I haven’t posted in a good while. The reason was that I had been preparing for a particularly contentious criminal jury trial.
I am happy to announce that this afternoon, after three days of trial, we finished closing arguments on the case, and the jury came back with two unanimous verdicts of not guilty. It was probably the most emotionally difficult case I have ever struggled with.
The best part about it was, during my closing argument, I asked the jury, when they went into the jury room to begin deliberations, to pick a foreperson, sit down, and take a vote on whether there was any reasonable doubt. If all hands were up, I asked them to come right back out and deliver a verdict of not guilty.
Apparently that is what they did. They may have deliberated 10-15 minutes. God, what a feeling. It felt so good. I don’t think I have ever wanted to win so bad. And I don’t think I have ever put so much time, effort, and passion into anything.
My client was charged with first degree arson and conspiracy, both felonies, with a sentence of 3 to 25 years. He had always maintained that he was innocent, and damn it felt so good to deliver him back to his family a free man. He is a good guy, and his family had suffered through such a nightmare with the prosecution and accusations. There’s nothing like standing before 12 jurors with somebody’s life and destiny in your hands. It’s the worst time and it’s the best time. Fighting [in the courtroom] for money is one thing. But fighting for someone’s liberty – someone’s child, someone’s father – with their life in your hands….. there’s nothing like it. God, it feels good.
- John H. Bryan
[Note: at the polite request of innocent family members, I replaced the name of the least culpable defendant with ****.]
Surprisingly, it appears that I am the first to break this story – that the “Cattlegate Cons” were sentenced this morning by U.S. District Court Judge Thomas E. Johnston as follows:
O’Brien was sentenced to 97 months of active incarceration and 3.4 million dollars in restitution.
Henthorn was sentenced to 9 months of incarceration and a $75,000 fine.
***** was sentence to 5 months of incarceration and a $50,000 fine.
ANOTHER UPDATE: The Register-Herald has now published a lengthy article on the sentencing yesterday. Reporter Christian Giggenbach noted in the article that Judge Johnston made some interesting observations about the case during the sentencing hearing.
Johnston also railed on Henthorn, 46, of Lewisburg, for abusing his position of trust in the banking community. He also insinuated this was probably not the only illegal act Henthorn had committed.
“You were living a privileged life and you threw that away,” Johnston said. “This is an example of what can happen when you allow greed to overcome you.”
Henthorn also apparently attempted to get his probation officer to remove negative letters that were going to the judge.
Former FNB board member James C. Justice II of Beckley was among family and church members who wrote letters in support of Henthorn. One document filed by a court official indicated the defendant called his probation officer on June 4 and asked her if “she would remove the negative” letters from his support file.
“The probation officer responded she would not do so … Mr. Henthorn was obviously upset by this answer and ended the conversation soon thereafter,” wrote U.S probation officer Peggy Adams.
Can you believe the arrogance of this guy? Judge Johnston also questioned why First National Bank of Ronceverte was suspiciously absent from this entire ordeal – despite the fact that their President and Board members caused this whole mess. According to the article:
Johnston also asked a rhetorical question about Henthorn’s former employers.
“I’m puzzled by the fact that First National Bank has not participated at all in this hearing,” the judge said. “I expect the whole story has yet to be told.”
However, there was a former board member and one former president of First National Bank there supporting Henthorn and *****, respectively (see Justice above). According to the article:
****** had about 15 friends and family members present for the hearing, including former state Commerce Secretary and ex-FNB president Tom Bulla, who Johnston vocally noted had come to support ******. Johnston said individuals filed more than 100 letters of support for ******, “the most I’ve ever seen in a case.”
So, “FNB” was not completely absent, they were represented by former officials – who were there to ask the judge to be lenient. I would note that one of those former officials himself resigned from the board only shortly before ***** and Henthorn themselves resigned from “FNB,” which was reported publicly, but not explained. Don’t you just love banks? Their only motivation is money, and even when their hands are publicly caught in the cookie-jar, they can just switch presidents and board members, and continue on foreclosing on people’s homes who do not have connections to the Board, and making sweetheart loans to crooks like O’Brien, who do have connections to the Board. For too long citizens have been abused by bank boards using their positions to help their buddies and harm innocent folks. A bank would slit your throat if they thought they could make a buck. And lawyers get a bad name….
To *****, Judge Johnston had this to say:
“You participated in a sorry effort to cover this up … which almost resulted in an obstruction charge,” Johnston said.
“Is this the way business is done in Greenbrier County? By being present when a bribe is slid across the table to a bank president?
