Six Sentenced in Georgia for Reverse Mortgage Fraud Scheme

Image source:

You've probably heard of reverse mortgages, pitched on television ads by celebrities such as Robert Wagner and Fred Thompson. The mortgages are part of the U.S. Department of Housing and Urban Development's (HUD) Home Equity Conversion Program (HECP) which permits senior citizens aged 62 years or older to purchase a home or remain in a home where it may be difficult for them to provide a conventional loan. There are two types of "reverse mortgages." First there is, the “refi-reverse” in which the lender pays the homeowner for a portion of the equity in the owner's home. The homeowner must have significant equity in the home to qualify. There is also the “purchase-money reverse,” in which the lender pays the homeowner towards the purchase of a home. The HECP is insured by the Federal Housing Administration (FHA).

On Monday, as fully recounted by RealEstateRama Georgia, six defendants, Kelsey Torrey Hull, Jonathan Alfred Kimpson, James Michael Green, Herbert Bush, Wilbur “Sonny” Letak, and Kevin Claude Barnett, were sentenced in the U.S. District Court for the Northern District of Georgia for reverse mortgage fraud. The defendants were charged with taking money from seniors to purchase homes under the HECP and then placing the seniors in homes worth only a fraction of the value paid. They were also alleged to have used forged and back-dated documents, faked down-payments, and to have purchased properties and resold them to seniors at up to 16 times their appraised value. The defendants included a closing attorney.

The defendants' sentences ranged from 5 years probation to 151 months' imprisonment. 


7th Circuit Reverses Mail and Wire Fraud Conviction of Contractor for Alleged Bid Rigging

Steven Fenzl was the principal of Urban Services of America, Inc. ("Urban"). Fenzl was charged with alleged mail fraud and wire fraud in the U.S. District Court for the Northern District of Illinois. The charges related to alleged bid-rigging under the Sherman Act on a 2005 contract to refurbish the City of Chicago's garbage carts.
Urban had won bids from the City in the past--however it had been subject to investigation on the allegation that Fenzl's partner and co-defendant, Douglas Ritter, had cashed checks from the City written to other contractors. As a result of the investigation, Fenzl and Ritter were afraid that Urban would not be awarded the contract even if it submitted the lowest bid. So Fenzl and Ritter persuaded three other companies to bid on the contract who would not otherwise have done so, with the understanding that if one of the companies were awarded the bid by the City, it would subcontract the fulfillment to Urban. Urban also submitted a bid, which was the lowest. The City awarded Urban the contract. However, the City was unaware of Urban's communications with the other bidders. All bidders, including Urban, had to certify to the City that they had not entered into any agreements with other bidders relating to the price of the bids. Fenzl was indicted in 2009, and was convicted at trial last year.
Last week, the 7th U.S. Court of Appeals reversed Fenzl's convictions, in an opinion authored by Judge Posner, U.S. v. Fenzl, No. 11-2459 (7th Cir. 2012), available here. The Court held that it was difficult to see what was wrongful about Urban's alleged "scheme,"  since it increased, rather than reduced, competition among the bidders. It noted that the theory behind the government's fraud charges against Fenzl was infirm, since "[n]o evidence was presented that the more bidders there
were, the more likely Urban’s bid was to be accepted and that this would result in a higher price to the City for getting its garbage carts spruced up." Even if there were fewer bidders, Urban still would have likely been awarded the contract as the low bidder.
The Court rejected Fenzl's companion argument, that he could not have committed mail or wire fraud since the City did not lose any money as a result of his conduct. It observed that "there is no requirement that the victim have incurred, or the defendant have intended him to incur, a pecuniary loss. [Cit.] If you steal money from a person, it is theft even if you intended to, and did, replace the money before he noticed it was missing." (Citing U.S. v. Joshua, 648 F.3d 547, 553 (7th Cir. 2011)).
Fenzl was also charged with fraud relating to failure to subcontract to a woman or minority-owned business enterprise. However, the trial court ordered him acquitted of this charge. The Court of Appeals ordered Fenzl to be retried on the charge.


