A former NASCAR driver is at the center of a $15 million fraud investigation and is accused of creating a fake coal mining company to get money from investors. Federal agents launched a massive investigation into Brian Rose after an alleged victim from Charlotte came forward. The Secret Service said the accused tried to cover every detail to convince investors it was the real deal. In the indictment, federal prosecutors named Rose as the ringleader of this elaborate coal-mining scheme. The defendants would call investors saying New Century Coal was looking to mine low sulfur and low ash coal in Kentucky and Tennessee, according to the documents. They promised a quarterly return of 6 percent until operations began. After that, investors would receive 100 percent or more during the first year of mining. The indictment stated the nine defendants were very careful to cover their tracks. Two of them legally changed their names and attached those names to New Century Coal. The defendants also created ghost companies to ease investors’ suspicions. Prosecutors said the defendants also spent part of the $15 million on ‘lavish gambling trips to Las Vegas’ and buying and training thoroughbred horses. All nine defendants are now charged with conspiracy to commit wire and mail fraud. The Secret Service already seized a number of race cars, race horses and property from Rose and the other defendants. Channel 9 learned Rose’s father was sentenced to four years in prison for bilking $15 million out of investors for fraudulent oil and gas companies. The Secret Service said they are currently investigating another company called Earth Energy Exploration that was run by Rose and his family.(WSOC), Rose ran 41 Camping World Truck Series races between 2001 & 2010. He attempted the October 2002 Sprint Cup race at Martinsville, but did not qualify.(6-28-2014)
UPDATE: Former NASCAR driver Brian Rose has entered an agreement to plead guilty to mail fraud and wire fraud in association with a scheme that federal authorities allege he spearheaded to raise money, including funding to revive his racing career. The plea agreement was filed Monday in federal court in Tennessee. Rose faces a likely sentence between eight and 20 years in jail plus restitution, according to the sentencing levels described in the agreement. The government, in return for the plea, will drop additional charges of wire fraud that were part of the Ponzi scheme that the indictment states bilked more than 160 coal mine investors of $15 million.Once suspended by NASCAR for violating its substance-abuse policy, Rose’s past marijuana and drug paraphernalia conviction, three DUI convictions and an assault conviction could increase his sentence. The 35-year-old driver has been in federal custody since June. No sentencing date has been set, and a spokeswoman for the U.S. attorney’s office had no comment. Rose’s attorney did not immediately return a request for comment.
Rose competed in 41 Camping World Truck Series races, primarily in 2001-02. He was suspended in April 2003 when he failed to take a NASCAR-mandated drug test, which he said at the time that he went to the wrong location. Five months later, he was arrested on drug possession charges. He was reinstated in 2010 and competed in three events that year. He hasn’t competed in NASCAR since, but did compete in two ARCA races in 2011 and the 2014 season opener at Daytona.
According to the indictment, Rose, who went under the fake name of John Hankins, lured investors for coal mines, promising quarterly payments of six percent, a 100 percent return in the first year plus royalties of $4 per ton of coal produced. The government also asserts that after the Securities and Exchange Commission began investigating in late 2013, Rose continued the Ponzi scheme under the guise of a new business entity, according to court filings. Rose and his co-conspirators created ghost vendor companies to help with the scheme and when no funds were paid, they persuaded investors to swap ownership to different mines, allegedly providing false financial statements, list of mining expenses and documentation of coal produced. While the money went for Las Vegas trips and to purchase several horses, the indictment said Rose used some of the money for his race team and ‘acquisition of racing cars.’ Federal authorities are well acquainted with the Rose family. His father was once convicted of tax evasion and ordered to pay $15.4 million to settle securities fraud allegations.(Sporting News)(12-2-2014)