Johnston then asked why ***** would have risked so much by setting up the bribes, but then not receive any money in return. Johnston also suggested this was not ***** first brush with illegal activity. Forbes told the court ***** turned down bribe money when approached by O’Brien.
“Why would a man of your experience get involved with this?” Johnston asked.
Lastly, the Register-Herald article noted that the case is still being investigated, and that the defendants will most likely enter prison within the next 30 to 45 days. It will be interesting to see whether Judge Johnston is right that “the whole story has yet to be told….”
Note: There also is a new Charleston Gazette article this morning.
- John H. Bryan, West Virginia Attorney.
Regarding the Greenbrier County “Cattlegate” case, the Register-Herald published an article this morning detailing defendant Kevin O’Brien’s presentencing memorandum filed by his defense attorney, in which his attorney states that this was not a typical fraud case because “many of his victims’ losses were unintended.”
Since when are ponzi schemes and check kiting not typical? It sounds like every other “white-collar” federal fraud prosecution that hits the headlines. I guess the word to pay attention to is “many.” There were a lot of victims, some of which were obviously intended. When you “sell” some poor sap a herd of cows that either don’t exist, or that you have already sold to someone else, you darn well intend to cheat that person out of their investment. Of course there were others that he didn’t know about. When you cheat someone, you also cheat others who were depending on the person you cheated. Although you may not intend to directly cheat those people, it is absolutely foreseeable that others will be affected and harmed.
O’Brien’s attorney argues that he will never be able to operate the same type of scams again because of the media coverage surrounding the case.
“Because (his) criminal prosecution has received a tremendous amount of media coverage in his community, it is highly improbable that individuals will place the trust in him necessary to engage in the same criminal conduct upon his return to the community.”
Yeah, but what if he moves to Florida? I guarantee that nobody there has ever heard of him. He could change his name, or use a pseudonym – and Florida is the third largest cattle-producing state. He could go right back into business. He obviously has no qualms about running a scam. He probably only regrets getting caught. If ever in the future he things he can do something like this again and get away with it, do you think he will hesitate? People would have no idea about his prior prosecution. But maybe if he serves a long stretch in federal prison, his desire to be a free man will overwhelm his greedy criminal tendencies.
– John H. Bryan, West Virginia Attorney
The Register-Herald published a rather lengthy and informative article about Greenbrier County’s “Cattlegate” scandal this morning. I have posted on this matter several times thus far, here, here, here, here and here, and I have noticed a lot of interest in this case from the sheer amount of search engine traffic directed to my site from searches about these individuals. I suppose that some people were relying on me to post an update to this matter since the sentencing was supposed to already have happened. But I really didn’t have any idea what was going on. But, I knew that Register-Herald reporter Christain Giggenbach was on top of it, so I need only wait until he published an article, which I knew he surely would – and this morning he did.
Apparently the sentencing was supposed to have taken place this morning, but it was continued, though there were no motions filed by either the prosecution or the defense. Well why was it continued? Apparently these angelic creatures have turned stool pigeons and are collaborating with authorities in investigating other individuals. But since all these canaries are proven liars, I’m not sure what their help is worth, and investigators better not give their words more than a micro-ounce of a grain of salt. The history books are full of tragedies which have occurred through the utilization of this type of snake-in-the-grass testimony. For example, see this post from Glen Graham at the Oklahoma Criminal Defense Blog.
The sentencings were continued to October 17 at 10:30 a.m. before U.S. District Court Judge Thomas E. Johnston in Beckley’s Federal Courthouse.
So what kind of sentences are they looking at? A lot of people have commented to me that this bunch is going to get away with probation, but that will not happen. They may however, get some type of home confinement, or mixed sentence. With respect to O’Brien, a presentencing memorandum filed by Assistant U.S. Attorney L. Anna Forbes recommended a prison sentence up to 10 years, but “indicated the defendant has provided more information about possible criminal conduct of others who may have filed claims in his multi-million dollar bankruptcy case.” Lastly, she writes to the Court that “a sentence within the advisory guildine range of 97 to 121 months of imprisonment is appropriate.” So fear not, even with his sleazy finger-pointing, he will be doing time.
With respect to Henthorn and *****, the AUSA recommended 6 to 12 months, while their lawyers are arguing for home confinement or a mixed-type of sentence – and they are apparently strenuously snitching as much as the feds will allow, in order to get what they want. Mind you, that all of these defendants already snitched on each other – one even reportedly wearing a wire in a conversation with the others.
