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Marine veteran still sits in limbo in NC jail, no sentence
after two years
By Clint Parker
2/20/2003
Squashed by the Federal Justice
System, Terry Stewart continues his fight
from a cell in McDowell County Jail, where he has been since his
conviction in November of 2001. He has yet to be sentenced by Judge
Thornburg and cannot appeal his conviction until he has been
sentenced.
Reporter's note: This report is
about one man's trip through the Federal Justice System in
Asheville, North Carolina.
What kind of Federal
Justice System do we have? Many people continue to ponder just that
question and wonder whether there " is any justice left in the
federal justice system?"
Terry Stewart, a resident of Lewis
County, Tennessee, is about to mark his two-year anniversary in
jail. He was convicted a little over a year ago in a federal court
in Asheville, NC. He has yet to be sentenced for the crimes he was
convicted of, and he claims that he is innocent. Until he is
sentenced, Stewart cannot appeal his convictions, and presiding
Judge Lacy Thornburg seems to be in no hurry to sentence Stewart.
Stewart went through the federal court without a lawyer
because his wife, Jeni, said that they couldn't find a lawyer in
Asheville who had won a case in federal court.
In fact,
according to Jeni, when they were looking for a lawyer to defend
Terry, they called 22 attorneys to check their record of wins at the
federal court level.
Jeni said that not one in the 22 had won a
case. Furthermore, Jeni said the lawyers they spoke with considered
a plea agreement a win. Terry refuses to plea bargain crimes he says
he never committed.
So how can a citizen get justice in
Asheville's Federal Court?
Here's the story in which you can
decide.
Who is Terry Stewart?
Terry Stewart spent 26
years in the Marines. Part of that time was spent in Vietnam, where
he was stationed for almost four and a half years.
Terry's
military record was impeccable. In fact, during his career he was
awarded two Purple Hearts, a Bronze Star with combat "V" for Valor,
the Navy Commendation Medal, the Vietnam Cross of Gallantry with
Bronze Star, a National Defense Medal, a Vietnam Service Medal, a
Vietnam Campaign Medal with 9 clusters, the Presidential Unit Award,
the Navy Unit Award, and the Marine Corps Unit Award.
He also
got an accelerated promotion, a Combat Meritorious Promotion to
sergeant, a Combat Meritorious Promotion to staff sergeant, early
selection for gunnery sergeant and was a member of the Superior
Performance Group Program. After marrying Jeni, Stewart retired in
October of 1991, as a master gunnery sergeant from the Marine Corps
Air Station Cherry Point, Havelock, North Carolina, where he was
Provost Sergeant.
After leaving the Marines and searching
for something interesting to do, Terry started learning things he
didn't like about the government he had served for 26 years.
Most of what Terry learned led him to believe that the
government's taxation of its citizenry was unconstitutional. Terry
also learned how the rich and famous protected themselves and their
assets from lawsuits and government taxation.
"He decided that
the domestic enemies [of the country] were more serious than the
foreign ones were," said Jeni.
Terry wanted to share his
newfound knowledge with others, so in the summer of 1994 he started
a business that would help him do just that and would pay the bills
too. Terry and Jeni started conducting seminars about the advantages
of private trusts. Acting as independent contractors, the Stewarts
started selling products offered by a California-based Commonwealth
Trust Company.
During that time Jeni said their tax attorney
wrote a series of letters questioning the IRS about the taxes they
might be liable for. The letters stated that the Stewarts would pay
all of the taxes for which they were liable and to identify which
ones they Stewarts should pay. They received a signed letter from
the IRS in 1997 stating the questions were being researched and to
take no further action until they heard back from the IRS. They
haven't heard from them about their income tax situation since.
Jeni told the Tribune that the seminars she and Terry
offered were informative in nature and anyone wanting to learn more
about trusts could ask. The seminars were also open to the public
and anyone could attend.
According to Jeni, Terry's seminars
started getting good attendance, including members of the IRS and
the FBI. However, this didn't seem to worry Terry. "His philosophy
was that he was not saying or doing anything that was untruthful so
therefore he should be safe in what he was doing," explained
Jeni.
Things were going well for Terry until the fall of
1996, when he met Phillip Mark Vaughan, owner of a Charlotte-based
investment firm named Banyan.
Jeni said that Vaughan told them he
specialized in high yield, guaranteed rate-of-return investments for
trusts, non-profit organizations and other entities.
According
to Jeni, Vaughan claimed his investment group was located offshore
and had no reporting requirements in the United States.
As
time went on, the Stewarts and Vaughan started doing referral
business. If someone were looking for a trust, Vaughan would send
them to Terry, and if someone with a trust were looking for an
investment with a high rate-of-return, Terry would send them to
Vaughan or to someone in Vanghan's group.
However, Terry
provided information regarding other investment opportunities to
individuals requesting that type of information. Jeni said Banyan
was not the only investment contact provided by Terry. Jeni told the
Tribune a trust that was managed by the Stewarts had an account with
Banyan, but no Banyan money was ever deposited into that account
other than interest earned by the account.
According to
Jeni, the only other financial dealings the two ever had was when
Banyan, on approximately six occasions, bought lunch for attendees
of Terry's seminars. Also, Banyan was given a $200 referral fee for
people who had been referred to Terry for a trust and had bought
one, which is a Commonwealth Trust Company requirement for all
referrals.
Jeni said that Terry never received a referral
fee, nor a finder's fee, from Vaughan or Banyan; nor was he ever a
Banyan employee, officer, account signatory or a part of the
decision making process for Banyan activities. According to Jeni,
Terry was not involved in Banyan's business, nor was Banyan involved
in Terry's business.
In November of 1999, Terry and Jeni
moved from South Carolina, where they'd been living, to Lewis
County, Tennessee. In December of 1998, one of the trusts they
managed bought a 40-acre farm with an old house at 761 Grinder Creek
Road. In July of 1999 the trust bought an adjacent 5-arce tract at
765 Grinder Creek Road, and the Stewarts moved to that
property.
Jeni told the Tribune that the reason for the move
was the fear and uncertainty surrounding Y2K. The farm was in the
country and offered a means of being self-sufficient if predicted
problems associated with Y2K did come true.
Terry and Jeni had
checked all their money out of the bank and placed it in cash and
gold and silver coins that they kept at their home. The amount of
money was approximately $130,000, and represented their entire
savings.
