Dallas Political Corruption Trial Ends in Smoking Ruins

May 22, 2017
By David Lee

DALLAS (CN) — After several embarrassing missteps at trial, federal prosecutors said late Friday they will not retry Dallas County Commissioner John Wiley Price for tax fraud after a jury acquitted him of several other corruption charges.

U.S. Attorney John Parker said that seeking a retrial on the four counts of tax fraud “will not serve the interests of justice.”

Price, 67, was acquitted in April on seven bribery, mail fraud and conspiracy charges; the jury hung on the tax fraud counts. The acquittal was a stunning defeat for Parker’s office and the FBI, which spent a decade investigating and prosecuting Price.

They failed to persuade the jury that Price took more than $950,000 in cash, cars and real estate from political consultant Kathy Nealy in exchange for her clients’ bids for county contracts, and more than $200,000 in cash from a clothing store run by Price’s assistant Dapheny Fain and an art gallery run by his friend Karen Manning.

Fain, 55, was tried with Price on one count of lying to federal agents and one count of conspiracy. She too was acquitted.

The defense said Price’s money was from loans he made to Nealy, a close friend, and that large amounts of cash seized by the FBI at his home in 2011 belonged to Fain, who claimed she kept it there to prevent her from spending it on shopping.

Price is the most prominent politician to be federally prosecuted in Dallas. His confrontational style and focus on issues of race and economic equality have made him controversial, but his constituents in south Dallas have comfortably re-elected him for three decades. His supporters have said Price was targeted because he is black.

Price said Friday evening that about halfway through his nine week-long trial he forgave the federal government for targeting him.

“God showed me favor,” Price told The Dallas Morning News. “We owe it to continue to try to make the system that we’ve inherited better, and that’s what I work to do every day.”

Nealy was to be tried separately from Price and Fain. She will no longer be prosecuted, the U.S. attorney said.

“Although I am disappointed in the outcome of this case, my responsibility is larger than the consideration of my subjective views,” Parker said in a statement. “I must objectively consider the totality of circumstances that the prosecution now faces. … My decision today is fundamentally different than the initial decision to seek this indictment and in no way reflects on the soundness of that earlier decision.”

Parker said that knowing what he knows now, the “reasonable, good-faith beliefs we had at the time of indictment” are “substantially diminished.”

“The evidence and facts as known at the time of indictment demanded that this office pursue this case,” he said. “However, while it is our responsibility to seek justice when presented with such evidence, it is never our responsibility to secure a conviction at all costs.”

Parker’s office had numerous embarrassing errors in the final weeks of the trial, acknowledging several failures to turn over evidence to the defense.

U.S. District Judge Barbara Lynn called the failures “terribly inappropriate and very disappointing.”

Price’s attorneys capitalized on the mistakes, accusing federal investigators and prosecutors of being incompetent and dishonest. They said prosecutors’ long line of witnesses and evidence lacked a “smoking gun” showing a conspiracy to bribe, and that the case was built largely on circumstantial financial records.

Judge Lynn was so unimpressed with the prosecution that she warned before closing arguments that she was probably going to throw out the mail fraud charges even if the jury found Price guilty. She said it was “virtually impossible” for the jury to convict based on the poor connection prosecutors made between the alleged crimes and the U.S. Postal Service.

From Courthouse News.

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Dallas Commissioner Acquitted on Most Corruption Charges

April 28, 2017
By David Lee

DALLAS (CN) – A Dallas federal jury punished federal prosecutors Friday for repeated mistakes at trial when it acquitted Dallas County Commissioner John Wiley Price on seven corruption counts while remaining hung on four others.

After eight days of deliberations, the jury acquitted Price, 66, on bribery, mail fraud and conspiracy charges while failing to reach a verdict on tax fraud charges.

U.S. District Judge Barbara Lynn declared a mistrial on the tax fraud charges and gave prosecutors one month to decide whether to retry Price.

Price is likely the most well-known politician to ever be prosecuted by the federal government in Dallas. His confrontational style and focus on the issues of race and economic equality have made him a controversial figure, but his constituents in south Dallas have comfortably re-elected him for three decades.

His acquittal is a stunning defeat for the U.S. Department of Justice and FBI, who have spent a decade investigating and prosecuting Price.

Judge Lynn urged jurors to “rest with your verdict” and resist talking to reporters about the verdict, but that it was their right to do so if they choose.

The jury also acquitted Price’s assistant, Dapheny Fain, 55, on a lying to federal agents count and conspiracy count.

