Contractor Prosecuted in Raleigh County – and thats a good thing…

From the Register-Herald today:

Matthew Peelish, a Raleigh County contractor, pled guilty to 3 counts of felony obtaining goods by false pretenses for taking money from people and not completing the work, and for obtaining materials from local merchants on an account and refusing to subsequently pay. The Court held him to task and sentenced him from 2 to 20 years.

This is extremely common here in Monroe and Greenbrier county, yet no one is ever prosecuted for it. Everyday people are prosecuted for some ridiculous things, and in these situations, you have real victims that lost real money. Yet 9 times out of 10, they have to resort to a civil action, which leaves them trying to collect a judgment years into the future, or worse, from a trustee in bankruptcy. The problem often cited by prosecutors is that it is difficult to show the requisite intent (intent not to pay at the time the goods are taken or money accepted) to prove the charges. But then again, since when do judges or juries hold prosecutors to their burden of proof anyways?

It really hurts a local business when a deadbeat contractor runs up an account of 5, 6 or 7 thousand dollars and then skips out on the bill. It should be prosecuted. Bravo to the Raleigh County Prosecuting Attorney.

You can read the full article here.

– John H. Bryan, West Virginia Attorney.

Sentencing Continued in Greenbrier County “Cattlegate” Case

I apologize for not posting much this week, but it has been one of those end-of-the-month weeks…

As I had previously detailed, the sentencing for O’Brien, Henthorn and **** was scheduled for Friday, June 30, but now has been continued until sometime in the fall. This was likely a joint motion as probation officers had likely not completed their presentencing reports, which the lawyers must rely on and respond to accordingly, depending on what they contain. It’s important to remember that in federal court, the most frequent claim for legal malpractice comes out of mis-advice given by attorneys, to their clients, regarding the federal sentencing guidelines, so it is important to get it right the first time.

For those of you who don’t know, this is just a case that probably repeats itself in all other small towns across the country. You have good country folks who work hard to earn a living. Then you have the fat cats, who get high-on-the-hog by ripping off the working folks. Most times they are greedy, compulsive, narcissistic liars who have an obsession with all things underhanded. They will do anything for money – anything that is, except for actually earn it. They look down at the working peons as a bunch of suckers who were not blessed with the infinite wisdom they were born with, when in reality they were just born as spoiled rich kids with a lack of morals and manners.

It still blows my mind that this bank CEO, and they almost always become extremely rich legally, would throw his life away for $10,000 worth of bribes… In all likelihood, this was not the first time, there probably were many other bribes passed under the table, and that was what made it worth it in his mind, not this particular bribe.

You can read the full article here.

– John H. Bryan, West Virginia Attorney.

Greenbrier County “Cattlegate” Sentencing This Month

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.

Federal Courts in WV Releasing Inmates With Crack Convictions

From the Charleston Daily Mail:

Courts begin freeing inmates under new sentencing rules

by The Associated Press

Federal courts in West Virginia have started releasing some inmates who are eligible for reduced sentences under new guidelines for crack cocaine convictions.

At least 28 inmates have been freed since the new sentencing guidelines went into effect March 3.

“I think it’s running more smoothly than anybody initially thought it was going to,” said federal Public Defender Mary Lou Newberger in Charleston. “The most important thing is, it’s not that everybody is being (released) at one time. There are people who are having their sentences reduced who won’t get out until next year or later. It’s a rolling process.”

The U.S. Sentencing Commission voted unanimously in December to ease its sentencing guidelines to reduce the disparity in prison time for crack cocaine and powder cocaine. For example, a defendant caught with 500 grams of powder cocaine previously faced the same penalty — a mandatory five-year prison sentence — as one caught with 5 grams of crack cocaine.

In West Virginia, about 490 inmates in the southern district and 617 inmates in the northern district are eligible for reduced sentences, court officials said.

U.S. Attorney Sharon Potter said 28 inmates in the northern district were freed on March 3.

But shorter sentences are not automatic for every inmate who seeks one, Potter said.

