Witnesses testify about problems with repayment from Pinson, Benjamin in Village at River’s Edge project

06/23/2014 11:20 PM

06/23/2014 11:21 PM

Shady financial dealings involving construction of the Village at River’s Edge housing development were the focus of Monday’s testimony in a federal public corruption case.

And prosecutors continue to link Mayor Steve Benjamin, a business partner in the north Columbia public/private housing project, to the case. The mayor has not been charged with a crime.

Prosecution witness Demond Pearson testified Monday that Benjamin asked him to invest $50,000 in the project in 2007, with Benjamin and former S.C. State board chairman Jonathan Pinson telling Pearson his money would double in three years. Then-private attorney Benjamin had Pearson wire the money to the account of Benjamin’s law firm.

But Pearson, who said he grew up a couple doors from Benjamin in the borough of Queens,N.Y., testified that he had to hound Benjamin and Pinson to get his money back. The final payment of $7,500 arrived from Benjamin earlier this month, and only after Pearson said he threatened the mayor late last year to expose the loan and its handling to his mayoral opponent.

An attorney for defendant Pinson, Jim Griffin, said Monday the defense has subpoenaed Benjamin. But Griffin said he’s unsure whether the mayor will be called to the stand.

Phil Mims, another witness, said Benjamin and Pinson asked him to apply for a seat on the Columbia Housing Authority board, “to basically have control of their people on the board.” City Council did not select Mims for the board seat.

The housing authority oversaw the public housing component of the River’s Edge development and was a conduit to $10 million in federal grants that went to construct the rent-assisted townhouses and private single-family homes on land that overlooks the Broad River. Benjamin has said he was bought out of the project just before he announced his first candidacy for the mayor’s seat in 2010.

Most of the day’s testimony was aimed at Pinson, who is accused of a range of offenses including bribery, extortion and misusing his public position as chairman of the board of trustees at S.C. State University for his personal gain.

SK Builders co-owner Tim Kalliainen testified that Village at River’s Edge LLC, the company run by Pinson, Benjamin and others, owed him $315,000 for work done on constructing the townhouses for low- to moderate-income tenants. The limited liability corporation (LLC) had the contract to build the homes and was entitled to a developer’s fee, according to earlier testimony as the trial enters its second week.

Pinson kept taking more and more of the payments that should have gone to SK, saying he had expenses, too, Kalliainen said. Pinson would pledge to “get caught up later.”

Kalliainen said he became so frustrated that he had a business associate write to the housing authority in October 2011 about a new payment agreement reached with the River’s Edge developers.

Pinson was furious, saying that SK Builders was trying to cost his company the contract with the housing authority, and that their new agreement was not to have been shared with the housing authority, Killiainen testified.

Prosecutors played a conversation with Pinson recorded by the FBI at 9:50 p.m. on Oct. 19, 2011.

“I ain’t never going to get kicked off that project,” Pinson is heard telling Killiainen angrily in often fractured sentences laced with profanity. “... Powers to be is higher than the housing authority for us to be successful on that project,” Pinson is heard saying.

It was not disclosed who Pinson was referring to when he mentioned higher powers who could ensure his success.

Pinson also said he could get subcontractors to line up to say that SK was not paying them for work they had done. He threatened SK with a lawsuit.

Killiainen, whose company is based in Taylors, also testified that he reluctantly extended a $375,000 loan in early 2010 to the developers when all of them co-signed, put the property up as collateral and committed to repay as townhouse lots were sold for $7,500 each.

It was the third private loan River’s Edge LLC had received, according to testimony. Witnesses have said the developers were getting loans to meet payments on other loans.

Mims, a partner in River’s Edge, testified that he and Pinson falsely certified that $3.9 million reflected in 10 payout documents had gone to SK when they had gone to River’s Edge, Pinson or to Mims himself for their personal uses.

Mims, a former commercial loan officer at three banks, repeatedly testified that he knew it was illegal to certify information that was incorrect.

Instead of paying SK what was due, Mims said he and Pinson were taking sums that ranged from 10 percent of each reported payment to perhaps as high as 23 percent.

“This should have been done differently ... not reimburse ourselves,” Mims said.

Taped conversations between Mims and Pinson were punctuated with cursing.

At some point during his testimony, Mims admitted there were so many numbers being bandied that he was unsure which were correct.

Pearson testified that Benjamin first approached him about investing in River’s Edge. They sealed the deal along with Pinson at the Hilton in the Vista. Testimony is pointing to that hotel, owned in part by Benjamin and Pinson, being used as a hub of questionable and allegedly illegal schemes by them and others.

Pearson said Benjamin initially told him to send the $50,000 to a Greenville bank and direct it to Titanium Investments. But Benjamin then asked it be sent to the account of what then was Benjamin’s law firm. The $50,000 was deposited on Aug. 31, 2007, according to records shown in court.

Pearson said Benjamin or Pinson repaid him about $10,000 in “dribs and drabs.”

“I’d have to call or text Stephen ... to find out what happened to my money.” Pearson said he received discounted room rates when he stayed at the Hilton.

Finally, the prosecution witness said, “I told Stephen I was going to go to his opponent” about the loan, how Benjamin used the money and repayment problems.

That’s when Benjamin agreed to make a $10,000 payment followed by monthly payments of $2,500, Pearson said.

On June 2, he received his final payment, Pearson said.

There was no testimony Monday against co-defendant Robinson, who, like Pinson, is a Greenville businessman.

The government’s case alleges five schemes that involve many people in Columbia, Marion County, S.C. State University and DeKalb County, Ga.

A DeKalb commissioner, Stan Watson, was identified in court Monday through a photograph shown to the seven-woman, five-man jury.

Mims identified Watson, without naming him, as one of the people at a business meeting hosted by Pinson and Florida developer Richard Zahn. Zahn also has pleaded guilty.

Mims said Pinson and Robinson made reference at the Hilton meeting to having influence with politicians.

Pinson remarked, “We got a few of them under control or we’ve got them in our corner.”

But Mims did not identify which politicians Pinson was talking about.

The trial resumes Tuesday in Columbia’s federal courthouse.

Prosecutors said they might rest their part of the case on Thursday.


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