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General News Mon, 30 Apr 2001

FBI probes American investor over Quality Grain scandal

The Federal Bureau of Investigations, (FBI) is investigating an American woman accused of embezzling $6 million from a $20 million investment project in Ghana and for which Ghana has initiated action to seize the rice farm she promised to establish in the country.


Already, Juliet Cotton from Duluth, USA. Is defending herself in Gwinnet Superior Court against a lawsuit brought by her former partners, claiming her luxurious lifestyle bankrupted Quality Grain, the company founded to grow rice in Ghana.


Cotton confirmed in Court that she is under criminal investigation by the FBI. Ghanaian officials also said last week that they were instituting legal action to take over what is left of the rice farm.


"We are initiating the process to take over the company", Ursula Owusu-Adjei, a personal Secretary to Ghana's Attorney General said, adding she expected the action to be completed by the end of May.

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The Attorney General and Minister of Justice, Nana Akufo-Addo also took steps to recoup some of the $20 million the country was forced to pay to South Trust and other banks that lent money to Cotton to start the rice farm.


"We are of the opinion that those public officials charged with protecting the interest of the nation but have not done the work they were supposed to do, are negligently or criminally responsible or should be made to pay for the consequences of their actions", Ursula told The Atlanta Journal-Constitution.


Meanwhile, Cotton has wrapped up her defence against claims that she spent much of the money on a $1 million home in north Fulton, buying two Mercedes, a Jaguar, furs, jewellery and Armani suits.


Cotton said she doesn't remember writing roughly 260 cheques brought in as evidence of her lavish spending.

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The home was a company guesthouse, the cars were company vehicles, and the Armani clothing may have been company uniform, Cotton testified.


Real Estate agent, Barbara Kirkland, testified that she helped Cotton to find the home at the gated St. Ives Country Club. "The house had to be adequate to entertain foreign dignitaries", Kirkland testified.


Judge Fred Bishop dismissed Cotton's counter claims of slander and business interference. Her uncle, Oscar Hudson and a former confidant, James McGarrh, brought the lawsuit, seeking to have the money returned to Quality Grain and Cotton removed from the company. Both men invested in the project.


Hudson put about $150, 000 into the project and McGarrh about $50, 000. Both were paid back, according to testimony. McGarrh was repaid $100,000 by Quality Grain, and Cotton brought him a Mercedes, he said in court.

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But Ghana, which puts its guarantee on the eight-digit bank loans, was left with about 20, 000 acres of uncultivated fields, 500 acres worth of spoiled crop, an unused rice mill and a $20 million debt.


Ghana backed Cotton's project in the hope that it would help the country to become self-sufficient in rice production. "We import a lot of rice, and we thought this would be a way to cut down on our imports. That's why the government spent so much money on it", Adjei said.


In court last week, Cotton forgot even her wedding date on the witness stand.


Juliet Cotton, who was President of Gwinnett-based Quality Grain Incorporated, testified in Superior Court that she could not recall whether she bought furs, jewellery, a Jaguar and Armani clothes with company money.

Cotton's explanation for various other expenses drew amused looks and chuckles at times from jurors. A Mercedes was required to pick up visiting dignitaries from Ghana, Cotton testified. A $1 million home was guesthouse for the company. Company uniforms may have been purchased from Armani. The company chequebook may have been stolen and someone may have forged her signature, she said.


Later, Cotton who is acting as her attorney, tried to bolster her defence by calling a bank executive as a witness. Cotton contends the two men suing her, Oscar Hudson and James McGarrh, had no ownership interest in the rice venture.


William Browning, the South Trust bank vice-president who approved part of $20 million in loans for rice project, testified he understood the financing was for venture by Cotton and the Ghanaian Government.


Browning said, to his knowledge, McGarrh had no ownership and neither McGarrh nor Hudson signed agreements with Ghana. McGarrh and Hudson were partners in a U.S company, Browning said. The banks would not lend that company money because it had no assets and did not have a financial guarantee from Ghana, he said.

Source: The Atlantic Journal-Constitution