After two years of court hearings, a legislative bailout and hard financial times, most clients of former cotton broker David Prosser have recovered their losses.
Ashley Bush has not.
The Estill, S.C., farmer is among the dozens who stored cotton with Mr. Prosser only to find it missing -- along with Mr. Prosser -- when his Statesboro company, Sea Island Cotton Trading Co., went bust two years ago.
Mr. Prosser was indicted Friday by a federal grand jury on 84 counts of mail and wire fraud, interstate transportation of stolen property and money laundering. The U.S. Attorney's Office claims Mr. Prosser stole $5.5 million in cotton from about 75 farmers and about a dozen cotton buyers and lost it trading in the futures market.
But Mr. Bush, who grows 400 acres of cotton, is one of the few clients who has seen no money for his $100,000 loss -- one-quarter of his annual gross income.
South Carolina farmers don't qualify for a $10 million indemnity fund, passed in early 1999 by the Georgia legislature specifically for Mr. Prosser's clients. And Mr. Bush has been told he doesn't qualify for a similar South Carolina fund in place for years.
Georgia's fund only pays Georgia growers for cotton grown in the state. South Carolina's fund pays for cotton fraudulently lost only in South Carolina. Mr. Bush stored his cotton in Mr. Prosser's Estill warehouse, but it turned up in an Augusta warehouse after Sea Island closed down. He says it was moved without his knowledge.
The South Carolina Department of Agriculture, which has paid Mr. Bush $88,000 for the cotton Mr. Prosser held for Mr. Bush in South Carolina, said Georgia is working to get Mr. Bush his money.
But time is running out for Mr. Bush to get his money back.
"I'm real deep in debt," Mr. Bush said, adding that he may have to sell off some of his 1,200 acres to make up for the loss.
Since 1998, nearly all of Mr. Prosser's assets have been seized and liquidated through U.S. bankruptcy court. But the process is only about halfway done, according to court records.
No further court dates have been set for his bankruptcy cases, but an appeals court has ruled that Mr. Prosser will not be allowed to postpone the cases until after his criminal trial, said Jesse Stone, who represents several of Mr. Prosser's former clients.
Those clients are also contesting Mr. Prosser's Chapter 7 bankruptcy classification, which would relinquish him of his debt to them. The decision on that point of contention is still pending.
De Strickland, who has organized the affected farmers into The Cotton Group, said farmers are frustrated that they can't find out exactly what happened to their millions. Mr. Prosser has pleaded his Fifth Amendment right against self-incrimination in bankruptcy court proceedings in which Sea Island's downfall is concerned.
Mr. Bush said he is more concerned about recovering money, not vengeance.
"I could hate him real easy. He did wrong," Mr. Bush said. "But he didn't start out to stick Ashley Bush."
He said if the federal court convicts Mr. Prosser, Mr. Bush may even make amends.
"If he gets put in an Estill facility," Mr. Bush said. "I'll go see him."
Sales processThe sale process typically looks like this:
A grower picks his cotton; it is ginned and baled.The bales are then kept in a warehouse, which supplies the grower with a receipt for each bale (500-550 pounds of cotton).A grower can keep the receipts or pass them on to a broker, who is responsible for selling the cotton at a good price, with the grower's permission, to a cotton mill.The grower is then paid for the cotton sold. Brokers take a commission from the sale.
The chargesFederal investigators claim former Statesboro cotton broker David Prosser stole $5.5 million worth of cotton from about 75 farmers and used it to trade in the risky futures market. His net loss in the futures market, the federal indictment reads, was $4.5 million.
He is charged with eight counts of mail fraud, 49 counts of wire fraud, nine counts of interstate transportation of stolen property and 18 counts of money laundering. His preliminary hearing on the charges will likely be within a week.
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