Editor’s note – the following is a story from the Pretty Southern novel series. Learn more about Randy Cunningham, the patriarch of the Cunningham family, and his alleged crimes.
Prominent Atlanta construction CEO convicted of running a pyramid scheme
Renowned developer Randy Cunningham was the epitome of the American dream. He grew his company, Cunningham Construction, into one of the top development firms in the South beginning with the housing boom of the 1990s. And he had even bigger plans financed by his firm, Cunningham Capital, to bankroll his projects through investments from hundreds of people across the country and outside the U.S.
However, a federal jury found Cunningham guilty of conspiracy to commit fraud and running an elaborate pyramid scheme which came crumbling down with the housing market crash in 2008.
After deliberating for almost eight hours, the jury ruled that Cunningham had embezzled nearly $10 million from his firm’s accounts including using the money to pay for the wedding of his daughter, Macy, to Campbell Brayden, son of Georgia’s governor, Bill Brayden.
Cunningham was also found guilty on conspiring to commit bank fraud, wire fraud, securities fraud, money laundering, and multiple counts of making false statements to the Federal Bureau of Investigation. Cunningham, who is out on a $1 million bond, could face decades in federal prison, although this will not be determined until a sentencing hearing to be held later this year.
Legal analysts interviewed on the subject said Cunningham would most likely be sentenced to 10 years in prison, with three years of supervised release.
The United States Attorney’s Office for the Northern District of Georgia is also initiating an asset forfeiture as part of this case with plans to seize Mr. Cunningham’s property and sell it off to provide restitution to the victims.
The prosecution asserted Cunningham had begun to siphon off funds from both Cunningham Construction and Cunningham Capital as early as 2004. During the review of Cunningham’s business and personal accounts, the money was used to pay for an opulent lifestyle including mortgages on both his family’s homes: a mansion in Buckhead’s posh Tuxedo Park and a beach house on St. Simons Island.
Cunningham also wrote large tuition checks for the education of his daughters, Macy and Katharine, as well as the private school tuition for his youngest daughter, Grace, to the prestigious Magnolia Academy, where all three Cunningham girls graduated before heading to college.
During this period, he supported Macy in her pageants, who had won Miss Georgia, and competed as a contestant at the national level. After Macy graduated from college and moved to New York City to become a Rockette, Cunningham paid his daughter’s rent for her Brooklyn apartment before she became engaged to Governor Brayden’s son in late 2008.
Six vehicles were also purchased during a five-year timeframe prior to Black Monday in 2008, including a Porsche 911, Cadillac Escalade, BMW 5-series, and cars for each of Cunninghams’ three daughters, though they were of more modest makes and models.
There were also lavish trips abroad to Europe and the Caribbean islands for Cunningham and his wife, Caroline, who is a regular fixture in the Atlanta philanthropy scene. In addition to vacationing in the family beach house, there was a three-week trip abroad to Australia and New Zealand in the summer of 2007 when the housing market was at an all-time high. Financial records show Cunningham awarded himself a $2.5 million bonus at the end of 2006 paid out in March 2007.
In his defense, Ernest Piedmont, Cunningham’s attorney of white-shoe Atlanta firm Piedmont, Candler, & Ware, asserted his client didn’t know that these millions of dollars in payments he made to himself had been drawn from the firm’s escrow accounts containing investment capital, which was not to be used for cash payouts like bonuses or other incentives.
The defense laid the blame on Cunningham’s chief financial officer and lifelong best friend, Darius Youngblood V, claiming Youngblood was the one who managed the funds and Cunningham never knew that the money was coming from somewhere it shouldn’t have been.
“People really want to believe in something, to trust someone, and to always see the best in others,” Piedmont said in the defense’s closing argument. “Randy believed in Darius and their business of building things. He trusted Darius as a friend for years, which could be his downfall if the ladies and gentlemen of this jury are to believe my colleagues at the U.S. Attorney’s Office.”
Cunningham testified that he had nothing to do with any conspiracy to commit fraud. Throughout his week-long trial, Cunningham said he was responsible for overseeing the numerous construction projects and hundreds of employees, while Youngblood was in charge of the books.
Although Youngblood was also charged in the indictment, he reached a plea agreement with the prosecution, avoiding prison time by agreeing to provide restitution to repay investors from personal funds belonging to the Youngblood family trust.
Surprisingly, the prosecution did not call Youngblood as a witness. Youngblood’s counsel said he was unable to appear in court due to his early onset Alzheimer’s, a disease which also claimed the life of Youngblood’s mother, Lydia.
The SEC investigation originally began in early 2008 starting with Youngblood, as he served as CFO of both Cunningham Construction and Cunningham Capital. Witness targets for this type of investigation can be indicted for any irregularity in the books or investor complaints, which in this case triggered the initial investigation.
A group of investors in Cunningham Captial have also filed a civil suit against Cunningham Construction, the family-owned business which was the primary pool of the investors’ dollars. The civil suit brings a RICO action against Cunningham, alleging that he knowingly bilked their money and used it for promotional money laundering.
Statements allege that Cunningham and Youngblood rented a mansion in Augusta for the Masters Tournament in 2006 where investors (predominantly men) were invited for a bourbon and cigar tasting, then quietly shuttled into a side room where Cunningham and Youngblood pitched them investment opportunities like the Ivy Terrace condominium project which never broke ground.
“The Recession has hit us all hard, some harder than others. I built this business from the ground up and never expected any of this to happen,” Cunningham said as he exited the Richard B. Russell Federal Building and faced a crowd of reporters. “At the end of the day, I’m a self-made man who got to where he is with help from his friends and the love of his family. After losing both my parents at a young age and never attending college, I wanted to give my children the life I never had. I’m disappointed in today’s verdict and I plan on appealing my case to the Eleventh Circuit.”
In support of his daughter-in-law, Governor Brayden’s office issued a statement: “Macy Brayden is the daughter we never had. She has been a light in our son’s life, as well as ours. Whatever may have happened is no reflection on her character and we ask the media to be respectful of Macy, her mother, and sisters during this difficult time for their family.”
The Governor’s office declined to comment on the verdict of Cunningham’s trial.
— Pretty Southern staff reports
Editor’s note – Rachel Boyd and Harry Dixon III contributed with editorial review of this story. This is entirely a work of fiction and any names are purely coincidental. Please let us know your thoughts in the comments section below.