“For example, if other drugs were involved in a conviction or if a firearm was involved, this reduction may not impact the original sentence whatsoever,” Potter said “Further, if a defendant was found to be a career offender, meaning his or her criminal history warranted a higher guideline sentence, this reduction would have no impact on the case.”

Potter said a defendant’s conduct while in prison also is a factor that is considered.

In the southern district, the judges issued an order Feb. 6 establishing a standard procedure for addressing such cases. Each eligible inmate’s case is reviewed by probation officers, federal prosecutors and a judge before a sentence is reduced.

Chief U.S. District Judge Joseph R. Goodwin said the procedure includes safeguards to ensure that an inmate who poses an immediate threat is not released.

“It would be naive to assume that all people getting out of prison will never again commit a crime,” he said. “But we have to keep in mind that all of these people will get out at the end of their sentences. The determination we’re making here is simply one which we hope is informed as to whether their sentence should conform to others eligible for this reduction.”

Ex Huntington Car Dealer Pleads Guilty to Fraud

From the Charleston Daily Mail:

Ex-car dealer pleads guilty to defrauding bank

by The Associated Press

HUNTINGTON — A former car dealer who falsely obtained at least $2.5 million from BB&T through a financing scheme pleaded guilty Monday to federal fraud charges.

Frederick G. Davis of Lesage admitted that he used a line of credit for his dealership to defraud the bank. The 51-year-old Davis owned Davis Chrysler Plymouth Jeep Eagle in Huntington until 2003, when he sold it.

U.S. Attorney Charles Miller’s office says the fraud occurred from July 2001 through December 2002 and cost BB&T between $2.5 million and $7 million.

Davis pleaded guilty to one count of bank fraud and one count of engaging in an unlawful monetary transaction.

He faces up to 40 years in prison and a fine of at least $1.25 million. Sentencing is set for June 8.

Update: O’Brien, Henthorn and **** Plead Guilty in Greenbrier County Cattle/Bank Scandal

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

Christian Giggenbach
Register-Herald Reporter

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.

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Patricia Brown Sentenced to 40 Years

Yesterday, Patricia Brown was sentenced to 40 years, which is the maximum sentence for 2nd degree murder. Following a jury trial, she was acquitted of first degree murder. At the hearing, two members of the victim’s family spoke. Then Patricia briefly spoke on her own behalf, still proclaiming her innocence.

Usually, when the family of the victim speaks at the sentencing, and when the defendant still proclaims her innocence, a greater sentence will be imposed than in your run-of-the-mill sentencing hearing. In this case, myself and Tom White, as her defense attorneys, were fully prepared for her to receive the maximum sentence.

However, 40 years is much better than life without mercy. In her case, she will come up for parole in 10 years – actually 9 years since she has already spent one year in jail. – John H. Bryan, West Virginia criminal defense attorney.

Former State Senator Sentenced to 2 Years

As detailed in the Charleston Gazette today, former WV State Senator Lisa Smith was sentenced to 2 years in federal prison in Alderson, and must pay the IRS 1.3 million dollars. As has been previously covered in the West Virginia Political Sweatbox Blog, this is a shining example of how politicians – especially in West Virginia – believe that they are above the law.

West Virginia legislators are like Robin Hood’s Sheriff of Nottingham. They are siphoning off every dime earned by our hard-working citizens (and then giving every dime to our non-working citizens), all-the-while lining their own pockets with silver and gold.

As an interesting side-note, at the sentencing Lisa Smith’s attorney, Tom Smith, argued that she should be given a lesser sentence because she is supposedly bipolar. He stated that “the spending, the irrational thought — that is the behavior that brings us here. Everything she did is consistent with bipolar disorder. You’re behind on your taxes so you start gift shopping? That’s not rational behavior.” Federal District Court Judge Robert C. Chambers rightly responded that her circumstances were more the result of “her greed and her arrogant pursuit of public office.” – John H. Bryan, Attorney at Law