The Raid
As Y2K came and went without much
notice, life returned to normal for most citizens who had fears
about the Y2K bug. The same was true for Terry and Jeni. They kept
the money at their home and went on as business as
usual.
However, the Stewarts were about to receive a visit from
federal agents.
According to Jeni, unbeknownst to her and
Terry, Banyan was under investigation by federal agencies because
Vaughan had been using United States banks to distribute funds to
investors.
On March 28, 2000, the Stewarts decided to go on a
family fishing trip with their son and his family. They left about 8
a.m. When they returned in the afternoon, they found federal
vehicles surrounding their home and agents inside. Jeni said that
the raid included the Secret Service, FBI and the IRS Criminal
Investigative Division. "There were cars all over the property. All
over," said Jeni. "I believe it was just divine intervention that we
weren't home."
Jeni said that at the same time their home
was raided in Tennessee, Vaughan's was raided in Charlotte and his
stepmother's in Atlanta, GA.
Why was the government raiding
the Stewarts? According to Jeni, the government believes that Terry
was a part of Banyan's operation.
Jeni said the warrant was
very specific about what agents were supposed to seize at 765
Grinder Creek Road. The warrant identified "All records for Banyan
International, Ltd., (BIL) and the Commonwealth Trust Company (CTC)
for the time period of January 1, 1995, to the present . . ." and
gave more details about documents, records and computer files.
It didn't include any money.
However, Jeni said the
feds seized the approximately $130,000, even though cash and coins
were not listed on the warrant. When Terry learned that the
Stewart's life savings were being taken during the search, he asked
the lead agent, IRS CID Agent Michael Boone, why he was taking the
cash, which was not on the warrant. Boone's response was that he was
just taking it. Terry then asked Boone for a receipt, which would
include a count of the cash and coins and identification of all
money taken. On two separate occasions, Boone denied the request and
he left without giving the Stewarts a receipt, along with boxes and
boxes of the business papers, which the warrant allowed.
Terry and Jeni tried to assess what all the IRS had taken
from them besides their money. Business records of course, that were
identified on the warrant, but according to Jeni, lead agent Boone
also allowed his task force to remove files containing all of
Terry's military retirement papers and legal research, their
marriage license, dog's AKC papers, Social Security cards, birth
certificates, one son's dependent military identification card and
many other things too numerous to mention, none of which were
included in the warrant's description of what should be taken. They
also took letters between the Stewarts and the IRS about their tax
liability.
The agents did not arrest Terry, but his ordeal
with the federal government and court system was just
beginning.
Several months pasted after the raid with nothing
occuring. Because the Stewarts said there were improprieties that
occurred during the raid, they, along with the Vaughans and Banyan,
filed a civil RICO suit in August of 2000. The suit named many of
the law enforcement agents (in their personal capacity) along with
other individuals the Stewarts say violated the law while conducting
the raids
Terry also attempted to file criminal charges
against the lead agent who was IRS Criminal Investigation Division
Agent Michael Boone. Boone, who led the raid, was charged with
unlawfully taking money and also with taking documents, records,
etc. from property that was not included on the search warrant.
Local and state authorities ignored Terry's criminal
complaint against Boone. The local sheriff, magistrate, local
attorney general and several other state agencies refused to accept
the criminal complaints against Boone.
Jeni said that the
local sheriff did say that when money is seized, a complete
accounting must be provided to the individual(s) before the money is
removed, which prevents any of the funds from "disappearing" after
they are taken.
After the RICO was filed, things were quiet
on both sides until a Case Management Conference (CMC) was held on
January 5, 2001. This type of proceeding is held to establish the
timelines for the discovery process, to establish the schedule for
pre-trial hearings and to set the jury trial date. "It really was
not a CMC...Everybody there was grilled on Banyan's business, who
had what to do with Banyan," says Jeni.
The
Indictment
Just five days after the conference on January 11,
2001, an indictment was issued for the arrest of Phillip Mark
Vaughan, Terry W. Stewart and Philip B. Greer, who was the "trader"
for Banyan's funds. In March and again in May, 2001, the initial
Indictment was modified, which resulted in two superseding
indictments. The final indictment, entitled "Second Superseding Bill
of Indictment", was issued on May 10, 2001, and named an additional
two defendants that were Banyan employees, Howard T. Prince and
Timothy B. Burnham, both from the Shreveport, LA area.
The
indictment charged Vaughan, Terry and Greer with 37 counts of
conspiracy, mail fraud, wire fraud, bank fraud and money laundering.
According to the Stewarts, even the indictment has errors
and misinformation. An excerpt from the first paragraph of the
indictment reads: "Beginning in or about April 1995, Phillip Mark
Vaughan, Terry W. Stewart and Philip B. Greer, and others known and
unknown to the Grand Jury, devised and executed an elaborate Ponzi
scheme." However, Terry did not meet Vaughan until the fall of 1996,
and has a notarized affidavit from the man that introduced him to
Vaughan to support that fact. Terry didn't meet Phil Greer until
September, 1997. Greer stated on the witness stand, under oath,
during Terry's trial that Greer met Terry in September, 1997. None
of these facts have had any effect on the government's pursuing
charges against Terry as one of the original founders of Banyan and
being responsible for devising and continuing the so-called Ponzi
scheme.
In many of the counts listed in the indictment, the
names of Vaughan, Stewart and Greer are listed and the illegal
activity that they committed is described in detail. However,
Terry's roles in the activities are not included in the description.
The same is true of the sworn grand jury testimony given by
United States Postal Inspector Robert Ridgeway from Charlotte, NC on
January 11, 2001.
For example, an excerpt from Ridgeway's
sworn Grand Jury testimony states: "...In or about November of 1997,
and between then and March of '99, Vaughan, and Stewart, and Greer
defrauded BB&T Bank here in Charlotte, the Chase Manhattan
Mortgage Corporation, and other lenders by providing false
representations about their employment, their income, their assets
and liabilities in order to obtain loans."
Ridgeway
proceeded to give specific details relating to the false statements
made by Vaughan and Greer, the amount of money each received from
the lenders and what each of them did with the loan proceeds.
However, once again there is no mention of any loan application(s)
completed by Terry Stewart, no accounting of money he received from
a lending institution and no mention of Terry's use of the loan
proceeds.
