Two principals of a failed ethanol production company made their first appearance in federal court on Tuesday after a grand jury indicted them on charges involving bribery, extortion and perjury.
David Lee Brady, 75, of Raleigh was president of Agri-Ethanol Products and James Albert Perry, Jr., 62 of Wake Forest was an employee. They were both brought into the federal building in handcuffs Tuesday morning and appeared in front of U.S. District Court Judge Terrence Boyle in the afternoon to hear the allegations against them.
The criminal indictment contains allegations the men have committed crimes, but they are presumed innocent unless proven guilty in court.
Brady is a businessman and real estate developer. Perry is a former mayor of Wake Forest. After the hearing Brady was released on a $50,000 bond and Perry on a $25,000 bond.
The indictment of one or more AEP officials was expected after Boyce A. Hudson, 67, a former state environmental official pleaded guilty in May to extortion and money laundering in connection with his efforts to help AEP obtain environmental permits through the Department of Environment and Natural Resources. Hudson was sentenced in August to 40 months in prison.
AEP planned to build an ethanol production plant in Beaufort County. Hudson was a senior field officer in DENR’s Legislative and Intergovernmental Affairs Office. In that capacity, he acted as a liaison with members of the state legislature and the governor’s office. Hudson retired from DENR in 2005.
The indictment stated that two AEP investors had a social and business relationship with Hudson that started in 1993. Those investors met with Hudson in April 2004 to discuss specifically the ethanol project.
During a subsequent meeting at a North Raleigh restaurant, AEP president Brady requested that Hudson use his official position to expedite AEP’s permits. In exchange for his assistance, Brady agreed that if Hudson could get AEP’s Air Quality Permit within 90 days, he would receive a $100,000 lump-sum payment, plus a two-year consulting contract for $4,000 per month after AEP received financing for the project.
AEP expected to receive full funding in 2005, but the funding was not secured and the project was never built.
An FBI undercover operation played a significant role in developing the allegations against Brady and Perry. In September 2005 an undercover FBI agent, posing as a potential investor, expressed interest in the project and became acquainted with AEP officials and also with Hudson.
In separate meetings with the agent, Hudson described his efforts to expedite the permits but expressed concern that he had not been paid. The agent later provided Hudson with a $15,000 bank check as a first installment of AEP’s obligation to Hudson.
The other AEP investors have not yet been specifically identified in court documents, but during Hudson’s sentencing hearing Judge Boyle asked for Assistant U. S. Attorney John Bruce to identify the investors. Bruce identified them as Ricky Wright and Barry Green. Thomas “Ricky” Wright is a Wake Forest businessman and has been a fund-raiser for Democrats.
Green at one time had an ownership in Thee Dollhouse, a now-closed adult entertainment facility in Raleigh. A federal subpoena to DENR sought documents relating to communications with Green, Wright, and former Northeast Commission CEO Rick Watson. Watson helped seek public money for the AEP project.
Neither Green, Wright nor Watson has been charged in connection with the AEP project.
Earlier allegations
In 2003 Carolina Journal first wrote about corruption allegations involving efforts to launch an ethanol production company in eastern North Carolina. Raleigh businessman William Horton alleged that James Perry, Rick Watson and others conspired to keep him from building an ethanol plant in Beaufort County.
AEP was formed after Horton made his allegations and the company ended up controlling the same site where Horton had planned to build his plant.
Don Carrington is executive editor of Carolina Journal.