Former Cartersville, GA, Mayor Sentenced for Mortgage Fraud

H. Gregory Cordell, the former Mayor of Cartersville, Georgia, was sentenced to over two years imprisonment last Friday in the U.S. District Court for the Northern District of Georgia for mortgage fraud, as reported by the Chattanoogan. According to statements by the U.S. Attorney's Office for the Northern District of Georgia, Cordell inflated the purchase price of the property, lied on his mortgage application, and received a $1 million loan, from which Cordell was paid a kickback.

Four Executives Acquitted in Florida Hurricane Catastrophe Fraud Case

As reported in the Miami Herald, four former executives for Vanguard Fire and Casualty Co. were acquitted yesterday in the U.S. District Court for the Northern District of Florida in Tallahassee on charges that they allegedly defrauded the Florida Hurricane Catastrophe Fund of $20 million. The charges arose from the 2004 hurricane season, one of the most deadly and destructive for Florida, in which the State was hit by four hurricanes, Charley, Frances, Ivan and Jeanne.

The defendants were tried by a bench trial (i.e. trial by the judge without a jury). U.S. District Judge Robert Hinkle found in favor of the executives, former Vanguard President William Sanders, former CEO Thomas Stinson, Richard Magsam and John Henry Axley III, holding that there could not have been any fraud because the defendants told hurricane fund officials what they were doing and why they were doing it.

Image source:


Chinese-American Former Motorola Employee Acquitted on Espionage Charge

Image source: World Military Forum

On February 28, 2007, Hanjuan Jin, a Chinese-American and engineer for Motorola, attempted to board a one-way flight for Beijing, China, at Chicago's O'Hare International Airport. She was stopped by Federal agents before she could board the flight and found to be carrying a computer and other electronic storage devices containing more than 1,000 proprietary Motorola documents.

Jin was charged in the U.S. District Court for the Northern District of Illinois with espionage and theft of trade secrets. Prosecutors alleged that Jin intended to provide the information to Sun Kaisens, a Chinese telecommunications company and supplier to the Chinese military.

Yesterday, as reported by the Chicago Tribune, U.S. District Judge Ruben Castillo, following a bench trial, found Jin guilty on the trade secrets counts, but acquitted her on the espionage count. The Judge held that while there was evidence that Jin intended to betray Motorola, there was no evidence that she intended to betray her adopted country.

The Jin case is one of a series of recent prosecutions of alleged espionage on behalf of the People's Republic of China. This week, prosecutors in California obtained an indictment against the Pangang Group, a Chinese company, for conspiracy to commit economic espionage against chemical giant DuPont, and last July, Chunlai Yang, a computer programmer, was indicted for allegedly stealing trade secrets from trading exchange operator CME Group.

Anand Leaving Atlanta USAO For Federal Magistrate Position

Justin Anand, 40, Deputy Chief of Economic Crimes at the U.S. Attorney’s Office in the Northern District of Georgia, is leaving that office in June to become the newest U.S. Magistrate Judge in that district. Justin distinguished himself during his 8 year tenure at the U.S. Attorney’s Office in Atlanta with his hard work and professionalism.

Justin graduated from Harvard Law School in 1998, clerked for a district court judge in the Southern District of New York and then spent four years working as a litigation associate at a large corporate firm in New York City.


Justin has been at the forefront of many of the major prosecutions conducted by the Atlanta USAO over the last few years and is well regarded by colleagues, defense counsel and of course, the judiciary. His efforts in the U.S. Attorney’s Office in Atlanta will be missed.

Georgia Federal Court Judgeships Remain Vacant

A seat on the Court of Appeals for the Eleventh Circuit and two judgeships with the U.S. District Court for the Northern District of Georgia remain vacant, as reported in the Atlanta Journal-Constitution. All of the three positions have been vacant for at least a year, with one of the District Court judgeship having been vacant for 31 months. The vacancies have been declared "judicial emergencies" by the U.S. Courts.