Jeni told the [ITALIC] Tribune [ITALIC END] the
only mortgage she and Terry ever applied for was in the spring of
1991 for the purchase of their home in South Carolina. She also
claims the evidence supporting Ridgeway's sworn testimony to the
grand jury cannot exist, because since 1991 Terry has never applied
for a mortgage with "BB&T, the Chase Manhattan Mortgage
Corporation and other lenders". Jeni says no evidence was presented
to the grand jury that would support those accusations.
In
addition, Ridgeway told the grand jury that "...beginning in about
April, 1995, Mark Vaughan, and Terry Stewart, and Philip Greer made
an agreement or joined together to market these investment
opportunities." It has already been mentioned Terry did not meet
Vaughan until the fall of 1996 and Greer in September of
1997.
Jeni says even though the sworn grand jury testimony of
Ridgeway was less than accurate and detailed about Terry, it was
pivotal in getting an indictment issued with Terry's name on
it.
The Arrest
Terry was arrested at his home in
Tennessee on April 21, 2001. He was held in Tennessee until the end
of May, when he was extradited to North Carolina. He arrived in
Asheville on or about June 9, 2001.
On June 11, 2001, the
first hearing was held with Magistrate Judge Max Cogburn presiding,
at which time Assistant US Attorney Anne Tompkins made a motion for
Terry to be held in jail instead of being released on bond. As a
result of her motion, a detention hearing (bond hearing) was set for
June 13, 2001 to determine if Terry was a "flight risk" and a
"danger to the community."
At the detention hearing, which
was also presided over by Judge Cogburn, IRS CID agent Boone
testified under oath as a witness for the government. The testimony
was a complete surprise to Terry. He had not been informed the
government would be presenting a witness. Assistant US Attorney Jill
Rose acted as prosecutor.
Jeni says that under Rose's
questioning, Boone attempted to paint a very negative picture of
Terry Stewart's character, but that in Cogburn's estimation, Boone
didn't present any information that would prove Terry to be a flight
risk or a danger.
Terry presented in his defense an affidavit
addressing his character from a lieutenant colonel who was his
commanding officer at Cherry Point and had known Terry for 20 years.
In part, the affidavit stated, that "...his integrity and honor will
prevent him from fleeing before his day in court or from harming
others".
In Cogburn's closing remarks he stated, "These
specific charges - this is not a tax case or tax protest case...I'm
not going to release you today, but I'm going to hold off ruling
until I get some further information on this - find out who this
Lieutenant Colonel is. And if the government has any further
information it wishes to submit, I would want to get copies of that
to Mr. Stewart and have him a chance to rebut it before I consider
it. And, Mr. Stewart, I'm going to go ahead and just try to make
some decision on this, if I can, this week, but no later than Monday
[June 18, 2001] on this matter..."
On the afternoon of June
20, 2001, Jeni said she went into Judge Cogburn's courtroom and
spoke with his clerk to find out when Terry's next hearing was going
to be scheduled. Judge Cogburn spoke with Jeni and stated that he
would be holding a hearing in the morning, Thursday, June 21.
Assistant US Attorney Jerry Miller was in the courtroom at the time
and Cogburn told Miller to notify his office that Terry would have a
hearing the next morning.
On June 21, 2001, Cogburn held a
bond release proceeding. Assistant US Attorney Jerry Miller was
present. Judge Cogburn ordered Terry to be released on a signature
bond, which was signed by Jeni and Terry. Once he arrived home, he
was to be electronically monitored by an "ankle bracelet". Before
the hearing was adjourned, Judge Cogburn gave the government an
opportunity to appeal his decision. A short time later, Miller came
back into the courtroom after contacting his office and stated,
"Your Honor, on the Stewart matter, we are not going to request a
stay or appeal in that."
What Now?
Terry's freedom was
short lived. Approximately five days after Terry arrived home he
received a phone call and then a visit from a US Marshal, who served
Terry with an order signed by Judge Lacy Thornburg to appear at a
hearing to be held in Asheville on July 2, 2001. The government had
submitted a request to revoke Terry's bond and an order that he be
immediate re-arrested. Thornburg denied the re-arrest, but ordered a
hearing at which the government would "show cause."
Terry
arrived in court on July 2, 2001 prepared to address the six issues
identified in the government's notice; however Jeni said that
opening remarks from Assistant US Attorney David Brown set the tone
for the hearing.
Brown stated that reason the government had
asked for the new hearing and a request for a re-arrest was "...the
detention hearing arose within about 30 - with 30 minutes notice to
the government." This statement contradicts Jeni, who says Cogburn
notified Jerry Miller the day before the hearing in her presence.
In addition, the transcript from the June 13 Detention
Hearing shows that Judge Cogburn intended to hold another hearing
once he made his decision regarding Terry's bond. He also stated,
"And if the government has any further information it wishes to
submit, I would want to get copies of that to Mr. Stewart and have
him a chance to rebut it before I consider it."
Brown
continued by saying "...these defendants [tax protestors] in
particular have no respect at all for the authority of the Court and
therefore present a detrimental flight risk and the likelihood of
their appearing either for Court appearances or, if convicted, for
sentencing is slim to none."
After Mr. Brown's opening
statements, Assistant US Attorney Anne Tompkins stepped in as
prosecutor. Again, IRS CID agent Michael Boone was the government's
only witness. He covered the same topics as before, but in greater
detail and Jeni says with additional embellishment this time.
Jeni states it was apparent to her that the purpose of the
hearing was to do a total character assassination of Terry, and it
was accomplished. Jeni says Thornburg played along by chastising
Terry for not having an attorney and made comments like, "it appears
that you don't desire counsel or intend to wait until you can
convince someone...to represent you..."
At the end of Terry's
cross examination of Boone, Jeni says Tompkins handed Thornburg a
stack of evidence that had been used to support Boone's testimony,
some of which he had referred to during the time Tompkins was
questioning him. Jeni said that Terry had not been provided with a
copy of the documents and so Terry asked for a copy. Thornburg told
him that the US Attorney's office had an open file that contained
the documents and he could obtain a copy from that office, a
difficult task to accomplish from a jail cell.
The hearing
ended with Terry's bond being revoked, and he was taken back into
custody immediately following that hearing and has been in jail ever
since.
