June 20, 2014

Prosecution witness: I helped Pinson buy out Benjamin

Columbia Mayor Steve Benjamin received $50,000 from people now accused of public corruption to help buy the then-soon-to-be mayor out of the controversial Village at River’s Edge project, a prosecution witness testified Friday.

Columbia Mayor Steve Benjamin received $50,000 from people now accused of public corruption to help buy the then-soon-to-be mayor out of the controversial Village at River’s Edge project, a prosecution witness testified Friday.

Tony Williams told a federal jury that he helped get a $500,000 loan for the public/private housing development that, in turn, was used in part to buy out Benjamin.

Benjamin – who is not charged with a crime – and defendant Jonathan Pinson were not creditworthy enough to get the loan themselves, Williams testified in the fifth day of the corruption trial. Benjamin and Pinson at the time were principals in the company that was supposed to build the combination of public-assisted housing and private single-family homes.

Williams, a prosecution witness who has pleaded guilty, said he provided a separate $72,000 loan in 2009 because his acknowledged fellow conspirator Lance Wright told him that as a Caucasian, Williams was barred from investing in the project. U.S. Department of Housing and Urban Development rules said the grants to build the development could be issued only to an all-minority firm, Williams said.

Ultimately, the project got $10 million from HUD, about $6 million of which was to pay for construction. The developers, including Pinson, Benjamin and others, were to receive a total of about $400,000 as a development fee.

Benjamin has declined comment during the trial. He might be called as a witness.

When asked by The State newspaper in December whether the FBI has sought to interview him, Benjamin said he would neither confirm nor deny such a request.

As the trial unfolds, the government continues to weave together a complex series of bank records showing loans, money transfers and deposits among many accounts. Prosecutors are seeking to tie together the financial mosaic to show evidence of public corruption schemes.

It was not clear from Friday’s testimony when Benjamin received his $50,000 share or whether that’s all he received.

Benjamin has said that in August of 2009, Pinson, his friend and business associate, bought out him and his father from the River’s Edge project for $492,500. That transaction occurred two days before Benjamin announced his candidacy, the mayor has said. He was re-elected to a second four-year term last year.

Benjamin never has said publicly how much of his money he invested in the development. The project was stalled for years over payment disputes but has been purchased by other investors, and the public housing portion is complete.

Williams also has pleaded guilty to bank fraud in an unrelated case. He once owned or shared ownership in about 15 companies and had $1 million in his bank account, Williams said in court.

He’s now broke, divorced, living in Florida and has the stigma of being an admitted felon, he said under cross-examination by Pinson defense attorney Jim Griffin.

“I regret the decision of not relying on my morals and ethics,” Williams said, adding he wishes he had never met Lexington County businessman and former S.C. State board member Wright, who was entangled in various business ventures with Williams and has pleaded guilty in the corruption case.

In 2009, River’s Edge developers needed money to pay bills associated with the project as they awaited grant money, Williams said. He could not make the loan directly to the project because the conditions of the HUD grant required the developers to be an all-minority owned company, Williams said.

The trial of Pinson and one of his business partners, Eric Robinson, like Pinson from Greenville, ended its first week Friday. It resumes Monday and is projected to last two more weeks. Williams and five others have pleaded guilty in hope of receiving lighter sentences.

The government is alleging five major, but differing, schemes involving people in Columbia, Marion County, S.C. State University in Orangeburg and DeKalb County, Ga.

Williams said Friday he was present in daylong investment meetings in the Columbia area that Benjamin attended.

The meetings often were at the bar at the Hilton hotel in the Vista and at the nearby Wild Hare Sports Cafe. Benjamin and Pinson are among the owners of the hotel. A lot of drinking was going on during the meetings, Williams testified.

Benjamin was in the meeting in which the $50,000 buy-out payment was discussed, Williams said.

But cash flow problems – caused in part by what prosecutors allege was illegal pocketing of public money – forced the group of investors to get loans to pay toward other loans.

The $500,000, 90-day promissory note was issued by First Community Bank with the help of Columbia engineering firm owner Chimin “Jimmy” Chao. Chao was on the bank’s board at the time, was a friend of Wright’s, and did engineering work for the River’s Edge development.

“The only reason I was signing was to help secure the loan,” Chao testified. “I was expecting they were going to repay the loan.”

Chao put his name on the note also because he was to get 5 percent of the profits from the River’s Edge project once it started making money. He said he ultimately paid off the loan himself.

Prosecutors allege that bank statements show the $500,000 loan went into a National Bank of South Carolina account of Brixstone Group, whose principals include Pinson, Wright and Williams.

Wire transfers went to Pinson and his wife, Pamela, among others, according to evidence in the trial. Williams said Pamela Pinson had no role in the River’s Edge project.

Friday’s final witness, Bianca Crawford, testified she was paid about $1,500 for public relations work to keep relations smooth between the developers and residents who live around the construction site.

Crawford said she was friends with Pinson and Benjamin as well as a business associate. She testified that she does not know if it’s illegal for federal grant money to be used to pay for public relations.

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