Marine squashed by local
Feds
Still sits in prison after 2 years without any
sentence
PART 2 - The Stewart Saga
By Clint
Parker
1/30/2003
Report's note: This is
the second in a series of reports about one man's trip through the
Federal Justice System here in Asheville, North Carolina.
What kind of Federal Justice System do we have? Many people
ponder just that question and wonder "is 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 for which he was convicted and of which
he claims that he is innocent. Until he is sentenced, Stewart cannot
appeal his convictions, and presiding Judge Lacy Thornburg seems 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 an Asheville lawyer that
had ever won in federal court.
In fact, according to Jeni, when they were looking for a lawyer
to defend Terry's case, they called 22 attorneys to check their
record of wins at the federal court level. Jeni said that not one of
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 that he says he never committed.
So can a citizen get justice in Asheville’s Federal Court? Is it
possible? Here's the second part of a multiple part story and about
which you can decide.
Recap Terry Stewart's story
Last week we reported that Terry Stewart, a 26-year veteran of
the Marines, had retired from the Corp and started a new business
with his wife, Jeni. The business sold non-taxable trusts to private
citizens.
During the course of conducting business seminars related to
these trusts, the Stewarts met Phillip Mark Vaughan, owner of an
investment company call Banyan, an offshore corporation. Banyan
specialized in high rate-of-return investments for trusts. However,
the Stewarts say that Banyan did not use offshore banks like Vaughan
claimed.
Banyan soon had several federal agencies taking a closer look at
his company.
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 and who had
actually bought a trust, which was 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 business, nor was Banyan involved in Terry's
business.
However, on March 28, 2000, federal agents raided the property in
Tennessee that is owned by the trust that the Stewarts manage and is
where the Stewarts live. The Stewarts had, in cash and precious
coins, their entire life savings at the home, which Jeni said
amounted to $130,000. Those funds were also confiscated in the raid,
but the Stewarts say money was never named in the search warrant and
a receipt was not given for the specific amount of money that was
taken.
The Stewarts were not arrested at the time and claim numbers laws
were violated in the raid.
Fighting back
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 Tribune 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 Tennesse, 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.
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