Jeni said that a couple of facts that were not taken
into consideration in the hearing were that his probation officer
submitted a report stating that Terry had totally complied with all
of the requirements of his bond. He also stated that Terry wasn't on
electronic monitor for approximately 22 hours from the time he was
released until he met with his probation officer in Tennessee, or
that he also had 26 hours of not being monitored from the time he
left Tennessee to return to Asheville for the July 2 hearing. Plenty
of time to make preparations to disappear if that was his
intention.
Leading Up To Trial
According to Jeni, it
was never Terry's intention to go to trial without an attorney. His
attorney of choice was in Indianapolis, and Terry planned to obtain
permission from the Court to travel to Indianapolis to meet with
that attorney while he was out on bond.
When his bond was
revoked, it became impossible to use that attorney because Terry and
Jeni couldn't afford to pay the attorney's travel and lodging
expenses to Asheville. When IRS agent Boone took the $130,000 from
the Stewart's residence, their ability to pay for an attorney was
taken also.
Once Jeni had done the research on 22 local
Asheville attorneys that could have been court appointed, it became
apparent that a plea bargain was what they were familiar with and
Terry was not looking to plead guilty to something he didn't do.
Were the Stewarts completely naïve of this country's
judicial system? To this day Jeni will tell you that they both
believed, because Terry was innocent, that all he would have to do
was to bring out the truth, and he couldn't be found guilty.
Therefore, Terry decided to go to trial on his own. According to
Jeni, they weren't prepared for the twists and turns given to the
truth during the trial.
Terry filed several motions prior to
his bond revocation hearing. The motions asked the Court to order
the government to provide a bill of particulars. If granted, the
government would have to identify the essential elements of all
charges in the indictment instead of relying on the vague statements
it currently contained. The US Attorney's office responded, but
incorrectly addressed the envelope that was sent to Terry. By the
time he received his copy, the ten days in which he had to reply had
passed. Thornburg denied the bill of particulars.
During the
Discovery period - the process during which Terry was to review all
of the evidence against him - there were numerous problems.
First, Terry had 18 days to go over more than 100 boxes
containing approximately 5,000 pieces of paper each, as well as to
review file drawers that contained transcripts of some Grand Jury
testimony and interviews. The government had 18 months to review the
discovery material.
Terry submitted a motion asking that
Jeni be allowed to help him review the discovery material, but
Thornburg denied the motion. In an effort to help Terry with the
discovery process, Cogburn asked a paralegal if she would
help.
On October 10, 2001, she appeared at the facility where
the documents were stored, was introduced to Terry and was allowed
to inspect the documents. Later, when Jeni spoke with her on the
phone, Jeni said the paralegal indicated that the amount of material
was overwhelming and that there wasn't enough time to review it and
refused to help.
Once he began reviewing material, Terry
noted that each piece of paper had a sticker on it and was
sequentially numbered. As he sorted through the boxes, it became
apparent that many documents were missing. He started making a
record of the missing documents, knowing that the law mandated that
all material taken during the raids was supposed to be available to
him. He was allowed to make copies of the things he felt would be
pertinent to his defense. Many of the things that Terry knew were in
the materials taken from his home were not found in the boxes
supposedly containing his former possessions. Terry also knew
co-defendant Vaughan had been interviewed by the federal agents, but
the transcripts of those interviews were not found. Terry asked for
copies of them on more than one occasion, but they were never
provided.
Jeni said that there were more than nine typed
pages of missing document numbers. Terry filed a motion requesting
dismissal of the case for failure by the government to comply with
the Federal Rules of Criminal Procedure relating to evidence.
Thornburg again denied his request.
The Trial
On
Monday, November 5, 2001, Terry's trial began. Prior to jury
selection, there were a couple of unanswered motions that Terry
filed the week before the trial began, that needed to be addressed.
First, he requested a continuance due to the fact that he had only
reviewed about 40% the discovery material, and that another 15% of
the documents were missing. Thornburg denied his
request.
Also discussed was a motion that addressed the
actions of IRS agent Boone during the raid of the Stewart's home. In
response, Assistant US Attorney Anne Tompkins stated that Boone was
not available for a hearing at the time, but would be the next
day.
Next Terry explained that he had been without pencil and
paper from the previous Thursday morning up until to the present,
and he had therefore been unable to prepare for an opening statement
or anything else. He also requested a haircut, since he had not had
one in eight weeks, and hadn't shaved for four and a half days.
Thornburg's response was, "...You certainly look well dressed to
me...and you appear to be well groomed from this position. So, I'm
going to overrule that motion."
The last thing Terry
requested was for Jeni to sit at the defendant's table with him.
Thornburg granted his request, as long as she didn't interrupt the
trial proceedings.
After jury selection, the government's
first witnesses were all Banyan clients. They all told financially
catastrophic stories that effected everyone in the courtroom. Terry
objected several times because the questions made it appear that
Banyan and Vaughan were on trial, but his objections were over
ruled.
During cross-examination, Terry tried to established
that it was Vaughan's requirement that trusts or other entities were
to have the financial relationship with Banyan rather than
individuals, that Terry had never been involved in the financial
discussions between the witnesses and Vaughan or the other Banyan
employees, had never given them any Banyan paperwork to complete,
and had never handled any funds on behalf of Banyan.
On
Tuesday morning, Nov. 6, without the jury present, Terry requested
that Vaughan, who was in jail in Charlotte, be brought to Asheville
to testify as Terry's only witness.
Thornburg issued the
order for that to be done. Tompkins asked Thornburg if Vaughan's
attorney shouldn't be notified that he was going to be moved.
Thornburg responded if Vaughan wanted to contact his attorney it
would be up to him. This was to become an important event in the
trial.
During Tuesday's trial, US Postal Inspector Robert
Ridgeway, who was the lead agent of the raid on Vaughan's home,
provided a long, detailed testimony, covering many documents that
were taken from Vaughan's home.
After the jury was dismissed
for the day, the hearing regarding the search of Terry's home was
held. Under questioning by Assistant US Attorney Joseph Bender,
Boone gave a great amount of detail regarding all of the research
that he had done at the Lewis County, Tennessee Courthouse prior to
the raid, relating to property that Terry owned. Boone stated that
the address of the property to be searched was 765 Grinder Creek
Road, Hohenwald, Tennessee.
