Klan ‘Prank’ Reverberates in Federal Lawsuit

March 31, 2016
By David Lee
OKLAHOMA CITY (CN) – A former Oklahoma police chief claims he was fired in retaliation for testifying about the mayor’s husband dressing up in a Ku Klux Klan robe in an embarrassing Halloween “prank.”
Matthew Ray Hankins sued the town of Lahoma, Mayor Theresa Sharp and Brian Hamen on Monday in Federal Court.
Lahoma made national headlines in November when Sharp’s husband, Cary, was pictured on social media with three other people dressed in KKK robes, holding lit torches around a cross.
Sharp tearfully apologized for her husband’s “stupidity” the next day.
“It happened on my property. I don’t know what else to say other than I am sorry to the community and I’m sorry to the public,” she told ABC affiliate KOCO-TV. “It was the actions of four separate individuals and it does not reflect on me or anyone else in the community.” Sharp’s husband said at the time that it was his cousin’s idea to dress up as Klansmen.
“I never realized it would be this harmful,” he said. “I apologize to everybody for this.”
Hankins says Sharp rejected requests for her to resign over the incident and chalked it up as a “prank,” just “four good ol’ boys sitting around drinking.”
Hankins had been police chief for three months. He says he encountered Sharp’s husband and defendant Hamen at the cross. He also says that Hamen was charged in January with damaging the personal vehicle of a reserve officer whom Hankins is dating.
One month after the “prank,” Hankins says, town leaders told him he was up for a raise because his six month probationary period was over, but he would not be given one because of budget constraints.
On March 9, Hankins says, when he was called to testify about victim protective orders between his girlfriend and Hamen, he was asked about the KKK activities to which he responded on Halloween. The judge then dismissed both protective orders.
Hankins says Hamen then filed a false resident complaint against him.
“Brian Hamen wrote the resident complaint form with malicious intent as a response to the plaintiff bringing up the KKK event during his testimony in the victim protective order hearing,” the 12-page complaint states. “The plaintiff was unexpectedly terminated without any notice at the town meeting on or about March 14, 2016.”
Hankins seeks reinstatement and damages for violation of due process, retaliation, wrongful termination, defamation and conspiracy.
He is represented by Richard Rice in Midwest City, Okla.

From Courthouse News.

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Dallas Fires Back at Porn Trade Show in Court

March 28, 2016
By David Lee
DALLAS (CN) – Dallas has the right to ban the Exxxotica expo from its convention center because of “unclean hands” and lewd acts at last year’s event that violated its contract, the city told a federal judge Friday.
The city’s 60-page response graphically describes video footage of “fondling and touching of breasts and simulated sexual intercourse by oral sodomy” that amounts to public lewdness under state law.
“For example, nude women at Exxxotica fondled, rubbed, and kissed one another’s bare breasts and buttocks,” the response states. “Several models appeared nude within the ‘MyFreeCams.com’ area, where they ‘performed’ live for viewing patrons.”
Three Expo Events sued Dallas in February on a First Amendment claim, after the City Council voted 8-7 to ban the event as an impermissible use of a public facility under City Code.
Mayor Mike Rawlings acknowledged that the vote would probably result in a lawsuit, but said the event at the Kay Bailey Hutchison Convention Center would not be “good for our city’s brand.”
The council voted after City Attorney Warren Ernst advised it that the city’s sexual-oriented business ordinance does not apply because Exxxotica is a temporary event, not a fixed business.
The city later ignored a last-chance letter by plaintiff’s attorney Roger Albright to lift the ban and avoid litigation.
Dallas’ March 25 response states that Exxxotica representative Jeffrey Handy promised city officials in August 2015 that no Texas Penal Code offenses, such as obscenity or public lewdness, would happen at last year’s inaugural event.
“Although Mr. Handy had represented that all Exxxotica Dallas patrons and personnel would be prohibited from ‘the display of less than completely and opaquely covered genitals, pubic region, anus or female breasts below a point immediately above the top of the areolas,’ in fact, many women at Exxxotica Dallas wore only pasties or tape covering their nipples and areolas and otherwise exposed their breasts,” the response states. “Although Mr. Handy had represented that sexual activities, including ‘the fondling or other erotic touching of genitals, pubic region, buttocks, anus or female breasts,’ were prohibited at Exxxotica Dallas in fact, such sexual activities took place at Exxxotica Dallas, and were observed and recorded.”
The city said Handy, who is not a defendant, also failed to arrange for drapes or screens to be placed near the lobby doors to block the view of exhibit space from the outside.
“The booths which were visible from the lobby when the entry and exit doors were open to permit entry and exit included LA Direct Models, Simply Erotic Xtras, Chaturbate, ArrangementFinders.com, MyFreeCams.com and, possibly, Clips4Sale.com,” the response states. “The Chaturbate booth included live models wearing pasties and g-strings. The MyFreeCams.com booth included women wearing nothing more than pasties or tape on their nipples and areolas and/or wearing g-strings or similar attire which exposed their buttocks, and was the location where some sexual activities and public lewdness took place.”
The city also claims that lessee of last year’s expo, Exotica Texas, does not exist.
And it claims the expo failed to check identification as promised and that some attendees saw an unidentified young woman in the exhibit space who did not appear to be 18 years old.
In February, Police Chief David Brown told the City Council his officers observed no crimes at last year’s event, nor an increase in prostitution.
Dallas asked the court to deny Three Expo Events’ request for an injunction. Its lead attorney is Thomas Brandt, with Fanning Harper Martinson Brandt & Kutchin.

