Meaningful stimulus

I received my official notice this week that I qualify for a “stimulus” check from the federal government. It’s real nice of Uncle Sam to borrow money from China in order to buy my vote this year. But I plan to make my stimulus check mean something by following a policy I advocated during my recent political campaign.

I’m going to spend that money on something that reduces my carbon footprint and, of course, my energy bill. Because I own a dinosaur of a washing machine, I expect I will decide to buy a new, energy-efficient, low water-use model that will also leave my clothes drier at the end of the spin cycle. This would cut my electric bill for washing, my water bill and my gas and electric cost for those times when I use my gas dryer. (Ideally, I know, I should NEVER use my dryer — but my neighbor has two pit bulls chained full-time next to our common fence so my back yard smells like dog waste for most of the summer. Eventually those poor beasts will die or I’ll move. So it goes.)

And to multiply the local effect of my dollars, I will buy the new machine from a local appliance dealer instead of from a national chain store. That keeps more of my dollars in the local community and even if I pay a little more because the local vendor doesn’t get the big volume discounts that go to Sears or WalMart, the money will stay in Asheville a little longer and that benefits everyone who participates in the local economy.

My refrigerator is also old, but I’ll have to do some analysis of energy costs before I believe a new, smaller refrigerator would get me as much bang per buck.

I’ve already installed additional attic insulation, another place that I could have profitably spent my check, and the cost of adding insulation to the walls of this 1905 building would far exceed the amount Uncle Sam has promised me. I also have a bicycle in good working condition, another way a person could spend the bonus to reduce energy use.

Economists have pretty unanimously agreed that the stimulus checks are a sham that will have no appreciable effect on the U.S. economy, but at least by using mine to carve into my energy use I will be gaining a long term benefit for my personal economy. And as a final note: what’s with the Feds and the mail? I have received one mailing telling me about the program. Another telling me that I qualify and can expect a check soon. And, presumably, I will eventually get a check in the mail. Wouldn’t ONE mailing have handled all three?

If you missed the link in the story, click here to read the articles.

Further update on trial

As I have time, I’m filling in details about the middle section of the Medford trial—for those of you who want the full scoop. If you jump to this post, then scroll down, I’ll date additions as I have time to insert them. I’m working in small town Mt. Airy this week, kind of like Asheville from an earlier era with a few modern accouterments thrown into the mix. (Maybe we could get the Asheville Chamber of Commerce to start advertising Mt. Airy instead?)

Questions linger following Medford conviction

Lest we forget, the just completed federal trial of former Buncombe County Sheriff Bobby Medford is only one part of the corruption evident in his administration. In fact, the trial opened new questions about Buncombe County government. Here are the questions I will continue to ask.

1. Payroll fraud

I told county commissioners about verifiable allegations of payroll fraud in Medford’s department in late 2004. I have sources on and off the record who say they were ordered by Medford to falsify records. Now, evidence introduced in the trial has documented outright fraud by Medford concerning his own work hours. After spending 162 work days at Harrah’s Cherokee Casino during his last year in office he claimed and received $20,000 in back pay for vacation time he “never used.” Uh huh. He took fellow employees, notably his secretary Sharon Stewart, with him on many occasions. How much vacation time did she claim?

2. Guns and drugs and money

We still have no accounting for the stuff missing from the department evidence locker in the interim between Medford’s exit and Sheriff Van Duncan’s entry to the building. Over 300 guns missing, with my sources indicating that Medford sold at least some of those guns to Jackie Shepherd and gave away others. Drugs from over 1,000 evidence bags vanished. About $200,000 in cash, nowhere to be found. Most grievous of all were the unlabeled rape kits. Have any prosecutions been diverted due to that missing evidence?

And why didn’t the District Attorney’s office know that the evidence from so many cases was missing?

3. The rest of the gambling money

The trial involved perhaps 150-200 video poker machines in the county. When I reported on the industry in 2005 I found more than 520 machines, and I’m sure I couldn’t account for them all. Are we supposed to believe that the corruption which involved Henderson Amusement, Hot Dog King, Mountain Music and Western Amusement together with the handful of shop owners who appeared as witnesses comprise ALL of the gambling industry in the county? What about the football pools and other organized gaming including big stakes poker in which Medford is said by multiple sources to have involved himself?

And what about the $1,000 payoff to “Buncombe County Commission” reported by two witnesses at the trial? Was it one commissioner? Which one?  More than one?

4. Ongoing video gaming

I have already received two separate reports that video gambling is back in operation in at least three locations in the county. The new twist is reportedly that players are issued a phone card and credits are accumulated on the card. The putative claim is that the transactions occur on the internet and so do not qualify as local gaming, but cash has been changing hands according to my sources.

Stay tuned. This opera ain’t over yet.