I know that there are a lot of people out there, in Greenbrier County, Monroe County – and across the fruited plain – who want the Judge to stick it to them. The AUSA noted in her memorandum that:
“One of the victims is a single-mom with a couple children in college, another is a Virginia cattle farmer with a small farm who lost so much money and was so ashamed by his financial predicament that he could not, for a long time, bring himself to tell his wife about what the defendant had done,” Forbes wrote. “Many of the victims attempted to pursue claims in bankruptcy, a process that left some with unsatisfactory settlements, large legal fees and a sense, because of the perceived misconduct by other creditors, that they had not been treated fairly by the bankruptcy system.”
So this is a great group of guys. Real quality people, and I wish them luck on the 17th.
- John H. Bryan, West Virginia Attorney.
A few days ago, I posted about an extremely troubling trend emerging whereby lawyer’s offices are being searched as part of a criminal investigation of their clients. Since then, Scott Greenfield at Simple Justice picked up the conversation with this post. He first noted mine and Bobby Frederick’s concerns, stating that:
My ilk will go on auto-pilot and pound the keyboard exclaiming how these searches, where the government comes in, seizes everything in sight and sorts it all out later when they can examine every file at its leisure. This blunderbuss approach has been condemned by South Caccalacca criminal defense lawyer Bobby Frederick and West Virginia criminal defense lawyer John Bryan, and their concerns are well-founded.
But he also argued that “when a lawyer gets too close to his clients, such that he becomes a party to their enterprise,” there is a legitimate reason to search for evidence. And in these situations, Greenfield argues that a mutually agreed upon “Special Master” should be appointed to conduct the first level of scrutiny. It seems to me that this is not a bad idea.
But it will never happen – not as long as you have prosecutors who are willing to go between judges to get their warrant, and not as long as you have gullible or malicious judges who grant the warrant without conferring with the first judge. And let’s not forget this is only legitimate in the scenarios Greenfield points out: where the lawyer has helped the client engage in wrongdoing. This absolutely should not apply in a Texas murder case where the prosecutor is merely fishing for evidence with no evidence of wrongdoing by the attorney.
Bobby Frederick, of the South Carolina Criminal Defense Blog, also noted that now “a federal judge in New Jersey is allowing prosecutors to review computer records seized from a criminal defense lawyer’s office, including the files of clients who were not targets of the search.”
Frederick also cited my game-leveling dream scenario where defense attorneys could do the same thing, and concluded that:
This practice, in any situation other than where there is probable cause that a defense attorney is himself engaging in criminal activity and the search is specific and focused so as not to violate attorney-client privilege, is an abuse of process.
And I think that is something we all agree on.
– John H. Bryan, West Virginia Attorney
Recently there have been a number of cases of search warrants being executed on Attorneys’ offices for the purpose of gathering evidence against a client/target of investigation. One such case was detailed by Bobby Frederick at the SC Criminal Law Blog here on August 23, where attorney George Argie’s office was raided by the feds seeking information/evidence on one of his clients. Frederick correctly notes that the appropriate method of obtaining information from an attorney’s files is through subpoena, in which case the attorney gets a chance to raise the attorney-client privilege before a judge.
On July 31, Frederick posted about the search warrant that was issued in Frisco Texas on attorney Keith Gore’s office, where State officials were seeking items and letters written from his client to his client’s wife. Thankfully, criminal defense lawyers in Texas came out in numbers in opposition to this Gestapo-like tactic.
It is sickening to see that there are prosecutors out there who would go between different judges to get an illegal search warrant of an attorney’s office. If that is legal, then I would like to see a mechanism put in place whereby the lawyers of criminal defendants can obtain their own search warrants to be executed on prosecutor’s office. Say, for instance, that you know a certain prosecutor has a video tape that would exculpate your client. He refuses to hand it over, or to even acknowledge it. You could get a search warrant and have your private investigator execute the warrant and look for the tape. Yeah right. That’ll be the day. The sad fact is, that prosecutors are perfectly willing and able to abuse their power and not only will many judges not stop them, some of them apparently will help. I’m just glad I don’t practice in Collin County Texas.
– John H. Bryan, West Virginia Attorney.
There was an editorial featured back in the July 9, 2008 issue of the Charleston Gazette, entitled “Payola,” which reported the staggering fact that 111 pharmaceutical firms were forced to disclose that they “showered” 14,933 “gifts, grants or payments” on West Virginia physicians during the last half of 2007 – with some “payola” exceeding $50,000. In other words, many, many, doctors in West Virginia are being paid by the drug companies to prescribe high-priced brands of prescription drugs to their patients – without regard to the patients’ health and financial situation. The kicker is that the patient has no idea that their doctor is doing this – nobody except for the drug companies and the state board of medicine does.
