By By Suzanne Monk/The Meridian Star
April 11, 2001
Defense attorney Henry Palmer took the offensive in U.S. District Court Tuesday, suggesting with witness after witness that his clients never suspected David Van Colvin was stealing money from Comcast to pay his American Express bill.
Palmer represents C.D. "Bubba" Newell and Wayne Raley, two of the four defendants in the three-week old "Comcast trial." Newell was a vice president of Trustmark National Bank. Raley is a building contractor.
All four defendants are accused of conspiring to defraud Comcast of $2.6 million between January 1994 and August 1996.
Federal prosecutors say Colvin, regional manager of Comcast-Primestar, was the "man in the middle" directing the activities of his alleged co-conspirators.
Everyone knew David was rich'
Palmer suggested that his clients were as deceived as almost everyone else in Lauderdale County about the reason for Colvin's sudden affluence.
Witnesses who testified about Colvin's explanations included business owners, Newell's wife, Catherine, and the couple's son, Trey. Here is what Colvin told them about where his money came from:
He had a Harley Davidson dealership in Atlanta that was doing well;
He was receiving a lot of money from Comcast in bonuses and commissions;
His aunt in California died and left him money;
His father was paying half his house note and financed a European vacation;
He had lots of frequent flyer miles;
His grandmother in Utah died and left him $500,000;
He got a percentage of each sale on QVC, a home-shopping television program;
He challenged Comcast about a manager in another part of the county who made three times more than he did, and Comcast had topped the other manager's salary retroactively;
He owned part of Reflections of Modern Garden and shared in the profits; and
He owned part of an antique store in New Orleans that was doing well.
Colvin has accused only one of the defendants in this trial of knowingly participating in a conspiracy to defraud Comcast Bubba Newell.
Catherine Newell testified that her husband may not have known about all Colvin's banking. She said he told her he was dissatisfied with Meridian banks and had planned move some of his financial dealings elsewhere.
She also contradicted Michael Crosby, who testified last week that Newell approached him with a scheme to contract with Comcast to do re-installation work. Catherine Newell said that was Crosby's idea.
Palmer asked her why Bubba Newell did not pick up on what Colvin was doing.
Raley's testimony
Raley took the stand in his own defense Tuesday, stating emphatically that he did not suspect that Colvin was stealing money from Comcast.
He said he got caught up in Colvin's American Express transactions in the fall of 1994, when Newell suggested he become an American Express vendor. At the time, Lowe's was paying a lot of Colvin's bills with local merchants and then re-billing Colvin for reimbursement. Lowe's charged a handling fee of 20 percent to 40 percent for this service.
Raley became an Amex vendor in September or October of 1994, agreeing to pay American Express bills associated with his building projects and charging Colvin a 10 percent handling fee. To do this, Raley would authorize American Express to draft a check made out to him. He and Newell would then sit down and pay Colvin's bills.
Two things happened, Raley testified.
First, the American Express funds were coming slower than Colvin was spending money. Raley said he found himself borrowing to pay bills until the Amex money arrived. By June 1996, he testified, he was $104,000 in the red. Second, the bills began to include items that had nothing to do with his construction projects.
Some of the checks Raley issued after his meetings with Newell were split up into even more checks. Raley said he had no knowledge of this practice; he left the checks with Newell and did not know about additional subdivisions until an IRS audit in 1997.
Prosecutors point out that more than $1 million passed through Raley's account over the course of three years resulting in a profit for Newell of more than $100,000.
Much of the money that was processed through Raley's account benefited Newell and his family, as Colvin showered them with houses, mobile homes, pick-up trucks, four-wheelers, tractors and furnishings.
Graham defense rests
Defendant Kary Graham is also indicted in connection with the alleged conspiracy to defraud Comcast. Like Kim Gianakos, prosecutors say he paid Colvin's American Express bills and then submitted false invoices to Comcast for reimbursement.
Graham testified Tuesday, and denied any knowledge of Colvin's illegal activities.
Graham admitted to sending invoices to Comcast for reimbursements of sales that never happened, but said he did it on Colvin's instructions. Earlier witnesses testified that Graham questioned Colvin about his billing practices, and was assured they were acceptable to Comcast.
Forensic accountant Jack Sykes also testified in Graham's behalf.
When the dust settled in August 1996, he said, Graham was in the red. Unlike Raley and Kim Gianakos, Graham did not charge a fee for paying American Express bills and submitting reimbursement invoices to Comcast.
Assistant U.S. Attorney Bob Anderson said during cross-examination that Graham could have walked away from an ethically unclear situation anytime but he didn't.
About Colvin's deal …
A remark by witness Becky Stubbs, owner of Reflections of Modern Garden, caught the attention of all three defense attorneys. She said Colvin was very upset after his theft was discovered.
Defense attorneys are expected to capitalize on the idea that Colvin lied about his former friends and associates in exchange for a reduction in his own sentence.
Today's court action
U.S. District Judge Tom Lee told the jury the final defense witnesses will testify today. Palmer has reportedly said Newell will probably not testify.
Closing arguments are expected to begin sometime this afternoon or Thursday morning.
Suzanne Monk is managing editor of The Meridian Star. E-mail her at smonk@meridianstar.com.