CHARLOTTE, NC (WBTV) - The former Chairman of the Board and co-founder of a Charlotte-based payroll services company has been sentenced to 30 months in prison for conspiring to steal $2 million from clients. Frank Moody II is the third executive of CenterCede Services to plead guilty in U.S. Federal Court and be sentenced to prison time.
The company's president, Jerry Overcash was previously given a sentence of 46 months, while Chief Financial Officer John Thigpen was ordered to serve 21 months in prison.
WBTV Investigates first reported on the dealings of CenterCede Services in 2012. Owners of several small businesses hired CenterCede to handle payroll functions, including paying their federal and state payroll taxes. Instead of making those payments to the appropriate revenue departments, CenterCede executives used the money to pay their high salaries and to fund lavish expense accounts.
Prosecutors say CenterCede Services tried to stay afloat with promises of new capital coming in to cover old obligations. The company favored what it called "priority" clients to keep them from learning of cash shortfalls. The "priority" clients obligations were paid ahead of what were described as "non-priority" clients.
WBTV Investigates found that CenterCede was formed by Moody and Overcash in 2010 to take over operations of another payroll services company that was shut down by the IRS for failing to pay $9 million in federal payroll taxes. Moody was Chairman of the Board of that CenterCede predecessor.
After serving his 30-month prison sentence, Moody will then face two years of supervised release and he has been ordered to pay $2.1 million in restitution.