Guilty on all counts

After two hours of deliberation the jury found Bobby Lee Medford and Guy Kenneth Penland guilty on all ten counts with which they were charged. In addition, the jury affirmed forfeiture of $287,776 by the defendants in recompense for ill-gotten gains.

The maximum sentences for each defendant amount to 170 years. Judge Tim Ellis has a record of imposing harsh sentences, particularly in cases involving misprision by public officials. Sentencing will occur in 4 to 6 weeks.

“Drink from the decanter of insanity” Medford case goes to the jury

The jury in the trial of former Buncombe County Sheriff Bobby Medford and co-defendant Guy Penland will begin its deliberation at 9 a.m. this morning. Yesterday the prosecution and defense presented closing arguments and Judge Tim Ellis provided jurors with instructions on their responsibilities, process and the law.

Ellis had presented proposed jury instructions to counsel at 9 a.m. Wednesday and the two sides offered amendments and objections until the final statement was approved just before 11 a.m. when the jury returned to its box.

At 11:10 a.m., Assistant U.S. Attorney Corey Ellis spoke for the government, using a Powerpoint to illustrate his argument. (I don’t think I’ve previously noted that the jury box is equipped with seven large flat-screen monitors to permit display of evidence.) The series of slides included split screen images depicting each of the principal witnesses in the case, quotes from their testimony and photos of corroboratory documents admitted as evidence. Ellis’ 40 minute recitation was tight and compelling.

He recounted Medford’s assignment of Johnny Harrison to oversee video poker registration and Harrison’s cashing of checks at Bi-Lo stores and George’s Mini-Mart beginning in 2002. The Mini-Mart was owned by Nick Anagnostopoulous, and Medford soon began to cash his own checks at Nick’s store. Displaying one of those items in the amount of $2,100, Ellis noted, “We’re told that Mr. Medford cashed these checks in order to deposit cash into his bank account. How many of you do that? There’s a pattern of strange behavior here, at the very best.”

Ellis discussed Jerry Pennington, the salesman for Henderson Amusement who was assigned to do community service as alternative sentencing for gambling convictions. “Judge Bridges in the Superior Court in Cleveland County signed an order to move that community service to Buncombe County under the supervision of Capt. Guy Penland. The judge thought Penland was a Captain working for the sheriff’s department which somehow engineered this fraud … When Linda Clontz, the supervisor of community service for the corrections system, called Bobby Medford to raise questions about Penland’s and Harrison’s false documentation of Pennington’s service, did Medford take action to enforce the law? No. ‘He placated me,’ is what Clontz told this court.”

Ellis reiterated Pennington’s testimony about purchasing 100 video machine registration stickers from Penland for $10,000, his possession of a deputy’s badge provided by Penland, his special deputy identification cards signed by Medford and the presence in his wallet of Medford’s business card with the sheriff’s pager number hand-written on the back. He displayed data accumulated by Henderson Amusement employee Anna Deaton which documented in excess of $150,000 paid to members of the Buncombe County Sheriff’s Department.

Ellis briefly touched on Jackie Shepherd, convicted of running illegal gambling operations, who funded Medford’s first run for office in 1994 with $20,000 or more, because then-Sheriff Charlie Long threatened his gambling business.

“Alvin Ledford,” here Ellis permitted himself a small laugh, “listed his employment as ‘gambler,’ when he testified here.” Ledford was a close friend of “Papa Jack” O’Leary, another gambler whose name ran through trial testimony. Ellis noted, “It’s kind of funny, Ledford is a long-time gambler, running a gambling establishment, and he was forced to put video poker machines in his place of business. He didn’t want them, but he was strong-armed.” Ledford allegedly met Medford at a Waffle House to discuss the deal.

Ellis said, “You heard from a waitress who remembered that meeting. What’s her motivation for testifying?”

Next he recalled Imran Alam and the direct extortion of money by Penland for golf tournaments and by Harrison and Medford for permission to switch from Henderson Amusement video poker machines to Mountain Music machines. Alam cashed a counter check for $6,000 on the day he allegedly gave $3,000 to Harrison and $3,000 to Medford in the Westgate Shopping Center parking lot.

Then Ellis discussed the testimony of Jim Lindsey, former owner of Mountain Music, who also testified that he was shaken down for $6,000 in that deal, though he was unable to come up with that amount all at once and paid it in three installments. “Medford testified that he had a rule that no machines could be moved from one location to another. That rule got bent for $12,000.”

Next he recounted testimony from Demetre Theodossis (a.k.a. The Hot Dog King) and his son Dennis Theodossis. He noted the correlation of testimony about phone calls, phone records from both the Sheriff’s Department and Theodossis’ cell, a check and hand-written records from the golf tournament. “How could they possibly have contrived these things?” Ellis asked, voicing doubt that the phone company would alter records on request.