Prosecutors failed to convince the jury that Price pocketed more than $950,000 in cash, cars and real estate from political consultant Kathy Nealy in exchange for her clients’ bids for county contracts, and more than $200,000 in cash from a clothing store operated by Fain and an art gallery operated by his friend Karen Manning. Nealy will be tried separately from Price and Fain.

Price has insisted the money was from loans he made to Nealy, a close friend, and that large amounts of cash seized by the FBI at his home belonged to Fain, who purportedly kept it there to prevent her from spending it on shopping.

Dressed in a brown suit and bowtie, Price smiled broadly Friday as the verdict was read and hugged his defense team. Surrounded by a large scrum of reporters, Price and Fain proceeded to walk back to work at the Dallas County Administration Building.

Price’s attorney, Shirley Baccus-Lobel of Dallas, told reporters she expected the acquittal.

“That does not mean my heart was not beating 100 miles per hour,” she said.

John Parker, U.S. Attorney for the Northern District of Texas, thanked jurors for their “extraordinary service” during eight weeks of trial and two weeks of deliberations.

“I will be convening with the prosecution team over the next several days regarding where we go from here, consistent with the court’s timeline,” he said in a statement.

Prosecutors stumbled in the final weeks of trial, admitting to several failures to turn over evidence to the defense.

Judge Lynn called the failures “terribly inappropriate and very disappointing.”

She also warned prosecutors before closing arguments she was probably going to throw out the mail fraud charges even if the jury found Price guilty, saying it was “virtually impossible” for the jury to convict based on the poor connection prosecutors made with the alleged crimes and the U.S. Postal Service.

The defense capitalized on the mistakes, accusing federal prosecutors and investigators of incompetence and dishonesty. They argued the prosecution’s parade of testimony and evidence lacked a “smoking gun” showing a conspiracy to bribe, and that the case is built largely on circumstantial financial records.

The defense also attacked the prosecution’s star witness, consultant Christian Campbell, who took a plea deal in exchange for his testimony. They told jurors that Campbell admitted to being a liar while on the stand.

From Courthouse News.

Jury Deadlocked in Political Corruption Trial

April 26, 2017
By David Lee

DALLAS (CN) — Federal jurors in the John Wiley Price government bribery trial were deadlocked Tuesday, increasing the chances for a mistrial or acquittal of the Dallas County commissioner and his assistant after numerous missteps by prosecutors.

U.S. District Judge Barbara Lynn met the jury in chambers for several minutes in the midafternoon before calling for attorneys on both sides. She then called court back into session to read jurors the Allen charge – a set of instructions that encourages federal jurors to keep trying to reach a verdict.

Lynn told jurors to go home to “watch some television” and “take a few deep breaths,” then come back Wednesday to try again.

Dressed in a dark suit and bowtie, Price, 66, grinned and waved at his supporters as he left the courthouse.

It is unknown how many of the 11 bribery, mail fraud, conspiracy and tax fraud charges against Price or the two charges of lying to federal agents and conspiracy against Price’s assistant Dapheny Fain the jurors are deadlocked on, nor how many of the jurors are split.

Prosecutors spent eight weeks telling the jury that Price pocketed more than $950,000 in cash, cars and real estate from political consultant Kathy Nealy in exchange for her clients’ bids for county contracts, and more than $200,000 in cash from a clothing store operated by Fain and an art gallery operated by his friend Karen Manning.

Nealy will be tried separately from Price and Fain.

Prosecutors say Price did not report the money on his income tax returns or on his state-mandated financial disclosure forms.

Price says the money is from loans he made to Nealy, a close friend, and that large amounts of cash found at his home belonged to Fain. He says he held it for her to keep her from spending it on shopping.

Lynn might declare a mistrial if jurors fail to reach a verdict. If she does, prosecutors are likely to try Price and Fain again, as several embarrassing failures to turn over evidence to the defense has tarnished their years-long investigation of Price.

Judge Lynn called the failures “terribly inappropriate and very disappointing.”

Exactly what charges the jurors are deadlocked on are key, as the judge warned prosecutors before closing arguments last week that she will probably throw out the six mail fraud counts against Price even if the jury decides to convict. Lynn said at the time it is “virtually impossible” to convict based on the prosecution’s poor job of connecting use of the U.S. Postal Service to the alleged crimes.

During closing arguments, the defense argued that the prosecution’s parade of testimony and evidence lacked a “smoking gun” showing a conspiracy to bribe, and that the case is built largely on circumstantial financial records.

