Woods trial: Banned FBI agent's testimony sought

Woods defense presses for misconduct subject

Former state Sen. Jon Woods, R-Springdale
Former state Sen. Jon Woods, R-Springdale

FAYETTEVILLE -- Defense attorneys in the public corruption trial involving former state Sen. Jon Woods wanted to call the discredited former lead investigator in the case as their first witness. This set off a series of hearings and motions Wednesday as the government successfully -- for now -- prevented it.

FBI Special Agent Robert Cessario is under investigation by the bureau's Office of the Inspector General for wiping the hard drive of a computer used to gather evidence in this case. He was barred from testifying for the government, which rested its case shortly after noon Wednesday. The agent admitted misconduct with the laptop in pretrial hearings. The defense has subpoenaed him.

Woods is accused of taking kickbacks from state General Improvement Fund grants to Ecclesia College, which received $550,000 in such grants from two now-former lawmakers, according to prosecutors. Oren Paris III, former president of Ecclesia College in Springdale, paid fees to consultant Randell Shelton Jr., who passed some of the money back to Woods and then-state Rep. Micah Neal, according to the indictment.

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photo

NWA Democrat-Gazette file photo

United States District Judge Timothy L. Brooks (left) is shown with United States Magistrate Judge Erin L. Setser in this 2016 file photo.

Woods of Springdale, Paris, and Shelton, formerly of Alma, were indicted in March 2017. Paris pleaded guilty April 4 to one count of conspiracy and agreed to testify for the government. He hasn't been called to the stand but is available as a rebuttal witness for the government after the defense presents its case. Paris resigned as Ecclesia's president and from the college's governing board the day before entering his guilty plea.

Woods also is charged with taking a kickback from a Bentonville-based company called AmeriWorks, but Shelton is not charged with anything involving that company. Neither was Paris. Neal pleaded guilty to one count of conspiracy on Jan. 4, 2017, for his involvement in both.

U.S. District Judge Timothy L. Brooks has barred testimony on the laptop issue from any source, but defense attorneys said they wanted Cessario to testify on a separate issue of the chain of evidence question. The government agreed to answer the defense's questions without testimony, which kept Cessario off the stand on that matter. The issue involved who at the FBI downloaded text messages from a cellphone of Neal's. The government answered it was another agent who is allowed and available to testify.

The defense told Brooks there could be other issues requiring Cessario's testimony. He remains under subpoena.

In testimony Wednesday, a forensic accountant for the FBI testified Ecclesia College accounted for almost all the money Shelton deposited into his consulting company's bank account. Shelton is accused of passing kickbacks through his business, Paradigm Strategic Consulting, according to the indictment.

Assistant U.S. Attorney Kenneth Elser described Paradigm in his opening statement April 10 as a "bogus company" with the purpose of passing kickbacks from Paris to Woods and Neal.

The defense protested the government wasn't showing a complete financial picture and was putting the two men's financial dealings in the worst possible light. Chad Atwell, defense attorney for Shelton, noted the government neither subpoenaed nor asked for Shelton's personal financial records such as his bank records or tax returns. The government appears disinterested in getting a complete picture or finding pieces that don't fit their narrative, the defense contends.

The defense will begin their clients' cases starting at 8:30 a.m. today.

Total deposits to Paradigm Strategic Consulting's account at Arvest Bank from 2013 through 2015 were $285,994, with Ecclesia providing $267,500, or 93.4 percent, of all deposits, according to bank records presented by Steven Williams, a certified public accountant assigned to criminal investigations for the FBI.

Shelton made a $40,000 wire transfer directly to one of Woods' bank accounts, another $1,800 to a band Woods' managed called the Plaid Jackets, $170,420 in cash withdrawals and another $9,235 in automatic teller machine withdrawals from the Paradigm account in the same time period, bank records summarized by Williams show. So in all, Shelton made a total of $221,455 of either cash withdrawals or direct transfers to Woods or Woods-related accounts, Williams testified.

The $40,000 wire transfer is a personal loan, the defense contends.

Woods' financial records show he made cash deposits to various accounts of his totaling $82,488 from 2012 through 2015. That includes $24,877 in 2013 and $37,782 in 2014, bank records show. This compares to $3,700 in 2012 and $16,138 in 2015.

Earlier testimony in the trial showed Woods took out $87,250 in loans from Arvest Bank between 2012 and 2014, all guaranteed by others. Testimony by government witnesses Tuesday and Wednesday showed Woods consolidated those loans, a $52,000 balance on a car loan and other debts into a $165,000 loan from Signature Bank in June 2015.

Woods learned he was under federal investigation shortly after taking out the large loan with devastating consequences to Woods' personal finances, claimed his defense attorney Patrick Benca of Little Rock. For instance, Woods was planning to run for re-election but decided to drop out early in 2016, Benca noted in cross-examination of a government witness.

"Had he won, he would have had a job the next four years," Benca said during cross-examination.

Christy Cops, fraud research specialist for Arvest Bank, previously testified Arvest loaned Woods $30,000 in 2012 guaranteed by Richard Roblee and two loans of $25,000 each in 2014 guaranteed by James Phillips. Former state Rep. Jonathan Barnett of Siloam Springs co-signed a $7,250 car loan for Woods in 2012, bank documents showed during Cops' testimony.

Bank records showed Woods had at least four checking accounts and failed to consistently maintain a positive balance in any of them, according to Cops' testimony.

Crandall Streett, a loan manager for Signature Bank, testified Tuesday that Woods was having to pay late fees on this debt consolidation loan with that bank by October 2015.

Woods paid Underwoods Fine Jewelers of Fayetteville $39,217 between Nov. 29, 2011, and July 7, 2015, according to records Williams summarized.

Woods faces 15 counts of fraud, all relating to either wire or mail transfers of money. Paris and Shelton were named in 14 of the fraud charges. All three were charged with one count of conspiracy to commit fraud. Woods is also charged with one count of money laundering in connection with the purchase of a cashier's check.

Woods and Neal also directed $400,000 in grant money to a nonprofit business called AmeriWorks, court and state records show. Neal said he received $20,000 delivered by Woods for steering $125,000 to AmeriWorks. Grant records show Woods directed $275,000 to the company.

AmeriWorks was incorporated by lobbyist Russell "Rusty" Cranford and described in a grant application as a work-training program. Cranford, 56, is set for trial June 11 in federal court in Springfield, Mo., on one count of conspiracy and eight counts of accepting bribes in an unrelated indictment.

NW News on 04/26/2018

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