April 9, 2014

The Cost of Deception

Filed under: Probable Cause — Bill @ 8:21 am

DBSIClosing arguments in the Idaho-based DBSI federal criminal trial will conclude today.  Federal district court Judge B. Lynn Winmill will provide instructions to the jury, and the jury should get the case for deliberation.

This morning’s Idaho Statesman article by John Sowell is headlined DBSI defense:  Can FBI agent be trusted? should be neither a surprise nor a shock to Statesman readers and those who have been following the DBSI trial stories in the Statesman.  In today’s story, Sowell reports that DBSI defendant Mark Ellison’s attorney Jeffrey Robinson said, “[FBI] Agent Morse was the face of this investigation.   Agent Morse was willing to look Judge Winmill in the eye and lie about her testimony.”  When a witness can be shown to have given sworn testimony that is inconsistent with or refuted by physical evidence or her previous sworn testimony, opposing counsel is usually permitted to challenge or impeach the witness’s credibility.

If FBI SA Rebekah Morse had been able to return to the witness stand, it is almost certain that Mr. Robinson would have been allowed to question her about the truthfulness of her statement to the Court that she had not sent text messages from the witness stand on her cellular telephone.  SA Morse was unable to be impeached in person because, according to the Ada County Coroner, she took her own life before she could be recalled.  Thereafter, “Chief District Judge B. Lynn Winmill informed the jury on Friday that Morse had not answered truthfully when she denied texting, but jurors have not been told about her death.”

Clearly and properly, Attorney Robinson hoped to persuade the trial jury that if FBI SA Rebekah Morse was willing to deceive the Court on a comparatively unrelated matter (her personal text messages with her husband), she might have been willing to lie to the Court on material matters relating to the allegations against the DBSI principals.   It is also appropriate that the Court has not told jurors about the coroner’s determination that SA Morse died by a self-inflicted gunshot wound before she could be recalled to the witness stand.

Until after the jury returns its verdict and has been discharged (and maybe not even then), it won’t be known what effect SA Morse’s deception, acknowledged and discussed in Court by Judge Winmill, may have had on the verdict.   Regardless of any influence SA Morse’s deception may have on the jury and on the outcome of the DBSI criminal trial, it has already irreversibly affected the lives of many people close to her.  Ultimately, her unnecessary and arguably irrelevant deception has already come at a very high cost.

ADDENDUM on 04-09-2014 at 3:30 PM:  On 04-08-2014 Judge Winmill filed another Memorandum Decision and Order.  This most recent one provides the Judge’s curative instruction to the jury in addressing the on-stand texting of FBI SA Morse.  It also explains how Judge Winmill considered the desires of both the government and the defendants in arriving at his curative instruction.

April 2, 2014

Doing It the Right Way

Filed under: Probable Cause — Bill @ 3:48 pm

StevenDMatheson copyIn our post on October 18, 2013, titled Steve Widmyer: Not Suitable for Mayor we were justifiably critical of Coeur d’Alene Mayor Steve Widmyer for authorizing print and online campaign literature which misrepresented that in 2013 he was  a CPA, a certified public accountant.  His license had, in fact, lapsed in 1995.  The Idaho State Board of Accountancy and Idaho statutes forbid such misrepresentation of the license.

So it is understandable that when the Coeur d’Alene Press ran a story about Kootenai County Treasurer candidate Steven D. Matheson on March 20, 2014, and the Press story included the statement, “He is also a certified public accountant,” we wondered if we had another poseur.

We don’t.

Mr. Matheson’s business website clearly and accurately stated then and now that he is an inactive CPA.  And just as important, Mr. Matheson’s campaign website states “CPA (inactive, WA).”

In our view, there is nothing wrong with a formerly licensed CPA using that information in business and campaign literature as long as the presentation conforms to the requirements in The Idaho Accountancy Act (Idaho Code Title 54, Chapter 2), specifically in I.C. 54.220.  The law does not forbid an inactive or lapsed CPA from using words that tend to indicate he was a CPA; it forbids him from using words that tend to indicate he is a licensed CPA.  Words such as “inactive” or “lapsed” clearly indicate former rather than currently valid licensure.

