Tucker v. U.S.
| Citation | 269 F.Supp.2d 1024 |
| Decision Date | 16 June 2003 |
| Docket Number | No. 4:00CV00630 GH.,No. 4.95CR00173.,4:00CV00630 GH.,4.95CR00173. |
| Court | U.S. District Court — Eastern District of Arkansas |
| Parties | Jim Guy TUCKER Petitioner v. UNITED STATES of America Respondent |
Jeffery M. Rosenzweig, Esq., Elizabeth Robben Murray, Esq., Little Rock, for Petitioner.
D. Thomas Ferraro, Esq., U.S. Attorney's Office, Texankana, TX, Julie Thomas, Esq., U.S. Department of Justice, Office of the Independent Counsel, Alexandria, VA, for Respondent.
Petitioner Jim Guy Tucker ("Tucker") has filed a motion to vacate his sentence under 28 U.S.C. § 2255. On August 17, 1995, a grand jury in the Eastern District of Arkansas indicted Tucker along with James McDougal and Susan McDougal in a twenty-one count indictment, of which Tucker was indicted on eleven counts. At the time of the indictment, Tucker was the Governor of the State of Arkansas. Count I of the indictment charged the defendants with a conspiracy to misuse the funds of Madison Guaranty Savings and Loan, a thrift institution that failed, and Capital Management Services, a small business investment company headed by alleged co-conspirator David Hale. On May 28, 1996, the jury convicted Tucker of the conspiracy and one count of mail fraud in connection with a loan from Capital Management Services to Castle Sewer and Water Corporation. The Court granted a judgment of acquittal during the trial on four counts relating to a loan by Capital Management Services to The Communication Company, and the jury acquitted Tucker on five counts, three of which alleged fraud in connection with a loan to Dean Paul and two of which alleged misapplication of Capital Management's money and causing false statements to be entered in the books and records of Capital Management in connection with a loan by Capital Management of Southloop Construction.
In the mid-1980s, Tucker was a lawyer in Little Rock. He did business with co-defendants James McDougal and Susan McDougal, who owned a savings and loan, Madison Guaranty Savings & Loan Association ("Madison Guaranty"). Tucker's law firm was general counsel to Madison Guaranty and represented it in numerous matters. Tucker also represented David Hale, a Little Rock municipal judge, who ran a Small Business Investment Company, Capital Managment Services ("CMS"). Tucker on occasion borrowed from CMS which was financed by the federal Small Business Administration ("SBA"), and was supposed to only lend to economically and socially disadvantaged business persons.
In the fall of 1985, Tucker, James McDougal and Hale schemed to perpetrate a series of frauds. The key to the scheme was a fraudulent transaction by which $500,000 from Madison Guaranty was funneled to Hale, which he invested in CMS. The funneling of the money was accomplished by means of a nominee loan of $825,000.00 from Madison Guaranty to Dean Paul, an associate, who used the money to purchase three pieces of property from Hale at grossly inflated prices to generate a $500,000.00 "profit." Robert Palmer, who testified at the trial, prepared fraudulent appraisals to support the inflated prices.2 After Hale invested the $500,000.00 "profit" from the fraudulent sales, the SBA provided funding to CMS for lending at about a 3 for 1 ratio; thus, the "profit" netted nearly $1.5 million in additional federal funding.
As part of the scheme, CMS made four fraudulent loans to designees of Tucker and James McDougal, two of which are of importance here. One loan was a $65,000.00 fraudulent loan to Stephen Smith d/b/a The Communications Company, who used the money to pay off a debt of partnership that included himself, Tucker and James McDougal.3 Smith testified as a government witness at Tucker's trial. Another loan was a $150,000.00 fraudulent loan to Castle Sewer and Water, a company of which Tucker owned two-thirds. Tucker submitted fraudulent documents regarding this loan, and he was convicted of one count of mail fraud for causing Hale to submit false documentation to the SBA regarding this loan. R.D. Randolph, who owned the other third of Castle Sewer and Water, testified for the government at the trial.
In 1986, federal regulators audited Madison Guaranty and concluded that numerous real estate transactions financed by Madison Guaranty were shams involving insiders. One of the transactions so identified was the Castle Grande development south of Little Rock. In October, 1985, Tucker purchased a 34-acre parcel of Castle Grande, which was wholly financed by Madison Guaranty. On February 28, 1986 Castle Sewer and Water purchased for $1.2 million, the sewer and water utility located in the Castle Grande development. The $150,000.00 down payment for this purchase was made with the proceeds of the $150,000.00 loan from CMS. The remainder of the purchase price was financed by Madison Guaranty.