From Courthouse News.

Jury Set to Deliberate in Dallas Bribery Trial

April 18, 2017
By David Lee

DALLAS (CN) – Attorneys for Dallas County Commissioner John Wiley Price tore into federal prosecutors and investigators Tuesday during closing arguments of his closely followed bribery trial, accusing them of unprofessionalism in putting on a weak case that lacks evidence of a crime.

Defense attorney Chris Knox, of Dallas, told jurors that the framing of Price and his assistant, co-defendant Dapheny Fain, is “nothing short of disgusting.” He accused FBI agents on the case of flat-out making up numbers, of using “smoke and mirrors” to mislead jurors.

Prosecutors spent eight weeks telling the jury that Price, 66, pocketed more than $950,000 in cash, cars and real estate from political consultant Kathy Nealy in exchange for Price supporting her clients’ bids for county contracts.

They also claim he took more than $200,000 in cash from a clothing store operated by Fain and an art gallery operated by his friend Karen Manning. He was indicted on 2014 on eleven counts of mail fraud, conspiracy and tax fraud.

Prosecutors have been dogged by at least four failures to turn over all evidence to the defense, resulting in U.S. District Judge Barbara Lynn angrily chewing them out for endangering their case. The errors have emboldened the defense, who declined to call Price or Fain to testify in their defense and called only two witnesses.

Prosecutors faced another setback Monday when Lynn told them she will probably toss the six mail fraud charges against Price even if the jury decides to convict.

Knox said he was disgusted “to his core” about how federal investigators “dug and dug and dug” for evidence of a crime to frame Price, claiming they found no evidence. He cited how investigators placed a surveillance camera on a pole near Price’s south Dallas home and how an FBI agent testified Price drove Nealy’s Chevrolet Avalanche over 90 percent of the time. The surveillance video showed Price used the vehicle only a small fraction of that amount, Knox said.

“The things that come out of the mouths of these FBI agents…I think they are the only people in their work that think it is right,” Knox told jurors.

Knox reiterated the argument that Nealy and Price were simply long-time friends who did things to help one another, citing a check memo by Nealy asking for help in getting her daughter a car. He said Price did these things for many people, not just Nealy.

“The list of people he helped wraps around the block,” Knox said.

He expressed his concern representing such a long-serving public servant while going up against “three Library of Congress’ worth” of evidence to go through. He said that even with so much evidence, prosecutors failed to find a smoking gun.

“If that evidence existed, it would have been stapled to my forehead by these people,” Knox said.

Knox also attacked the prosecution’s star witness, consultant Christian Campbell. He said Campbell immediately admitted to being a liar during cross-examination.

Campbell was indicted with Price, Nealy and Fain and took a deal, pleading guilty to one count of bribery in 2015. He testified in March that Price would nudge companies who wanted his support on county contracts to hire Nealy, who then allegedly passed on bribes to Price.

Knox said over 150 federal employees have worked on the 12-year-long investigation against Price, while the defense has student aides who “were in the 3rd grade” when the investigation started. He blasted prosecutors for their failures to turn over evidence until the middle of trial, saying the investigation has gone on for so long and only now are extremely relevant documents being turned over to the defense.

Assistant U.S. Attorney Katherine Miller reminded jurors the prosecution is not required to show any written contract to engage in a conspiracy or pay bribes.
“Price told no one he was being paid by Nealy,” Miller said.

She said “not a penny” of the money that Price was paid or the cars paid by Nealy were on his state-mandated financial disclosure forms. She said the piles of cash found in a safe in Price’s home was his, not Fain’s. The defense had argued that Price was holding the money for her to keep her from spending it on shopping.

“A career politician, Price took double his salary for ten years,” Miller said. “He compromised the county’s purchasing process and he delayed economic development in south Dallas County.”

From Courthouse News.

Legs Knocked From Under Political Corruption Trial

April 18, 2017
By David Lee

DALLAS (CN) — The federal judge in the bribery trial of Dallas County Commissioner John Wiley Price warned prosecutors Monday that she will probably take the rare step of dismissing most of the charges even if the jury convicts him.

U.S. District Judge Barbara Lynn declined to dismiss any of the 11 charges against Price on Monday, but expressed concern that the prosecution failed to prove its case in six mail fraud charges.

Lynn said it is “virtually impossible” for the jury to convict him of mail fraud, as the prosecution did a poor job arguing use of the U.S. Postal Service in the alleged crimes. She said she would not submit the mail fraud counts if they were the only charges filed.

