Posted on 10/06/2005 10:22:32 AM PDT by SirLinksalot
Harriet Miers at center of investment fraud
Jerome Corsi
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Posted: October 6, 2005 1:00 a.m. Eastern
© 2005 WorldNetDaily.com
"She's a woman of principle and deep conviction," President Bush pleaded on Tuesday in the Rose Garden, trying desperately to justify his nomination of his White House counsel, Harriet Miers, to the Supreme Court. Somehow, the president's praise belies the record of the corrupt Dallas law firm Ms. Miers managed before being named by Gov. George W. Bush to the Texas Lottery Commission.
While Miers was co-managing partner of Locke, Liddell & Sapp, the firm was involved in a $30 million investment scam for which Miers' firm had to pony up $22 million to settle an investor suit that the firm aided in defrauding the investors. All this happened on Harriet Miers' watch.
The case involves Russell Allen Erxleben, a University of Texas football player who shares a record for the longest field goal in NCAA history. Erxleben played 10 seasons in the NFL as a place kicker, first for the New Orleans Saints, then for the Detroit Lions. He never made the Pro Bowl.
Then, in 1977, he set up an investment firm under the name Austin Forex International. The idea was to trade in international currencies. Unfortunately, Erxleben ran a Ponzi scheme which ended up defrauding investors of some $33 million. Locke, Liddell & Sapp were more than passive professional advisers – the firm provided legal documents that Erxleben used to convince investors and potential investors the deal was legit and their investments were secure.
On Sept. 18, 2000, Denise Voigt Crawford, the Texas Securities Commissioner, was able to announce that Russell Allen Erxleben had been sentenced by U.S. District Court Judge James R. Nowlin to a total of 84 months in federal prison, a $1 million fine, and $28 million in restitution in connection with his conviction for one count of conspiracy to commit securities fraud, mail fraud and money laundering, and a second count of securities fraud in connection with his activities as president of Austin Forex International, Inc.
On Oct. 13, 1999, a suit had been filed in Travis County alleging that Miers' Dallas firm had developed work product including internal memos and notes that aided Austin Forex International in their scheme to defraud investors. When the case naming the law firm as a defendant surfaced in 1999, Harriet Miers was almost as brave in support of Locke, Liddell & Sapp as President George W. Bush was of her in his Rose Garden press conference defense of his nomination. "Locke Liddel has done nothing improper and in our judgment never should have been named as a defendant," she told the press at the time.
Still, on April 14, 2000, Locke Liddel agreed to pay $22 million to settle the suit. Bankrupt.com noted that the amount was so high because court authorities approving the settlement believe that Locke Liddel's behavior in the fraud was so outrageous that an example needed to be made of the firm to serve as a warning to other firms that they have an obligation to take action when they become aware that a client's actions are causing harm to third parties. Moreover, no firm can ever participate in a client's fraud, whether by advice and internal memos, or by guidance which ends up being communicated to clients.
Think about it. Erxleben's scheme was slick. Here was a famed University of Texas football player with NFL credentials, backed by a prestigious Dallas firm, peddling sure-to-win arbitrage currency plays to investors who thought they couldn't lose. In the first stage of a Ponzi, everybody wins and the word-of-mouth alone is good enough to expand the scheme to proportions where no mortal can manage, regardless of how brilliant they are. What will Harriet Miers do on the Supreme Court – recuse herself from any cases involving the Securities and Exchange Commission or investment fraud? We wonder how many seniors lost their lifetime savings in the currency scam because they relied upon Locke Liddel to give honest advice.
According to Bankrupt.com, the case was viewed as a test of the Texas Supreme Court's April 1999 ruling that a lawyer can be sued by a non-client for negligent representation. This ruling only applies if the lawyer's actions invited the non-client to rely upon the lawyer's fraudulent opinions and misrepresentations. Managing a law firm that advises a Ponzi scheme on how best to defraud investors of $33 million is hardly an admirable credential for confirmation to the U.S. Supreme Court.