“It is an interesting coincidence as well,” Ellis said, “That Ron Honeycutt was on Medford’s campaign committee and operated video poker machines in his place of business.”

Next Ellis recounted Tracy Bridges testimony, hand-written notes on an envelope from Harrison, purchase of money orders, filling in of names on those money orders which corresponded to the names and handing over the money orders to the re-election campaign. One of the final defense witnesses had actually corroborated this piece of fraud, he explained. Cynthia Roberts, co-owner with her father Tony, of City Transmission, had testified that her business supported the Bobby Medford golf tournaments most years and always wrote checks for the event. Yet somehow, in 2006, a money order had been deposited in Tony Roberts‘ name—a money order she was certain they had never purchased.

Ellis briefly touched on Frank Orr’s testimony about money laundering, and Orr’s involvement in the golf events and connection to machine registration.

Next came a reminder of the video footage filmed in Rutherford County Deputy John Parker’s office, in which James Henderson attempted to convince incoming Sheriff Jack Conner. At the time, the newly elected Conner was working undercover for the FBI as was Parker. Henderson bragged that $2,000 or $3,000 per month kept the Buncombe sheriff happy.

At one point Ellis said, “The argument that these witnesses conspired to come up with this story is laughable. In order to believe it you would have to drink from the decanter of insanity.” He ended by noting that “the truth is hard to keep out .. all of these circumstances point to no other conclusion … I believe you will conclude beyond a reasonable doubt that these men are guilty.”

The Defense

Medford attorney Stephen Lindsay presented his hour-long closing arguments after lunch, starting at 1:20 p.m., and relied heavily on painting Medford as “a man of the people, by the people and for the people,” a career law enforcement officer with an unblemished record and a sick old man who was only trying to find a little pleasure in life when he went to Harrah’s.

Lindsay was at his best picking apart a few specific pieces of the government case, trying to create alternative scenarios to explain his client’s actions and odd banking habits. He was relatively unconvincing in an extended argument that Medford was, in essence, over his head in his attempt to manage a large organization. Lindsay said “When we think of a sheriff we tend to think of Andy Griffith, with the sheriff’s desk here and the jail cell right over there, and the town barber dropping in every day … ” and went on to explain the 325 person force and multiple functions of the department.

I nearly laughed out loud at Lindsay’s unintentional joke. As many sources have corroborated for me over the years, Medford was never visited by his barber. He drove his county car out of state to visit his hair stylist in South Carolina on a regular basis: driving a county car out of the county on personal business is a violation of county law.

Another point in Lindsay’s argument was most amusing to me, personally. He claimed that former department attorney Julie Kepple’s testimony had shown that when a local newspaper editor had phoned requesting video poker records, Medford had immediately complied and ordered Kepple to make the records available. Her testimony did not show that, and it isn’t true. I was the editor who contacted Medford and I was turned back both on the phone and in writing. Then I filed a formal request under the North Carolina public records statute, and the request reached Kepple who understood that there are no legal grounds for denying public access to such records. It took weeks for her to permit me to come into the office to see the records, the weeks during which she apparently straightened out the mish-mash she testified she had discovered in the filing cabinet. I remember I was so scared going into Medford’s compound that I wore a wire and recorded the entire interaction, which, I was relieved to discover, went without confrontation or hitch. And I would note that the records were far from complete at the time, since I discovered many unregistered machines, or registered machines in differing locations, or machines listed with the county tax office and not with the sheriff in the course of my investigation reported in 2005.

Lindsay cherry picked and totalled a few checks to create totals that seemed to correspond to a couple of cash deposits or repayment to the campaign fund of cash allegedly handed to Medford, but in the face of the vast documentation provided by the prosecution, I can’t imagine it will work for the jury.

He ended by describing Medford as an “old, sick, tired man who didn’t want his job. He had a difficult job and he did the best he could. … As long as he was there he was kept in the dark so the others could use his name. Bobby Medford is an innocent man.”

Penland’s Defense

Penland attorney Paul Bidwell decided to base his defense on us-versus-them, with “them” played by the government. He told the jury that they were the line of defense against the power of big government to steamroll innocent people and described his client as a “gentle old man,” and said “it’s a shame the government isn’t going after big fish.” He went on to say that Penland was guilty of trusting friends and was interested in making a little money on the side and that Penland was paid “because he knew people, outside of his volunteer work for the sheriff’s department.”

Bidwell went a bit over the top, describing the government evidence as a “shock and awe” campaign intended to stir the emotions of the jury. Like Lindsay he tried to pick apart a few specific bits of evidence and impeach witnesses with limited success. He too insisted that an impartial jury would be forced to find his client innocent of all charges.

To be fair to both defense attorneys, they were faced with a monumental task and tried very hard. I will be shocked and amazed if they succeed. I anticipate guilty verdicts on all counts.

