Attorneys on both sides of a lawsuit that the government filed in October to seize seven properties it says were purchased with proceeds of a fraud scheme asked a federal judge Wednesday to halt all activity while a related criminal case plays out in another court.
In the lawsuit, the U.S. attorney's office contends that the real estate in Little Rock, North Little Rock and Texas should be turned over to the government because all the parcels were bought with proceeds of a fraud scheme involving four sisters and a daughter of one.
The motion to stay the civil proceedings cited a related criminal case that was filed against the women, an attorney and a tax preparer in December, also in the Eastern District of Arkansas.
The 40-page indictment, handed up Dec. 5 by a federal grand jury, levels 115 charges altogether against the women, attorney Everett Martindale of Little Rock and tax preparer Jerry Green of Grand Prairie, Texas. The sisters are Lynda Bryant-Charles of Hot Springs; Rosie Bryant of Colleyville, Texas; Delois Bryant of North Little Rock; and Brenda Sherpell of Gainesville, Texas. Also charged is Bryant-Charles' daughter, Niki Charles of Sherwood.
The majority of the charges are against the women, with Bryant-Charles facing 106 charges that include mail fraud, filing false tax returns, money laundering, conspiring to defraud the government and tax evasion; Rosie Bryant faces 109 similar charges; Delois Bryant faces 114 of the same charges except for filing false tax returns; Sherpell faces 90 charges including mail fraud, conspiracy and filing false tax returns; and Niki Charles faces eight counts of mail fraud.
Green faces only one charge: conspiracy to defraud the government. Martindale faces eight charges of aiding and abetting mail fraud.
"Conducting civil discovery in this case will adversely affect the government's ability to conduct the related criminal prosecution," assistant U.S. Attorneys Cameron McCree and Angela Jegley wrote in the motion asking U.S. District Judge James Moody Jr. to stop the clock on the civil case for now.
They noted that a two-month jury trial stemming from the criminal indictment, handed up Dec. 5 by a federal grand jury, is scheduled to start a year from now, on Jan. 25, 2021, before Chief U.S. District Judge D. Price Marshall Jr.
The indictment alleges that the defendants joined forces to defraud a program for black farmers and a program for Hispanic and women farmers, and also to avoid reporting more than $4.6 million in income to the IRS.
It says that from 2008 to 2017, the women solicited people to file false claims alleging they were discriminated against when they tried to get assistance from the USDA for their farming operations. The claims were submitted under the two litigation settlement programs.
The indictment alleges that 192 false claims were filed that resulted in a loss to the government of more than $11.5 million. The claims were false, it says, because the claimants hadn't actually suffered any discrimination, and in most cases had not even managed a farm.
Martindale is accused of depositing claim checks into his law firm trust account and then issuing checks from that account to the claimant. Green is accused of helping the recruited claimants receive false tax refunds.
Property that the government is trying to seize through the civil suit includes a house and a lot in the Rockwater Village area of North Little Rock; a house at 105 E. F Ave. and an adjacent structure at 3600 John F. Kennedy Blvd., both in North Little Rock; a house at 8117 Doyle Springs Road in Little Rock; and two homes in Texas -- one in Colleyville and one in Euless.
The complaint alleges that because the properties were bought with proceeds of crimes, they should be surrendered to the government. Meanwhile, the women have claimed their ownership of the properties is lawful and have asked that forfeiture request be denied.
Also Wednesday, U.S. Magistrate Judge Beth Deere held a short hearing, at the request of federal prosecutors, on whether attorney Larry Jarrett of Garland, Texas, is permitted under federal rules to represent all four sisters. Prosecutors said that the Federal Rules of Criminal Procedure "require a trial court to inquire about the possibility of a conflict whenever jointly charged defendants are represented by the same counsel."
Rule 44(c) requires that the court inquire into the defendants' knowledge of the risks to avoid problems later on, in the event of potential post-conviction claims that any defendant was deprived of her Sixth Amendment right to counsel.
Jarrett said three of the sisters have doctoral degrees and the other has a master's degree, and that they told him upon hiring him that their joint representation was key to him joining the case. They had previously been jointly represented, during an investigation preceding the indictment, by attorney John Walker of Little Rock, who has since died.
The women, all present at the hearing, affirmed that they wanted Jarrett to represent them, and Deere said she would make that recommendation to Marshall, the presiding judge.
Metro on 01/23/2020