On January 26, 2011, President Obama nominated U.S. Magistrate Judge, Linda Walker, and Natasha Perdew Silas, a Federal public defender in Atlanta, for the District Court judgeships. If confirmed by the Senate, they would become the first African-American women District Court judges in the Northern District. Georgia's Senators, Saxby Chambliss and Johnny Isakson, have given blue slips of approval for Judge Walker, but have not for Ms. Silas. The failure to give Ms. Silas a blue slip effectively blocks the Senate from voting to confirm her. The failure has caused friction between the White House, which views Judge Walker and Silas as a package nomination, and Congressional Republicans.

Image source

The Eleventh Circuit vacancy is the result of the retirement of Justice Stanley Birch, who was appointed by President George H.W. Bush in 1990, in August of 2010. The White House has not nominated any replacement for Justice Birch.

Two Former Georgia Department of Family and Children Services Employees Sentenced for EBT Fraud

The Atlanta Crime Examiner reports that Gene Tell and Kristy Nicole Williams were sentenced last Thursday in the U.S. District Court for the Northern District of Georgia. Tell and Williams, employees of the DeKalb County office of the Georgia Department of Family and Children Services (DFCS), were charged with defrauding the U.S. Department of Agriculture of nearly $600,000. The defendants took the funds through DFCS' electronic benefits transaction (EBT) system.

Government Won't Take Another Swing at Barry Bonds

 The United States Attorney's Office for the Northern District of California filed a dismissal last week of its remaining charges against former San Francisco Giants slugger and outfielder, Barry Bonds, as reported by the Associated Press. Bonds was convicted in April on one count of obstruction of justice. However, a mistrial was declared on the three counts of perjury against Bonds.

The dismissal has spared Bonds a second trial. However, the trial judge has upheld his obstruction conviction. Bonds'  recommended sentencing range is 15 to 21 months' imprisonment, but the court may impose a lesser sentence at sentencing. 

Georgia Resident and DOD Employee Charged with Bribery

As reported by Reuters, Desi Deandre Wade, of Climax, Georgia, was a chief of fire and emergency services for U.S. Department of Defense, based in Kabul, Afghanistan. Wade has been charged with allegedly accepting a $95,000 bribe from a contractor in exchange for providing the contractor with quotes from competing bidders.

Wade was arrested last week in Atlanta while attending a Fire Rescue International Conference.

New York Attorney Salvatore J. Piemonte Acquitted on Federal Charges of Allegedly Aiding and Abetting Drug Dealers

Salvatore J. Piemonte, a former prosecutor for the Onondage County District Attorney's Office in Syracuse, New York, for seven years, and former a local judge, was indicted last November in the U.S. District Court for the Northern District of New York for allegedly aiding and abetting the sale of marijuana, according to The government charged that Mr. Piemonte allegedly accepted a large sum of money from drug dealers in exchange for providing them with false documentation. The documentation allegedly falsely represented that a courier for the drug dealers had been arrested, and the drug dealers purportedly intended to show the documentation to their supplier in Canada in a scheme to pocket the proceeds from their drug sales. 

Happily, yesterday, a jury acquitted Mr. Piemonte on the charges following trial. His defense centered on a frequent theme in such prosecutions--that the drug dealer witnesses for the government had fabricated the allegations in order to get their sentences reduced. The Blog congratulates Mr. Piemonte and his counsel on the victory. 

Image source:

Conrad Black Re-Sentenced to an Additional 13 Months' Imprisonment


Photo credit:

On Friday, U.S. District Judge Amy St. Eve of the Northern District of Illinois re-sentenced Lord Conrad Black, former CEO of newspaper giant Hollinger International, Inc., to serve the remainder of his sentence, as reported in Canada's Globe and Mail. Black has served 29 months of his original 78 month sentence, imposed following his conviction on three of 12 counts in July of 2007. He has been on release from prison for nearly a year while his appeals of his convictions have been pending.

According to the article, Black has sued Richard Breeden, a special investigator for Hollinger and former Chairman of the U.S. Securities and Exchange Commission, and others for libeling him in a special report prepared for Hollinger. The Supreme Court of Canada is considering whether the dispute should be heard in Canada or the United States. 

