The ex-president of the University of South Carolina says he needed money in order to treat his mental illness.
By Associated Press
Published September 26, 2003
MIAMI - A former University of South Carolina president testified Thursday that he tried to run a scam on a man he thought was a Russian mobster because he was desperate for money to treat his mental illness.
In reality, it was not a mobster but an undercover detective James Holderman was dealing with, and Holderman was arrested on charges of visa fraud, visa fraud conspiracy and money laundering conspiracy. He could face 20 years in federal prison if convicted.
Holderman, head of the university for 13 years until a financial scandal in 1990, testified that he wouldn't know how to begin money laundering.
But prosecutor Richard Gregorie confronted him with his 1996 bankruptcy fraud conviction, which included a money laundering count.
When Gregorie read an excerpt from the law involving wire transfers, Holderman said, "I didn't understand that to be money laundering."
Holderman called, met with and exchanged e-mails with Miami Beach police Detective Sgt. Peter Smolyanski for nine months. The officer posed as a drug trafficker in need of U.S. visas for himself and up to 200 associates and $500,000 to $1-million a month in clean profits from his crimes.
"This idea of violating the law originated with the government," defense attorney Neil Nameroff told jurors in closing arguments. Holderman, 67, of Charleston, S.C., said he was willing to take $15,000 from Smolyanski twice as part of his own "charade" to get treatment for his bipolar disorder but never did anything to get illegal visas or to launder money.
He said he talked up his connections to White House chief of staff Andrew Card, former U.S. Secretary of State Lawrence Eagleburger and former White House chief of staff Howard Baker but never contacted them about the mobster.
Holderman's co-defendant and former protege, Rafael Diaz Cabral, 39, testified Wednesday that he was brought in by Holderman, thought it was a mistake to get involved but still agreed to take part in visa fraud and laundering.
The two were arrested counting out money from $400,000 dumped by Smolyanski on a table during a hotel meeting last March.
Diaz, of Greenville County, S.C., is to report to prison in November to begin serving a 14-month prison term, which was shortened due to his cooperation.