Columbia Mayor Steve Benjamin and former city employee Tony Lawton were among the original targets of what has become a broad federal public corruption investigation, a defense attorney said in federal court here Wednesday.
Attorney Jim Griffin of Columbia said prosecutors and the FBI improperly redirected their case toward his client, Greenville businessman Jonathan Pinson, making much of the evidence gathered about Pinson illegal because it was gained through wiretaps aimed at Benjamin, Lawton and the city of Columbia.
But in a key ruling, U.S. District Judge David Norton decreed the government had not abused its authority and decided that the months of recorded conversations could be used as evidence at Pinson’s trial, scheduled for March in Columbia.
Griffin had argued that the wiretaps that captured Pinson’s cellphone conversations exceeded the authority of the judge’s approval because the investigation was supposed to focus on possible corruption in Columbia’s city government.
The original allegations that triggered the investigation only involved alleged kickbacks to city officials for their help in developing a Pinson housing project – the Village at River’s Edge just north of downtown – Griffin said.
“It’s the fruit of the poisonous tree,” Griffin told Norton.
When asked whether Benjamin and Lawton were or still are targets of the investigation, assistant U.S. Attorney Nancy Wicker said: “It would be inappropriate for me to comment on anything that was not discussed in open court pending resolution of this case.”
“As the mayor has made clear on numerous occasions, he has had no involvement with the Village at River’s Edge project since deciding to run for mayor in 2009 and has recused himself from all council discussions on the subject since taking office,” aide Michael Wukela wrote as Benjamin’s response.
“He continues to pray for Mr. Pinson and his family,” Wukela continued. “He believes that beyond that, this is a matter for the legal system, which should be allowed to run its course without interference from him or anyone else trying to litigate it in the media.”
The indictment accuses Pinson of money laundering through shell corporations, bribes, kickbacks (which the accused allegedly called “love offerings”), racketeering, extortion and the use of public money and bank loans for illegal purposes.
Most details of the FBI’s sweeping case, including the recorded conversations, have not been made public.
Prosecutors have spelled out some of their case against Pinson and a co-defendant in a 69-page indictment issued by a federal grand jury on Oct. 17 and disclosed Nov. 7. The indictment refers to more than a dozen wiretaps made over a two-year period when the government was investigating the case.
The indictment alleges Pinson – former chairman of S.C. State University’s board of trustees – and fellow Greenville businessman Eric Robinson used their political and personal connections and business expertise to commit a host of white collar crimes in several locations in South Carolina. The indictment also mentions nine people involved in the public corruption case but does not identify all of them.
Five people already have pleaded guilty.
The indictment charges Pinson, 43, with 51 counts of various kinds of fraud and illegal activities and Robinson, 43, with 11 counts.
The indictment of Pinson – a longtime friend and business associate of Benjamin – and Robinson makes it clear that federal prosecutors believe Pinson was the mastermind behind the wrongdoing, alleging he was “routinely at the heart of this criminal activity.”
“Deception, influence peddling and greed were the hallmarks of this enterprise,” the indictment said.
The government’s indictment refers to more than a dozen wiretaps.
One piece of evidence, called Exhibit 3, concerns “Columbia City Council’s discussions re: The Village at River’s Edge,” according to a non-sealed but brief description of that evidence in a defense motion. Benjamin was a partner with Pinson in the Village at River’s Edge before Benjamin removed himself from the project and announced he would run for mayor in 2009.
Other evidence now under seal is described as a “chart containing information derived from wiretap and designated confidential by the government,” according to Griffin’s motion.
The indictment contains numerous references to Columbia and the public-private River’s Edge development, which involves a Columbia Housing Authority component.
According to the indictment and federal officials, Pinson gave a former Columbia city employee identified in the indictment only as “Person A” a $5,000 check in 2011 for help with respect to the Village at River’s Edge project.
“Person A” had not been identified publicly – until Wednesday.
In court Wednesday, Griffin repeatedly named former city employee Lawton as being the person who got the $5,000 check that federal prosecutors believe was a kickback. That kickback was supposed to compensate Lawton for help he allegedly gave in getting money from a $1.8 million grant for Village at River’s Edge infrastructure, Griffin said.
After months of investigation involving “wiring people up,” subpoenas and witness interviews, prosecutors still don’t have any evidence to charge Lawton with any crime, Griffin said.
The Lawton kickback allegation “was a crucial linchpin of their case – it’s false,” Griffin said.
Lawton was director of the city’s Community Development Department and once ran its federal Empowerment Zone program. He worked for the city for 16½ years, until October 2011.
Federal prosecutors got Lawton’s name from Lance Wright, a Lexington businessman and former S.C. State University board member who was being investigated for various kinds of fraud, Griffin said. To get a lighter prison sentence, Wright gave the feds information about Lawton – information that was not correct, Griffin said.
In November, Wright pleaded guilty to conspiracy and bank fraud. He will be eligible for a lighter sentence after he testifies for the government in Pinson’s upcoming trial, prosecutors have said.
After Wednesday’s hearing, Lawton’s attorney told The State that – as Griffin had said earlier in open court – prosecutors have no evidence against Lawton and that Wright implicated Lawton to get a lighter sentence.
“Tony Lawton has done nothing wrong,” attorney Dick Harpootlian said. “He met with the FBI and the U.S. Attorney’s Office and laid it all out. He pointed out that whatever Lance had told them was incorrect.”
Pinson devised an illegal scheme to accept wire transfers of public money from the Columbia Housing Authority that were supposed to go toward building 60 public housing units at the River’s Edge, according to the indictment. Pinson then “engaged in skimming by illegally keeping a portion of each of the various wire transfers for his own personal use,” the indictment said.
In other action Wednesday, Norton denied a motion by attorney Shaun Kent of Manning, who represents Robinson, to have his trial kept separate from Pinson’s.
Allegations against Robinson make up only a small portion of the total charges in the government’s indictment, and the jury will be unfairly prejudiced if it sees Robinson sitting next to Pinson during a three-week trial, Kent said.
But Norton said he would instruct the jury to weigh the various criminal charges against Pinson and Robinson individually and with care.
Norton also denied a motion by Griffin to toss out public corruption allegations against Pinson involving S.C. State University.
Griffin said the wiretap was only supposed to specifically gather information about public corruption in the city of Columbia, and the FBI’s chance wiretaps of calls Pinson had with S.C. State officials allowed the government to stumble into allegations involving S.C. State, Griffin said. Pinson and Florida businessman Richard Zahn are facing charges involving the university; Zahn has agreed to plead guilty to conspiracy and attempted bribery in connection with a land deal involving the school.
“This is where (the feds) hit the jackpot,” Griffin said sarcastically. “They switched gears.”
And S.C. State University, a predominantly black state institution with a history of political and financial troubles, is an easy target for prosecutors, Griffin said.
“It’s sort of a sport for some folks in South Carolina to look at S.C. State and say, ‘Let’s see what we can do this week,’” Griffin said.
Kent and Griffin said their clients are waiting for their day in court.
“This is a witch hunt,” Kent said.
In arguments to Norton, prosecutors stressed the case had been put together with considerable care.
The latest indictment spells out “approximately 100 overt acts in chronological order,” assistant U.S. Attorney Wicker said.
And assistant U.S. Attorney Jane Taylor, in arguments that indicated the extent of the investigation, told Norton that the FBI had intercepted and listened to all or portions of more than 5,103 calls. Of those, 776 calls “were deemed pertinent” to the investigation, she said.