in state history.
The brothers, Robert and Daniel Burr, said they would invest the businessman's money in the foreign currencies market and promised returns of 10 percent a month, according to officials with the N.C.
Secretary of State's office. Instead, they are alleged to have spent the money on themselves.
The businessman, Billy B. Britt, made payments of $2 million and $3 million to the Burrs in July 2001, according to their arrest warrants. Britt and his wife, Peggy, are among the world's largest distributors of Amway products.
The case is unusual not only for its size, said Secretary of State Elaine Marshall, but because Robert Burr pleaded guilty to a similar scheme in Arizona less than three months before when he is alleged to have defrauded Britt.
According to the Securities and Exchange Commission, Robert Burr had taken part in a Ponzi scheme masterminded by Benjamin Franklin Cook of Phoenix. The scheme, which involved the sale of nonexistent bank securities, bilked about 300 investors out of more than $45 million, according to the SEC. Burr agreed to pay nearly $5 million to victims of the Arizona scheme. He awaits sentencing in that case.
Had Britt called the secretary of state's office to check on the Burrs, Marshall said, "We could have told him that this chap in particular had a criminal problem in another state." As it was, Britt contacted state officials this spring, launching the investigation that resulted in the Burrs' arrest.
Britt was not available for comment Monday. Amway Corp. , a Michigan-based direct-marketing firm, features the Britts on its Web site.
Robert Henry Burr, 40, and Daniel David Burr, 54, face two counts each of obtaining property by false pretense. Robert Burr faces an additional six counts of securities fraud for failing to disclose to Britt his problems with the law. All the charges are felonies.
The two Burrs were charged in Wake County because they conducted business with Britt in Raleigh. They are scheduled to appear in Wake County Superior Court next week.
The brothers have been held in the Wake County jail since their arrest in Wilmington on June 25. Robert Burr is being held under an $8 million secured bond, while Daniel was placed under a $2 million secured bond.
Marshall said the bails are high because the Burrs "are extreme flight risks."
At the time of the arrests, federal officials seized homes, cars and other property that the Burrs had acquired, some under the names of family members or associates. The property will be used to pay restitution in the Arizona and North Carolina cases, Marshall said.
The SEC, through an agent appointed by a federal court in Texas, earlier seized a home and other assets from Robert Burr to partly pay back the investors in the Arizona case. In June, the judge expanded the agent's powers to seize property in North Carolina.
After his arrest, Robert Burr claimed to be indigent and was given a court-appointed attorney. The attorney, Peter Wood of Raleigh, would not say how his client would answer the charges when he appears in court. Wood said he did not know whether Daniel Burr had an attorney.