Ex-academic charged with money laundering

A former university president and a current college vice president are accused after an FBI sting.

©Associated Press
March 28, 2003

MIAMI -- A former University of South Carolina president and a vice president at a Texas junior college appeared in federal court Thursday on charges of trying to launder $400,000 that an undercover FBI agent told them was from illegal drug sales.

James B. Holderman, 67, who has served time for bankruptcy fraud, was charged Tuesday with conspiracy to commit money laundering.

He was granted bail of $100,000 but was still in the Miami federal jail late Thursday, said FBI spokeswoman Judy Orihuela said. He faces up to 20 years in prison on the conspiracy charge.

Rafael Diaz, a vice president at Brookhaven College in Farmers Branch, Texas, and Holderman's alleged associate in the deal, was being held on the same charge and bond.

According to an arrest affidavit, an undercover FBI agent and a cooperating witness posed as Russian Mafia members wanted by Interpol and asked Holderman in Miami in June 2002 to help them get fake U.S. visas under aliases.

Holderman agreed to obtain the visas and took $15,000 as a down payment, FBI special agent Kevin Donovan said. He had Diaz use the Texas school as a front to obtain student visas, Donovan said.

On Tuesday, Holderman and Diaz met with the agent to discuss getting him a visa, Donovan said. During that meeting, the agent put $400,000 of what he said was drug money on the table and asked Holderman and Diaz if they could help him launder it, Donovan said.

The two men agreed to help the agent if they could charge him a one-time fee of $250,000 and 20 percent of all money laundered afterward, Donovan said. When they began to count the money, they were arrested.

Holderman later admitted that he had agreed to launder the money and help the agent obtain fake visas, Donovan said.

Holderman spent 13 years as university president, but scandals over his spending of public money for travel, lavish dinners and expensive gifts forced his resignation in 1990.

Holderman was released in 1997 after serving nine months for bankruptcy fraud. He had earlier pleaded guilty to eight counts of hiding assets from creditors and then lying about it.

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