Knight retrial put on hold as U.S. files appeal

Prosecutor to dispute ordered acquittal, retrial in Barber lawyer’s fraud case

U.S. Attorney Conner Eldridge filed notice Tuesday that he will appeal a judge's order granting acquittal on one charge and a new trial on other charges for K. Vaughn Knight, a Fayetteville lawyer who represented former Northwest Arkansas developer Brandon Barber during his bankruptcy.

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The notice was filed in U.S. District Court in Fayetteville. Eldridge stated in the notice that he will appeal the case to the U.S. Court of Appeals for the 8th Circuit.

Knight's jury trial scheduled to begin Aug. 4 was canceled Tuesday because of the notice of appeal, according to an order signed by U.S. District Judge P.K. Holmes III.

On June 10, Holmes ordered that Knight be retried on charges of conspiracy to commit bankruptcy fraud and bankruptcy fraud and five counts of money laundering.

Holmes acquitted Knight of aiding and abetting in making false statements, one of the eight charges on which a federal court jury convicted Knight last November after a nine-day trial in Fort Smith.

Holmes was critical of the government's case, writing he was troubled by the "nature, quantity and character" of the evidence, which left him with "significant concerns that a miscarriage of justice may have occurred."

After sitting through two weeks of trial and viewing a large amount of evidence, the jury of nine women and three men took just six hours over two days to reach a verdict. Holmes wrote that the complexity of the case made it too difficult for jurors to sort through all the evidence to find the truth.

Knight was charged in January 2013 with Barber and New York attorney James Van Doren in a 27-count indictment charging them with conspiracy to commit bankruptcy fraud, conspiracy to commit wire fraud, bankruptcy fraud, concealment of assets and money laundering.

Barber pleaded guilty in July 2013 to conspiracy to commit bankruptcy fraud and money laundering and is in the Washington County jail awaiting sentencing, which is scheduled for Aug. 13.

Van Doren pleaded guilty in August to money laundering. He is scheduled for sentencing Aug. 18.

Most of the allegations in the charges centered on Knight's allowing Barber to use his lawyer's trust account as a bank account to, as the government alleged, hide money from his many creditors. In the time Knight served as Barber's attorney, more than $1 million of Barber's money passed through the account.

The government also accused Knight of helping Barber provide false information in his personal bankruptcy.

Holmes wrote that the government presented a lot of evidence of Barber's activities during the trial, but he called the evidence of Knight's involvement in Barber's schemes "thin at best."

Barber was a prominent real-estate developer in Northwest Arkansas before the recession that began in late 2007.

Metro on 07/10/2014

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