In July, 1986, the McDougals were removed from control of Madison Guaranty. Investigations followed. In 1989, a grand jury charged McDougal and his brothersin law, Jim and David Henley, with conspiracy to commit bank fraud involving two transactions arising from development of a four hundred acre tract of land known as the 145th St. property. All defendants were acquitted. See United States v. James B. McDougal, 133 F.3d 1110,1112 (8th Cir.1998).
In February, 1990, John Latham, Madison Guaranty's former president, pled guilty to a felony count of falsifying Madison Guaranty's records. His guilty plea related to false entries he had made in connection with a Castle Grande transaction. Latham agreed to cooperate with the government. In 1990, the Resolution Trust Corporation ("RTC") closed Madison Guaranty.
On September 1, 1992, the RTC submitted a criminal referral to the U.S. Attorney for the Eastern District of Arkansas and the FBI Little Rock office concerning criminal allegations involving Madison Guaranty and other entities controlled by James McDougal, the principal shareholder. The other entities included the Whitewater Development Company, Inc., a real estate venture owned by McDougal and his wife Susan McDougal along with then Governor Bill Clinton and Hillary Clinton. The referral named James and Susan McDougal as suspects and Governor and Ms. Clinton as witnesses. The RTC agents prepared an additional nine criminal referrals on Madison Guaranty between June and September, 1993. The nine referrals named McDougal as a suspect and Tucker was named as a suspect in two.4
In May of 1993, the SBA sent a criminal referral to the FBI in Little Rock detailing possible crimes committed by David Hale in his conduct of the affairs of CMS. The SBA believed that Hale had fraudulently concealed non-performing loans by making subsequent loans to payoff the non-performing loans.5 The FBI executed a search warrant for the offices of CMS on July 21, 1993. The agents seized loan files and other documents relating to Susan McDougal's $300,000 Master Marketing Loan. The FBI also found evidence of a fraudulent transaction from September 1998 involving Hale and Little Rock attorneys Charles Matthews and Eugene Fitzhguh. On September, 23, 1993 Hale, Matthews and Fitzhugh were indicted by a federal grand jury in Little Rock for defrauding the SBA. On the day of his indictment, Hale publicly alleged that Governor Tucker and President Clinton were involved in his conduct of CMS.
In November, 1993, Paula Casey, the United States Attorney for the Eastern District of Arkansas, recused herself and her entire staff from the Hale, Fitzhugh and Matthews prosecution as well as all matters involving Madison Guaranty and CMS because of allegations linking President and Mrs. Clinton with CMS. See United States v. Tucker, 78 F.3d 1313, 1315 (8th Cir.1996); United States v. Fitzhugh, 78 F.3d 1326, 1328 (8th Cir.1996). Responsibility for Hale's prosecution and the ten RTC Madison Guaranty criminal referrals was transferred to the Fraud Section of the Criminal Division of the Justice Department.
On January 12, 1994, President Clinton directed Attorney General Janet Reno to appoint an independent prosecutor. At the time, the independent counsel provisions of the Ethics in Government Act had lapsed in accord with the statute's sunset provision, and had not yet been reauthorized. On January 20, 1994, Attorney General Reno appointed Robert B. Fiske, Jr., a former United States Attorney for the Southern District of New York, as regulatory Independent Counsel pursuant to Department of Justice regulations. 28 C.F.R. § 600.1 (1993). He was given authority to investigate: "whether any individuals or entities have committed a violation of any federal criminal or civil laws relating in any way to President ... Clinton's or Hillary ... Clinton's relationships with 1) Madison Guaranty .. 2) Whitewater Development Corporation, or 3)[CMS]." 28 C.F. R § 603.1 Fiske took over the pending proseuction of Hale, Fitzhugh and Matthews, as well as the investigation of the Madison Guaranty criminal referrals.
In March, 1994, Hale agreed to plead guilty to one felony violation of 18 U.S.C. § 371 (conspiracy) and one felony violation of 18 U.S.C. § § 1341 and 2 (mail fraud) and to cooperate with the government.6 Hale provided substantial assistance to the government.7
On June 30, 1994, President Clinton signed the Independent Counsel Reauthorization Act of 1994 into law.8 On July 1, 1994, the Attorney General requested the appointment of an independent counsel. In her application to the Special Division of the Court for the appointment, the Attorney General requested that the Court appoint Fiske so that he could continue his investigation.9 The Special Division declined the suggestion and appointed Kenneth W. Starr as Independent Counsel on August 5, 1994.10 Starr continued the investigation of matters begun by Fiske, such as allegations of bankruptcy and tax fraud by Tucker, as well as related matters as the investigation progressed.
...
To continue reading
Request your trial