Rebuttal

At 3:45 p.m. Assistant U.S. Attorney Richard Edwards delivered the government’s rebuttal. Most of his argument was to the point that the defendants are charged with conspiracy and that it is not necessary for each person to have done everything done by the conspiracy as a whole, only that they were part of a conspiracy to do illegal things.

“Mr. Bidwell talked about what a nice guy Mr. Penland is, and what a shame it is that he is charged. The shame is what Penland did. No one in government made him do what he did.”

He went through the charges point by point and argued that the government evidence had proven Penland’s guilt on all matters. Edwards directly addressed Bidwell’s repetitious litany of “shock and awe” commenting that he was unaware that Donald Rumsfeld had any part in the case.

Then he took up Lindsay’s arguments, for example, that Medford had not personally ordered or received poker machine stickers, and again noted that he is charged with conspiracy, and that means that if anyone who was part of the scheme committed the acts, then all are guilty.

Toward the end, Edwards said he believed that the reason Medford stepped-up his gambling in later years was a combination of “arrogance, power, greed and I would submit, addiction.” Referring to Lindsay’s recall of Medford’s testimony that he just wanted to “see the world,” Edwards said, “His idea of ’seeing the world’ was sitting on a stool at Harrah’s staring at a machine.”

He concluded that “all of the rights we enjoy as citizens are due to the rule of law” and that Medford had “prostituted his office” and should be found guilty.

The judge then presented his instructions over an hour and a half, and charged the jury. The jury quickly decided to delay the start of their deliberation until this morning.

Medford trial: May 13, final testimony

Today’s proceedings began with continued cross-examination of Bobby Medford and concluded with character witnesses for co-defnedant Guy Penland, who declined to take the stand in his own defense. The defense has rested its case and the prosecution will not offer rebuttal, so the evidentiary portion of the trial is over. Tomorrow, Judge Tim Ellis will present proposed jury instructions to both sides at 9 a.m., rectify any disagreements at 10 a.m. and call the jury in at 11 a.m. to hear concluding arguments.

At the outset today, Asst. U.S. Attorney Corey Ellis continued to cross-examine Medford and elicited the claim that Medford was entitled to the proceeds of the golf tournaments he organized in non-election years, to disburse as he saw fit. Medford continued to insist that all funds were used for charitable purposes.

Ellis also elicited agreement from Medford that while he had a policy of excluding volunteers who violated department policy, he never excluded Penland despite violations of policy beyond telling him that he could no longer register video poker machines.

Medford confirmed that special deputy I.D. cards issued to Jerry Pennington bore his signature, but said that he signed multiple cards and had no idea who received them. Although he insisted that all recipients of special deputy IDs were subject to background checks, he was unable to explain how Pennington, with a criminal record, was able to obtain his deputization. Twice.

Medford repeated his testimony that he had garnered $2,500 to $3,000 from each golf tourney, then, when showed evidence that he had been handed at least $7,500 in proceeds in 2006, he denied knowledge of the payments. Ellis reminded him that he had reported more than $20,000 in cash donations from the golf tournament in the 2002 election and asked if inability to accept cash in 2006 (due to a change in election law) represented a problem that year. Medford denied concern about the cash problem.

The former sheriff indicated that correlation of phone calls from Medford’s cell phone to Demetre Theodosis with cash deposits to Medford’s account were coincidental, as were meetings and phone calls concerning a change of machines at Imran Alam’s stores, a withdrawal of cash by Alam, and alleged payments to Johnny Harrison and Medford.

Similarly coincidental were records showing $2.400 in cash moved from receipts in a 2006 golf tournament to Medford, deposit of $2,400 to his checking account, payment of $2,400 to a veterinarian and newspaper reports that Medford had paid the vet bill out of his own pocket. Medford’s girlfriend’s son, a deputy, had shot a dog who died after extensive efforts to save him, and Medford had grandly announced that he would pay the veterinary bills. Only he didn’t.

While denying that he had used proceeds from the golf tournament, Medford insisted that the money had come from six or so other department employees, though he could only name Pat Hefner, George Stewart and Randy Bradford as contributors.

Ellis also noted that Medford had claimed $45,000 in charitable donations on his 2006 tax return and asked if the $2,400 was part of that total. Medford expressed astonishment at the number and denied having made such donations and insisted that it was a typographical error. He said he would file an amended return.

Medford’s total itemized deductions for 2006 totalled $97,000 with a reported income of $215,000.

Ellis also noted that upon retirement Medford had claimed $20,000 in back pay for vacations he had never taken, despite the fact that he spent at least 160 work days at Harrah’s from 2003 to 2006. Medford said that he only counted vacation days when he was away from Buncombe County, and that Harrah’s was only 50 minutes from town.

Altogether, Medford dug himself deeper during his testimony.

