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Alleged Carolina Fraudster Arrested, Arraigned

Robert Dane Freeman, a former investment advisor from Flat Rock, North Carolina, was arrested and arraigned last week, having been alleged to be a co-conspirator in a securities fraud. Freeman is being charged with five felonies pertaining to his participation in a 2008 Global Holdings LLC scheme to sell fraudulent high-yield investments. The scheme generated over $3.5 million from 35 investors.

Freeman's alleged co-conspirators include Mark McAdams and Charles Lowell Walker. McAdams is a former Myrtle Beach, South Carolina lawyer who is believed to have used his position at a prestigious law firm to lend plausibility to the scheme. Walker is alleged to have assisted in the recruitment of investors. Each alleged co-conspirator is looking at three charges of wire fraud, one charge of conspiracy to commit wire fraud, and one charge of international money laundering. If convicted, the maximum sentence that each could receive is 140 years imprisonment.

The SEC brought a similar suit against McAdams and Freeman in 2010. The two men were found to be liable and were ordered to pay $4.3 million taken from investors and $240,000 in civil penalties. In the suit, McAdams and Freeman were found to have promised clients that they could earn as much as 4,900% interest on short-term investments in Standard & Poor's AAA-rated and AA-rated bonds. They supported this assertion by claiming that Global Holdings would purchase the bonds at a discounted rate straight from the issuer and then would immediately resell the bonds in international markets. The majority of Global Holdings investors lost all of the funds they placed in the scheme.

According to federal authorities, instead of using investor cash to purchase the bonds, McAdams and Freeman used the funds for personal expenses, including Freeman paying off a $150,000 personal debt.

Freeman was released on a $25,000 unsecured bond, ordered to surrender his passport, and was told not to travel outside of South Carolina.