Conversion Solutions Holdings CEO of Adairsville, GA, Arrested in Provo, UT, After Fleeing Trial

After a five-day nation-wide manhunt, Rufus Paul Harris, former CEO of Conversion Solutions Holdings Corporation (CSHC), originally of Adairsville, Georgia, was arrested on Sunday  by the U.S. Marshal's Service in Provo, Utah. According to the Rome News-Tribune, Harris fled Atlanta on May 23 following the eighth day of his jury trial for conspiracy, fraud and falsifying financial statements in the U.S. District Court for the Northern District of Georgia in which Harris was representing himself.  The charges against Harris were based on an alleged "pump-and-dump" scheme in which Harris and others allegedly inflated CSHC's stock prices by false claims and financial statements and defrauded investors out of millions.

Harris was convicted in absentia and will be sentenced on August 18, and will face a potential 25 years' imprisonment. 

Photo: amberlrhea

Government to Decide Whether to Take a Second Swing at a Bonds Conviction

Former San Francisco Giants slugger and outfielder Barry Bonds was convicted last Wednesday on one count of obstruction of justice, after the U.S. District Court for the Northern District of California declared a mistrial on the three perjury counts against the former player.

The Associated Press has reported that U.S. Attorney for the Northern District of California Melinda Haag has informed the media that the Government may seek a second trial of Bonds as a result of the dismissed counts. The Court has scheduled a hearing on May 20 to determine whether or not the Government will seek a second trial.

New York Senator May Be Retried in Wake of Supreme Court's "Honest Services" Fraud Decision

New York Senator Joseph L. Bruno was indicted in January of 2009 on eight counts of fraud. A jury in the U.S. District Court for the Northern District of New York acquitted Bruno, who is now 81 years old and the former Republican Majority Leader of the New York State Senate, on five of the remaining charges and deadlocked on the sixth in December of 2009. The charges were based on allegations that Bruno allegedly took approximately $3 million in kickbacks from businesses seeking to do business in New York, as well as labor unions. In particular, Bruno s alleged to have accepted $280,000 in "consulting fees" from companies associated with Loudonville, New York, businessman Jared Abbruzzese. Bruno was sentenced to two years' imprisonment last May, but has remained free pending his appeal in the U.S. Court of Appeals for the Second Circuit.

Now the U.S. Attorney's Office has filed a brief with the Court of Appeals requesting that the dismiss the charges against Bruno and remand his case for a new trial, as reported in the Saratogan. The prosecution argued that Bruno's convictions under 18 United States Code Section 346--the honest services fraud statute--cannot stand following the U.S. Supreme Court's decision in U.S. v. Skilling, the case against former Enron executive Jeffrey Skilling, as the Blog has noted here. However, it maintains that it can obtain another indictment of Bruno under the statute, as amended by Skilling. The government contends that it will be able to prove a quid pro quo if Bruno is ordered retried. Bruno and his counsel have filed a brief with the Court of Appeals arguing that any retrial of Bruno would violate double jeopardy.

Perjury and Obstruction Trial Against Former San Francisco Giant Barry Bonds Commences in San Francisco; Trial to Begin With Hearing on Bonds' Former Weight Trainer--Possible Contempt


The trial of former San Francisco Giants outfielder Barry Bonds on four counts of perjury and one count of obstruction of justice commenced yesterday in the U.S. District Court for the Northern District of California according to the San Francisco Chronicle. The charges against Bonds arise from his statements to a grand jury in 2003 in relating to an investigation into the Bay Area Laboratory Co-Operative (BALCO) in Burlingame, California, and steriods. Bonds told the grand jury that he never knowingly used banned drugs. The transcript of his December 4, 2003, testimony may be read in full here. Jury selection took place yesterday.

The jurors' names will be kept secret until the conclusion of the trial (however, the jury includes at least one Oakland Athletics fan). Opening statements are expected to take place today, followed by a hearing concerning Bonds' former weight trainer, Greg Anderson. Anderson pled guilty in the BALCO case and has served a year in prison for refusing to cooperate in the investigation of Bonds. The prosecution has subpoenaed him as a witness at trial, however Anderson has stated his intention not to testify against Bonds. The Court has stated that it will rule Anderson in contempt if he refuses to testify and hold him in prison for the duration of the trial.

