June 25, 2014

Florida developer spent up to $8,000 to wine, dine public officials in SC

Richard Zahn who’s at the heart of a public corruption case testified Tuesday that he needed to sell his resort-style property in Orangeburg County so he could afford to focus on his bigger plan – to rebuild Columbia’s oldest public housing complex.

A Florida developer who’s at the heart of a public corruption case testified Tuesday that he needed to sell his resort-style property in Orangeburg County so he could afford to focus on his bigger plan – to rebuild Columbia’s oldest public housing complex.

“The primary target was Gonzales Gardens in downtown Columbia,” Richard Zahn said in an hour on the witness stand at the federal courthouse where two Greenville businessmen are on trial in a wide-ranging, multi-state case that alleges bribery, converting public funds to private use and money laundering, among other charges.

Zahn was heard on a Sept. 10, 2011, telephone conversation intercepted by the FBI telling defendant Jonathan Pinson that the sale of Sportsman’s Retreat in Orangeburg County to S.C. State University for $2.8 million would raise Zahn’s liquidity to about $7.5 million. That would enable him to submit a bid to raze and rebuild Gonzales Gardens.

Zahn, a 46-year-old prosecution witness, also disclosed details of a Dec. 15, 2010, trip to Orlando, Fla., where Zahn wined, dined and entertained a contingent of S.C. State officials and Columbia Mayor Steve Benjamin.

Benjamin has not been charged with a crime but could be called as a defense witness.

Zahn said he paid two women who worked at Rachel’s strip club between $1,000 and $1,100 to return to the Westin hotel where Zahn had booked rooms for the group.

Rachel’s advertisments on its Facebook page proclaim, “Nobody has to know, keep it on the low” and “Hands down the place where discerning gentlemen come to receive world class service from the best looking ladies in Central Florida.”

Zahn testified that as Benjamin, Pinson and others on the trip were leaving Rachel’s and heading back to the Westin “to have cocktails ... one of the girls asked me out in the hall, ‘What are we talking about here?’ ”

Before Zahn could finish his sentence, Pinson defense attorney Jim Griffin objected and Judge David Norton stopped Zahn’s testimony on that aspect of the trip.

Pinson’s legal team fought last week to exclude testimony that the women gave the public officials “a private show” in a hotel room, according to the judge’s written order. The judge ruled while that kind of testimony might be “unseemly,” it did not prejudice the jury against Pinson.

Zahn testified that the whole trip cost him between $7,000 and $8,000, including travel on one of his planes, a rented limousine to chauffeur Pinson, Benjamin and S.C. State’s then-campus police chief Michael Bartley and university administrator Charles Smith around Orlando, their hotel rooms and meals. Zahn also said he gave the men wads of $5 bills for tips for dancers at Rachel’s.

The trip was intended to introduce him to public officials with whom he was doing business or hoped to do business, Zahn said under questioning by prosecutor J.D. Rowell.

He said his Columbia interests were Gonzales Gardens and Willow Lakes, an abandoned apartment complex off Monticello Road that he hoped to renovate for tenants displaced while Gonzales Gardens was being rebuilt. Gonzales Gardens is located across Forest Drive from Providence Hospital.

Ultimately, Zahn did not get the Gonzales Gardens contract, a project he testified he wanted “very badly.” The Willow Lakes plan did not materialize either.

Zahn, sporting a closely cropped beard and dressed in a dark business suit, delivered his testimony with machine-gun rapidity. He spoke similarly during an intercepted phone call with Pinson made on Sept. 22, 2011.

Hearing his own words in court, Zahn said, “It’s kind of obnoxious to hear myself.”

During that September conversation, Zahn excitedly rattled off S.C. State’s likely profitable uses of Sportsman’s Retreat, including subdividing some of the sprawling property into lots and leasing cabins to university alumnae for hunting or fishing trips. “You could hit a lot of angles,” he tells Pinson, who also clearly is thrilled with a purchase by the university board, which he chaired.

Pinson is charged with agreeing to accept a luxury Porsche sport utility vehicle from Zahn for influencing the university board to buy the retreat. Pinson has said he was not going to vote when the board was to decide on the purchase.

The FBI killed the deal when agents disclosed Pinson’s scheme to university officials.

Zahn said his connection to South Carolina dates to his time growing up in Myrtle Beach and graduating from Socastee High School. He joined the Army immediately after and later became a reserve deputy and consultant for then-Orangeburg County Sheriff Larry Williams. That’s where Zahn met Bartley, in about 2005, and formed a fast friendship. Bartley has pleaded guilty to agreeing to accept $30,000 or a four-wheeler for his role in the retreat’s purchase.

The Florida resident said he got into the business of redeveloping blighted properties in the late 1990s.

.Zahn had several meetings with Columbia officials at the Hilton in the Vista as well as during an Aug. 22, 2011, trip to Tampa to show them a $450 million housing development he built there

Benjamin, Councilwoman Tameika Isaac Devine and Councilman Brian DeQuincey Newman flew on a commercial flight that day in August to see Zahn’s project, The State newspaper reported in December after acquiring copies of city officials’ emails.

Zahn is to continue his testimony Wednesday in the government’s public corruption case that alleges five schemes that involve many people in Columbia, Marion County, S.C. State University and DeKalb County, Ga. Six people have pleaded guilty and are testifying.

The trial is entering its eighth day Wednesday. Prosecutors have said they might rest their case on Thursday.

In other testimony Tuesday, Bartley, the former campus police chief, said that Pinson instructed him to lie about Benjamin going on the Orlando trip.

“‘Mike, if anybody ever asks you if Mayor Benjamin went on the trip, say no,’” Bartley said Pinson told him.

Bartley told the seven-woman, five-man jury that one of the two women from the strip club was in Benjamin’s hotel room with others.

But Bartley testified that he left Benjamin’s room and does not know what ensued.

Bartley said he does not know if the women were strippers, but they worked at the club. In the judge’s ruling on admissibility, he refers to them as strippers.

Bartley has admitted to mail fraud, wire fraud and extortion. He faces up to five years in prison – instead of 20 – under a plea agreement with federal prosecutors in exchange for his cooperation.

“It is my hope and prayer that I will not be incarcerated,” the 26-year law enforcement veteran said.

In earlier testimony Tuesday, an FBI forensic auditor testified that Pinson, a co-owner of the company developing the Village at River’s Edge housing project in Columbia, misused almost $235,000 from the project.

Agent Bud Wilson said his examination of bank records showed that between April 2011 and January 2012, $234,732 was spent improperly.

Wilson also said the project’s construction contractor, SK Builders, which was building 60 rent-assisted town houses, received from 66 percent to 91 percent of the money for the work it had performed.

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