NEWTON COUNTY – Current Newton County chairman Marcello Banes and longtime business partner and District 3 commissioner-elect Stephanie Lindsey have been indicted by a federal grand jury on money laundering and wire fraud charges, United States Department of Justice officials announced today.
“By allegedly laundering proceeds obtained from a fraud conspiracy, these defendants violated the trust placed in them by their client, their constituents, and their fellow commissioners,” U.S. Attorney Ryan K. Buchanan said in a press release to The Covington News. “Public officials who undermine the public’s faith in our institutions by abusing their power for personal gain must be held accountable.”
According to the release, Banes and Lindsey are specifically charged with conspiring to launder money obtained from wire fraud and honest services wire fraud. The alleged money laundering took place within the confines of the Joint Development Authority (JDA) which comprises of represenatives of Jasper, Morgan, Walton and Newton counties, the release said.
Banes – who sits on the JDA board – responded to a request from a company in 2018 who hoped to purchase 40 acres of land for commercial development in the Stanton Springs area. The company, described as “Company A” in the indictment, entered into a brokerage agreement with Lindsey, in which the company would pay Lindsey’s CSL Realty Group $150,000 when the purchase of the parcel was complete.
A resolution was passed at the Jan. 22, 2019 JDA meeting to transfer the parcel to the company, with the purchase being finalized on March 1 of that year.
However, according to the indictment, Banes and Lindsey allegedly misled the company into thinking the $150,000 commission was only for Lindsey.
The following day, Lindsey contacted the company to collect the $150,000 payment. Once the payment was submitted, Lindsey allegedly sent $100,000 of it directly to Banes via a mutual business entity.
“The indictment alleges that at the time Company A entered this brokerage agreement, Banes and Lindsey misled Company A into believing that the commission was only intended for Lindsey,” per the news release. “Neither Banes nor Lindsey disclosed to Company A that Lindsey would pay most of the commission – which was contingent on the JDA voting to approve the sale – to Banes.”
The news release also stated that Banes used a “substantial amount” of that payment for a new house that he was building in Newton County.
Additionally, Banes allegedly did not disclose to the JDA that Lindsey’s CSL Realty Group would be involved in the closing.
The JDA issued a statement condemning the "unethical behavior" alleged in the indictment and distanced itself from the transaction at the heart of the allegations.
"The Joint Development Authority of Jasper, Morgan, Newton, and Walton Counties (JDA) condemns any unethical behavior alleged by the indictment and believes that those in public service should hold themselves to the highest standards,” the JDA statement said. "This JDA has at all times acted in accordance with the laws and disavows itself from any implications otherwise as a result of this indictment."
The statement went on to say, "The JDA was not a party to the transaction through which the alleged illegal activity occurred and was not aware that such alleged activity by Mr. Banes or Ms. Lindsey occurred. In January 2019, the JDA approved a resolution transferring a 40-acre property to Stanton Springs, LLC per a 2003 Purchase and Sale Agreement. This private, third-party company is not affiliated in any way with the JDA. On March 1, 2019, Stanton Springs, LLC sold the same property to another entity, “Company A”. The alleged illegal activity occurred during the second transaction of which the JDA was not a part."
The statement ended with, "Since our establishment in 1999, the JDA has been committed to upholding the highest moral, ethical, and legal standards in all our operations. Our mission has always been to serve our counties with integrity, and to attract high quality job growth and investment to our communities."
In addition to the prior charges, Lindsey is also charged with two federal tax violations for federal income tax returns that were filed in 2019. In those returns, Lindsey allegedly claimed false business deductions to reduce her tax liability for the $150,000 payment.
Banes is also charged with lying to FBI agents in a 2023 interview, in which he told investigators that he was “unaware” that Lindsey was involved in the transaction.
FBI Atlanta special agent in charge Keri Farley also commented on the indictment via the news release.
“Banes and Lindsey undermined the public’s confidence in government and business in Georgia,” said FBI Atlanta Special Agent in Charge Keri Farley. “This indictment is a stern warning that anyone who violates our laws will be brought to face justice.”
Demetrius Hardeman, special agent in charge, of the IRS criminal investigation Atlanta field office added:
“This is a case of a public official breaking the public’s trust to enrich himself and a realtor who did not serve her client, but instead, assisted the public official in breaking the law,” Hardeman said. “Criminal Investigation special agents, our law enforcement partners, and the U.S. Attorney’s office are working together to hold those who break the law accountable.”
The case is being prosecuted by assistant U.S Attorneys Brent Alan Gray and Bret R. Hobson.
Banes has served as Newton County’s chairman of the Board of Commissioners since 2017. He was recently re-elected for a third term in May when he defeated challenger Marcus Jordan during the Democratic primary election.
Lindsey is set to become District 3’s newest commissioner after defeating incumbent Alana Sanders in the 2024 Democratic primary runoff election on June 18.
It is not clear how these charges will impact, if at all, their respective offices.
In a statement sent to The News, Banes said he is "not going anywhere," while vowing to clear his name in court.
”I am deeply disappointed in the legal action taken today and look forward to clearing my name and demonstrating my good character. With integrity and faith, I will deal with this legal matter and continue to work, honestly, for the citizens of Newton County," Banes said. "I am not going anywhere and deeply appreciate the support I am already receiving from family, friends, and the citizens of our county.”
The News has also reached out Lindsey and Newton County for comment, but have not heard back.
This is the latest update at the time of this publication. Check covnews.com for available updates regarding this story.
