FORT SMITH — A federal prosecutor and the attorney for K. Vaughn Knight, a former attorney for ex-developer Brandon Barber, continued their paper argument Tuesday over whether Knight’s conspiracy, bankruptcy fraud and money laundering convictions should be overturned or a new trial granted.
Rogers attorney David Matthews, representing Knight, filed Tuesday a reply to the government’s response to his Dec. 10 motion to U.S. District Judge P.K. Holmes III. That motion argued the evidence was not sufficient for a jury to reach the conclusions it announced Nov. 18 after atwo-week trial.
Holmes has not ruled on Matthews’ motion.
The jury of nine women and three men convicted Knight on all eight counts of a superseding indictment charging him with conspiracy to commit bankruptcy fraud, bankruptcy fraud-concealment of assets, bankruptcy fraud-false statements and five counts of money laundering.
Matthews argued in Tuesday’s filing that the government was wrong to claim it proved that Knight and Barber contemplated filing for bankruptcy more than a year before Barber filed his petition in U.S. Bankruptcy Court on July 29, 2009.
He argued that Holmes should have given jurors an instruction defining “contemplation of bankruptcy” instead of, as the government held, allowing the jurors to use their common sense in defining the term.
First Assistant U.S. Attorney Wendy Johnson argued in a brief filed Dec. 19 that emails introduced into evidence during the trial showed that Knight was talking about bankruptcy for Barber as early as February 2008. Matthews should have made the argument about defining contemplation of bankruptcy during the trial, she wrote. Matthews stated in Tuesday’s filing that he had.
Matthews argued that Knight didn’t make any false statements to the Bankruptcy Court. Any false statements were made by Barber in his bankruptcy petition and testimony, he said. Matthews also argued there was insufficient evidence that Knight intended to defraud the Bankruptcy Court by using his lawyers trust account to conceal Barber’s money from his creditors.
Johnson wrote in her Dec. 19 brief that two expert witnesses in the trial testified theynever heard of a lawyers trust account being used as Knight’s was used on Barber’s behalf. And, she argued, Knight knew where the money was coming from and going in that account because he had to endorse all the transfers involved with it.
The government’s case against Knight centered on two main allegations: that he used his lawyers trust account to help Barber hide $1.3 million from his many creditors so Barber could use the money for his own purposes, and that Knight misrepresented Barber’s financial condition to the Bankruptcy Court by omitting income from one or more business entities that Barber used for his own benefit.
Knight remains free on bond pending sentencing, which will follow the completion of a presentence investigation by the court’s probation office.
Barber, Knight and Barber associate James Van Doren of New York were named in a 27-count federal indictment unsealed in March. Barber pleaded guilty in July to conspiracy to commit bankruptcy fraud and money laundering. Van Doren pleaded guilty in August to money laundering. Barber is being held in the Washington County jail awaiting sentencing; Van Doren is free on bond.
Northwest Arkansas, Pages 7 on 01/01/2014