Federal prosecutors have filed fraud charges against the former owner of a D.C. security firm whose business dealings with former heavyweight boxing champion Riddick Bowe have helped sink the athlete’s finances.
Jeffrey N. Jackson, former owner of Unlimited Security Inc., has been charged with diverting more than $300,000 from his firm during bankruptcy proceedings in 2003 to fund his boxing-promotions business.
The Washington Times first reported in August about Mr. Jackson, his firm’s pattern of questionable expenses and the executive’s dealings with Bowe, who has filed for bankruptcy and faces losing his home in Fort Washington.
The charges, detailed in documents released Tuesday in U.S. District Court in the District, carry up to five years in prison.
Unlimited Security collapsed into bankruptcy liquidation earlier this year. The family-run company over the years held tens of millions of dollars in government security contracts, including assignments to guard FBI, U.S. Department of Transportation and D.C. government buildings.
G. Allen Dale, Mr. Jackson’s attorney, yesterday said he was aware of the charges but declined to comment pending a hearing set for next month. He said Mr. Jackson also had no comment.
Prosecutors did not take the case to a grand jury.
Charging a suspect without a grand jury often signals that a defendant plans to plead guilty, said Randall Eliason, a former assistant U.S. attorney and an adjunct professor at American University Washington College of Law.
“If the charges were filed without a grand jury, the defendant must have consented to that,” he said. “That almost always means that the defendant is looking to resolve the case.”
According to charging documents, Mr. Jackson illegally funneled corporate funds during the security company’s bankruptcy reorganization to his boxing-promotions business, including fees he paid to the D.C. Boxing and Wrestling Commission.
Investigators think the diverted funds came from a payroll account containing upfront cash that the security company was receiving from its financier, Vienna, Va.-based Commerce Funding Corp.
In bankruptcy court records filed this month, Commerce Funding said the diversions of funds by Mr. Jackson caused Unlimited Security to fail to pay its employees, insurance premiums and federal taxes.
The Times earlier reported that $110,000 of the diverted money ended up in the hands of Ernest Mateen of Palm Beach, Fla., who was charged last year with running a scam in which he posed as a boxer.
In the charging documents, prosecutors detailed a $110,000 payment from Mr. Jackson to an unnamed professional boxer.
Mr. Jackson remains entangled in several civil court proceedings filed in the wake of his security company’s demise.
A part-time boxing promoter, he met Bowe in 1999 through the boxer’s nephew, who worked for Unlimited Security.
Bowe has said that he never was repaid a $2 million loan he gave to the company in 2000 and that he was conned into backing a line of credit from Commerce Funding to Unlimited Security, court records show.
Commerce Funding has won a judgment against Bowe for more than $2 million and says he knowingly backed its line of financing to the security company.
Commerce Funding also is pursing another claim for more than $3 million against Mr. Jackson, who filed for personal bankruptcy in August.