Next the defense called Erik Lioy, an expert in forensic accounting, who had examined all of Medford’s and girlfriend Judi Bell’s financial records for the years in question. Lioy’s testimony seemed tapered to fit the defense. He used gross income figures to illustrate that the pair’s gambling losses were entirely explicable and affordable, instead of net income which, in 2006, should have deducted Medford’s alleged $45,000 in charitable giving. Lioy also glossed over the idea that the records he examined from Harrah’s ONLY INCLUDED gambling done while the pair used their membership cards. Gambling without use of a card would be invisible unless a person won more than $1200 at one time on one machine.

Asst. U.S. Atty. Richard Edwards shredded Lioy’s credibility on cross-examination.

Medford’s defense concluded with three character witnesses who all said Bobby is trustworthy.

Guy Penland’s attorney Paul Bidwell offered three character witnesses who all like Guy a lot. Then he questioned FBI agent Michael McNeely with the intent of casting doubt on the testimony of prosecution witness Tracy Bridges. Bidwell failed in the attempt.

That’s it for today.

Medford trial: Monday, May 12

In order to keep this record as unconfusing as possible, I will fill in the details from last week in the entry below this one, and try to keep up with current events in this and subsequent posts.

Yesterday the most interesting action in the trial was off stage. Judge Tim Ellis noted at the start that he had been notified by Medford’s defense team that prosecution witness Tracy Bridges had allegedly contacted two defense witnesses over the weekend: Sean Ledford and Ebony Nate Dickens. This opens two cans of worms at once.

Witnesses are not permitted to contact other witnesses once they have been notified of their status and provided with a list of the others. If Bridges contacted them he is liable for prosecution for tampering with witnesses. Furthermore, Bridges is currently on probation after pleading guilty to crimes connected with the Medford case. This opens the possibility that his plea deal will be invalidated, or that he will face trial for probation violation. Ellis assigned a probation officer present in the court room to investigate the matter.

At lunch time another bomb went off. Ellis informed the Medford defense team that he had received information that an investigator working for the defense had posed as a federal agent while conducting his work. The judge was careful to point out that the charge may not be true, but observed that if true it was a felony violation of federal law and would be subject to prosecution. Attorney Stephen Lindsay assured the judge that he would look into the matter immediately.

Bobby Medford spend most of the rest of the day in the witness stand answering a tedious list of questions from Lindsay. The main thrust of the defense effort seems to be to portray Medford as an incompetent administrator who was way over his head, with too many employees and too heavy a work load, making it impossible for him to keep tabs on something as incidental as video poker. Medford denied any knowledge of any wrongdoing, denied receiving money from anyone connected to gambling, denied the multiple meetings with operators which had been presented in previous testimony and talked about sending money to his grandsons’ mothers. He also insisted that the golf tournaments never netted more than $2,000 to $3,000 and that all money collected in non-election years was used as alms for the poor who flocked to his office seeking heating oil, food or clothing.

Medford flatly denied any involvement in cashing checks at George’s Mini-Mart, authorizing others to cash checks, permitting cash donations to his campaign once he was informed of the law or permitting money orders to be purchased with cash. He insisted that the cash used to purchase money orders “made out with the names of people who had always given me checks in the past” came from cashing those checks in the 2006. This is an interesting explanation of the source of the checks, and when the judge queried him, he couldn’t explain why the checks (if they existed) weren’t deposited directly into the campaign account, since they would have been completely legal contributions. Nor could he explain why he was purportedly “mad” about the purchase of money orders if the money was from a legal source.

Medford admitted to enjoying some gambling now and again, but only at legal casinos outside the county. (He insisted that he prohibited his deputies from gambling inside the county with a one-warning rule.)

Cross examination by Assistant U.S. Attorney Corey Ellis began at 5:15 p.m.

Ellis started by challenging the golf tournament numbers with previously introduced documents that showed net profits of $11,650 and $9,270 in spring and fall of 2005. He asked Medford why those were so high if other tournaments were much lower. Medford obfuscated but didn’t really answer.

Ellis elicted further explanation from Medford about golf receipts during non-election years, clarifying what Medford insisted was a charitable operation from his office using unreported income. Medford claimed a complete disconnect from the golf tournament organization, no knowledge that many video poker operators funded the tourneys, no knowledge that Guy Penland styled himself as a “Captain” including references on repeated golf tournament flyers over several years, etc.

Then Ellis cranked up the heat and tried to elicit explanation for the tens of thousands of dollars of cash deposits made to Medford’s bank account over a six year period, as well as larger cash deposits to his girlfriend’s account. Medford obfuscated further with claims about an insurance settlement, cashing in his 401K and finally suggesting that he used his VISA card to obtain cash to put in his checking account, upon which he kept the loosest of tabs. Girlfriend Judi Bell balanced the check book.