This was the first disclosure of this type revealed under new West Virginia state reporting rules. However, the catch is that the state board of medicine has made the decision to hide the names of these doctors. The Gazette’s editorial board was arguing that these names should be made public. And I agree. However, “state medical groups” complained, leading to the state board’s refusal to release the names.
And the lawyers get a bad rap in West Virginia? This article was forwarded to me by my father, who is a physician, and who was formerly President of the Florida Medical Association – though I didn’t ask him his opinion about it. I can’t imagine a doctor taking cash and gifts from these pharmaceutical firms to the impediment of his or her patients, much less openly arguing to the state that names should not be released. It sounds to me like the state medical association needs some new leadership – not to mention some common sense. Whatever happened to the hippocratic oath?
This has happened in Florida as well. Awhile back, a doctor was arrested in a nightclub while wearing a superman costume and belligerently harassing women with a sub (sandwich) in the lower portion of his costume. As it turned out, this doctor, among others, were in the process of being wined-and-dined by pharmaceutical firms (in exchange for them prescribing their drugs to patients).
While all of this is going on, we, as consumers, are being perpetually blitzed by pharmaceutical commercials. People forget, or fail to realize, that even 5 years ago there practically was zero direct advertising to consumers by pharmaceutical firms. I think that any ethical doctor, who is taking their oath sincerely, will agree that this is not in the best interests of patient health.
The point is, that this is one of the reasons why people go outside the state of West Virginia for serious health care needs. It’s not the lawyers – it’s the doctors. I support doctors as much as anybody, but there are bad one’s and good one’s, and it seems that some bad one’s are currently in charge. That needs to change. There absolutely is no good reason for the state to withhold the names of doctors who accept bribes from pharmaceutical companies.
– John H. Bryan, West Virginia Attorney.
I have been asked many times recently what has happened with this case. Well, nothing has really happened since the sentencing has not yet taken place. The sentencing for these crooks will take place on June 30, 2008 before U.S. District Judge Thomas E. Johnston. There are also several civil cases currently pending in this matter, which undoubtedly will be detailed in the future.
You can read my previous post here.
– John H. Bryan, West Virginia Attorney.
This is a story that I will detail in a later post if need be, but it rises to the situation where the public should be informed of this massive abuse of authority.
A southern West Virginia Chief of Police, who is a big guy and also a military veteran, had his little wife arrested by a buddy law enforcement officer for “domestic assault,” taken into physical custody, after which she was able to bond out with a $5,000 cash bond. For those of you who don’t know, $5,000 is the average bond for felonies in southern West Virginia.
This police chief then filed for divorce and refused to drop the frivolous criminal charge against her unless she agreed to his terms for the divorce. This story is continuing and may be updated based on future actions taken by the law enforcement officer.
– John H. Bryan, West Virginia Attorney.
From West Virginia Metro News website:
Regarding the recent controversy regarding the governor’s daughter and WVU, was a crime committed when the Bresch transcript was altered? Attorney Tom Payton with the Payton Law Firm, analyzed that very question. His take on the facts are that:
1) In at least one course that she did not actually complete, she was given a grade that “was simply pulled from thin air.”
2) The grade modification forms bear only the signature of Dean Sears and “[a]ppropriate faculty and division chairs were neither consulted nor asked to sign these forms.”
3) “[O]ver Dean Sears’ signatures rather than the requisite course instructors’ and department chair’s signatures (as required by WVU standard operating procedures), grade modification forms were prepared and filed to add to her transcript credit for (redacted) hours of (redacted) that the principals all knew that she had not taken.”
4) The amended transcript now reflects her completion of some courses that she did not in fact complete, and reflects a number of grades that she did not in fact earn.
He points to the pertinent criminal statute which could apply as West Virginia Code § 61-5-22, which provides that:
If any clerk of a court, or other public officer, fraudulently make a false entry, or erase, alter or destroy any record in his keeping and belonging to his office, … he shall be guilty of a misdemeanor, and, upon conviction, shall be confined in jail not more than one year and be fined not exceeding one thousand dollars; and, in addition thereto, he shall forfeit his office and be forever incapable of holding any office of honor, trust or profit in this State.
So as he sees it, given that Dean Sears signed the document, if he is a “public officer,” then the statute may apply to him. However, his analysis of the case law reveals that the statute probably would not apply to Dean Sears, and that the ultimate punishment for his in this matter is likely resignation. He does note though, that there is enough authority here to form an investigation, subpoenas, grand juries, etc.
Read the entire article here.
– John H. Bryan, West Virginia Attorney.
