RALEIGH, N.C. – Former Rep. Frank Ballance (search), who cited ill health in resigning from Congress in June, was indicted on federal fraud and money-laundering charges Thursday in connection with a drug and alcohol counseling program he founded.
The 62-year-old Democrat was indicted along with his son, Garey Ballance, who was charged with not filing a tax return in 2000.
Ballance resigned from Congress four months after being diagnosed with myasthenia gravis, a condition that results in muscle weakness. At the time, federal and state investigators were looking into the foundation.
A stinging state audit last fall found that the John A. Hyman Foundation (search) was riddled with conflicts of interest and had made $325,000 in questionable payments. The foundation has received $2.1 million in state money since 1994, thanks in part to Ballance, a former state legislator.
The indictment claims Ballance used his office as a state senator to obtain more than $2 million for the foundation, and used more than $100,000 to benefit himself, his family, and a church where he served as chairman of the board of deacons.
The indictment also alleges he forged or caused the forgery of the notarized signature of a foundation official, and accuses him of concealing the proceeds of the fraudulent schemes.
Neither Frank Ballance, who was elected to Congress in 2002, nor his 34-year-old son could immediately be reached for comment Thursday.
Joseph Cheshire V, a lawyer for Frank Ballance, said the former lawmaker would surrender and appear in court Friday, and that he expects to reach a plea agreement. "I don't anticipate a trial," Cheshire said.
Boyd Sturges, an attorney representing Garey Ballance, declined to comment.
Ballance was indicted on charges of conspiracy to commit mail fraud, mail fraud of money and money laundering — a charge that carries a maximum sentence of five years in prison and a $250,000 fine. His son faces a maximum of one year and a $100,000 fine if convicted.
Garey Ballance is accused of using $20,000 in foundation money to buy a new Lincoln Navigator, and not reporting it as required on his income tax return.