FORMER N.C. CONGRESSMAN PLEADS GUILTY TO CONSPIRACY CHARGE

ELIZABETH CITY, N.C. -- Frank Ballance, the former U.S. congressman
who resigned from his eastern North Carolina seat this summer, pleaded
guilty Tuesday to a federal conspiracy charge related to mishandling
of money by his charitable foundation.

U.S. District Court Judge Terrence Boyle accepted Ballance's guilty
plea to one charge of conspiracy to commit mail fraud and money laundering.

A sentencing date was not set. Under a plea agreement, Ballance, 62,
could receive a maximum sentence of five years in prison, a $250,000
fine and three years' supervised release.

Ballance also agreed to make restitution in the amount of $61,917.25
and to forfeit $203,000 in a bank escrow account in the name of the
John A. Hyman Memorial Foundation.

"One of these days, I'll have a story to tell you," Ballance said
outside court.

The Democrat was in his first term representing the 1st Congressional
District when he resigned in June, citing ill health.

"The defendant crafted an elaborate conspiracy under which he
defrauded the citizens of North Carolina of honest services,"
Assistant U.S. Attorney Dennis Duffy said in court.

"We're pleased that U.S. Rep. Ballance admitted his guilt," prosecutor
George Holding said after the hearing.

Earlier Tuesday, Ballance's attorney said Ballance was not admitting
guilt to every crime with which the government charged him in
September's 51-page indictment.

"The allegations may involve millions of dollars. What he's accepting
responsibility for is a very small part of that," attorney Joseph B.
Cheshire V said.

The indictment alleged that Ballance channeled $2.3 million in state
money from 1994 to 2003 to a nonprofit foundation he operated to help
poor people fight drug and alcohol abuse.

According to the felony indictment, more than $100,000 from the John
A. Hyman Memorial Youth Foundation went to Ballance's law firm; his
church; his mother, Alice Eason Ballance; his daughter, Valerie
Ballance, and his son, Garey Ballance.

Garey Ballance, a state District Court judge, is awaiting arraignment
on a charge of failing to file his 2000 income tax return.

The indictment said Ballance repeatedly forged the foundation
director's signature on state money requests and said he diverted
foundation money to pay a $15,500 legal bill in a criminal case and
more than $69,000 in rent to his church, which housed the foundation's
office.

The indictment said Ballance also dipped into foundation money to give
his son $20,000 toward a Lincoln Navigator luxury sport utility
vehicle; to pay his daughter $5,000 for computer services she didn't
perform; and to give his mother $143,250 to spend on community programs.

The lone formal charge against Ballance encompassed three elements:
that he conspired to deprive the state's citizens of his honest
services as a state senator; that he defrauded the Hyman Foundation of
money; and that he hid self-dealing expenditures.

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