Posted on 06/05/2007 10:14:50 AM PDT by SmithL
CHATTANOOGA - A federal prosecutor told jurors at state Sen. Jerry Cooper's fraud trial Monday that the senator was desperately in debt and used political influence to arrange a $1.77 million bank loan so he could sell a lumber mill.
"That's his motive," Assistant U.S. Attorney Gary Humble said in his opening statement. "He was desperate to get out of debt."
Cooper, 59, has pleaded not guilty to charges of bank fraud, mail fraud and conspiracy.
Humble said the Morrison Democrat obtained and provided to BankTennessee an inflated appraisal that showed a rail spur on the 13.6 acres in Warren County when there was not a rail spur. Humble said Cooper went to a bank co-owned by a political friend, then-Lt. Gov. John Wilder.
"If it meant using his political influence, he (Cooper) was going to do it," Humble said.
Cooper's attorney, Jerry Summers of Chattanooga, told the jury of 10 women and two men that there was no fraud on Cooper's part. He said the appraisal that showed a rail spur on the property in south-central Tennessee was "conditional" and everyone knew it.
"The bank has got egg all over its face," Summers said.
Summers told jurors that a bank officer in October 2004 testified to a grand jury and accepted responsibility for making a "mistake" in the loan process. Summers said a prosecutor later told the loan officer that his testimony was blowing the government's case.
Summers told jurors they would hear a recording of that testimony and that Cooper was only charged "because he is a state senator," a claim he also made in a pretrial filing.
The prosecution also claims that besides laying out Cooper's role in obtaining the inflated appraisal to get the loan for the buyer, Cooper put campaign money in personal accounts and did not show it as income on tax filings. Cooper is not charged with misusing campaign money.
Internal Revenue Service investigator Scott Kennedy testified that his review of Cooper's bank records and tax returns show Cooper transferred a total of $95,000 from a campaign account to a personal account between December 1999 and November 2001.
Summers said Cooper's failure to report the transferred money as personal income didn't result in any unpaid tax. Summers said Cooper's business losses offset that obligation.
"We don't deny he didn't pay taxes," Summers said.
Humble said that before the lumber mill property was sold, Cooper was missing loan payments and bouncing checks and his company was having "huge losses."
Since 1985, Cooper has represented Senate District 14, which includes Franklin, Bledsoe, Coffee, Grundy, Sequatchie, Van Buren and Warren counties in southern Middle Tennessee.
U.S. District Judge Curtis L. Collier told jurors that the trial would not be held Thursday and likely would continue into next week.
Cooper's federal trial previously was delayed after the senator, while free on bond, was injured in a Feb. 7 wreck that led to a charge of driving under the influence. He has pleaded not guilty in that case and is awaiting trial.
Real estate appraiser James Passons of McMinnville, a co-defendant who was acquitted by a separate jury in April 2006, testified Monday that he prepared the inflated appraisal at Cooper's request.
He said he was assured by Cooper that it would be used only to show the projected value with a planned rail spur. Bankers never called him about the appraisal, he said.
The buyers of Cooper's land, Huntsville, Ala., businessman Anthony Auyer and his wife, Theresa Auyer, pleaded guilty in the case and were sentenced to prison terms.
An indictment contends Cooper sold the property to Auyer's construction company with a commitment from the Tennessee Department of Economic and Community Development that a grant would be issued to build the rail spur.
Summers said Tony Auyer also used an inflated appraisal on undeveloped land in Alabama to help secure the loan. He was convicted of falsifying invoices to keep his business afloat.
"They got Tony Auyer, and that's when they should have stopped," Summers said.
Prosecutors claim Cooper used the inflated appraisal and his political connections with Wilder and former state economic development commissioner Bill Baxter in a borrowing scheme.
Wilder initially said he spoke with Cooper about the loan but later said he didn't.
Baxter said previously that Cooper called him about a 1998 economic development grant for a railroad spur in Warren County but never mentioned it would benefit him financially.
Cooper is the fifth incumbent Tennessee legislator indicted since May 2005. The others, plus a former state senator, were charged in the FBI's unrelated Tennessee Waltz bribery sting.
Hmmmmm...
If he was in the GOP, the headline would be “GOP Senator Commits Fraud, Prosecutors”
Lumber mills which were always a core industry in America were inevitably closed as their sources of trees were choked off.
Lumber mills which were always a core industry in America were inevitably closed as their sources of trees were choked off.
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