From the Charleston Gazette:
A jury found a Braxton County magistrate who is up for re-election next week guilty of attempted retaliation against a state witness Wednesday.
Prosecutors charged Carolyn Cruickshanks with conspiring to retaliate against Philip Dailey, who testified against her son, Jordan Grubb, in a drug case.
Cruickshanks reportedly delivered a copy of Philip Dailey’s plea agreement and a transcript of his plea hearing to the jail, where Grubb hoped other inmates would punish Dailey for being a snitch.
It always amazes me that these small-town political conspiracies involving corrupt public officials actually take place in West Virginia. Then, the corrupt official still runs for office as they are on trial…. Unbelievable.
Read the full two-page article here.
– John H. Bryan, West Virginia Attorney.
From the Charleston Gazette today:
Yesterday Saad Kamil Deeb, a Welch Pharmacist, pled guilty to a 3 count information, charging him with enlisting others to help him conduct transactions at a McDowell County bank so that he could move large amounts of money without triggering a Currency Transaction Report. A financial institution is required to file such a report with the Internal Revenue Service for any transaction over $10,000.
Assistant U.S. Attorney Hunter Smith said that between 2001 and 2005, Deeb became heavily involved in gambling on sports, betting large sums of money and even placing bets on behalf of his friends.
Whether he won or lost, his gambling proceeds or debts were paid in cash, Smith said. Usually, the amounts would approach $100,000 before Deeb or his bookies paid up, he said. “Mr. Deeb did not want the IRS to know that he was engaged in large cash transactions,” Smith said. So he and the others would keep their transactions under the $10,000 ceiling, Smith said, sometimes transferring just under that amount to various accounts several days in a row. According to the information, Deeb and his associates moved more than $871,000 that way over a four-year period. Deeb also admitted skimming cash from the pharmacy and filing false tax returns in 2003 and 2004, failing to report roughly $300,000 in income for each year, resulting in a tax loss of $175,000. Deeb has since filed amended reports and caught up on the taxes he owes, Smith said.
Who knew that a small town pharmacy could make that much so as to skim $300,000 per year for a gambling habit (addiction)? It makes you wonder who is at fault for the high prices of prescription drugs… My grandfather was a small town pharmacist, and for part of my life I grew up in his pharmacy. Things must have changed a lot since then… or maybe that is just par for the course in McDowell County….
– John H. Bryan, West Virginia Attorney.
From the Register-Herald:
Another lawsuit filed against bank, officials in alleged cattle fraud case
By Christian Giggenbach
LEWISBURG — Another lawsuit has been filed against First National Bank of Ronceverte and two former bank officials, this time by an Illinois man who alleges disgraced cattle broker Kevin Scott O’Brien defrauded him out of $104,000.
The lawsuit, filed by Robert Dwyer, named First National Bank, former bank president Charles A. Henthorn and former board director **** as defendants.
Henthorn and **** recently pleaded guilty in federal court, Henthorn for taking $10,000 in bribes from O’Brien, and **** for setting up bribes.
O’Brien pleaded guilty to a mail fraud charge involving the sale of cattle in fraudulent Ponzi schemes. A sentencing date has not been set for any of the defendants.
Dwyer claims he gave O’Brien $104,000 in February 2006 for “80 pairs of heifers and their calves,” which should have been shipped to Dwyer’s farm in Carthage, Ill.
“Instead of arranging for the cattle to be trucked to Dwyer … O’Brien sold the cattle to ****,” the lawsuit said. “O’Brien’s sale of the Dwyer cattle to **** was simply one of the last acts of fraud and deceit in O’Brien’s continuing scheme.”
Dwyer claims the bank knew about the **** deal, but looked the other way because O’Brien owed the bank money.
“The bank, through its senior management, including Henthorn and ****, devised a scheme with O’Brien pursuant to which O’Brien would sell **** cattle,” the lawsuit said. “The money that **** paid for the cattle was to be deposited into O’Brien’s checking account in satisfaction of debts that O’Brien owed the bank.”
Dwyer is seeking punitive damages on the basis of fraud, civil conspiracy, and aiding and abetting a wrongful act, among other charges.
Dwyer is being represented by Charleston lawyer James W. Lane.
Neither **** nor Henthorn could be reached for comment.
In February, another Illinois man, Frederic W. Nessler, filed a $340,000 lawsuit against the same three defendants alleging fraud.
O’Brien, who is currently mired in a multimillion-dollar bankruptcy, wasn’t named as a defendant in either suit.