Bonds, who played as a left fielder for the Pittsburgh Pirates from 1986 to 1993, and for the Giants from 1993 to 2007, holds Major League Baseball records for home runs in a single season, is an all-time leader in walks and intentional walks, and is also the recipient of 14 All-Star awards, 8 Golden Glove awards and 7 Most Valuable Player awards.

Georgia Minister Receives 5 Years for Burning and Defrauding Church

Donny Ray Horton of Hoschton, Georgia, a minister at Gardendale First Baptist Church in Birmingham, Alabama, was sentenced to five years imprisonment yesterday in the U.S. District Court for the Northern District of Alabama on  charges of arson and mail fraud, according to Horton allegedly set two fires at the church last year. He was also charged with defrauding the church of  $78,769 for church pews, which he received in his role as a sales representative for Sauder Manufacturing, which makes seats and pews for churches.

Head of Georgia Medical Equipment Provider Indicted for Medicare Fraud; Atlanta Inmate Indicted for Selling "Cooperation" Information to Defendants

Samuel Curtis, III, a Texas resident, has been charged with four counts of health care fraud and aggravated identity theft in the U.S. District Court for the Southern District of Georgia for allegedly attempting to steal more than $500,000 from Medicare, according to an article in the Florida Times-Union. Curtis is alleged to have operated Perferred Prosthetics and Orthotics, a medical equipment supply company doing business in Georgia and Texas, and to have allegedly stolen information from Medicare physicians and recipients and used the information to submit false claims to Medicare. The indictment alleges that Curtis and others routinely billed Medicare for ankle, knee and back braces and other medical devices that either were never provided to patients, were not medically necessary or had not been prescribed by a doctor. Curtis' associate, Cecil Risher, of Brunswick, Georgia, was arrested earlier in the investigation.

In other Georgia news, according to 7th Space, Sandeo Dyson, a former inmate of the Atlanta City Detention Center, has found himself indicted once again in the U.S. District Court for the Northern District of Georgia for allegedly obtaining information about crimes being committed in Georgia and North Carolina from other inmates and then selling the information to criminal defendants in cases in the Northern District for five to ten thousand dollars apiece, earning an approximately $50,000 from the scheme. The defendants would offer the information provided by Dyson to have their sentences reduced for cooperation. Dyson allegedly instructed the defendants to lie to authorities by concealing the fact that they had no real personal knowledge of the proffered information, and had  purchased the information from Dyson. Dyson is charged with one count of conspiracy to obstruct justice and to make false statements, three counts of obstruction of justice, and two counts of false statements.


Utah Man and Canadian Citizen Indicted In Georgia for Conspiracy, Mail and Wire Fraud, May Have Been Conned by Their European Contacts

As reported in the Salt Lake Tribune, Thomas Repke of Holladay, Nevada, has been indicted in the U.S. District Court for the Northern District of Georgia on 22 counts of conspiracy, mail fraud and wire fraud. The charges are based on allegations that Mr. Repke, through the companies Coadum Capital and Mansell Acquisition Co., allegedly defrauded more than 100 investors of more than $30 million. Mr. Repke and James Jeffrey, a Canadian citizen, are alleged to have promised investors monthly returns of 5 percent on their investments. The indictment charges that Mr. Repke and Mr. Jeffrey promised investors that their money would be kept safe in escrow accounts, but allegedly transferred $20 million in investor funds to accounts in Switzerland and Malta, as well as allegedly diverting substantial funds to themselves, companies which they controlled and investments of family members. The defendants are alleged to have made false statements to investors about their monthly gains and account balances and to have used funds from investors to pay off other investors in what a Ponzi scheme.

