A federal appeals court Wednesday upheld the conviction and sentencing of former Little Rock lawyer David Patrick Henry, who is serving a five-year term for stealing a $1.3 million family trust he oversaw for a friend's widow and two daughters.
A federal jury convicted Henry, now 72, in March 2014 on 26 counts of mail fraud and three counts of tax evasion, all of which stemmed from his eight-year management of the Joe Thomas Swaffar family trust.
Swaffar, a Little Rock architect who was a friend of Henry's, died in 2004 of a gunshot wound that some suspected was self-inflicted. Before he died, Swaffar arranged for Henry to oversee the trust -- which was funded by life-insurance proceeds -- to ensure that Swaffar's widow, Sandra Carol Swaffar, and her daughters had enough money to live on.
As trustee, Henry was supposed to make investments on behalf of the trust and manage it, but instead he set up several accounts for the trust and had all the financial statements forwarded to himself, giving Sandra Swaffar access to only one, in which he deposited $4,000 a month. He told her the money constituted earnings from the trust's investments in oil, real estate and an annuity, but he never showed her the statements from the other accounts and regularly told her that the trust principal was largely untouched.
Instead, he created a company to conceal his skimming of the funds to pay off his mortgage and pay for insurance coverage, vehicles and college tuition for his family.
In 2008 or 2009, after stealing about $850,000 from the trust while making the deposits into Sandra Swaffar's account with portions of the principal, Henry told Sandra Swaffar that she was broke, blaming the economy. His fraud was discovered years later.
After his conviction, Henry appealed 15 of his mail-fraud convictions, all of which were based on his mailings of Sandra Swaffar's account statements to a post office box. He said no proof was presented that they were mailed for the purpose of executing his fraud scheme.
But a three-judge panel of the 8th U.S. Circuit Court of Appeals in St. Louis, citing U.S. Supreme Court holdings, said mailings that are "designed to lull the victims into a false sense of security, postpone their ultimate complaint to the authorities, and therefore make the apprehension of the defendants less likely" are considered part of executing a scheme.
"Given that Sandra was vulnerable and financially unsophisticated, a reasonable jury could believe that Henry caused the mailings of the statements in order to lull her into a false sense of security -- as, in fact, they did," the panel said.
The panel was comprised of U.S. Circuit Judges Raymond Gruender of St. Louis, Michael Melloy of Cedar Rapids, Iowa, and Duane Benton of Kansas City, Mo.
Metro on 06/18/2015