By MELINDA WILLIAMS
ROANOKE – A man who operated scooter shops in downtown Pulaski and Fairlawn was indicted by a federal grand jury Thursday for allegedly bilking business investors out of more than $590,000.
Charles G. Shomo, 63, of Radford, already was in custody at New River Valley Regional Jail on local fraud and attempted fraud charges when he was indicted in U.S. District Court in Roanoke Thursday on three counts of mail fraud, two counts of securities fraud and one count of money laundering.
According to a press release from Brian McGinn, public affairs specialist for the Western District U.S. Attorney’s Office, Shomo allegedly used funds obtained from investors through the Ponzi scheme for “personal expenses and to help fund an unrelated scooter business.” McGinn said the scooter shop in question was Chubber’s Scooters.
Shomo operated the scooter shops in the building on the northeast corner of Jefferson Avenue and West Main Street in downtown Pulaski and on Lee Highway in Fairlawn. He is believed to own the downtown building, which is currently for sale.
According to the indictment, Shomo founded a business, P&G Enterprises LLC, in 1999 to purchase and set-up retail ATM and credit card processing systems throughout Virginia, West Virginia and North Carolina. The company’s revenue was purported to come from fees paid by P&G ATM users and retailers using the company’s credit card processing service.
“It is alleged that between December 2006 and June 2013 Shomo solicited investors under the representation that investor funds would be used to load ATM units and generally fund the operation of the ATM business,” states McGinn’s press release. “In return, Shomo offered investors promissory notes that typically matured over a one-year time period and paid an annualized interest rate of at least 5.95 percent.”
However, investors didn’t know Shomo allegedly was using their funds for personal expenses and the scooter business,” according to McGinn. He said Shomo also is accused of using funds from new investors to pay existing note holders in the company.
Shomo is alleged to have received more than $595,000 from investors through the sale of P&G promissory notes.
According to McGinn, the charges stem from “a thorough and cooperative investigation” by the U.S. Postal Inspection Service, Virginia State Corporation Commission (SCC), commonwealth’s attorneys’ offices in Giles, Smyth, Floyd and Wythe counties and sheriff’s offices in Giles, Smyth, Floyd, Wythe and Pulaski counties.
An indictment is a finding enough evidence exists to hold a trial. It is not a finding of guilt.
According to court records, Shomo was convicted in Pulaski County Circuit Court in 2009 of four counts of fraud. He received a total 24-month jail sentence, all of which was suspended.
McGinn said Shomo is scheduled to appear in U.S. District Court for arraignment Monday at 9:15 a.m. He is being held at NRVRJ in lieu of $20,000 bond on the local charges, according to jail records.