Ellis pointed out that he was frequently overdrawn or teetering on the brink, and relying on his overdraft protection to kick in money and asked if it wasn’t irresponsible to gamble away upward of $50,000 per year with such shaky finances. Medford agreed that it wasn’t necessarily responsible but that “I knew I had cash coming in.”

Ellis: “From where?”

Medford: “My sister and my brother.” Then he added, “I had a VISA card.”

The trial will reconvene today at 9 a.m. Ellis estimates another hour and a half of cross examination.

Medford

Catching up on Medford trial: Monday, May 5

First a general observation: As Jon Ostendorf reported in the Asheville Citizen-Times over the weekend, testimony to date suggests that former Buncombe Sheriff Bobby Medford collected over half a million dollars in illegal pay-offs over several years.

What Ostendorf didn’t say is this: the prosecution has presented extensive evidence about two video poker operators (Henderson Amusement and Western Amusement, Jackie Shepherd’s company), it has mentioned others more or less in passing. Also, we have heard from a few store owners where the operators placed their machines.

This evidence cannot have accounted for even half of the machines in operation when I reported on the industry in Buncombe in 2005. Nor does it account for possible protection money paid to Medford by those running other forms of gambling in the county, though there was some indication of such payoffs from one witness. My guess is that a full accounting of all proceeds would place Medford’s take well above $1,000,000.

Monday, May 5
• Medford defense attorney Victoria Jayne kicked off the week with cross-examination of Anna Deaton. Deaton kept computer records for Henderson Amusement and was responsible for transcription of notes from that company’s salesman for WNC, Jerry Pennington. Pennington’s notes accounted for cash disbursements to Medford, Guy Penland, Johnny Harrison, Frank Orr, Ronnie “Butch” Davis, George Stewart and “the Haywood County sheriff” among others. There was also a cash payment of $1,000 to the “Buncombe County commission” in 2004.

Jayne pushed Deaton to tears while inquiring about the young woman’s arrest during an August, 2006, raid of Henderson’s Kings Mountain offices by state agents. (Deaton was released without charges.)

• Jerry Wayne Pennington took the stand. He said he had started placing machines in WNC for Henderson in the 1990s and explained that the usual arrangement was a 50/50 split with store owners, sometimes 40/60 (to store). He said that he was aware the machines were being used for illegal gambling. He explained the system of weekly or bi-weekly check-ups by Henderson personnel who settled with store owners and provided extra cash when pay-offs were too high for store owners to cover. Pennington also explained his role in illegal registration of out-of-state machines.

Pennington detailed his dealings with Johnny Harrison, Guy Penland and Homer Honeycutt. Harrison has pled guilty in this case, Penland is on trial with Medford, and testimony has implicated Honeycutt in aiding and abetting money laundering, though he has not been charged. Honeycutt was briefly responsible for video poker registration at the Buncombe County Sheriff’s Department, but “made a mess of it” according to my sources and was quickly removed from that chore.

Pennington said he had put Guy Penland on his payroll. Penland was a wanna-be deputy who was volunteering at the department, and Pennington decided to pay him $450 per week plus $500 per location for all new locations in Buncombe, Haywood and Henderson counties that Penland helped him land. He also reimbursed Penland for gas purchases. (Credit card receipts from Penland’s account matched disbursements recorded by Deaton.)

He testified that Penland, who posed as a Captain, frequently wore his uniform shirt, badge, captain’s bars and walkie-talkie when they made sales calls. Penland also drove a white Crown Victoria which could easily be mistaken for an unmarked law enforcement vehicle. (Pennington said he had procured the car for Penland from an acquaintance who dealt in retired police vehicles.)

Pennington said that after Ronnie “Butch” Davis took over video registration responsibility from Harrison (as well as the role of bag-man in the illegal pay-off scheme), Penland arranged a lunch date between Pennington and Medford. Medford evidently didn’t trust Davis and asked that all further payments be made directly to himself. So Pennington said he began to make regular cash payments of $2,000-2,500 directly to Medford, in his office, every couple of months. Some of those meetings occurred at the Waffle House restaurant He also made “campaign” contributions of $5,000 on two occasions.

Pennington also offered extensive testimony about payment for the Medford golf tournaments.

In addition, Pennington affirmed that the $1,000 donation to Buncombe County commissioners “had nothing to do with gambling.” Also, that his donation of $400 to a golf tournament for Buncombe Clerk of Court Bob Christy was made because “the Sheriff’s department asked that we give to him.” Both of these observations deserve closer scrutiny.

As I have noted elsewhere, there is no way that a cash donation of $1,000 to commissioners during an election year was legal. So, if the balance sheet entry is accurate, someone in the 2004 race received illegal cash. Also, why was Republican Medford urging a campaign contribution to Democrat Christy?

Pennington was one of the more than 1,000 recipients of special deputy authorization and a badge from Medford’s department. (In subsequent testimony it came out that other gambling operators also carried BCSD badges.)