From Courthouse News.

Paxton-linked Investment Firm Fined by Texas Regulator

March 24, 2016
By David Lee
AUSTIN, Texas (CN) – The Dallas-area investment firm for which Texas Attorney General Ken Paxton solicited clients and was fined has itself been fined by the Texas State Securities Board for failing to disclose the bankruptcy of its founder, plagiarism and altering disclosure documents.
The board’s April 18 disciplinary order directs Frederick Eugene Mowery to pay $40,000 for two violations of the Texas Securities Act. Mowery and his investment firm, Mowery Capital Management, were ordered to pay another $50,000 for four additional violations of the act and for administrative fees.
Mowery and his firm have 15 days to comply with the order.
The board said Mowery’s firm plagiarized a letter to clients on its website from an article by Larry Kudlow published in 1999. It also found the firm failed to disclose a bankruptcy filing by Mowery in September 2005.
“Several of MCM’s clients were aware of Mr. Mowery’s bankruptcy petition, but others were not,” the 24-page order said. “Two of MCM’s former clients stated that awareness of that petition could have affected their decisions to employ MCM.”
The board said Mowery admitted in May 2014 to altering disclosure documents signed and dated by clients.
“Mr. Mowery removed both an old address and his current address from the bottom of the documents,” the order said. “It would have been obvious that the disclosures were signed after 2013 if MCM’s current address had appeared on those documents.”
Paxton is not a party to the disciplinary order. He was reprimanded and fined $1,000 by the board two years ago after he admitted he had solicited clients for his friend Mowrey and Mowery’s firm without being registered as an investment advisor.
A subsequent investigation by the Texas Rangers resulted in Paxton being charged last year with two first-degree felony counts of securities fraud and a third-degree felony count of failing to register with the state securities board. Paxton is awaiting trial and faces up to life in state prison if convicted.

From Courthouse News.

DePuy Must Pay $498M for Hip Implant Injuries

March 17, 2016
By David Lee
DALLAS (CN) – A federal jury in Dallas ruled Thursday that DePuy Orthopaedics should pay five Texans over $498 million for severe medical complications they suffered as a result of the company’s defective metal-on-metal hip implants.
A subsidiary of Johnson & Johnson, DePuy is facing several thousand such lawsuits over its discontinued Pinnacle hip implants.
The cases have since been consolidated under multidistrict litigation in Dallas Federal Court under U.S. District Judge Ed Kinkeade.
The jury awarded over $130 million in compensatory damages and over $360 million in punitive damages, according to plaintiffs’ attorney W. Mark Lanier, of Houston.
“There are thousands of these cases, and Johnson & Johnson needs to get responsible,” Lanier said after the verdict.
During the two-month trial, the five plaintiffs claimed the implants were defectively designed and led to high levels of metal debris due to quicker than expected wear and tear.
DePuy said it plans to appeal the verdict.
In October 2014, the first Pinnacle case to go to trial ended when a Dallas federal jury cleared DePuy of liability and ordered the plaintiff take nothing.
Depuy said at the time that it “expects additional cases to be tried” and that it “remains committed to the long-term and vigorous defense” of the cases.