We’re pleased that Mr. Matheson did it the right way.

DBSI Update (Subtitle: Manipulating Audits)

Filed under: Probable Cause — Bill @ 8:51 am

DBSIUnless you’ve been reading the Idaho Statesman newspaper’s reporting of the DBSI trial in Boise, you may be unaware of the scope of the securities fraud, wire fraud, mail fraud, and interstate transportation of stolen property the government alleges defendants Douglas L. Swenson, Mark A. Ellison, David D. Swenson, and Jeremy S. Swenson committed from the headquarters of DBSI in Meridian, Idaho.

As the Idaho Statesman newspaper reported in its April 11, 2013, article headlined How Meridian Company DBSI’s ‘house of cards’ fell, DBSI was “… a once-respected local company that lost millions of dollars invested by thousands of people who were attracted by DBSI’s promises of sure-fire profit on their purchases of pieces of shopping centers and office buildings around the country” including Virginia, Illinois, Georgia, Missouri, North Dakota and Texas.

Today’s Idaho Statesman story by John Sowell is headlined Lengthy DBSI trial winding down this week.  As the headline suggests, the defense may rest its case by the end of today, and closing arguments are expected to begin on Friday.  The jury could get the case early next week.  But even as the trial is winding down, today’s story also contained very eye-opening disclosure. (more…)

March 31, 2014

Idaho Police Sued in Federal Court for ‘License Plate Profiling’

Filed under: Probable Cause — Bill @ 7:43 am

idaho-state-police-trooper-marijuana-license-plate-profiling-640x344A civil lawsuit has been filed in Idaho Federal District Court by plaintiff Darien E. Roseen alleging that several defendant Idaho law enforcement agencies including the Idaho State Police, the Fruitland City Police Department, and the Payette County Sheriff’s Office committed acts under the color of law which deprived Roseen of protected rights, privileges, and immunities secured by the Constitution and laws of the United States.

Specifically, the lawsuit alleges the ISP and other law enforcement agencies target vehicles traveling in Idaho and bearing license plates from states such as Washington and Colorado which have legalized the possession of marijuana.  It implies that when necessary, the ISP and others have used pretexts to stop vehicles and then intimidate vehicle operators to give consent to search vehicles without sufficient probable cause.

The lawsuit was reported in the Denver Post online article dated March 29, 2014, and headlined Colorado man sues Idaho police over “license plate profiling” in marijuana case.  It was also reported on the website on March 28, 2014, in a post entitled Troopers ‘License Plate Profiling’ in Idaho for Marijuana.

The 25-page civil complaint supporting the allegation was filed in the Federal District Court of Idaho on March 26, 2014.

Nothing illegal was found during the search of Roseen’s vehicle.

If the allegations in the complaint are proven at trial, then the public should be very, very concerned that the profiling practice was either explicitly or implicitly approved by the Idaho State Police’s command structure and condoned by other Idaho law enforcement agencies.

The detail and wording in the federal civil complaint suggests that Mr. Roseen has engaged legal counsel who knows how to expose and prove questionable if not outright illegal law enforcement practices. Just like former CdAPD LT Dan Dixon, Mr. Roseen and his counsel wisely sought to get this case into federal court and out of the hands of “local control” judges in Idaho’s district courts.

March 27, 2014

Charlotte, NC, Mayor Arrested – Corruption

Filed under: Probable Cause — Tags: — Bill @ 2:58 am

CannonThe Charlotte Observer online reports that Charlotte, NC, Mayor Patrick Cannon (shown left) has resigned after being arrested on Wednesday by the FBI and charged with corruption.   Cannon was accused of taking over $40,000 in bribes from undercover agents posing as big developers who wanted to do business with the City.

The criminal complaint and affidavit in support of the complaint sworn by FBI Special Agent Eric J. Davis alleges that Cannon committed violations of the Hobbs Act (Extortion/Color of Official Right), Theft or Bribery Concerning Programs Receiving Federal Funds, and Honest Services Wire Fraud.

