NORTH AUGUSTA, S.C. – Riverside Village Investor Indicted for Fraud

NORTH AUGUSTA, S.C. – Riverside Village Investor Indicted for Fraud

In a significant legal development, Dwayne Davis, a 54-year-old investor involved with Riverside Village, has been indicted for wire fraud and money laundering, according to a statement released by the United States Attorney’s Office. This indictment comes after allegations that Davis defrauded his business partner, Government Employees Insurance Company (GEICO), of more than $5 million.

A Breach of Trust

U.S. Attorney Ryan K. Buchanan noted that Davis held a position of trust in his partnership with GEICO and purportedly abused this trust to carry out fraudulent activities. “His alleged diversion of his business partner’s funds to pay personal expenses could leave Davis facing decades behind bars,” Buchanan said.

Partnership Details

The indictment highlights Davis’s role as the minority owner in a limited partnership known as PIS QOZ Fund 2018-A, LP, with GEICO as the majority owner. In November 2018, GEICO made a substantial investment of $26 million into the partnership for the development of Riverside Village located in North Augusta. Later, in April 2021, amid several disputes over unpaid taxes and legal issues, GEICO agreed to contribute an additional $5.91 million to help resolve these matters.

The Allegations Against Davis

The core of the allegations revolves around how Davis allegedly managed the $5.91 million funds. GEICO wire transferred this amount into a partnership account that Davis controlled, with specific instructions for its use. The funds were intended solely for paying off taxes, settling a lawsuit, and halting foreclosure proceedings.

However, the United States Attorney’s Office reports that almost immediately after gaining control of the funds, Davis began transferring a staggering $5,898,000 out of the partnership’s account to various personal bank accounts. These transfers, according to officials, were made without any legitimate partnership purpose and were intended to deceive both GEICO and the partnership itself.

Misuse of Funds

Although some of the money was eventually used to pay taxes that were owed by the partnership, Davis allegedly failed to make the necessary payments to address the lawsuit and stop foreclosure actions. Instead, rather than following the agreed-upon protocols, Davis utilized the remaining funds for his personal debts and expenses, including costs related to business ventures that did not include the partnership or GEICO.

Ongoing Investigations

The federal grand jury indictment was handed down on Tuesday, marking a critical moment in this ongoing investigation being led by the Federal Bureau of Investigation (FBI). The fallout from these allegations highlights significant concerns over financial practices and ethics in business partnerships.

Potential Consequences

If convicted, Davis could face severe penalties that would likely include a lengthy prison sentence. The allegations put forth not only illuminate the serious nature of wire fraud and money laundering but also demonstrate a breach of trust that many business partnerships rely on for integrity and success.

This case is a reminder of the need for transparency and accountability in financial dealings, particularly when significant sums of money and trust are at stake. As more details emerge, community members and stakeholders in Riverside Village will be watching closely to see how this case develops.