— E-mail: email@example.com
From the Beckley Register-Herald:
Note: See my earlier post regarding this case here. Each defendant faces a maximum of 30 years in federal prison. Obviously each will receive less than that. Their sentencing, which will take place in June will follow the federal sentencing guidelines, which I will not attempt to decipher in this post. Almost positively however, they all will do time. You can also read today’s Charleston Gazette article about this case here, and the Charleston Daily Mail article here. – John H. Bryan, West Virginia Criminal Defense Attorney.
Three plead guilty in cattle, bank scandal
A businessman and two former bank officials pleaded guilty Monday in Beckley’s federal court to charges stemming from a Greenbrier County $4.2 million cattle and banking scandal.
A federal postal inspector testified that an investigation by State Police involving dirty dealings by cattle broker Kevin Scott O’Brien, of Ronceverte, also led to separate criminal charges being filed against former First National Bank of Ronceverte president and CEO Charles A. Henthorn and former First National Bank board director ****.
Last month, O’Brien, 28, was charged in an information with one count of mail fraud, but the complaint also listed several instances of fraudulent business practices including “phantom herding” — selling the same cattle to multiple buyers — check kiting, bribing a bank official, and running pyramid or “Ponzi” schemes.
Prosecutor’s say O’Brien used sophisticated schemes to defrauded investors and businesses out of $4.2 million beginning in early 2005 while brokering cattle deals in West Virginia, Illinois, Texas, Virginia and Nebraska.
Monday’s testimony revealed O’Brien signed a plea agreement with prosecutors in May 2006 and then helped police gather evidence against Henthorn, 48, by wearing an undercover wire which secretly taped the bank president incriminating himself about taking bribes.
Prosecutors then used that evidence and more in persuading Henthorn to wear an undercover wire which recorded incriminating statements made by ****.
There was no evidence that **** wore an undercover wire during the federal investigation which also included FBI and FDIC officials. State Troopers Sgt. V.S. Deeds and W.A. Pendleton, who brought their investigation to federal prosecutors, were present for Monday’s hearing.
Last month, Henthorn was charged with accepting nearly $10,000 in bribes from O’Brien, and **** was charged with aiding and abetting those bribes. Henthorn originally brokered his deal with prosecutors nine months ago and **** signed a plea agreement last August, Forbes said.
When asked why nearly two years had elapsed since O’Brien’s first contact with prosecutors, Forbes said O’Brien’s and Henthorn’s cooperation “took many months to develop.”
“There is no evidence that any criminal activity goes beyond these three defendants,” U.S. Attorney L. Anna Forbes said after the hearing.
O’Brien softly said “yes, your honor” when U.S. District Judge Thomas E. Johnston asked him point blankly: “Did you do it?”
Although O’Brien’s felony charge was specifically based on a $362,000 check he received in the mail after defrauding a Virginia cattle owner, much of Monday’s testimony concentrated on the four bribes O’Brien gave to Henthorn.
Postal Inspector Burl Fluharty testified **** introduced O’Brien to the bank president and told the cattle broker that Henthorn had “the keys to the bank.”
“**** advised O’Brien that payments to Charles Henthorn would help him procure loans,” Fluharty said. “**** facilitated these bribes to the bank president.”
Forbes said O’Brien gave Henthorn four separate bribes in late December 2005, with two cash payments totaling $2,200 and two checks written from his Shamrock Farms business account of $2,500 and $5,000. Forbes entered both checks into the court record as evidence against O’Brien and Henthorn. Henthorn was represented by Charleston lawyer James Cagle.
“It was expected that Charlie Henthorn would extend favorable treatment to Kevin O’Brien and be generally influenced in banking matters,” Fluharty told the court. No specific loan was tied to the bribes.
All three defendants posted a $10,000 unsecured bond and were immediately released after Monday’s hearing. None were available for comment. Each faces a maximum prison sentence of up to 30 years; however, it is unlikely that any of the sentences will be that stiff. Johnston set all three sentencing hearings for 10 a.m. June 30. The trio also face a bevy of fines.
O’Brien, a 1999 graduate of Greenbrier East High School, told the court he previously had worked for his father’s asphalt and excavating business and a NAPA store prior to brokering cattle deals. His federal bankruptcy case is still pending and one court official said O’Brien’s liabilities now total almost $8 million.
Forbes said “close to a dozen victims” were cheated out of money by O’Brien.
O’Brien’s defense attorney, Rodney Smith of Charleston, suggested that the $4.2 million number that prosecutors say his client defrauded investors will be challenged. Karin Nelson, who claims O’Brien cheated her out of $200,000, attended the hearing but declined comment.
