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Article published Nov 7, 2004
Ex-Carolina Investors president testifies
Associated Press
GREENVILLE -- Former Carolina Investors
Chairman Earle Morris knew the company was in bad financial shape for five years
before it went bankrupt, the former president of the Upstate firm says.Larry
Owen appeared in public Saturday for the first time since pleading guilty to
securities fraud this summer for his role in the collapse of Carolina Investors,
the biggest bankruptcy in South Carolina history.Prosecutors accuse Morris of
lying to investors. The 76-year-old former lieutenant governor has been charged
with 22 counts of securities fraud. His trial started Monday.If convicted,
Morris could face a maximum of about 200 years in prison and nearly $1 million
in fines.Owen's claim that Morris knew Carolina Investors was in bad shape
starting in 1998 runs counter to Morris' defense that he was just a figurehead
for the investment company and was not told by Owen or executives at parent
company HomeGold how bad finances were at Carolina Investors.Owen said he and
Morris felt like they had no choice but to lie and say Carolina Investors was
doing well."As soon as that news broke, the public would bolt," Owen said.
"There was no way without an act of God that Carolina Investors would
survive."The company finally collapsed in spring 2003, leaving more than 8,000
investors out more than $275 million.On the stand, Owen apologized to the
investors, saying he decided to plead guilty because it was time to take
responsibility for his actions."We had thousand of investors that relied on me
and they were my friends and family and I let them down," Owen said. "God knows
I am sorry and want them to forgive me. I can't explain the hurt that it has
caused."