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.

~ by bothwellsblog on May 12, 2008.