From Courthouse News.

Travis County Settles Jailhouse-Recording Suit

March 15, 2016
By David Lee
AUSTIN (CN) – Travis County, Texas, officials settled a federal class action that claimed they illegally record phone calls between inmates and their lawyers at the county jail.
Sheriff Greg Hamilton said Monday that officials accept that there are “policy refinements that make the process better.”
No taxpayer money was paid to the plaintiffs in the settlement, he added.
The Austin Lawyers Guild, four of its criminal defense attorney members, the Prison Justice League (an inmate advocacy group), and the Texas Civil Rights Project, sued the several county officials and county jail phone contractor Securus Technologies in April 2014.
In the lawsuit the plaintiffs disputed the sheriff department’s claim that attorney-client phone calls were not recorded and that video visits were “secure and completely private” for attorneys.
“[I]n reality, Securus Technology and the sheriff’s department do record confidential attorney-client communications,” the complaint stated.
It continued: “They also disclose those recorded conversations to prosecutors in the Travis County and District Attorneys’ Offices. In both offices, prosecutors have procured recordings of confidential attorney-client communication from the Sheriff’s Department and/or Securus Technologies and listened to them. Some prosecutors have disclosed copies of those records to defense attorneys among other discovery materials; some have used that knowledge to their tactical advantage without admitting they obtained or listened to the recordings.”
The plaintiffs sought damages for violations of the Federal Wiretap Act, the Texas Wiretap Act and the Fourth, Fifth and Sixth Amendments of the Constitution.
They also sought the destruction of the jailhouse recordings and an injunction against any additional recordings.
Hamilton said the lawsuit was dismissed on Friday after the settlement agreement was entered.
He said the plaintiffs had earlier amended their complaint “to acknowledge that there was no evidence of knowing or intentional wrongdoing or misconduct by these officials of their offices, including the Sheriff’s Office.”
He said the plaintiff organizations agreed to inform their members how the phone system works and how to use it correctly.
“Additionally, the instructions for how the system works will be made clearer for the attorneys using the system,” Hamilton said in a statement. “We will be updating our website and making the instructions clearer for all involved.”
The Texas Civil Rights Project did not immediately respond to an email from Courthouse News requesting comment.

From Courthouse News.