Henthorn told the court he had been in the banking industry for 25 years. A former bank examiner, Henthorn resigned from First National last summer after working there for over 10 years.
****, who was represented by Charleston lawyer Michael Cary, said he began working in the real estate business with his father in 1974. He now owns two Virginia car dealerships and is a Realtor and auctioneer. **** had been on the bank’s board for eight years until his resignation last July.
From the Beckley Register-Herald:
3 charged in multimillion-dollar cattle scandal involving bank
Ending months of speculation and rumors, the U.S. Attorney’s Office in Charleston filed criminal charges Wednesday against a businessman, a former bank president and a former bank board member for alleged crimes stemming from a multimillion-dollar cattle scandal in Greenbrier County involving First National Bank of Ronceverte.
Named in the information were Kevin Scott O’Brien of Ronceverte, Charles A. Henthorn of Lewisburg and **** of Covington, Va. An information allows prosecutors to bypass a grand jury and usually indicates a defendant is cooperating with authorities.
O’Brien, 27, was charged with one felony count of frauds and swindles, according to court documents. O’Brien first made headlines in April 2006 when State Police began investigating the cattle broker after he filed a multimillion-dollar bankruptcy case.
Federal prosecutors say O’Brien brokered the sale of cattle in Greenbrier and Monroe counties and several other locations, including Virginia, Illinois, Nebraska and Texas, under the business names of Shamrock Farms and K&M Properties Investments.
Prosecutors allege O’Brien devised “schemes” to “defraud and obtain money by means of false and fraudulent pretenses” while selling cattle “at the expense of numerous farmers, banks and other business entities.”
The five-page criminal charge against O’Brien alleges in the spring of 2006 he under-reported his liabilities and distributed false financial statements to lenders and investors and “solicited and procured substantial sums of money” with the “false promise that he would invest the monies in specific cattle sale transactions.”
“It is further part of the scheme that (O’Brien) defrauded these various investors and lenders out of a total of approximately $4.2 million,” federal prosecutor L. Anna Forbes wrote.
O’Brien also allegedly engaged in “phantom herding” — selling the same group of cattle to multiple buyers — and pyramid schemes, where money from one investor is used to fund business dealings with another investor. Other allegations lodged against O’Brien include:
- Giving Henthorn, former First National Bank of Ronceverte president, bribes totaling approximately $10,000.
- Tendering worthless checks for large amounts of money.
- Directing banks to stop payment on checks for the purpose of quelling the investors’ mounting suspicions of fraud and to dissuade investors from reporting him to police.
- Engaging in check-kiting activities involving hundreds of thousands of dollars with various financial institutions to stave off financial disaster.
O’Brien could not be reached for comment Wednesday. If convicted, he faces a maximum sentence of 30 years in prison, with five years of supervised released and a possible $1 million fine.
Henthorn, who abruptly resigned as president and CEO of First National Bank of Ronceverte last June, was charged with one felony count of accepting bribes from O’Brien totaling about $9,700. Henthorn, a former bank examiner, had worked at the bank more than 10 years, starting out as a senior loan officer and vice president.
“(Henthorn in his capacity as bank president) did accept said payments by a customer … intending to be influenced in connection with business and transactions between (O’Brien) and the First National Bank,” Forbes wrote.
When reached by phone Wednesday, Henthorn refused to comment. Court documents indicated the bribe payments were paid in the fall of 2005 through December 2005.
****, who had served on the bank’s board of directors since 1999, resigned last July. **** was charged with one felony count of aiding and abetting the bribes that O’Brien gave to Henthorn. The criminal charge did not state that **** received any bribe money from O’Brien.
****, a Realtor, broker and auctioneer, owns Greenway’s Real Estate & Auction Co. and two car dealerships in Covington. When reached by phone Wednesday, he respectfully declined to talk about his pending charges.
“Everything will work its way out in the end,” he said.
Both **** and Henthorn face maximum prison sentences of 30 years each, five years of supervised release and possible $250,000 fines.
First National Bank chair Ron Snyder, who was out of town Wednesday, told The Register-Herald by phone he had not yet seen the charges leveled against his two former bank associates, but was “relieved to see this finally out in the open.”
“We are happy that this has finally been filed and now the rumors can either be quashed or reinforced,” Snyder said. “We understand the only wrongdoing were by the actions of these two individuals and this bears that out because they are the only ones that were charged.”
But left in the wake are nearly a dozen individuals, banks and businesses that O’Brien allegedly defrauded for millions of dollars. Lewisburg lawyer Steve Hunter, who represents Karin Nelson — who claims O’Brien cheated her out of more than $200,000 — said there are still many unanswered questions that need to be addressed.