Also Pennington testified that Penland had run plates for him twice: once concerning his girl friend, and once per the undercover agent. Also that Penland joined him in a stake-out of Asheville’s federal courthouse during a grand jury investigation, to see if they recognized anyone coming and going from the building.

Pennington’s testimony included discussion of convenience store owner Imran Alam who hosted Henderson machines in several locations. Alam was unhappy with Henderson’s business practices and sought permission from Medford to switch poker machine providers.

Pennington also testified per outright purchase of 100 machine registration stickers from Penland (for $10,000), for application to illegal machines to make them appear to be registered.
•••

ADDITION: WEDNESDAY MAY, 21: CATCHING UP

… continued from report on Monday, May 5
There was extensive discussion of pay-offs, meetings at a Waffle House in Columbus, Tripps restaurant parking lot, the parking lot at Westgate Shopping Center. Pennington confirmed that Penland routinely posed as a Captain and cultivated the appearance of being an officer with shirt embroidered with badge, captain’s bars, walkie-talkie on belt, driving a white Crown Victoria, etc. Penland said to accompany him on many calls on prospective locations.

In passing, there was mention that Medford wanted Pennington to support James Grant in his election campaign. Grant, an African American, was running for the Democratic nomination for Sheriff. This would seem to confirm reports from my sources that Medford had some interest in affecting the Democratic race to his advantage. (From campaign finance reports I have examined, I know that Medford’s top contributor in 2002 and 2006, Betty Donoho, was Grant’s largest contributor in both of those years. Grant’s second highest contributor? Jackie Shepherd.)

Pennington testified that he had asked Penland to run tags for him on two occasions. Once to figure out who was following his girlfriend, a second time to identify a person patronizing one of the video poker locations. That turned out to be an undercover FBI agent. For Penland to run a tag for a non-law enforcement persons was strictly illegal, as of course, it was actually illegal to permit Penland to run the tag (since he was a volunteer and not certified). Penningto also described the occasion when he and Penland staked out the federal courthouse in Asheville to watch comings and goings during grand jury testimony, to see if they recognized any of the parties. (There was a certain keystone cops element here, since it turned out the stake-out was on the wrong date.)

Pennington described one pay-off which occurred in Medford’s car. “He said, ‘Ive never done anything wrong.’ … What I understood was, ‘This is your problem.’ We both talked as if each one of us thought we were being recorded.”

Lindsay’s cross examination was aimed at picking apart minor differences between Pennington’s testimony on the stand and his previous testimony to FBI investigators, but what he chiefly succeeded in doing was making Pennington’s testimony more believable.

Bidwell’s cross was somewhat more effective. He pressed Pennington about the 100 stickers he had allegedly purchased from Penland for $10,000. “Why did you buy stickers you could have obtained for free [by registering the machines]?”

“Because the machines were illegal.”

Bidwell inadvertently let Pennington expand on his story about staking out the grand jury, but he also elicited testimony that Pennington had told Penland the machines were coming from the Henderson Amusement warehouse (and were therefore putatively legal, meeting the requirement that they be in state before Jan. 2000.). This was somewhat exculpatory for Penland.

When Bidwell asked about payment arrangements he opened a window on another player. “Why did you deal with Guy instead of Johnny Harrison?”

Pennington said, “Johnny let Guy take over the position because Homer [Honeycutt] was real rude and wouldn’t register any machines. Guy said Homer didn’t have authority to say that.” For me, this raised the question of whether Honeycutt was fending off further machine registrations or fending off further registrations by certain companies.

In cross examination concerning the deputy badges and special deputy I.D.s Penland gave him, Pennington said, “I was told it would be fine to use it as long as I didn’t arrest nobody. I could use it if I was ever pulled over by the state police, as identification.” [Pennington did, in fact, use the I.D. when pulled over in Henderson County where the arresting officer found that he was carrying a large quantity of cash, assumed it was drug money and arrested Pennington and confiscated the first I.D.]

In one other small score for the defense, Bidwell showed that while Penland was a co-owner of Asheville’s Diamond Pawn & Jewelry during a period in which the location hosted Henderson video poker machines, an Inez Bartlett was in charge of operations there. This might let Penland off the small hook of being a machine operator in addtion to facilitating installation elsewhere.

I had to duck out early for an election-related matter, but Alvin Ledford took the stand after Pennington and talked about his involvement in gambling over more than two decades.

The afternoon session ended at 5:30 p.m.

Tuesday. May 6

Session began at 10 a.m. to permit jurors time to vote. I was a half hour or so late due to campain matters.

When I arrived, Medford attorney Stephen Lindsay was conducting a cross-examination of Alvin Ledford when I arrived about 20 minutes late (campaigning until the last.)

More soon. Stay tuned.