During the search, Terry's
closest neighbor was questioned by Boone, at which time the neighbor
mentioned some backhoe work he had done around a blue storage
building on the property next door. Jeni said that the testimony
given by Boone relating to that conversation is considerably
different than a notarized affidavit given to Jeni by the neighbor.
Boone contacted the Assistant US Attorney's office in
Nashville to make sure that by searching the blue storage building,
he was not reaching beyond the latitude given in the search warrant.
However, Boone did not explain to the attorney that the building was
on a different piece of property.
Bender then asked Boone
what his search entailed, to which Boone responded that they were
looking for documents, Banyan and Commonwealth records, computers,
"...as well as any gold, silver, cash..." The government did not
enter any evidence into the record to support Boone's
testimony.
Upon cross-examination, Terry told Boone that the
blue storage building was on an adjacent piece of property, not on
765 Grinder Creek Road. Boone's response was that he had a map with
him the day of the search and made the decision that it was on the
property.
Terry then asked Boone about his having mentioned
that the gold and coins were on the search warrant, and could Boone
tell Terry where they were listed. After giving testimony about a
warrant in Charlotte, Boone responded that "...it was not in the
search warrant". Boone then stated that after he had seized the cash
and coins he contacted Ridgeway to "make a return", but because the
money was not covered, Ridgeway refused. Boone stated that he then
"...contacted the U.S. Attorney's office and received guidance that
we should prepare a seizure warrant for those items. And the FBI
seized those items from me, I believe, the very next day." Terry
again asked where Boone received the authority to take the cash and
coins, to which Boone responded that he thought the items were
covered under a seizure warrant in North Carolina. When asked if
Boone had possession of the warrant the day of the search so he
could refer to it, Boone responded that he did not have it with
him.
When Terry questioned Boone about not providing an
itemized receipt for the cash and coins that were taken, Boone
responded that he had given Terry an accounting in the inventory
list of what was taken during the search. Terry stated that the
inventory list identified that a box of coins and a box of cash were
taken, but that did not constitute an itemized receipt.
Terry
then asked Boone as to the specificity of the search warrant
relating to Commonwealth and Banyan documents, and where Boone
obtained the authorization to take Terry's military retirement
papers, legal research documents, his marriage license and birth
certificate, children's birth certificates, his dog's AKC papers, or
his son's military identification card. Boone answered, "I'm unaware
of each and every item that you just mentioned, but the items that
were taken from your home, I believed at the time, were covered
under this search warrant and that's the reason that they were
taken." Terry continued his line of questioning, which caused Bender
to object. Thornburg sustained the objection, but then asked Boone
if he had "any of those materials that he's [Terry] describing in
your custody now?" Boone's reply was that he did. Thornburg then
ordered Boone to give them back because he was not entitled to keep
all those things and they shouldn't have been taken to start
with.
Terry responded by asking if the return order included
the cash and coins that were not on the search warrant, but
Thornburg denied the return of the money, and also denied the motion
relating to the search of the property at 765 Grinder Creek Road.
On Wednesday, Nov. 7, the first witness was Giesela Crider,
Vaughan's employee that acted as his assistant. She identified by
name all of the individuals associated with Banyan, but did not name
Terry. Then a document listed as government evidence was put on the
screen that listed all of the sales staff and the trader for Banyan.
Terry's name wasn't included. She discussed the fraudulent employee
verifications that had assisted people in getting mortgages, but
again there was no document with Terry's name on it.
There
were some documents relating to financial transactions between
Banyan and the trust which the Stewarts managed, but Jeni says Terry
wasn't concerned about them because he knew Vaughan's testimony
would clarify the situation and absolve Terry of any
wrongdoing.
On cross-examination Terry established that there
were other trust providers working with Banyan furnishing trust
documents to Banyan clients.
IRS agent Michael Boone was the
next witness. Because Terry had not prevailed in his motion
regarding the search of the property, Boone's testimony was very
similar to that given during the hearing the evening before. Jeni
said he had a 'creative addition' to his testimony. He stated that
the marriage certificate, children's birth certificates, etc. were
taken because we were being investigated and he was trying to
establish a tax liability. It didn't seem to matter that previous
tax returns had been filed jointly or that none of their children
were of dependent age.
Boone introduced evidence that had no
relationship to the indictment. Terry objected, but Thornburg
overruled the objection.
On cross-examination Terry was able
to bring up the seizure of the cash and coins from his home and the
fact that they weren't on the warrant and Terry wasn't given a
receipt. Boone then stated that he thought the cash and coins were
covered under the North Carolina warrant, so Terry questioned him as
to what procedure of law allowed for items listed on a warrant in
one state to be seized during a search in another state. Jeni stated
that Boone was very adept in not answering questions by giving
details about things that didn't pertain to the question, but that
Terry felt he had been able to make the point that Boone's testimony
was not forthright.
FBI agent Mark Fedders was also called
upon by the government to testify Wednesday afternoon. Fedders
testified that he became involved in the Stewart case on March 30,
2000, when he obtained a "seizure warrant for gold and silver coins
that were seized from Mr. Stewart's house by an authorized Search
Warrant." (Please note that the seizure warrant was issued two days
after the money was taken from the Stewart's residence and that
Boone had previously admitted under oath that the cash and coins
were not included on the warrant.) Fedders went on to testify that
the coins were appraised and valued at $53,544.
The value of
the coins surprised Terry and he focused on that aspect of Fedders'
testimony during cross-examination. During previous testimony, the
government entered into evidence documents that were taken from the
Stewart's home showing the purchase of gold and silver coins
totaling in excess of $67,000. Terry identified that there was a
$13,000 discrepancy in the amount of documented purchases and the
amount that made it into Fedders' possession. Government prosecutor
Bender objected to Terry's argument, which Thornburg overruled.
Terry followed by again stating that a discrepancy existed.
Thornburg asked Terry if that was his position, and when Terry
answered that it was and that he didn't have any more questions for
Fedders, the witness was dismissed.
Jeni later stated that
the true discrepancy was between $20,000 and $25,000.
After
court ended, Terry had an opportunity to meet with Vaughan, who had
been transported from Charlotte to the Buncombe County Jail. The
purpose of the meeting was to review the testimony Vaughan would be
giving as Terry's only defense witness.