“There are still pending motions left in the bankruptcy case. I still don’t think we have gotten to the bottom of this whole story and we won’t know until O’Brien is questioned under oath by lawyers representing the victims,” Hunter said Wednesday. “We still don’t know whose cattle went where and there are a lot of people who are out of a lot of money.”
Creditors named in O’Brien’s bankruptcy case include The Bank of Monroe, United Bank and Farm Credit of Lewisburg. These alone total $2.5 million. During his initial bankruptcy filing, O’Brien stated he owed First National Bank nearly $400,000. One Virginia cattle dealer filed worthless check charges against O’Brien two years ago totaling 270,000.
In August 2006, O’Brien attended one bankruptcy hearing after skipping out on several others. At that time, he invoked his Fifth Amendment right against self-incrimination more than 100 times.
Hearings to accept pleas from the three men will most likely be set in the next five days.
Note: Since the three men who were charged were charged by information rather than by indictment through a grand jury, it indicates that all three have made plea deals with the government already. Indeed, speculation for months has been that all three of these characters had in fact already made plea agreements. It has been noted through the grapevine that one of the defendants either wore a wire or had a recorded telephone conversation with the other – ensuring his conviction. With all of the rumors flying around, it will be interesting to see which of them are true. The fact of the matter is that when you are charged federally, your chances of not going to prison are extremely, extremely low. So, it is safe to say that all of these guys are going to do time in the federal pen – and deservedly so. – John H. Bryan, West Virginia criminal defense attorney.
From the Charleston Gazette today:
Police: Clerk cut gas price for family
By Davin White
South Charleston police say gas prices dropped to .001 dollars a gallon for one clerk’s friends and family.
On Sunday morning, South Charleston Police arrested clerk Madeline Jordan, 25, of Nitro and five of her family members and friends after she allegedly sold them gas at a rate of 10 gallons per penny.
The owner of the Spring Hill BP alerted police Thursday that he was losing money at an alarming rate and feared he would have to file for bankruptcy protection, according to South Charleston Patrolman C.A. Crowder.
Police did not wish to release the owner’s name.
The store is on U.S. 60 at the west end of town near Jefferson, Crowder said.
The owner estimated that he’s lost more than $40,000 in about six months, Crowder said. Receipts led investigators to monitor Jordan’s Sunday work shift. She starts at 7 a.m. and could change the rate customers were charged for gas, Crowder said.
Crowder said they found five vehicles Sunday morning hauling between four and seven gasoline containers each, with about 25 in all. Each of the gas containers could hold three or more gallons of gas, he said. Some of the drivers arrived by 6:45 a.m. and started pumping gas before the store even opened at 7 a.m., Crowder said.
Police charged Jordan, Mary Catherine Jordan, 58; Clifford Parker, 47; Vonnie Oldham, 38; Glennis Fields, 39; and John Jordan III, 27, each with fraudulent schemes, a felony.
Crowder said Madeline Jordan is not related to Fields. She may be related to Parker, he said.
The six suspects are from the Nitro, Dunbar and Leon areas.
Madeline Jordan may also face additional charges, Crowder said.
All six were sent to the South Central Regional Jail on Sunday, Crowder said.
Note: all involved here are probably judgment-proof civilly. However, as far as restitution out of a criminal case, the more the merrier. In West Virginia, the monetary threshold between misdemeanors and felonies is $1,000.00. Certainly the clerk is above that threshold. But, it would be difficult to figure out who bought what gas as far as the records are concerned. That being said, it would be difficult to pin the felony against any of the individuals absent some sort of conspiracy-type charge. But then again, they could confess to stealing more than $1,000.00 worth of gas and they wouldn’t have to worry about the records. – John H. Bryan, Attorney at Law.
- Civil Liability
- Computer Crimes
- Concealed Weapons
- Criminal Records
- Domestic Violence
- Excessive Force
- Forensic Labs
- Governmental Liability
- Grand Juries
- History Series
- John H. Bryan
- Judicial Misconduct
- Law Office Tech
- Law School
- Media Coverage
- Medical Examiners
- Money Laundering
- motions for change of venue
- Negligent Homicide
- Plea Agreements
- Police Misconduct
- Preliminary Hearings
- Pretrial Hearings
- Right to Speedy Trial
- Searches and Seizures
- Self Defense
- Sex Crimes
- Sex Offender Registration
- State Agencies
- United Bank Lawsuit
- Vehicular Crimes
- West Virginia Concealed Carry Laws
- West Virginia Gun Laws
- White Collar Crime
- Wildlife Violations