CHARLOTTE, N.C. -- United States Attorney Gretchen C.F. Shappert, Nathan Thomas Gray, Special Agent in Charge of FBI Operations in North Carolina, and Charles Hunter, Special Agent in Charge of the Internal Revenue Service-Criminal Investigation Division, announced that Paul Stephen Young, Jr., 41, of Mooresville, NC has entered guilty pleas in U.S. District Court for the Western District of North Carolina to (1) committing fraud upon investors and others in connection with the sale of securities, to wit: Sonshine Stock Sales Certificates, and (2) willfully attempting to evade and defeat the assessment and payment of income tax due by him to the U.S. for the year 2005 by failing to make an income tax return by or before April 15, 2006.

According to a bill of information filed April 28, 2008, Paul Stephen Young, Jr. owned and operated a travel agency named Sonshine Tours & Travel, Inc. located in Mooresville, N.C. from 1997 to August 2007, and through Sonshine Tours & Travel, Young provided travel agency services to, among others, senior citizen and church groups. The bill of information states that beginning about July 1999 and continuing through May 2007, Young advertised sale of Sonshine Stock to the public through mailings to clients and existing shareholders. In these mailings Young falsely promised that all shareholders would receive guaranteed dividends of 8% a year. Young not only misled investors by claiming his business was profitable and growing when it was not, but when he received proceeds from the stock sale, he deposited the funds into Sonshine’s operating account and used the funds to continue to operate his failing business and pay his personal living expenses.

Also according to the bill of information Young collected more than $120,000 from investors during the course of the scheme. Many investors failed to receive any dividends. Finally, when Sonshine went out of business in August 2007, Young failed to return any investment principal to the individuals who purchased Sonshine stock.

The bill of information also charges that Paul Stephen Young willfully attempted to evade and defeat his income taxes for the calendar year 2005. Pursuant to a plea agreement, also filed on April 28, 2008, Young agreed before the court today (May 14, 2008) to plead guilty to each of these two charges. As part of the plea agreement, Young has agreed to provide full restitution to the victims harmed by the entirety of his conduct including those who purchased stock in the securities fraud scheme and customers who paid for travel packages that they never received. Young faces a maximum sentence of 20 years imprisonment and a $5 million fine on the securities fraud count (Count One) to which he is pleading guilty. As to Count Two, the tax evasion count, Young faces a maximum sentence of five (5) years imprisonment, a $250,000 fine, or both. Any sentence received upon conviction will be influenced by the Federal Sentencing Guidelines, which the Court consults in order to determine a defendant’s actual sentence based upon a formula that takes into account the severity and characteristics of the offense and criminal history of the defendant, if any. Defendants in criminal cases are entitled to a presumption of innocence, and the Government has the burden of proving all charges beyond a reasonable doubt.

U.S. Attorney Shappert credits the FBI and IRS CID for their work in the investigation that resulted in the filing of these charges. U.S. Attorney Shappert credits the Mooresville Police Department for its assistance in the investigation. The Government is represented in this matter by Assistant U.S. Attorney Mark Odulio of the U.S. Attorney’s Criminal Division in Charlotte.

US v. Paul Stephen Young, Jr.,
Docket Number 5:08cr22
Paul Stephen Young, Jr.
41 years of age
Mooresville, NC