Texas Swindler Gets No Sympathy From Fifth Circuit

March 1, 2017
By David Lee

NEW ORLEANS (CN) — The Fifth Circuit on Monday affirmed a Dallas area man’s conviction for swindling $20 million from investors to buy property near a phony North Texas Disney amusement park.

A three-judge panel affirmed the conviction of Thomas W. Lucas Jr., 37, of Plano, on seven counts of wire fraud and one count of making false statements to an FBI agent. He was sentenced in September 2015 to 17½ years in federal prison and ordered to pay $8.5 million in restitution.

Lucas raised $60 million from more than 100 investors from 2006 to 2010, luring them with supposedly secret information about a “Frontier Disney DFW” resort north of Dallas. Disney employees testified at Lucas’ trial that the information he gave investors was not true and that Disney had no plans to open a resort and theme park in North Texas at any time.

The scheme ripped off two kinds of investors: those who invested in options to buy land near the phony development and those who actually bought land near the property.

Lucas told investors the development would have “several theme parks, a water park, a new airport, a maglev train, hotels, villas, sports facilities, and a shopping mall” with elaborate maps, floor plans and mockups of the property.

Writing for the panel, Fifth Circuit Judge Jerry Smith was not persuaded by Lucas’ argument that the trial court incorrectly allowed evidence that he met the alleged source of his Disney information, Michael Watson, at a methadone clinic. Lucas claimed the now-deceased Watson leaked the information to him using burner phones and acted as a go-between for a Disney employee named Tyson.

“It was not an abuse of discretion to admit the evidence that Lucas met Watson at a methadone clinic, because it was not subject to the prohibitions of [Federal Rule of Evidence] 404(b),” the 13-page opinion states. “Only extrinsic evidence is inadmissible under Rule 404(b).”

Smith said the rule does not apply because Lucas’ relationship with Watson was “inextricably intertwined” with the scheme.

Nor did the panel buy Lucas’s argument that he should be granted a new trial because of new evidence that his deceased uncle, Beau Lucas, was responsible for the scheme.

Lucas claimed before sentencing that financial records indicate his uncle authorized $63,000 in wire transfers to a government witness and scam victim without the knowledge of his partners. Lucas also claimed that $740,000 was missing from entities his uncle controlled.

But Smith found the new evidence was “immaterial” to Lucas’ convictions and would be “highly unlikely” to result in acquittal.

“Lucas claims the district court was wrong to find that he had done insufficient due diligence to uncover the new evidence,” the opinion states. “But the court actually found that Lucas had failed to provide enough evidence that he had done the requisite due diligence at all.  That Beau Lucas was in exclusive control of the partnership records does not excuse Lucas from the burden of explaining to the court the steps he took to attempt to obtain the information.”

Joining Smith on the panel were Circuit Judges E. Grady Jolly and Stephen Higginson.

From Courthouse News.

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