Government prosecutors want $352,000 from convicted S.C. State University former board chairman Jonathan Pinson, arguing he should not be able to keep the money he made while participating in illegal schemes.
Pinson’s attorneys told a federal judge in court on Wednesday that amount is far too high – that he didn’t make all the money the government says he did.
And, in fact, because HUD fell short by hundreds of thousands of dollars when paying him to develop Columbia’s Village at River’s Edge neighborhood, Pinson should owe nothing from that deal, his attorneys say.
Prosecutors told U.S. Judge David Norton on Wednesday the $352,842 was money Pinson made in two of the four schemes a jury convicted Pinson of last year. Prosecutors said he should forfeit $234,732 for illegally taking HUD money meant for the Village at River’s Edge and another $118,110 for misappropriating money from a $1 million federal economic development grant that was supposed to go to build a diaper factory in Marion County.
But Pinson’s lawyer, Jim Griffin, said his client still is due some $245,000 in HUD funds for Pinson’s role as the developer of 60 affordable townhouse units in the Village at River’s Edge.
“The balance he is owed is more than they claim he misappropriated – so there’s nothing to forfeit,” Griffin told Norton.
As for the Marion County scheme, Pinson actually only received some $22,000 of the $118,00 the government claims, Griffin said.
But government lawyers – there were five of them in the courtroom, along with FBI agent Chris Garrett – told Norton they were actually being lenient with Pinson because he is subject to up to $10 million in fines in all for the crimes he was convicted of.
Last July, a federal jury in Columbia found Pinson guilty of 29 crimes, including racketeering, wire fraud, money and money laundering. Pinson was the ringleader in his various schemes and sometimes used his position as S.C. State board chairman to make money illegally, the jury found.
“We think we have come up with a figure that is very generous to Mr. Pinson,” assistant U.S. Attorney Jane Taylor told Norton. “All the testimony at the trial established that this man took money he was not entitled to.”
Another assistant U.S. attorney, Anne Hunter Young, a specialist in forfeiture actions, added, “Any profit that Mr. Pinson gained, the government is entitled to the forfeiture of that money.”
In the case of the Village at River’s Edge, the government contends that while Pinson didn’t collect all the developer’s fees due him, he did divert HUD money that was supposed to go to the project’s contractor and use it for unlawful personal expenses such as outings at clubs.
Griffin argued that any forfeiture Pinson might make should be limited to illegally gotten money the government could show specifically went to Pinson.
But government lawyers argued that all money Pinson made from his illegal schemes was tainted and subject to being confiscated.
“We are entitled to the gross proceeds,” said assistant U.S. Attorney DeWayne Pearson.
During the 80-minute hearing, both the government and Griffin bandied around various numbers and cited numerous sources.
At the hearing’s end, Norton asked each side to submit a letter to him within a week. Each side should identify amounts to be forfeited or not in each scheme. He also asked them to detail the money trail from which they were drawing their conclusions. The letters should cite trial testimony and evidence, said Norton, who presided over the trial.
If Norton determines that Pinson should forfeit money, the judge also could order in later hearings that assets of Pinson’s be seized and sold to pay the government. Pinson also would be subject to fines, but a judgment involving fines does not generally involve a property seizure.
No date has been set for Pinson’s sentencing. According to federal filings, the government is seeking a stiff sentence, likely up to 10 years or more.
Six co-defendants involved in Pinson’s schemes already have pleaded guilty, cooperated with the government and are expected to get little or no prison time. Ed Givens, S.C. State’s former general counsel, is the only defendant sentenced so far. He pleaded guilty to misprision of a felony and was given six months probation. He was also temporarily suspended from practicing law.
In papers filed in federal court, a government prosecutor said Pinson had the same opportunity to plead guilty and get off with a light sentence as did the other six defendants involved in his schemes.
“Pinson was offered a plea deal in line with the deals offered to other co-defendants, but Pinson failed to accept it,” wrote assistant U.S. Attorney J.D. Rowell. “Pinson repeatedly refused to accept responsibility or cooperate with the investigation.”
After court Wednesday, Griffin told reporters, “I think we got our point across to the judge. My client left money on the table. This has been a nightmare for him financially and otherwise.”
Although 60 housing units were built at Village at River’s Edge, the $1 million in federal funds Pinson and others received to start a diaper plant to create jobs in Marion County was a total loss, according to the government.
Pinson diverted money from the diaper project, effectively scuttling the plant’s chances, “and there is no evidence that any jobs were ever created, despite an investment of $1 million taxpayer dollars,” according to government filings.
The other two schemes the jury found Pinson guilty of after a two-week trial involved an effort by Pinson to solicit a $90,000 Porsche Cayenne as a bribe from a developer seeking to sell land to S.C. State as well as a plan to make money illegally off an S.C. State homecoming band appearance. In both cases, Pinson was the university board chair. He resigned the post in early 2013 after becoming an FBI target.
Columbia Mayor Steve Benjamin was an early partner with Pinson in the Village at River’s Edge. Benjamin sold his interest to Pinson in 2010 as he readied to run for mayor. He was not charged with a crime and was not called to testify.