Uncovering the Shady Dealings: Former Nightclub Owner's Guilty Plea Exposes Money Laundering Scheme

In a shocking turn of events, the former owner of Charlotte's Scorpio nightclub, John Harvey Martin, has pleaded guilty to executing a money laundering scheme involving his used car dealership and a known drug trafficker. The federal prosecutors allege that Martin utilized his business as a front for illicit activities, shedding light on the dark underbelly of the local economy.

Exposing the Intricate Web of Deceit and Corruption

The Illicit Partnership: Martin and the Drug Trafficker

Court documents reveal that since at least July 2017 and until around January 2021, Martin and a known drug trafficker were engaged in a calculated scheme to conceal the trafficker's illicit activities. The two individuals allegedly exchanged money, with Martin and a salesman at his iNetwork Auto dealership selling approximately 20 cars to the trafficker. To further obscure the true nature of the transactions, the sales paperwork, titles, and registrations were placed in the names of "straw purchasers" – individuals who were not the actual buyers or intended users of the vehicles.

Forging Signatures and Evading Tax Obligations

The prosecutors allege that Martin and the salesman went to great lengths to cover their tracks, forging the signatures of the straw purchasers on the necessary documents. Furthermore, the cash transactions often exceeded ,000, which should have triggered the filing of federal tax forms. However, Martin reportedly failed to do so intentionally, further compounding the illegal nature of the dealings.

Funding Renovations and Acquiring Nightclub Interests

The investigation uncovered that Martin used at least 0,000 of the cash obtained from these transactions to fund renovations to a building adjacent to the dealership. Additionally, he allegedly provided 0,000 in cash to a courier to be delivered to the trafficker's source of supply in California, though law enforcement ultimately seized the money. The trafficker then instructed the courier to claim the money as his own, and Martin provided fraudulent documentation to support this false claim.

The Forfeiture and Potential Consequences

As a result of the investigation, the federal government has demanded the forfeiture of more than 0,000 in a money judgment. U.S. District Judge Robert J. Conrad sided with the prosecutors in a default judgment after Martin pleaded guilty. The actual plea document is not yet publicly available, but a factual basis document confirms the plea agreement and the prosecution's and defense's agreement with the information within it.The maximum punishment that can be handed down to Martin includes up to 20 years in prison, a fine of up to 0,000 or twice the amount of laundered funds (whichever is greater), and a maximum of three years of supervised release after his prison sentence.

The Fate of the Scorpio Nightclub

The Scorpio nightclub, which Martin previously owned, has faced its own challenges. The establishment temporarily closed its long-running location on Freedom Drive in the fall of 2023, with management citing development plans nearby as the reason. However, the Scorpio has since found a new home in the South End, acquiring the space owned by RSVP South End on Fairwood Avenue.The Scorpio Lounge has been a fixture in Charlotte's LGBTQ community for over 55 years, earning the distinction of being the oldest-running nightclub in North Carolina. As the investigation into Martin's dealings continues to unfold, the future of this iconic establishment remains uncertain, leaving the community to wonder about the lasting impact of these revelations.