“The chances are 99 percent that if the jury returns a guilty verdict on counts two through seven, this court is going to enter a judgment, notwithstanding the verdict, virtually immediately,” Lynn said.

Price was charged in July 2014 with conspiracy to commit bribery concerning a local government receiving federal benefits, conspiracy to defraud the IRS, six counts of deprivation of honest services by mail fraud, and three counts of subscribing to a false and fraudulent income tax return.

Prosecutors spent eight weeks telling the jury that Price, 66, pocketed more than $950,000 in cash, cars and real estate from political consultant Kathy Nealy in exchange for her clients’ bids for county contracts, and more than $200,000 in cash from a clothing store operated by Price’s assistant and co-defendant Dapheny Fain and an art gallery operated by his friend Karen Manning.

Fain is being tried alongside Price; Nealy will be tried separately.

Prosecutors say Price hid the bribes and failed to report them on state-mandated financial disclosure forms or in his federal tax returns.

Judge Lynn also expressed doubts about the conspiracy charges. She said prosecutors failed to establish a conspiracy took place, and failed to present evidence of a verbal or written agreement between Price and Nealy. She cited testimony that Price did not always vote in support of bids from Nealy’s clients.

Assistant U.S. Attorney Leigha Simonton said that alone does not disprove the existence of a conspiracy, but Lynn expressed concern that it would allow prosecutors to have a “long look backward” into Price’s entire political career, “without getting close to quid pro quo language.”

The prosecution has been dogged by at least three admitted failures to turn over evidence to the defense, failures that Lynn slammed as “terribly inappropriate and very disappointing.”

The mistakes have emboldened the defense, which declined to call Price to the stand and rested their case after calling only two witnesses last week.

Closing arguments were to begin Tuesday.

From Courthouse News.

Defense Rests Case in Price Bribery Trial

April 14, 2017
By David Lee

DALLAS (CN) – Bolstered by repeated stumbles by federal prosecutors, the defense rested its case Thursday in the bribery trial of Dallas County Commissioner John Wiley Price after calling only two witnesses.

Price was charged in July 2014 with conspiracy to commit bribery concerning a local government receiving federal benefits, conspiracy to defraud the IRS, six counts of deprivation of honest services by mail fraud, and three counts of subscribing to a false and fraudulent income tax return.

Prosecutors claim Price accepted approximately $1 million in cash, cars and real estate from political consultant Kathy Nealy for supporting her clients on county contract bids. He also allegedly received $200,000 in cash from a clothing store operated by Price’s assistant and co-defendant Dapheny Fain and an art gallery operated by his friend Karen Manning. Prosecutors say Price hid the bribes and failed to report them on state-mandated financial disclosure forms or in his federal tax returns.

Price publicly stated last week he was “going to have to testify” in his own defense, but he never took the stand.

Many of the three dozen witnesses listed by the defense with the court have already testified for the prosecution and have faced cross-examination by the defense.

Price’s attorneys called expert witness Chris Dellinges, a forensic accountant, who disputed prosecution claims Price took profits from Fain’s store, Man Made Sales. Price has steadfastly maintained Fain was paying back loans he made to help her with the store and that he was holding onto over $100,000 for her to keep her from spending it on shopping.

Dellinges testified that prosecutors erroneously added up all of the money Price loaned to Fain, claiming that it was really “the same money rotating over and over.”

“There was not income; it is loans back and forth,” he said. “Fain still owes Commissioner Price.”

The defense also called Assistant Dallas County Administrator Gordon Hikel to the stand.

Hikel disputed prosecution claims that documents Price allegedly turned over to Nealy’s clients were confidential.

The two days the defense presented to the jury contrast sharply with the eight weeks of testimony the prosecution presented before resting its case on Tuesday.

The excessive evidence presented may endanger the prosecution’s case. U.S. District Judge Barbara Lynn chewed out prosecutors for failing to deliver evidence to the defense on at least three occasions, calling the failures “terribly inappropriate and very disappointing.”

Defense attorneys quickly moved for acquittals for both Price and Fain, which Lynn denied. Fain’s attorney, Thomas W. Mills with Mills Williams in Dallas, told Lynn Tuesday he believes there has been “prosecutorial malfeasance and negligence” in the bungling of evidence.

From Courthouse News.

Prosecutors Trip Up in Dallas Political Bribery Case

April 12, 2017
By David Lee

DALLAS (CN) – Federal prosecutors Tuesday rested their bribery case against Dallas County Commissioner John Wiley Price after the judge angrily chewed them out for endangering their case by failing to deliver evidence to the defense on three occasions.