Vaughan had
communicated before the meeting with Terry that because of Vaughan's
plea agreement he could testify only if Terry subpoenaed him. Then
he could testify on Terry's behalf and not jeopardize the plea
bargain that he had signed.
When Terry met with Vaughan,
Vaughan told Terry that his attorney, Charles Viser from Charlotte,
had contacted him as a result of a phone call Viser had received
from Assistant US Attorney Tompkins. This was the same Tompkins who
had agreed three times in court the day before to let Vaughan
contact his attorney if he wanted to do so.
Vaughan went on
to say he was told that if he took the witness stand on Terry's
behalf, it would effect his plea agreement as well as cause other
legal problems for him and members of his family. He told Terry that
due to the ramifications of giving testimony on Terry's behalf, he
would be unable to take the stand and that he would plead the
"Fifth" if he was forced to testify.
On the Thursday morning
before the jury was brought in, Terry addressed the court, reporting
"a possible incident of witness tampering, witness intimidation, and
obstruction of justice...". He told Thornburg of his meeting with
Vaughan and what transpired. Terry also reminded Thornburg that he
(Thornburg) had told Tompkins that if Vaughan wanted to let his
attorney know he was being moved to Asheville, it was up to Vaughan
to tell him. Thornburg's response was, "I ordered that he be brought
up here and asked that the clerk or someone notify his attorney...so
let's clarfiy that. I did not say do not notify his attorney..."
Jeni said Terry knew that Thornburg had not told anyone to notify
Vaughan's attorney, but didn't pursue the matter.
Thornburg
then asked Tompkins if she had called Vaughan's attorney. Jeni
reports that she replied in a stammering voice, "I did call Casey
Viser who represents Mark Vaughan just to let him know that he was
being transported to Asheville. I didn't make any representations
about whether he would or wouldn't testify. Just simply asked Mr.
Viser to inform me if he knew if - after he talked to his client, if
he had a sense of which way - if he was going to testify or if he
was not going to testify and that was it."
Thornburg covered
the law regarding Vaughan's testimony affecting his plea agreement,
stating that he would consider it a violation, an abuse of
discretion, that Vaughan's plea agreement could be effected if he
testified on Terry's behalf. He went on to say that the information
Terry presented was hearsay, but that Tompkins was an officer of the
court, and she said that she made no such representation. He also
stated that Vaughan would be available to Terry for questioning
regarding any threats that had been made to him. On six other
occasions during the trial, Thornburg told Terry that he would have
an opportunity to question Vaughan.
During the day Thursday,
the government presented more witnesses. By the end of court that
day, the government rested its case and court was adjourned for the
day.
Thursday evening, after court was adjourned for the
day, a special hearing was held on an oral motion to quash a warrant
[subpoena] issued at Terry's request for Vaughan to testify as the
defense's only witness.
Vaughan's attorney, Charles Viser
stated that he was "informed that a subpoena has been issued for my
client to appear and testify in this proceeding". He went on to
request that the subpoena "be quashed based on my client's desire to
invoke the Fifth Amendment and his privilege not to incriminate
himself". Viser proceeded to produce an affidavit signed by Vaughan
stating the same. Viser also stated, "I received information about
this situation late yesterday afternoon...".
Viser then
identified that Vaughan had signed a plea agreement with the
government where he pled guilty to only five of the 37 charges, and
Vaughan would invoke his Fifth Amendment privilege against
self-incrimination if called to testify. He further stated that
since Vaughan had not been sentenced he could possibly be held
liable under other counts and other charges.
Judge
Thornburg's response: "...I'll have him here tomorrow morning at
9:00am...and if he chooses to exercise the fifth amendment, I first
have to hear what the questions are, and then if he exercises his
rights, I'll rule on it".
Terry voiced his concerns that
Vaughan would not be aware of the fact that Terry reported the
possibility of witness tampering and that Vaughan was still fearful
of retaliation when he signed the affidavit.
Thornburg again
stated that Vaughan would be in court the next morning at 9:00am and
told Terry that he could ask Vaughan questions, which he could
refuse to answer. Thornburg said that he would determine if Vaughan
had a valid basis for refusing, depending upon the content of
Terry's questions. Thornburg further stated, "if you're suggesting
to the court that the government has in some way intimidated him,
then...I may personally ask him some questions about that...That's a
rather serious charge, and if he told you that, then we may want to
hear from you on that, too".
After Thornburg again stated to
Terry that Vaughan would be brought before the Court the next
morning, he made arrangements to meet with Vaughan that evening to
discuss Vaughan's testimony. Vaughan's attorney made it clear that
he was to be present during that meeting. Court was adjourned for
the day.
The next morning before the jury was brought in,
Thornburg opened court with an address to Viser. "All right. You are
present, and having filed an answer to the brief, thank you, sir" to
which Viser responded in the affirmative.
Terry told Jeni
that it felt like they had walked into the middle of a court
proceeding without having a clue about what transpired before they
arrived.
Thornburg then told Viser that he hadn't excused
Viser's client (Vaughan), that he wanted Vaughan to tell him if he
planned to exercise his Fifth Amendment rights. Viser stated that
his client fully intended to assert his Fifth Amendment privilege
against self-incrimination because "he has the very real and
legitimate fear of further criminal liability, and other adverse
consequences as a result of anything that he might say [emphasis
added] on the stand if compelled to testify".
Thornburg then
asked Vaughan if his signature was on the affidavit and if he had
also submitted a handwritten statement to which Vaughan responded in
the affirmative. Thornburg asked Vaughan if it was his intention to
exercise his Fifth Amendment rights and not answer any questions
posed by Terry. Vaughan replied in the affirmative.
Thornburg asked Terry if he had anything to add. Terry
stated that his meeting with Vaughan the night before was delayed
until Viser arrived. Terry proceeded, "And when I was brought into
the room with Mr. Vaughan, who I have known for a while and I have
had a friendship with, he literally didn't speak to me. Didn't say
anything to me. He looks very, very depressed, scared and physically
ill, like he was scared so badly he couldn't even talk to me. During
the whole five, ten minutes that I was in there, Mr. Vaughan didn't
speak to me. His attorney did. It's very obvious that he was
undergoing a great deal of stress.
"And I believe in light of
what I reported to you the morning before that there's plenty of
evidence here that something is amiss. And I feel that it needs to
be looked into because I'm being deprived of a vital witness...".
