NC businessman involved in $32 million Chinese money laundering scheme, feds say
The owner of a Charlotte-based sneaker and apparel boutique that once hosted Kamala Harris as a vice presidential candidate has been named as a central figure in a $32 million international money laundering scheme, according to federal court documents.
The scheme involved illicit sneaker sales to Chinese couriers, prosecutors said in court documents.
James Whitner Jr., owner of Social Status in Plaza Midwood in Charlotte and downtown Raleigh, allegedly sold sneakers to a Chinese businessman in violation of a contract with a Portland-based sneaker company, according to a civil complaint filed against a New Jersey man in U.S. District Court in Charlotte on Friday.
Whitner has not been charged with a crime.
Social Status also has locations in Greensboro, Atlanta, Baltimore, Houston, Tampa Bay, Florida, and Pittsburgh, Pennsylvania, according to its website.
The complaint doesn’t name the sneaker company, but Nike is based in Beaverton, a suburb of Portland.
Unlicensed money-transmitting firm
The scheme was comprised of an unlicensed money-transmitting business involving Chinese money couriers, Whitner, Antwain Freeman of North Bergen, New Jersey, and unnamed others, according to the complaint filed by U.S. Attorney Dena King and IRS special agent Rajender West.
“The purpose of Whitner’s involvement in the unlicensed (money transmitting business) was to obtain payment for shoes and apparel — including shoes and apparel produced by an Oregon-based manufacturer that one of Whitner’s businesses improperly resold to the Chinese seller,” the complaint said.
“In actuality, the unlicensed money transmitting business involved a complex web of Chinese and American individuals, some of whom have been criminally charged, and facilitated the movement of millions of dollars in crime proceeds,” the complaint said.
In August, investigators seized nearly $2 million in cash from Freeman’s apartment that prosecutors say was connected to the scheme, court records said.
The civil complaint filed Friday asks that the money be “condemned and forfeited” to the federal government. The complaint includes no criminal charges against anyone named in the documents, and it is not known if charges will be filed.
Social Status says complaint ‘unjustified’
Whitner declined to comment when reached by The Charlotte Observer by phone Wednesday. He referred the Observer to a statement posted on Social Status’ social media accounts.
In a statement on Instagram, Social Status calls the allegations in the federal complaint “unfounded, unrelated to our business or this community and unjustified.”
“The recent action by the U.S. Attorney’s Office for the Western District of North Carolina comes after significant cooperation and good-faith negotiations on our part,” according to the statement.
“Our professional inventory management team runs a transparent process built on systems that are both legally compliant and consistent with industry standards,” company officials said.
The company said it has complied with all of its annual tax obligations.
“We have been a staple of the global business community for over 20 years, operating over 20 locations and employing over 250 employees across the country,” according to the statement.
“Our work has been dedicated to helping people of color tell their stories and build a legacy of excellence,” company officials said. “That work is now under attack, despite our best efforts at productive engagement with the U.S. Attorney’s Office.”
‘Hallmarks of a Chinese Money Laundering Organization’
At least some of the laundered money allegedly benefited Whitner and his businesses, according to the civil complaint.
Whitner, Freeman, and others “coordinated ... this movement of money despite the fact that none of the individuals involved were properly licensed or registered as money transmitting businesses,” according to the complaint.
Also, money transactions weren’t properly reported under the federal Bank Secrecy Act, prosecutors said.
The scheme involved a “network of Chinese nationals known and unknown to investigators” that “bears the hallmarks of a Chinese Money Laundering Organization,” according to the complaint.
Such Chinese operations have become more popular in the U.S. since at least 2016, prosecutors said. That’s partly because China enacted a law restricting the amount of money that could be transferred out of China, according to the complaint.
And that caused Chinese nationals “to resort to the black market to circumvent the law and acquire access to their money in the United States,” prosecutors said.
This story was originally published November 22, 2023 at 5:25 PM with the headline "NC businessman involved in $32 million Chinese money laundering scheme, feds say."