Here is the press release issued March 26, 2014, by Anne M. Tompkins, US Attorney for the Western District of North Carolina.  The press release nicely summarizes the allegations against former mayor Cannon.

ADDENDUM on 03-28-2014 at 7:02 AM:  People sometimes ask why law enforcement doesn’t act more quickly on corruption cases against public officials.  In Cannon’s case, people asked why the FBI could not have arrested him before he was elected and sworn in as Charlotte’s mayor just a few months ago.  Here is a partial answer.

Calif. State Senator Arrested By FBI – Gunrunning, Honest Services Fraud

Filed under: Probable Cause — Tags: — Bill @ 2:03 am

YeeBannerSizedIn its Wednesday online edition, the San Jose Mercury News article headlined State Sen. Leland Yee indicted on arms trafficking, corruption reports that California State Senate colleagues were shocked at the indictment of Sen. Leland Yin Yee, one of the state’s strongest advocates for both gun control and good government.  Yee was considered a strong contender to be California’s next Secretary of State.  Yee’s district includes San Francisco and part of San Mateo County.

In addition to Yee, the 26 people indicted included Raymond “Shrimp Boy” Chow, the alleged leader of San Francisco’s Chee Kung Tong .  FBI Special Agent Emmanuel V. Pascua’s  136-page affidavit in support of the complaint identifies a wide range of charges including firearms trafficking, money laundering, murder-for-hire, drug distribution, trafficking in contraband cigarettes, and honest services fraud.  So far, however, the charges against Yee are for Wire Fraud of Honest Services, Conspiracy to Deal Firearms Without a License and Conspiracy to Illegally Import Firearms.  (Note:  The honest services fraud allegations against Yee are detailed in the affidavit and are an excellent tutorial in how campaign finance donations are used to bribe public officials.)

Here is a link to the March 26th  press release issued by the US Department of Justice‘s United States Attorney for the Northern District of California Melinda Haag, FBI Special Agent in Charge David J. Johnson, and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez.

ADDENDUM on 03-28-2014 at 07:13  AM:  Some but not all racketeers and gangsters shun publicity.  Others like Raymond “Shrimp Boy” Chow seek to achieve an air of legitimacy by associating with prominent community leaders and appearing to “give back to their community.”  As reported in this San Jose Mercury news story, this SFGate story, and this Los Angeles Times story, Chow was in the latter category.

March 25, 2014

DBSI – A New Wrinkle?

Filed under: Probable Cause — Bill @ 7:08 am

DBSIThis morning’s Idaho Statesman article headlined Hearing after FBI agent’s death raises questions about her veracity during DBSI trial by John Sowell further complicates the already complicated federal trial going on in Boise.

As we reported in our March 23 post entitled DBSI – Ever Hear of It?, after testifying on Tuesday and Wednesday last week, FBI Special Agent Rebekah Morse was found dead in her Boise home on Thursday morning.  By Thursday night, within a period of about 16 hours, the investigation of her death resulted in the Ada County coroner announcing that she had died of a self-inflicted gunshot  to her head.

In his Monday morning hearing, federal district court Judge B. Lynn Winmill said that afternoon he would review the contents of the alleged text messages found on Morse’s phone and discuss the contents with the attorneys on Tuesday morning before bringing in the jury.

It is likely that the contents of any of the text messages on Morse’s phone will help Judge Winmill decide how to best proceed with the trial.

For readers who have PACER accounts, the case number is Case 1:13-cr-00091-BLW.  This will give you access to several of the unsealed filings and court documents.

And still no timely reporting of this major Idaho story from either The Coeur d’Alene Press or The Spokesman-Review.

ADDENDUM on 03-25-2014 at 11:36 AM:  From the Idaho Statesman:  Update:  Judge concludes deceased FBI agent was texting during testimony

ADDENDUM on 03-26-2014 at 03:25 AMHere is a link to Judge Winmill’s Memorandum Decision and Order filed 03-25-2014 concerning the assertations that FBI SA Morse had been texting during her testimony and had lied about it to the Court.  The heavily redacted portions of the FBI’s FD-302 form presumably pertain to matters of her death investigation.  This is one of the “newly unsealed court documents” Idaho Statesman reporter John Sowell refers to in his article in today’s paper headlined FBI agent’s court texts unrelated to DBSI.

