An Iowa lawyer faces a trial in August for his part in a plastics recycling business that allegedly defrauded Sonoco Products Co. of more than $2.25 million.
Michael Charles Vinyard of Ottumwa, Iowa, was indicted last month by a federal grand jury on 32 counts of defrauding Sonoco. His trial is scheduled for Aug. 23.
His brother, James Stewart Vinyard, pleaded guilty in December to mail fraud in connection with the same alleged scam. He has not been sentenced. As part of a plea deal, James Vinyard agreed to testify against his brother. James faces up to five years in prison and five years of probation, as well as a fine that could equal twice the amount he embezzled, a Justice Department spokesman said.
According to U.S. District Court records in Florence, S.C., James Vinyard was Sonoco's plastics recycling manager from 1990-97. He was in charge of purchasing recycled resin pellets and post-consumer grocery sacks for Hartsville, S.C.-based Sonoco, which is a major extruder of plastic T-shirt bags.
According to the court records, in 1990 Michael and James Vinyard formed Charles Stewart Enterprises Inc., which they presented as a legitimate brokerage company and to which James steered Sonoco business while concealing the firm's ownership.
The brokerage bought resin pellets on the open market and had the pellets shipped directly to Sonoco, but the invoices were mailed to Charles Stewart Enterprises. The brothers allegedly doctored the invoices by increasing the cost of the material several cents per pound — resulting in overcharges of more than $1 million during a seven-year period, court documents claim.
The company also overcharged Sonoco by more than $1.25 million for grocery sacks, according to court records.
James Vinyard was fired from Sonoco in May 1997.
Michael Vinyard's lawyer, Lionel Lofton of Charleston, S.C., claims his client is innocent.
``At the time Mike Vinyard entered into a business relationship with his brother James, he had no reason to believe that James was doing anything illegal. Mike Vinyard did not believe at the time and does not believe today that he has done anything wrong,'' Lofton said in a statement to the Associated Press.
Sonoco has filed a civil suit against the Vinyard brothers seeking the $2.27 million it claims Michael and James Vinyard stole from the company.