Mr. Repke's and Mr. Jeffrey's uses of investor funds do not appear to have been totally selfish, however. Coadum is alleged to have used $425,000 of the funds to commission a 40-foot bronze statue of New York City firefighters for the National Fallen Firefighters Foundation for a memorial to September 11, 2001. Furthermore, in a novel twist, comments by Pat Huddleston, a receiver appointed to oversee companies operated by Mr. Repke and Mr. Jeffries, indicates that the two men might have been victims themselves, deceived by individuals in Europe who they dealt with. "My investigation shows they were conned out of that money," Huddleston stated. "They might have believed they were making legitimate investments over there, but the person was essentially conning them."

Mr. Repke pleaded not guilty to the charges yesterday and was released on a $250,000 bond. The U.S.Securities and Exchange Commission has also sued Mr. Repke and Mr. Jeffrey.

Alabama Contractor Roger Taylor Acquitted of Conspiracy, Bribery and Obstruction Charges Following Federal Trial; Avoyelles Parish Sheriff Bill Belt and Family Acquitted

On Tuesday, a jury in the U.S. District Court for the Northern District of Alabama in Tuscaloosa found construction contractor Roger Taylor not guilty on one count of conspiracy, five counts of bribery and two counts of obstructing justice, according to Tuscaloosa News. Mr. Taylor was one of numerous individuals investigated in relation to Alabama's Community College System. Mr. Taylor, co-owner of Hall-Taylor Construction, and was alleged to have bribed former two-year college Chancellor Roy Johnson by paying for more than $92,000 in construction costs and appliances at Johnson’s home in Opelika, Alabama, in exchange for awards of construction management work within the system. The government alleged that Mr. Taylor  was awarded $4 million in no-bid state contracts from 2002 to 2006 in exchange for the alleged bribes.

Mr. Taylor's trial began on October 25. He  was originally charged with 17 counts, but the majority of these were dropped after a successful appeal by a co-defendant. At trial, however, the prosecution failed to present any testimony showing that Johnson alleged directed or threatened college presidents to hire Hall Taylor on contracts for a massive makeover of the college system. On the contrary, witnesses testified that another construction management firm received a fair share of the contracts. The witnesses at the trial also praised Hall-Taylor's work. Mr. Taylor's counsel made the trial into a referendum on Johnson's credibility. Johnson pled guilty to 14 charges of conspiracy, bribery, witness tampering and money laundering in January of 2008. He is scheduled to be sentenced on November 18.

17 individuals, including former state legislators, college presidents and the system chancellor, have either pled guilty or been found guilty by a jury as a result of the investigation. A spokesperson for the U.S. Attorney’s Office for the Northern District of Alabama issued a statement that the prosecution believed it had presented sufficient evidence to find Mr. Taylor guilty of the bribery and obstruction charges, but that it respected the jury's verdict. The government has a companion civil forfeiture case against Hall-Taylor's assets. Mr. Taylor's counsel stated that the prosecution intimidated and threatened witnesses at the grand jury investigating Johnson, and have indicated that Mr. Taylor may seek recourse for the prosecution's actions.

In other positive Federal criminal news, Bill Belt, the former Sheriff of  Avoyelles Parish, Louisiana, his wife, Tracy Belt, and his sister, Julie Bernard, were found not guilty of conspiracy, mail fraud and obstruction of justice last week by a jury in the U.S. District Court for the Western District of Louisiana after a trial which also began on October 25, according to

In 1988, Sheriff Belt allegedly contracted with Michael and Rae Johnson to install pay  telephones  for prisoners in Avoyelles Parish in a venture called Cajun Callers. Under the agreement, Cajun Callers would pay a monthly commission to the Sheriff's Office. The Johnsons made large amounts of money  from the venture, which they failed to pay taxes on. Johnson subsequently became a Louisiana  State Judge, but  was removed from the bench due to ethical violations relating to Cajun Callers. The government alleged that Sheriff Belt was paid kickbacks.

In 1990, Sheriff Belt's future wife began keeping the books for two companies She owned: Southern Louisiana Communications, which operated public pay phones; and Central Louisiana Communications, which operated phones in Louisiana parish jails.