March 23, 2014

Good Question! Can Someone Answer Authoritatively?

Filed under: Probable Cause — Bill @ 10:56 am

Good ideaIn her comment appended to our March post titled URDs Hurt Community Colleges, Susie Snedaker asked,

“A friend familiar with urban renewal legislation in another state told me that legislation in her state permitted taxing districts to negotiate percentages taken by URAs. Prior to the city’s adoption of urban renewal legislation, I contacted Steve Schenck at NIC to discuss the impact that the legislation would have on NIC and the possibility that NIC could negotiate the percentage taken by the URA. If I remember correctly, he told me something to the effect that the sum wouldn’t amount to much.  Are percentages taken from taxing districts negotiable?”

Does anyone have an authoritative answer, particularly one traceable directly to the wording in Idaho’s urban renewal statutes or precedent case law?

DBSI – Ever Hear of It?

Filed under: Probable Cause — Tags: — Bill @ 8:01 am

DBSIHave you ever heard of DBSI?  That’s Diversified Business Services & Investments, Inc., a Meridian-based real estate development company.  Several of its principals have been charged with federal crimes and are currently on trial in US District Court in Boise.

According to an Idaho Statesman article, the trial was abruptly recessed this week when a Boise FBI special agent who had been testifying in the trial was found dead in her home of what the Ada County coroner stated was a self-inflicted gunshot wound.

In April 2013 a federal grand jury in Boise indicted Douglas L. Swenson, 64, of Eagle, Idaho; Mark A. Ellison, 64, of Boise, Idaho; David D. Swenson, 35, of Boise, Idaho; and Jeremy S. Swenson, 40, of Meridian, Idaho, for conspiracy to commit securities fraud, wire fraud, mail fraud, and interstate transportation of stolen property stemming from their involvement in the DBSI Group of Companies (DBSI).  The details of the indictment are in this press release from the Office of the US Attorney for the District of Idaho.  Here is a link to the April 10, 2013, federal grand jury indictment.

This 2008 Watch List article gives readers some idea of the geographic and financial span of the allegations raised against DBSI both civilly and criminally.

This 2009 report by Boise television station KTVB explains how the allegations against DBSI affected one particular individual who likened the breadth of the losses allegedly attributable to DBSI as being proportionally similar to those attributed to convicted swindler Bernie Madoff.

OpenCdA wonders if DBSI’s tentacles reached into northern Idaho?  According to the website,

“DBSI and its various entities issued many different investments including non-traded real estate funds (REITS), tenants-in-common investments (TICs), in addition to various notes. It has been alleged in various regulatory and legal filings that the broker-dealers who sold DBSI investments were deficient in discharging their due diligence requirements with regard to approving DBSI for sale to their retail investment clients.”

Our local and regional newspapers, The Coeur d’Alene Press and The Spokesman-Review, seem to have been missing in action on this very significant Idaho-based story.

March 20, 2014

Coeur d’Alene Press Wrong – Again

Filed under: Probable Cause — Bill @ 7:58 am

Fact CheckThe Thursday, March 20, 2014, Coeur d’Alene Press ran an online unattributed story headlined Matheson seeks county treasurer post.

The Press story included this statement, “He [Steven D. Matheson] is a graduate of Central Washington University with a double major in accounting and finance. He is also a certified public accountant.”

OpenCdA’s search of the Idaho State Board of Accountancy’s online database did not show Steven D. Matheson as being a certified public accountant in Idaho.

We sent an email inquiry to the Idaho State Board of Accountancy asking for confirmation that Steven D. Matheson is a certified public accountant.  A representative of the State Board responded via email and referred us to Matheson’s website which states, “Steve is a CPA (inactive) with undergraduate degrees in Accounting and Finance from Central Washington University.”  The Idaho State Board of Accountancy has no record of Steven D. Matheson ever being a licensed certified public accountant in Idaho.  (more…)

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