Thornburg then declined to investigate the matter further,
granted the motion to quash the subpoena and ordered Vaughan to be
returned to the Charlotte custodial facility.
Terry's only
defense witness had been silenced by what Terry believes was
government intimidation. Jeni said as Vaughan was led from the
courtroom, she heard a noise that came from the prosecutor's table
and looked over just in time to see Tompkins slouch back in her
chair and look up, emitting an audible sigh.
Terry was numb.
Right up until the Friday morning proceedings, he was told by
Thornburg that he would have an opportunity to question Vaughan.
Now, Thornburg had determined Vaughan had a right to take the Fifth
on each question without even knowing the questions and that Terry's
defense was gone.
The jury was then brought into the
courtroom, fully anticipating that Terry would be presenting his
defense. Instead, the jury was informed that there would be no more
witnesses, closing remarks were made, instructions were given to the
jury, and they withdrew to make their decision. When they returned,
they brought with them a verdict finding Terry guilty of 24 of the
37 counts.
Terry discovered after the trial was over that one
of the items in Vaughan's signed plea agreement stated, "The
defendant understands and agrees that by pleading guilty, he is
expressly waiving the following rights". Four rights were listed as
being waved, one of which was his Fifth Amendment
privilege.
Vaughan was the only one that could provide
information proving Terry's innocence, because Vaughan ran Banyan.
Vaughan's testimony would have identified to the jury that he didn't
meet Terry until the fall of 1996. Vaughan would have stated that
Terry was not an officer or an employee of Banyan, that Terry was
never paid by Banyan or given a referral fee of any kind for telling
people about what Banyan offered.
In fact, Jeni says Vaughan
would have said that on two occasions he offered Terry 2% of all
money that came to Banyan from Terry just telling people about
Banyan, but Terry refused it.
One other item of importance
is that during the entire time from April 21, 2001, when Terry was
arrested to the day the trial began, November 5, 2001, Terry was not
interviewed by one government agent from any of the various agencies
involved in the case.
After The Trial
Immediately
following Terry Stewart's trial, on November 16, 2001, he filed a
motion for acquittal due to the prosecutorial misconduct by
Assistant U.S. Attorney Anne Tompkins, who contacted the defense
witness and co-defendant Vaughan's attorney after Judge Thornburg
told her Vaughan could contact his own attorney. The motion also
stated, among other things, that Terry was denied trial by an
impartial judge.
Four days later Thornburg denied Terry's
motion stating that Terry hadn't presented any new evidence other
than the hearsay evidence that was raised at trial.
On
December 4, 2001, Terry submitted a motion to reconsider the Nov.
16th motion and included, as new evidence, a copy of an unsigned,
undated letter Vaughan sent to Terry just days before the trial.
Because prisoners aren't allowed to write to each other, Vaughan
sent the letter to Terry by first mailing it to Vaughan's best
friend, who then forwarded it on to Terry. In addition to Vaughan's
letter, the motion included a notarized affidavit from the friend
stating he had forwarded a letter from Vaughan to Terry on October
26, 2001.
In the letter Vaughan stated, "You don't have to
worry about me not telling the truth. I will not lie about you or
anyone else...I lied (signed a plea) about the money laundering
charge to protect Linda [Vaughan's wife], Jeannie [Vaughan's
step-mother], and my brother. The feds were threatening to indict
Linda and Bert, so I signed the plea to protect
them."
Vaughan continued, stating, "I can imagine the
frustration on your part. There is no reason for you to be locked
up...The feds want me to also say things about you, but all I can
tell them is what went on in your seminars, and their own agent was
sitting in on these meetings so there is little I can elaborate
on.
"I can't really "appear" to be helping you because of my
plea, but I will not twist things to assist them in any way. I will
tell the truth but keep things as correctly implied as
possible...I'm sorry I can't sign an affidavit for you but depose me
or put me on the stand, and I think you will get what you want! Once
again I must be 100% cooperative with the Feds...If I could sign an
affidavit for you I would, but under my agreement with the feds I
cannot give any indication of being anything but 100% on their side
and cooperating with them.
"...I have repeatedly told them
[feds] that you were completely independent of Banyan. They are
grasping at any straw they can. They will have enormous egg on their
face if you beat them."
Two days later Thornburg denied the
motion to reconsider stating that in the affidavit from Vaughan's
friend, he "does not attest that the letter he received is in fact
the unsigned letter attached to Defendant's [Terry] motion".
Thornburg continued by stating that Terry's motion "is not supported
by any new, credible evidence and must be denied."
Jeni said
that Terry was still not ready to give up, "He's a Marine and he
never will."
On May 3, 2002, he filed the first of several
Mandatory Judicial Notices. The purpose of these motions is to bring
to the Court's attention matters in the case that were previously
overlooked or intentionally ignored.
The first Mandatory
Judicial Notice was in two parts, one pertaining to all of the
circumstances relating to Vaughan's not testifying on Terry's behalf
and the other to IRS agent Michael Boone's testimony about the raid
on Terry's home.
Seven days later Thornburg denied the
motion, stating that the practice of filing mandatory judicial
notices has become popular with pro se litigants (individuals
representing themselves before the court). Thornburg further stated,
"such demands of "mandatory judicial notice" are particularly
popular with litigants who are dissatisfied with the federal
government and use such devices as a method of harassing the
judicial system". Thornburg then cited unpublished case law to
support his statement. However, unpublished case law is not supposed
to be used to support statements made.
Following the denial
of the judicial notice, which contained multiple issues, Terry
decided to file notices addressing only one issue, so over a couple
of months, Terry filed judicial notices addressing several different
issues:
First, the issue regarding Assistant U.S. Attorney
Anne Tompkins having contacted Vaughan's attorney after Thornburg
had told her that it was up to Vaughan to contact his attorney,
Second, Thornburg's having stated that he had not said it
was up to Vaughan to contact his attorney, but instead saying he had
told the clerk or someone to notify Vaughan's attorney. However,
transcripts of the trial prove otherwise.
And third, the fact
that Terry W. Stewart does not own any property in Lewis County
Tennessee, that the blue storage building was located on property
with a different address than that contained on the search warrant,
and that IRS agent Boone violated the warrant by seizing documents
and other items from that building.
