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Albemarle Firms Named on Fired Workers' Papers: Companies Listed As Home Sellers in Philip Morris Case

Posted on: Friday, 23 June 2006, 06:00 CDT

By Victoria Cherrie and Adam Bell, The Charlotte Observer, N.C.

Jun. 23--ALBEMARLE -- At least 13 Philip Morris workers who were fired over falsifying documents say they got their paperwork from Albemarle companies whose operator was sentenced Thursday on larceny-related charges involving his businesses.

Unique Homes and D&P Enterprises were listed as sellers on home purchase contracts that employees used to obtain hardship withdrawals from Philip Morris USA's deferred profit-sharing plan.

Those documents are separate from a two-year investigation by local and state authorities into Fernando Ponds, the head of the Albemarle companies.

The Philip Morris workers say they got their Unique Homes or D&P contracts through Walter Davis, a co-worker who is an old friend of Ponds.

As was discovered later, many contracts -- including some that had nonexistent addresses or were vacant lots -- were never executed, even though employees were allowed to withdraw money to help them at a time of need.

Since October, Philip Morris has fired at least 52 people and suspended 39 others from its cigarette manufacturing plant in Concord. Workers say the firings were over claims they falsified documents used to get hardship withdrawals.

Philip Morris has declined to discuss personnel matters.

Workers insist they did not falsify documents. They say they were following a longstanding practice of dipping into profit-sharing funds, and neither Philip Morris nor plan administrator Fidelity Investments raised concerns until last year.

The workers said they gave Davis $500 to $1,000 cash for documentation they needed to get the withdrawals.

Davis denied getting any money from workers and said he only passed the paperwork from them to Ponds.

"I'm not saying nothing against my co-workers," he said. "(But some) didn't have any intent in buying a house. All they wanted was to get some kind of contract so they can (get) their money, and that's the bottom line."

Ponds said he wasn't aware of any of the contracts until Davis, a 17-year machine operator, was one of the first to lose his job when firings started in October.

"I didn't do any of them," Ponds said.

Companies' background

Ponds is the registered agent of Unique Homes and D&P.Unique Homes, a real estate company, was incorporated in 1999. The state dissolved the corporation last year for failing to file annual reports, state records show. Its phone was disconnected this week.

D&P is a trucking company with two addresses in Albemarle. On May 31, the N.C. Department of State gave the company 60 days to file an annual report, or face being dissolved. D&P has not filed one since its 2002 incorporation, said Liz Proctor, spokeswoman for the agency that oversees N.C. corporations.

The Albemarle Police Department began investigating both companies and accused Ponds of taking money in advance of transporting shipments, then stealing the merchandise.

Ponds was charged with four counts of obtaining property by false pretenses, five counts of felony larceny and five counts of possession of stolen goods. The charges involved shipments of paper, chickens, onions and candles being transported by D&P that disappeared in 2004, according to court records.

Investigators and the district attorney declined to discuss the cases.

In one case, D&P picked up about $13,000 worth of Weyerhaeuser paper for delivery to Ohio, according to a search warrant. The company filed a police report when it never arrived.

In another case, a D&P driver was to pick up $40,000 worth of candles from Old Williamsburg Candle Corp. in Brooklyn, N.Y., and deliver them to Jupiter, Fla., according to court documents. The driver received $625 in advance, but the candles never arrived.

Investigators later discovered the same types of candles were being sold to Albemarle businesses, a search warrant says.

The Albemarle police cases prompted the N.C. Department of Insurance to investigate the circumstances surrounding the shipments, said Ben Tesh, an investigating officer for the department.

On Thursday, Ponds, 36, pleaded no contest to nine felonies. A list of specific charges was not immediately available.

A judge ordered him to serve five years' supervised probation and a year of house arrest. He has to pay $70,036 in restitution, complete 72 hours of community service and get treatment for substance abuse, court officials said.

Ponds also has had legal trouble with his father, Emory Johnson, who said he had been estranged from Ponds.

Five years ago, Johnson had agreed to help Ponds financially, he said.

Johnson said he put property in his own name or got loans for property Ponds wanted to buy. But he later filed a complaint with Albemarle police, charging that Ponds had forged checks and signed Johnson's name without his permission, according to court documents.

Ponds pleaded guilty in 2002 to misdemeanor common-law forgery. A judge gave him one year of supervised probation and ordered him to pay Johnson $32,630.

