ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, December 19, 1996 TAG: 9612190068
SECTION: VIRGINIA PAGE: C-1 EDITION: METRO
SOURCE: JAN VERTEFEUILLE STAFF WRITER
Still refusing to acknowledge that he misled his friends, the former head of radiology for a Roanoke hospital was sentenced to 21 months in federal prison Wednesday for defrauding "investors" in nonexistent business ventures during the 1980s.
Billy L. Ferguson, 54, was ordered to pay $350,000 in restitution, although loss estimates ranged up to $900,000, according to Assistant U.S. Attorney Jennie Waering. But the restitution is to be paid at $200 a month once he gets out of prison, which would take 146 years to repay.
"If [the victims] get any of that, they'll be lucky," Waering said.
The victims who testified seemed as upset by Ferguson's betrayal of their friendship as they were about the loss of their money. Three witnesses testified that if Ferguson had told them he needed money, they would have loaned or even given it to him.
"I think greed changed him - to take advantage of the people he works for, take advantage of his very best friends, who would have helped him," said J.C. Arney. "But he did not ask us."
Arney said he lost more than $250,000 he thought he was investing with Ferguson. Arney has had to declare bankruptcy and come out of retirement since the loss.
According to the government, Ferguson traded on his professional reputation at Carilion Roanoke Community Hospital and the Imaging Center of Southwest Virginia to persuade people to invest, promising them returns of 16 percent to 20 percent. Initially, he made interest payments and encouraged them to leave the principal in the investment.
The various "investments" victims were told about included buying used X-rays and reclaiming the silver in them for profit, buying and refurbishing CAT scan machines, and making bridge loans to builders.
But he characterized the $3.1 million given to him by friends from 1985 to 1990 as "loans" rather than investments and denied telling people that the money was going to be invested. The IRS documented that Ferguson repaid at least $2.06 million of that, and there were additional cash payments that cannot be documented.
Even though he pleaded guilty, Ferguson testified that he had no intent to defraud and that he did not tell people that he was investing their money. He pleaded guilty to filing a false income tax return in 1989 and to wire fraud.
The 21 months he received was the maximum under federal sentencing guidelines. He also will have to pay taxes to the IRS on about $1.8 million, which he didn't declare in 1989.
"I hold myself personally responsible [for the losses] and all the bad things that happened to the people involved - the victims," he said, adding, "I feel like I'm a victim, everybody is a victim."
Ferguson lost his job and was forced to declare bankruptcy in 1992, after investors sued him. His schemes began in 1985 and by 1990, people were demanding their money and "my whole life was falling apart."
U.S. District Judge James Turk asked Ferguson several times what happened to the money.
"I certainly don't have any of the money," the 54-year-old said. "I wish I could tell you."
Government investigators said by reviewing Ferguson's checking account - where he put the money his victims gave him - and interviewing the "investors," they believe some was paid back as interest payments to victims and some was spent for Ferguson's family members to live beyond their means.
The former director of radiology had enormous credit card bills and spent tens of thousands of dollars more than the $42,000 to $54,000 he made annually at the hospital.
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