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.

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

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.

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.
•••
Tuesday, May 6

Start was delayed until 10 a.m. to permit jurors time to vote before traveling to court.
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.

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.

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?

I’m still covering the trial, though I had to duck out an hour early Wednesday for a board meeting of Biblioworks.org, a charitable foundation I work with which builds and supports rural libraries in Bolivia.

The prosecution ought to finish its case today and the defense will almost certainly start. Tomorrow Judge Tim Ellis will be back in his Virginia court room, so no session here amd I’ll do a complete run-down of this week’s sessions.

The most interesting part of today’s proceeding is likely to be video footage filmed in Rutherford County after the November 2006 election. The meeting was captured with a hidden camera. The defense tried to block use of the film, arguing that the conspiracy depicted in the footage is not directly related to events in Buncombe County and that, in any event, Medford had been voted out and therefore had no power to continue any alleged conspiracy in any meaningful way. The prosecution successfully argued that a conspiracy can continue even when participants are jailed, because conspiracy can include failure to divulge information or continuing attempts to hide previous activity, and also that the conspiracy in Rutherford was part of a region-wide network which included several counties, and that conspirators need not be aware of all other members of a conspiracy in order to be implicated.

Thank you so very much! Yep, we lost, but only by .8 percent of the votes cast. Unseating incumbents is extremely difficult and we came pretty close. We proved once again, if proof is needed, that under current campaign finance laws the race is almost invariably won at the bank, not in debate.

Holly Jones and K. Ray Bailey, who both finished ahead of incumbents Peterson and Stanley, both out-spent our campaign by approximately 2.5/1 (final numbers won’t be reported for several weeks.)

16,440 people voted for this grassroots candidate in his first try for elected office. To take the financial analysis one step further, it appears that Holly’s votes cost her about $1 each, Bailey’s about $1.30 each, and mine about 60 cents each. That’s the difference between a media campaign and a grassroots effort. That’s what your feet on the ground, your talking and leafletting, your requests for yard signs and your contributions made happen. (And by this I mean to take nothing from the two winners.)

Let’s all push for local campaign finance reform to make voter-owned elections a reality in Buncombe and Asheville in the near future.

If you have an Obama sign, I suggest you keep it for the fall campaign. If you have a Bothwell sign, it will be picked up by whomever delivered it, or you can return it to 54 Fulton Street, in Asheville. E-mail me if you need directions.

I’m asking my volunteers to collect the signs they planted and any strays you spot. Also, please help Holly and Keith by collecting their signs and returning them to me. I’ll get them back to the other campaigns.

Again, thanks so much for the outpouring of support, the kind words, the great ideas and the funds. I am honored to have represented you and your hopes for Buncombe in this race and look forward to working for our common goals in the future.

-Cecil Bothwell

Not much time to post this morning. Out until midnight delivering yard signs to precincts and have an appointment at 7 a.m. to start my campaign day (before heading in to the courtroom at 10 a.m. — the start has been delayed to give jurors time to vote.)

So, only some high points here.

Medford attorney Victoria Jane continued her cross-x of Henderson secretary Anna Deaton. The Macon County Sheriff’s Office had received a check according to Deaton. (This non-factoid was picked up later in the day by raunch radio, establishing once again that right wing broadcasters are more interested in ratings than accuracy). Before the lunch break, Asst. U.S. Attorney Richard Edwards used his questioning of Henderson salesman Jerry Pennington to establish that the payment to the Macon department was unrelated to gambling, illegal gambling, or any illicit activity whatsoever. Edwards took special care during the lunch break to report the real reporters in the court room and direct our attention once again to the testimony we had all just heard. He said, “I’m not adding anything to the testimony. But you heard it. I don’t want the Macon sheriff to have a heart attack.”

The other hugely significant testimony from both Deaton and Pennington involved payments to the Haywood County Sheriff. He was not mentioned by name, but Henderson records introduced as evidence and corroborated by both witnesses indicate monthly payments to Haywood of $100 per poker machine, or $3,300 per month, over several years, in return for being permitted to operate machines in the county.

Whether or not the Haywood department knew that machines were being operated illegally, the payments themselves, if accurate, are a felony violation of the law.

Overall, Guy Penland was the biggest loser in Monday’s session, being tied by Deaton and Pennington to payoffs, to running of license plates for Pennington, for soliciting store owners to participate in illegal gambling, for issuance and reissuance of false law enforcement credentials to Pennington, etc.

However, former Chief Deputy George Stewart was named as recipient of payoffs for the first time, and the money map around Medford grew denser as well. Off to the polls. More detail, probably tomorrow. Go vote!

Beware: Celebrity Endorsement

Deceptive robo-calls which have reportedly targeted black voters in North Carolina have been traced to Women’s Voices Women Vote, a Washington, DC-based nonprofit. Women’s Voices founder and President Page Gardner has made substantial contributions to the Clinton campaign.

The calls suggest that one cannot vote unless one returns a signed statement to be found in a registration packet that the listener received in the mail. Women’s Voices has been implicated in similar illegal voter suppression efforts in multiple states across the country. The NC NAACP has filed a formal complaint with Attorney General Roy Cooper.

Numerous voters in WNC have reported getting the deceptive calls.

For more, click here.