Texas Bar Protects the Connected, Lawyer Says

March 25, 2016
By David Lee
AUSTIN (CN) – A New York-based attorney accused the State Bar of Texas of protecting “politically-connected attorneys” after it dismissed his disciplinary grievance against state Attorney General Ken Paxton.
Ty Clevenger said he “really shouldn’t be surprised” the bar’s Office of Chief Disciplinary Counsel dismissed his February grievance regarding a pending felony securities fraud case against Paxton in Collin County Court.
Paxton was indicted in 2015 on charges of fraudulently selling more than $100,000 in Servergy Inc. stock to two investors in July 2011 without disclosing he would be paid commissions on it.
He also failed to disclose that he had been given 100,000 shares in the company but had not invested in the company himself, according to the indictment.
Paxton faces up to life in state prison if convicted.
The charges were the result of a Texas Rangers investigation that began after the Texas State Securities Board fined Paxton $1,000 in 2014. In that case, Paxton admitted he had solicited clients for a friend’s investment firm, Mowery Capital Management, while he was a state senator, without being registered as an investment adviser. Paxton paid the fine and was reprimanded.
According to the bar’s March 9 dismissal letter, Clevenger’s grievance “is not ripe for compulsory discipline” unless Paxton is convicted and sentenced.
“We have concluded that some of the conduct you described is not a violation of the disciplinary rules,” Assistance Disciplinary Counsel R. Uribe wrote. “Concerning the remaining conduct you allege, it is the subject of a pending criminal case against the respondent.”
Clevenger disagrees, arguing there is “nothing in the disciplinary rules preventing OCDC from prosecuting attorney misconduct charges concurrently with criminal charges.”
He cites an earlier disciplinary grievance he filed against former Robertson County District Attorney John Paschall where the bar prosecuted concurrently with criminal charges.
“If you file a grievance against a politician lawyer before he gets indicted, the state bar will dismiss the grievance — no matter how damning the evidence — on the grounds that you failed to state a violation,” Clevenger said. “But if you file the grievance after he gets indicted, then the state bar will dismiss your grievance because a criminal case is pending. Is it any wonder that my profession has such a miserable reputation?”
The bar “needs to be gutted and reorganized from top to bottom,” Clevenger contends.
A second disciplinary grievance remains pending against Paxton regarding a controversial, nonbinding opinion he issued after the U.S. Supreme Court’s landmark ruling last year in Obergefell v. Hodges, which legalized same-sex marriages. Paxton told state judges and county clerks they can invoke their religious rights in refusing to perform same-sex marriages, but warned that they might be sued.
Paxton’s opinion was cited immediately by Hood County Clerk Katie Lang, who invoked her religious objection to gay marriage within days of the Obergefell ruling.
A same-sex couple sued her in Fort Worth Federal Court after she repeatedly refused to issue them a marriage license and “humiliated” them.
After Lang relented, Hood County officials settled the lawsuit by paying the couple’s $44,000 legal bill.
Paxton’s opinion was cited a second time in February by Republican Dallas County Justice of the Peace Bill Metzger, who said his “sincerely held religious beliefs” prevent him from being “forced to conduct anything but a traditional wedding.”
Dallas County Democratic Party officials immediately demanded Metzger resign, accusing him of violating federal law and his oath of office.

From Courthouse News.

Former Okla. Senator Gets 3 Years for Fraud

March 11, 2016
By David Lee
TULSA, Okla. (CN) – A former Oklahoma state senator was sentenced Friday to over three years in federal prison for tax evasion and for stealing $1.8 million while leading the Better Business Bureau.
Ricky L. Brinkley, 54, of Owasso, was sentenced to 37 months in federal prison. U.S. District Judge Claire V. Eagan also ordered Brinkley to pay $1.8 million to the Better Business Bureau in restitution, as well as $165,000 to the Internal Revenue Service.
Brinkley pleaded guilty in August to five counts of wire fraud and one count of subscribing to a false tax return. He then resigned as senator for the 34th District, which includes Tulsa. He most recently served as chairman of the Committee of Pensions and vice-chair of the Senate Finance Committee.
Prosecutors said Brinkley used his employer’s credit card to make cash withdrawals at casinos to support his gambling habit. They said he would create false invoices using Better Business Bureau money for payment.
Danny C. Williams, U.S. Attorney of the Northern District of Oklahoma, said Brinkley “will now face the consequences of his actions for betraying the public’s trust.”
R. Damon Rowe, IRS-Criminal Investigation Special Agent, said all income including embezzled money is taxable.
“The Better Business Bureau was not Mr. Brinkley’s personal piggy bank, and today’s sentence sends a positive message to honest taxpayers – a reminder that the justice system works, and that filing a false tax return is a crime that will be punished,” he said.
Between November 2005 and February 2015, Brinkley diverted more than $1.2 million while serving as the bureau’s president and chief executive officer and later as chief operating officer, the 6-page criminal information stated.
“He fraudulently signed checks, transferred, used, and disbursed funds to pay personal expenses and debts including mortgage payments, expenses for pool cleaning services at his home, and his personal American Express, Discover, and Visa cards,” prosecutors said in a statement.
Brinkley had faced up to 20 years in prison and a $250,000 fine on the wire fraud charges and up to three years and a $250,000 fine on the false tax return charge.

From Courthouse News.