All of these mandatory
judicial notices were denied within a few days of being filed.
Jeni stated that in his last denial, Thornburg didn't
address the fact that the blue building was not on the property
identified in the search warrant. She said this type of denial had
become typical, that Thornburg denied motions by very selectively
addressing a minor issue he felt was debatable in the motion and
completely ignoring the issues that were proven by the exhibits
attached to the motion.
"It has been ruled by the Supreme
Court and other federal courts that motions by individuals
representing themselves are to be construed liberally and held to a
less stringent standard than formal pleadings drafted by lawyers,"
Jeni told the [ITALIC] Tribune [ITALIC END]. "If the court can
reasonably read pleadings to state a valid claim on which litigant
could prevail, it should do so despite litigant's failure to cite
proper legal authority, confusion of legal theories, poor syntax and
sentence construction, or litigant's unfamiliarity with pleading
requirements."
Toward the end of May 2002, Jeni wrote
Vaughan, asking him to do the honorable thing by coming forward with
the truth. Unlike the letter Vaughan wrote to Terry, his reply
letter was dated and signed. In it Vaughan addressed the fact that
Terry had used a copy of Vaughan's letter to Terry in a motion,
stating that Terry's action "probably increased my sentence by at
least 5 if not 10 years". Jeni said Terry saw this letter as the
evidence needed to prove the earlier letter was from Vaughan.
Terry filed another motion on July 11, 2002, including a
notarized true copy of the envelope and Vaughan's letter to Jeni. In
the motion Terry stated, "If Mark Vaughan was threatened and
intimidated with an increased sentence of five (5) to ten (10) years
for a letter he wrote to his friend Terry W. Stewart, how much
stronger would those threats and intimidation be when he indicated
he was willing to give truthful testimony that Assistant U.S.
Attorney Anne Tompkins knew would be of benefit to Defendant
Stewart?"
Terry's motion further stated, "Evidence contained
in the letter to defendant [Terry] states that Mark Vaughan signed
the plea agreement to protect his wife and brother because 'the feds
were threatening to indict Linda and Bert, so I signed the plea to
protect them'. Such actions as Mark Vaughan describes in his letter
to defendant, along with the increased sentence threat he identifies
in his signed Letter [to Jeni], need to be investigated for witness
intimidation, witness tampering, obstruction of justice and/or
prosecutorial misconduct."
Five days later Thornburg again
denied the motion, totally ignoring Vaughan's statement that by
writing a letter to Terry he had increased his sentence by five to
10 years or that he had signed his plea agreement because the feds
had threatened to indict his wife and brother.
At the end of
July, Terry submitted yet another mandatory judicial notice. This
time it contained a notarized, signed affidavit from the Lewis
County, Tennessee tax assessor, who stated that he had been to the
property that housed the blue storage building and it was not on 765
Grinder Creek Road, which is the address that was on the Search
Warrant. A sworn statement from a government official is to be
considered "self authenticating evidence" according to the federal
rules of evidence. The tax assessor's statement should have put to
rest the question regarding the property location of the blue
building as well as the issue that IRS agent Boone was on the wrong
piece of property when he took the contents from the
building.
However, even though submitted over six months ago,
Thornburg has not ruled on this motion.
What reason could
Thornburg have for not ruling on this motion? The Stewarts believe
the reason is related to the explicit detail given by Boone during
his testimony about the in-depth research he did prior to the raid
to identify the property to be searched, which is nullified by the
tax assessor's statement.
Other judicial notices filed by
Terry include one addressing Boone's initial sworn testimony that
everything he took during the raid was covered by the search
warrant. That proved to be untrue, and Thornburg stated that Boone
had no business taking things outside the scope of the warrant.
Another one addressed Boone's sworn testimony that the cash
and coins he took the day of the raid were identified in the search
warrant, when in fact under Terry's cross examination Boone finally
admitted that they were not. Those statements made by Boone showed
that his testimony was "less than forthright".
Yet another
judicial notice was filed addressing Boone's sworn testimony during
another hearing when he stated that federal agents had interviewed
Vaughan. However, Terry has never seen any of the transcripts of
those interviews, which he is entitled to see. Vaughan informed
Terry that during the interviews, he told the agents that Terry was
in no way part of Banyan. Statements made by Vaughan containing that
kind of information would be "exculpatory", which means that it
would clear Terry of alleged fault or guilt.
The last
judicial notice that was filed addressed US Postal Inspector Robert
Ridgeway's sworn testimony to the grand jury about Terry's
involvement in fraudulently obtaining mortgage loan proceeds.
Ridgeway's testimony is what caused the indictment to issue. Terry
and Jeni had not applied for a mortgage since they purchased their
South Carolina home in the spring of 1991, and Terry did not receive
copies of any evidence supporting Ridgeway's testimony. This last
judicial notice was filed on November 4, 2002.
As of the date
of this publication, Jeni states that Thornburg has failed to issue
any orders regarding the judicial notices.
Terry Stewart
continues his fight from a cell in McDowell County Jail, where he
has been since his Conviction in November of 2001. He has yet to be
sentenced by Judge Thornburg and cannot appeal his conviction until
he has been sentenced.
Reporter's note: This series on Terry
Stewart has generated numerous inquires from readers. In fact, the
most inquires this reporter has received on any one
story.
The inquiries have ranged from outrage at the federal
court system, to offers of legal assistance, to one lawyer, who
practices in the federal courts here in Asheville, referring to
Judge Lacy Thornburg as being "the worst federal judge in the
system." That lawyer, of course, spoke on the condition of
anonymity.
The Tribune contacted Judge Thornburg's
offices to try to ask Thornburg why Phillip Mark Vaughan was allowed
to take the "Fifth" when in fact had signed that right away in his
plea bargain. The Tribune is also interested in learning why the
judge has waited more than a year to sentence Stewart. His secretary
told us that Judge Thornburg does not talk with
reporters.
Whether you agree with Terry Stewart's view of
federal taxes should not be the issue; that was not what he was
convicted of in court. The context of and reason for the series of
articles that have been published by the Tribune was to point out
his ordeal with the federal court system.
While the series of
articles was published from the Stewarts point-of-view, this
reporter has numerous copies and transcripts from this case. The
facts about the trial, letters, judge's conduct and the conduct of
the federal prosecutors used in these articles are a matter of
record.
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