PART 4 - The
Stewart Saga Continues
By Clint
Parker
2/13/2003
Report's note: This is
the fourth 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 reflect as to whether " there is any
justice left in the Federal Justice System?"
Terry Stewart, a resident of Lewis County Tennessee, is about to
mark his second-year anniversary in jail. He was convicted a little
over a year ago in federal court here in Asheville, NC. He has yet
to be sentenced for the crimes he was convicted of and of which he
claims he is innocent. Until he is sentenced, Stewart cannot appeal
his conviction, 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 on their
record of wins at the federal court level. Jeni said that not one of
the 22 had ever won a case. Furthermore, Jeni said the lawyers they
spoke with considered a plea agreement a win. Terry refused to plea
bargain crimes he says he never committed.
So, can a citizen get justice in Asheville Federal Court? Here's
the third part of a multiple part story in which you can decide.
Recap Terry Stewart's story
Terry Stewart, a 26-year veteran of the Marines, had retired from
the Corp and started a business with his wife, Jeni. The business
sold non-taxable trusts to private citizens.
During the course of conducting business seminars related to
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.
Vaughan soon had several federal agencies who were taking a
closer look at his company.
Jeni said the only financial dealing she and Terry ever had with
Banyan was on approximately six occasions when Banyan bought lunch
for attendees of Terry's seminars. Banyan was given a $200 referral
fee for people who had been referred to Terry for a trust and had in
fact bought one, which is a Commonwealth Trust Company requirement
for all referrals.
However, Terry was arrested as a member of the Banyan group on
April 21, 2001. He arrived in Asheville on or about June 9,
2001.
On Monday, November 5, 2001, Terry's trial began in Judge Lacy
Thornburg's court where Terry, without a lawyer, a haircut or a
shave, faced a jury. The federal prosecutors called several Banyan
clients tell their story of financial devastation.
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.
Also during Tuesday's trial, US Postal Inspector Robert Ridgeway,
who was lead agent of the raid on Vaughan's home provided a long,
detailed testimony.
Part 2 of Stewart's Trial
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.
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