Rae Johnson testified at trial that Tracy Belt would allegedly take money collected from the pay phones and deposit it and then write three checks in identical amounts--one of which was to her husband's tax account from which taxes were never paid. Johnson stated that she would allegedly cash one of the other checks and deliver the money to Mrs. Belt. Sheriff Belt's counsel undermined Johnson's account of the triple-check scheme on cross-examination, however. Counsel argued in closing that Johnson was a liar who escaped prosecution herself by making up stories about the Belts. The government also presented the testimony of a convicted male pedophile who installed the Cajun Callers phones in the jails, and another convicted felon who served time for crimes including insurance fraud.

Rome Man Enters Last Minute Plea In Phantom Timber Prosecution

Aaron Wilbert Freeman of Rome, Georgia, pled guilty last week in the U.S. District Court for the Northern District of Georgia to one count of conspiracy and one count of wire fraud after a jury had been selected in his trial, according to a press release by the U.S. Attorneys Office for the Northern District of Georgia,  Freeman operated a "scale house" for the Temple-Inland Company where trucks carrying timber were weighed and drivers were issued a "scale ticket" as proof of delivery of the timber. Freeman was alleged to have manipulated the scale house's computer system to note multiple deliveries of timber where in fact there was only a single delivery. Freeman allegedly recruited delivery drivers, co-defendants Kevin Fields, Jason Joseph, Roger Carthern, Andrew Carthern, David Carthern, Robert Frank Ferguson and Bonner Tate to redeem false scale tickets with timber suppliers. The alleged co-conspirators are alleged to have laundered the monies gained through various accounts, and to have split the profits with Freeman. The scheme allegedly netted approximately $4 million. All of the defendants were indicted in November of 2009.

Former Home Depot Employee Ian Jay Evans Acquitted on Conspiracy and Money Laundering Charges for Alleged Kickback Scheme

Ian Jay Evans of Mableton, Georgia, a former Home Depot employee, admitted to splittting  $1.4 million in commissions with a product buyer for Home Depot, first to purchase rugs and other products from a vendor, and later to select Evans as a consolidator for rugs when Home Depot reset its rug department. He was charged in the U.S. District Court for the Northern District of Georgia with conspiracy to commit money laundering and 17 counts of money laundering. However, according to the Atlanta Journal-Constitution, after a week long trial, the jury acquitted Evans on all charges yesterday after deliberating for approximately 30 minutes.

Evans and his counsel argued that, even if the payments violated Home Depot policy, they did not constitute a federal offense. Evans attorney argued that, despite any alleged conduct by Evans, Home Depot did not lose any money but, on the contrary, made millions from the transaction.The Home Depot product buyer, Ronald Douglass Matheny, pled guilty to honest services fraud last year.

Evans' case is one of several against Home Depot employees for alleged kickbacks. A Home Depot spokesman stated that the company is considering filing a civil action against Evans.

Former Brocade CEO Greg Reyes Sentenced to 18 Months; Counsel Blames Lawyers for Failure to Catch Stock Option Backdating

From, the former Chief Executive Officer of Brocade Communications Systems, Inc., Gregory Reyes was sentenced to 18 months in prison yesterday in U.S. District Court for the Northern District of California for securities fraud and backdating stock options. The government had sought a 37 month sentence and a loss amount of $137 million.

Reyes' counsel attempted to argue that his lawyers should have done a better job in advising Reyes. U.S. District Judge Charles Breyer apparently found the argument an interesting one, stating "Yes, it's not a bad question to ask, 'Where were the lawyers?'" However, the Court rejected the argument, finding that Reyes was a sophisticated executive who understood what he was doing.

Reyes was first tried and convicted on the charges in 2006 and was sentenced to 21 months' imprisonment. However, the Ninth Circuit Court of Appeals reversed his conviction last year based on prosecutorial misconduct in interfering with witness testimony. Reyes was tried a second time in February and March of this year, and was convicted on nine counts. During the trial, Reyes' counsel blamed Brocade's outside counsel, attorneys with the law firm of Wilson Sonsini Goodrich Rosati, for failing to catch stock option backdating. However, Reyes' trial counsel never called anyone from the firm to testify. One of the documents at issue in the case was drafted by two experienced attorneys.

The Court received over 400 letters on Reyes' behalf.