Originally created 02/28/97

N.C. judge freezes funds in medical fraud case



CHARLOTTE - A North Carolina judge froze a $26,000 account held by fraud suspect Bruce I. Diamond after a civil court hearing Thursday.

Mecklenburg County Superior Court Judge Marcus Johnson also ordered Dr. Diamond not to transfer or destroy any records or property related to the 172-count indictment against him and Dr. Richard L. Borison, his co-worker at the Medical College of Georgia for 15 years before the two resigned in June.

The two researchers were arrested Feb. 18 and charged with theft, income tax evasion, bribery, racketeering and drug violations. They remained incarcerated late Thursday night.

Augusta Judicial Circuit Judge Albert M. Pickett set the researchers' bail at $1 million each at a bond hearing last week.

Christopher C. Fialko, a Charlotte attorney who represented Dr. Diamond on Thursday, said another North Carolina action could come up next month.

"There's been a civil complaint filed, and we have to answer that in 30 days unless (the Georgia Attorney General's office) agrees to litigate in Georgia," he said.

Investigators allege that Dr. Borison and Dr. Diamond transferred more than $3 million from personal and corporate accounts in Georgia to various banks in South Carolina and North Carolina, according to court documents filed in Charlotte.

A document in Dr. Borison's handwriting also makes reference to offshore accounts worth more than $1 million, according to an affidavit filed in Mecklenburg County and signed by Richard Hyde, chief investigator for the Georgia Attorney General's office.

The two researchers - who worked on such diseases as depression and schizophrenia - are accused of stealing more than $10 million dollars of research funds by funneling the money through their private businesses.