By By Suzanne Monk/The Meridian Star
The U.S. Attorney's office rested its case Friday against four people accused of conspiring to defraud Comcast of $2.6 million between 1994 and 1996.
The "man in the middle" is former Primestar executive David Colvin.
Prosecutors claim he directed the actions of four co-conspirators: Kim Gianakos, owner of a Meridian public relations firm that did business with Comcast; Kary Graham, manager of a Comcast satellite sales office in Waynesboro; C.D. "Bubba" Newell, a former vice president of Trustmark National Bank in Meridian; and contractor Darrell Wayne Raley.
None of the defense lawyers deny that money was stolen from Comcast. The conspiracy, however, hinges on whether the people involved in the financial transactions were aware that their actions were illegal.
Prosecution viewpoint
Bob Anderson and Harold Brittain of the U.S. Attorney's office contend that the defendants knowingly participated in a scheme to defraud Comcast. The reason, they say, was financial gain.
Gianakos is accused of paying Colvin's American Express bills and then submitting false reimbursement vouchers to Comcast. Prior to August 1995, she charged a 33.34 percent mark-up on these transactions. After August 1995, the mark-up dropped to 10 percent.
Prosecutors point out that Raley received a 10 percent fee for accepting American Express checks, converting them to cashier's checks and paying Colvin's bills at local stores.
Newell is accused of helping with the financial arrangements. Prosecutors claim he benefited from the scheme by receiving many of the items and services charged on Colvin's American Express card.
Ironically, Comcast auditor Sharon Desmond said earlier this week that Kary Graham seems to have lost money in the deal.
Defense witness No. 1
The defense attorneys claim their clients had no knowledge of criminal acts an acid test in the definition of conspiracy. Three defense witnesses appeared Friday; their testimony supported that point of view.
The first was Amy Smith, Colvin's former office manager at Comcast-Primestar. She was called by attorney Frank Trapp, representing Gianakos.
Smith testified Colvin told her more than once that he had authority from Comcast to have his American Express card paid through the marketing budget.
Smith also admitted saying, in previous depositions, that Colvin had told her he had corporate authority to have vendors pay his personal bills.
Defense witness No. 2
Attorney Charlie Wright, representing Kary Graham, called Nancy Van Doran to the stand. Van Doran was Colvin's personal secretary.
She recalled a conversation between Colvin and Graham about paying rent on an apartment in New Orleans. During this time, the spring of 1996, Colvin had been diagnosed with multiple sclerosis and often traveled to New Orleans for treatment.
Colvin said yes.
On another occasion, she said, Colvin was more forceful.
Defense witness No. 3
Wright next called Gay Stewart, Graham's former office manager. She, too, remembered a conversation about New Orleans expenses.
Colvin's father is Glenn Colvin. At the time, Glenn Colvin was the senior executive at the Comcast regional office in Meridian.
Coming up Monday
Two of the defense attorneys, Trapp and Henry Palmer, who represents Raley and Newell, moved for dismissal of all charges after the prosecution rested its case.
Wright asked for U.S. District Judge Tom Lee to acquit Graham.
The trial resumes Monday at 8:30 a.m.
Suzanne Monk is managing editor of The Meridian Star. E-mail her at smonk@themeridianstar.com.
Definitions:
Conspiracy:
All four defendants standing trial in U.S. District Court are accused of being part of a criminal conspiracy to defraud Comcast.
In a conspiracy, two or more people knowingly participate in a plan to commit a crime. It is not necessary that all conspirators have a large role. It is not necessary that all conspirators know each other. In this case, prosecutors identify former Primestar executive David Colvin as the "man in the middle" directing the activities of his alleged co-conspirators.
Mail/wire fraud:
Kim Gianakos and Kary Graham are accused of mail fraud, using the U.S. Postal Service in the commission of a crime. In this case, checks and invoices were mailed.
Wayne Raley and C.D. "Bubba" Newell are accused of wire fraud, using a "wire" service in the commission of a crime. In this case, a wire service was used to cause the transfer of money from American Express.
Money-laundering:
Gianakos, Raley and Newell are accused of money-laundering. The goal of money-laundering is to disguise the origin of money acquired through illegal means. One of the ways to do this is to "book" the money in seemingly legal ways providing a reasonable explanation for where it came from and obscuring the audit trail.
In one part of the alleged conspiracy, personal items were charged on Colvin's American Express cards either directly or indirectly. In the indirect method, Newell is accused of causing checks to be drafted by American Express and sent to Meridian. Wayne Raley converted them to cashier's checks and paid Colvin's bills at local stores.
In another part of the alleged conspiracy, Colvin charged personal items on his American Express card. Gianakos paid the resulting bills. Federal prosecutors allege Gianakos then legitimized the amounts by creating false invoices and causing the money to be "booked" by Comcast as marketing expenses.
By definition, money has to be "dirty" before the layering of financial transactions begins. "Clean" money doesn't need to be laundered.
Tax evasion:
Newell is charged with income tax evasion, which is under-reporting income in order to avoid paying all taxes owed to the Internal Revenue Service. The charge derives from the allegation that Newell benefited from many of the items purchased on Colvin's American Express card.