Days after his drug arrest, a Biloxi councilman started moving money around, feds say
Federal prosecutors got a judge to appoint a receiver over bank accounts Biloxi Councilman Robert L. Deming III created for his law firm and its clients, arguing Deming is trying to disguise money from a string of CBD and kratom shops where he sold illegal drugs.
In Wells Fargo accounts that he opened after DEA agents raided his properties, Deming co-mingled money the government has claimed with client funds he held as an attorney, prosecutors say.
U.S. District Judge Bradley Rath granted the request and issued a restraining order that prohibits Deming from withdrawing any money from the client trust account he created. They want the receiver to determine how much of the money belongs to Deming clients and return it to them.
In January, Drug Enforcement Administration Agents raided Deming’s home and nine CBD and kratom shops called The Candy Shop in in Mississippi and North Carolina, seizing over $1.8 million in cash.
About two weeks after the raid, DEA Agent Alexander Smith said, Deming closed his business and personal accounts at Cadence Bank, formally known as Bancorp South, withdrawing over $280,000.
Five days later, the agent said, Deming opened new accounts at Wells Fargo and deposited around the same amount of cash into those accounts and an existing account at WoodForest National Bank.
The DEA agent did a financial analysis of transactions in Deming’s accounts over the past three years said he believes, “the funds withdrawn from Deming’s ... multiple accounts are co-mingled with proceeds derived from the sale of illicit substances..”
In other words, Smith said, the financial review showed Deming “consistently and repeatedly co-mingled funds between accounts for The Candy Shop and his personal law and law firm accounts.”
A “cooperating witness” in the criminal investigation also told agents that Deming was concerned about his assets after the Jan. 26 raid.
DEA agents started a criminal investigation into The Candy Shop and its owners, identified as Deming and Damion Fletcher, employees, suppliers and alleged co-conspirators in late 2021, Smith said in an affidavit.
During the raid, agents seized over $1.8 million in cash from Deming, and over $70,000 from the Candy Shop, various logs, receipts and financial records along with alleged synthetic cannibinoids and other suspected additives..
Eight months later, in September, authorities arrested Deming on federal charges of conspiracy to possess with intent to distribute a controlled substance and destruction, alteration or falsification of records in a federal investigation.
Deming has denied any wrongdoing.
Deming is currently out of jail under house arrest pending trial. He has a daily curfew and other restrictions but continues to serve as Ward 4 councilman in Biloxi.