Another brief trial update: more coming

I’ll be out collecting campaign yard signs today, but will definitely do a catch up on the trial before the weekend is out.

****
The prosecution has rested in the corruption trial of former Buncombe County Sheriff Bobby Medford. Testimony and evidence presented in the first eight days of proceedings have drawn a picture of a conspiracy which endured over several years involving extortion, mail fraud and money laundering connected to illegal gambling in Buncombe, Cleveland, Haywood, Macon and Rutherford Counties. Prosecution witnesses have included gambling operators, machine owners, law enforcement personnel, attorneys, a waitress and a CPA.

Medford and co-defendant Guy Penland have remained largely impassive throughout, with the former sheriff gazing straight ahead and Penland casting a dazed look all around the room. The former sheriff appears to studiously avoid eye contact with his former employee. Defense attorneys Stephen Lindsay, Victoria Jayne and Paul Bidwell have made very little apparent headway in attempts to undercut the witnesses veracity or the evidence introduced, though of course, that will be up to the jury to decide, and the defense won’t conclude its case until about May 14.

Several of those involved reported handing sums of cash as high as $5,000 to Medford, while others explained money laundering operations that included forged signatures on checks and conversion of illegal cash campaign donations to money orders for reporting purposes. Video poker machines which were imported to the state illegally were registered in Buncombe County and then operated illegally, by offering cash payouts instead of the maximum of $10 in store merchandise prescribed by law.

The most surprising testimony has been somewhat tangential to the government’s case. Three witnesses offered evidence that Henderson Amusement, one of several gaming machine providers in the region, had not only paid off Buncombe sheriff’s personnel but had paid the Haywood County Sheriff $3,300 per month for a period of years. That news has rocked Haywood, and Sheriff Tom Alexander has been summoned by the grand jury.

Two witnesses testified to the accuracy of a document that reported delivery of $1,000 in cash to Buncombe County Commissioners during the 2004 election cycle. No names there, but that amount of cash could not have been a legal contribution even if spread around to all 9 candidates in that year’s race, since cash donations were capped at $100 at that time.

After the prosecution finished, the defense entered a plea for dismissal of all charges. This is a standard procedure and requires the judge to rule as to whether sufficient evidence has been offered to permit the jury to decide guilt or innocence beyond a reasonable doubt. Judge Tim Ellis ruled that the evidence is sufficient to proceed on all ten counts facing the pair.
Medford attorneys Lindsay and Jayne began their defense with testimony from current Buncombe Sheriff Van Duncan, former department attorney Julie Kepple, former sheriff’s secretary Rhonda House and former deputy Jerry Miller. Miller provided the juiciest surprise of the week-long proceedings, telling the court that he received warning from a close friend , “a high-ranking Democrat,” that Medford was being investigated and warned his boss three years ago.

Miller’s career includes 24 years as an Assistant U.S. Attorney in the the Western North Carolina District before joining Medford’s ranks. He stated that he warned Medford, who “blew up” and then told me “he didn’t want me standing in the way when the bomb went off.” Miller said he learned that sheriffs could entirely ban video poker in their counties, though gaming operators had sued at least one county where that occurred, and so informed his boss. This opened the way for Assistant U.S. Attorney Richard Edwards to inquire whether Medford had, in fact, removed any machines. “No,” was Miller’s response.

The revelation also throws open the question of what, if anything, Medford did during those three years to prepare for the likely eventuality that prosecutors would come knocking. Given the amount of cash that changed hands in the multi-million dollar gambling business in Buncombe County, there would seem to be plenty of room for squirreling away retirement funds in a barn or a closet or under a rock.

Defense will continue to present its case on Monday, May 12, with concluding arguments anticipated by about May 16.

Breaking news: Buncombe Commish implicated in Medford trial

One last note before I head to the trial today. I didn’t mention this earlier because I thought it would be viewed as “political.”

The Henderson Amusement financial records introduced into evidence by Anna Deaton and corroborated by Jerry Pennington showed a cash outlay of $1,000 to the Buncombe County Commissioners race in 2004. I haven’t seen that reported elsewhere and I haven’t had time this week to obtain the campaign finance records from that race. You heard it here first.

I should note that while Mountain Xpress referred to this as a “legal donation” in its coverage, there is no way that $1,000 in cash could have been legally contributed to commission candidates in the 2004 election. The cash limit at the time was $100 (which is why Medford’s campaign reported dozens of $100 cash donations in the 2002 election, for example.) There were only 9 candidates in that race, so no matter how you split the money, someone received more than the limit.

The candidates were Mark Crawford, Republican; David Gantt, Democrat; Mike Harrison, Republican; Mike Morgan, Republican; Carol Weir Peterson, Democrat; Bill Reynolds, Republican; Bill Stanley, Democrat; and David Young, Democrat. Ed Hay and Nathan Ramsey were candidates for chair. Wonder who got the cash?