For eight weeks, prosecutors have portrayed Price, 66, as a self-interested crook who took more than $950,000 in cash, cars and real estate from political consultant Kathy Nealy in exchange for support for her clients, and more than $200,000 in cash from a clothing store operated by Price’s assistant Dapheny Fain and an art gallery operated by his friend Karen Manning. Nealy will be tried separately; Fain is being tried with Price.

Price is accused of hiding the bribes and failing to report them on state-mandated financial disclosure statements or in his federal tax returns.

Price was charged in July 2014 with conspiracy to commit bribery concerning a local government receiving federal benefits, conspiracy to defraud the IRS, six counts of deprivation of honest services by mail fraud, and three counts of subscribing to a false and fraudulent income tax return.

For the first several weeks of trial, prosecutors called a steady line of FBI agents, Price’s acquaintances, county contract bidders and fellow county commissioners to build their case to the jury.

They stumbled badly last week when defense attorneys began asking about the missing evidence. The latest batch of missing documents pertains to a suite Nealy held at the American Airlines Center and a condominium unit she had nearby.

Assistant U.S. Attorneys Walt Junker and Nicholas Bunch have apologized for the errors, but say the missing evidence was not pertinent to the case.

U.S. District Judge Barbara Lynn was not swayed Tuesday, lamenting her loss of confidence in prosecutors’ ability to turn over evidence to the defense, calling the failure “terribly inappropriate and very disappointing.”

Lynn wanted their boss, U.S. Attorney for the Northern District of Texas John Parker, to explain the errors to her in court. Parker is in Washington, D.C. this week, so his deputy, Assistant U.S. Attorney Chad Meacham, bore the brunt of her frustration. He told the judge his office has “fallen short” on the mistakes.

“We take our discovery obligations very seriously,” he said.

Lynn swatted down prosecutor Junker when he said the errors resulted from the large amount of evidence from the six-year investigation, telling him that is not the defense’s problem.

“The scope of this investigation and prosecution is of the government’s making, not the defense’s,” she said. “Difficult as it is, the government is obligated to staff the case.”

Price’s attorney, Shirley Baccus-Lobel of Dallas, disagreed with the statement that the missing evidence had no impact on the defense. She said the documents show Price participated in construction work at the condominium and support their argument that the two friends did things for one another.

Price moved for acquittal Tuesday, repeating the argument that prosecutors have failed to show that the financial transactions between Nealy and Price were bribes.

The defense has had to recall certain prosecution witnesses since last week, as they go through the missing evidence.

Fain also moved for acquittal Tuesday. Her attorney, Thomas W. Mills with Mills Williams in Dallas, told the judge he believes there has been “prosecutorial malfeasance and negligence” in the bungling of evidence.

He said there is no proof that “we are going to get what we should get.”

Mills said prosecutors failed to prove Price and Fain “worked together to do anything illegal” and failed to prove she made false statements to law enforcement.

“It wholly failed to provide sufficient evidence of a conspiracy: it failed to put on evidence that any income was actually received by Commissioner Price from Ms. Fain, which negates the argument of concealment and the requirement that such income should have been disclosed on Commissioner Price’s tax returns,” a 12-page memorandum in support of the motion for acquittal states. “The prosecution put on no evidence to prove that Ms. Fain possessed the criminal intent necessary to enter into and carry out a conspiracy to defraud the I.R.S. with Commissioner Price or that she did any overt acts to further such conspiracy.

Fain gave her opening statement Tuesday. Her attorney Marlo Cadeddu disputed prosecutors’ claims that Price was paid bribes by the clothing store, Man Made Sales. She said Price loaned Fain more money than she ever paid back to him, making the store a “burden” on him, not a benefit.

The government’s star witness, political consultant Christian Campbell, testified in March that Price would nudge companies who wanted his support on their county contract bids to hire Nealy, who then passed bribes on to him.

Campbell was indicted with Price, Nealy and Fain and took a deal, pleading guilty to one count of bribery in 2015.

Campbell also testified in 2016 against former BearingPoint executive Helene Tantillo, who was sentenced to six months in federal prison by an Austin jury. She was convicted of making false statements to the FBI, that a $10,000 increase in consulting fees paid to Campbell was going to charity. Prosecutors in that case said the money went to Nealy in the company’s bid on a county records digitization contract in 2004.

From Courthouse News.