The first words out of Agent Shannon O’Toole’s mouth demonstrated that he is no ordinary beat cop.
O’Toole took the witness stand Tuesday morning in a bond hearing for Kenneth R. Sullivan Jr., a Wake Forest graduate who’d been indicted the day before on three felonies connected to ripping off a church and members of his own family.
The allegations were complex — essentially a Ponzi scheme — and the presiding judge needed to know something about O’Toole’s qualifications.
“I’m a special agent with the North Carolina secretary of state’s office, the securities division,” O’Toole said.
“The nexus is anything investment related. … Financial crimes.”
Following the money would involve tedious examinations of bank accounts, wire transfers and paper records.
In other words, this was far beyond a run-of-the-mill dope dealer, wife beater or street hustler.
And individual victims would be difficult to locate.
Bond hearings, in most instances, are routine, slam-dunk affairs over in a matter of minutes. Many times, bonds are set in the belly of the jail by magistrates and don’t require the attention of a Superior Court judge.
But as mentioned, state v. Sullivan is hardly ordinary.
Sullivan was indicted Monday afternoon by a Forsyth County grand jury on two felony counts of obtaining property by false pretenses and one county of securities fraud.
Convictions carry a maximum of 19 years, 3 months in prison. Each.
The short version of a complicated — and still unspooling — story is that investigators believe that Sullivan preyed on Grace Presbyterian Church on Carver School Road and individual congregants including some of his own family. “He was a trusted member of the church,” O’Toole said.
Sullivan used money transferred from church accounts, O’Toole told Judge William A. Wood, to pay for such things as pawn shop loans, car payments and cellphone bills.
O’Toole also explained that investigators believe Sullivan took money individual investors, church members, who believed that they were buying shares in a company that Sullivan ran.
“They were not savvy investors,” O’Toole said. “They trusted him. They knew him for a long time.”
Sadly, we’ve seen this sort of thing time and again.
One similar case involved a Clemmons man named Russell Mutter, a former financial adviser charged with 36 separate financial crimes for stealing more than $2 million from investors including his own father.
O’Toole was front and center in that investigation, too. He worked in the financial world as a broker-trader before going into law enforcement, so he uses computers and bank records to chase crooks rather than snitches and DNA samples.
“I investigate Ponzi schemes,” he said.
‘Peeling an onion’
On its surface, Sullivan’s hearing was to settle two simple matters: setting a bond and finding out what Sullivan intended to do about hiring a lawyer.
Beyond that, investigators no doubt hope that news of the indictment might prompt other victims to come forward.
“From my perspective, we don’t have a good handle yet on how many other victims are out there or whether he has access to their money,” O’Toole said.
To prevent further theft, District Attorney Jim O’Neill argued for a big bond to keep Sullivan in jail and away from computers.
“It’s like peeling an onion,” O’Neill said.
“We don’t know what we’re going to find. We’re asking for $4 million to $5 million because he poses a danger to other people out there.”
Wood apparently agreed. He set bond Sullivan’s bond at $3 million and ordered him to stay away from the church and alleged victims, including members of his own family.
“I’m concerned that there is still money out there and he could use that to flee,” Wood said.
While Sullivan considers his options, the investigation will continue. Additional victims (and charges) are likely to emerge.
And because these sorts of fast-talking rip-offs continue, O’Toole was kind enough to offer a few words of advice for potential investors.
Start by checking credentials with the U.S. Securities and Exchange Commission and the state secretary of state’s office.
“Financial statements should come from third parties, legitimate wealth management companies, not individuals,” he said. “It’s a red flag that somebody’s working out of their basement.”