Inquiry into withdrawals

During a review of its deferred profit-sharing plan last year, parent company Altria Group Inc. noticed irregular withdrawals by Philip Morris workers, spokesman Bill Phelps said.

Altria provided the information to Philip Morris. As a result, the company fired a small percentage of its employees, who Phelps said had provided false information or documents to withdraw money from their profit-sharing accounts.

Hardship withdrawals are designed to let people handle financial needs such as buying a primary residence or paying college expenses. The plan is similar to a 401(k); the company makes contributions based on operating profit and workers' eligible compensation. Employees can contribute up to 15 percent of pre-tax earnings and must exhaust all other loans.

Besides the Concord dismissals, at least 70 to 100 people have been fired at Philip Morris' Richmond, Va., plant, an N.C. union official has said. Philip Morris employs about 6,300 in Virginia and about 2,600 in Concord.

At least 13 workers fired in Concord say they had dealings with Davis, and several said they thought their contracts were legitimate.

"If I'd known all of this was going on, I never would have dealt with them," said Eric Sellars, 44, who got fired after getting a withdrawal for a house other than the one listed on his D&P contract. "I tried to tell Philip Morris (my contract) wasn't a scam, I got scammed."

Ponds said he has an attorney looking into why his companies' names were on some of the contracts and other hardship withdrawal documents, several of which are signed in the name of Davis' son, Kyri Davis.

Johnson, Ponds' father, said he and Walter Davis have been friends since school. Kyri Davis once worked for Unique Homes and D&P, Johnson and Walter Davis said.

"I am not really familiar with those contracts," Ponds said. "I'm trying to see what the deal is."

When workers began getting fired over the paperwork, Ponds said, he wrote letters explaining some of their contracts had been canceled.

One of the letters, undated and addressed "to whom it may concern," says, "D&P Enterprise Inc. now is aware of some fraudulent selling of property." The letter claimed the Philip Morris worker didn't know he was entering into a "false contract, neither did D&P."

A letter dated Sept. 22, 2003, also signed with the name of Kyri Davis, says, "To my understanding the numbers on the last good faith estimate were incorrect; (this employee) is needing $80,000 hardship."

Several workers said they thought Walter and Kyri Davis were real estate agents.

Walter Davis denied telling anyone he was a real estate agent.

Numerous attempts to reach his son were unsuccessful. An arrest warrant was issued in July 2005 for Kyri Davis, 24, on a charge of possession of stolen goods in an unrelated Greensboro case.

Says workers sought help

Walter Davis, 56, said co-workers approached him to help get the withdrawals because they knew he bought, fixed and sold houses. And he knew that Ponds and his companies were involved in selling houses, he said.

Unique Homes and D&P did the workers' contracts, he said.

"Me myself, I don't know how to do that. I took their papers. I didn't charge them nothing," Davis said.

The 13 workers who said they paid Davis don't have records of payments because, they say, they were made in cash.

Kenny Richardson, 46, said he paid Davis $1,000 cash after receiving his withdrawal funds in 2004. Richardson said he had approached Walter Davis about finding a house, and Davis told him his son could help.

Several days later, Davis returned with an "offer to purchase and contract" on a three-bedroom home for $42,300, listing D&P as the seller. Richardson said he didn't look at the house before he signed the deal because he trusted Davis and was not that familiar with the process of buying houses.

"D&P came up with the contract," Richardson said. "The only thing of mine was the ink on the signature."

Richardson said he changed his mind about buying the house because he needed to fix his current home and pay bills.

After co-workers began to get fired last year, Richardson started to worry. He said he decided to look for the address on his contract.

Richardson went to the street named in the paperwork, but did not find the address. He was fired in May after nine years at Philip Morris.

Richardson said he tracked down Ponds, who said the contract never should have been submitted on behalf of D&P.

"It's been a real roller coaster, I'm telling you," Richardson said. "It's a mess."

-- Staff researchers Marion Paynter, Sara Klemmer and Maria Wygand contributed.

-- Victoria Cherrie; Adam Bell: 704-786-2185

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Copyright (c) 2006, The Charlotte Observer, N.C.

Distributed by Knight Ridder/Tribune Business News.

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Source: The Charlotte Observer (Charlotte, N.C.)

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