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Federal prosecutors seek to revoke Farley’s bond

South Boston News
Kathy Farley / September 03, 2015
Federal prosecutors are seeking to revoke bond for Kathy Farley, former president of Cherokee Tobacco, on the grounds that she has “sent abusive and intimidating text messages” and posted comments on social media about potential witnesses in her upcoming trial on tax evasion and fraud charges.

The bond revocation motion, filed Thursday by Assistant U.S. Attorney Joseph Mott, notes that Farley was allowed to stay out of prison in the aftermath of her April 2015 indictment on the condition that she “avoid all contact, directly or indirectly, with any person who is or may become a victim or potential witness in the investigation or prosecution.”

In addition to sending texts, Farley has “posted messages toward the victim company and witnesses on social media, and physically appeared on company premises,” Mott stated in the motion, filed in U.S. District Court, Western District of Virginia.

There has not been time for a formal response by Farley’s attorney. She has been defended by Randy Cargill of the Federal Public Defenders Office in Roanoke.

However, Farley, reached for comment Thursday night, denied that she has stepped foot on the Cherokee Tobacco premises since departing the company in January 2014.

“I was not on the property, I have not been on the property,” she said. “That is a total, complete lie.”

Farley said she became aware earlier Thursday that a report was circulating that she had returned to the place of her former employment. She countered that Cherokee and nearby businesses have videocameras that would show whether she had been on the premises, as is alleged. “Look at the film,” she said.

She said she had sent a text message to two persons who might be connected to the case, but only in response to a prior text message that she construed as personally threatening to her. Regarding her posts on social media, Farley acknowledged making critical comments about people she described as “former friends,” but without identifying anyone by name. “It’s pretty obvious who I’m talking about, but I have not named the person,” she said.

In the revocation motion, Mott also notes that Farley has been charged in a separate felony case now pending in Halifax General District Court. In that case, Farley is accused by Kyle Duffer of accepting his payment of $300 for two refrigerator freezers but subsequently failing to produce the goods.

Farley has said she’s innocent in the dispute, noting that Duffer is relatives of the people who purchased Common Grounds, a coffee shop that she sold after departing Cherokee. The new owners moved the business to Halifax, where it later went out of business. The charge against Farley is for obtaining money under false pretenses from the sale of items valued at $200 or more. The $200 figure is the threshold for felony theft in Virginia.

Mott’s two-page motion does not identify the individuals who received the disputed text messages from Farley or who have been the target of her ire on social media. However, Farley on her private Facebook page has insinuated that a local accountant shared with her the private financial information of other businesses and individuals in town. While she does not identify the accountant by name, it is an apparent reference to South Boston CPA Corbin Pulliam, who performed accounting services for Cherokee Tobacco during Farley’s tenure there as company president.

In one such passage, Farley posted a link to Virginia’s legislative services website with the code section governing professional conduct of certified public accountants. She invited individuals who suspected that their privacy may have been violated to contact her privately via Facebook. “I will respond to each of you but my list is larger than I expected,” she wrote on Aug. 6. “Please bear with me as I’m trying to help you!”

At another passage, she wrote: “Would it be acceptable if you went to the doctor and the doctor told your acquaintances that you had knee surgery and you were sick during anesthesia etc etc.? If your insurance provider told the same group of people the amounts of your coverage or denial of coverage — would that be acceptable? Lawsuit? If your lawyer told his friends about his or her clients? Would that be acceptable?

“If your CPA, told about your business — how much you made, how you filed your taxes would that be acceptable?”

On Aug. 5, she wrote, “And especially since everyone wants to make up and tell my story for me — I’ll just start setting the record straight as I see fit — when I see fit.”

Pulliam, contacted by telephone Thursday night for a response, declined to comment.

Farley was named president of Cherokee and Firebird Manufacturing, based in South Boston, in June 2012 after previously serving as company vice-president. She was terminated around the beginning of 2014, months after federal agents raided the company complex on U.S. 58 Bill Tuck Highway.

Upon her indictment, Farley was released on a $25,000 unsecured bond and since has been living at her home in Halifax. Conditions of the bond included that she not travel outside the Western District of Virginia, turn in her passport, avoid contact with any witness or victims outside the presence of her attorney, maintain full employment and provide a DNA sample to authorities.

A federal grand jury charged Farley with 22 counts of fraudulent refusal to pay or evasion of over $13 million in federal cigarette excise taxes, seven counts of violating the contraband cigarette trafficking act, seven counts of wire fraud, six counts of money laundering and five counts of engaging in monetary transaction with funds from specified unlawful activity. Federal prosecutors have sought to go forward with a forfeiture sale of a number of Farley’s assets, including a boat and several vehicles, but U.S. District Judge Jackson Kiser of Danville has blocked the auction while the outcome of Farley’s trial is pending.

If convicted, she faces a maximum prison sentence of not more than 5 years and a fine of $10,000 for each count of tax evasion and fraud. The charges related to dealing in contraband cigarette trafficking carry an additional prison sentence of not more than 5 years on each count.

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