In the 2004 presidential campaign, John Kerry underestimated the degree to which the Swift Boat Veterans for the Truth remembered his conduct during the Vietnam War and still held resentments sufficient for them to conclude that he was "Unfit for Command." Who took the time to vet Harriet Miers for President Bush? Or, did President Bush think we would all simply roll over and accept his "stealth" nomination simply because he begged "Trust me"?
Maybe President Bush should be reminded of the admonition of a true conservative who preceded him to the nation's highest office: "Trust, but verify." That motto seems more applicable in the present case. Mr. President: Please withdraw this dreadful nomination. There are highly qualified conservatives with stellar credentials who merit your consideration.
I don't know if this is to be believed or not.
Any comments/thoughts/rebuttals welcome.
84 months? One legitimate complaint that Jesse Jackson et. al. have is the fact that if a black kid robs someone of a few hundred bucks, they get longer in jail than people who steal millions.
"if a black kid robs someone of a few hundred bucks, they get longer in jail than people who steal millions"
Same goes for a white kid. Its true, the more you steal the less time you do.
Corsi better have his facts straight. I trusted him and Oneill regarding Kerry and until proven otherwise, I will trust him on this.
OK, everyone here knows that I have been a vocal critic of Miers, but I will defend here here. Partnerships can be dangerous sometimes. All of the partners of a firm will be hit hard if one partner does something wrong. If one partners was determined to engage in this kind of behavior, there is no way that the firm could have stopped him/her.
Now, it is possible that there were red flags, and associates going to Meirs telling her of the illegal work. If that is the case, then that would be a problem. But absent that, we can't assume that the illegal work of one partner should be blamed on her.
As for her defending the firm against the charge, that's her job.
"This editorial is from the same guy who wrote the book that help defeat John Kerry -- UNFIT FOR COMMAND."
It would be more accurate to say he had a hand in assembling and editing some of the material.
hoo-boy. Here we go...
IT have you weighed in yet on this?
Notice something missing from this article? Like the, um, relevant fact as to whether Miers was a partner who actually worked on the Austin Forex matter?
Smear.
Have disagreed with you on Miers from the start but I, for one, appreciate your integrity
Ping. We are now officially knee-deep in aligators.
thanks.
He also came on Free Republic and, using his real name, trashed the Catholic Church about a year ago. His comments here were used by the Kerry Campaign.
Sorry for all my typos above.
Nah. Read Rodney King's comment above. Corsi is smearing an entire firm for the actions of one partner.
I know it's a smear. That doesn't make the alligators go away.
Jerry doesn't post here anymore...
http://www.freerepublic.com/focus/user-posts?name=jrlc
As you can see from my other recent posts, I am not supportive of this nomination. However, to attack Miers on the basis of this civil lawsuit is off the mark. I am familiar with lawsuits of this sort. Most such suits against law and accounting firms are little more than deep pocket searches by amoral plaintiff class action attorneys. It is very unlikely that any attorney in her firm had any knowledge of the fraud or any reason to believe the fraud was taking place.
Thank you for your candor and fairness. I have been a "wait and see" FReeper. I add my voice to yours, saying that she needs to address this issue, but she will hopefully be able to truthfully and effectively show she was not involved.
I once applied for a job with Austin Forex (never heard back from them) and I followed this case quite closely when it broke. All of the factual details given above seem correct to me. What isn't said is the level of Miers' involvement with Austin Forex other than her being the managing partner who was chosen to be a spokesperson for the press.
Managing a law firm that advises a Ponzi scheme on how best to defraud investors of $33 million is hardly an admirable credential for confirmation to the U.S. Supreme Court.
I'm very disappointed so far in Miers because I wanted a Scalia clone. But.......
That sentence sounds like a very cheap shot. If it was true, one of the firm's lawyers should also be in jail. If they were, you would expect the article to say so. I seriously doubt that the law firm actually instructed their client on how best to steal the money. "Listen up, this is how we are gonna rip off all the old people. Sounds far fetched.
This guy is making the case that the lawyers not only knew what was going on, but that they were in some way the masterminds, and that Miers had some sort of full knowledge. Exaggeration like that raises doubts, for me anyway.
handy
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