Chase Mortgage and Stephens Millirons law firm of Huntsville ignore their "trustee" relationship to ship foreclosure proceeds to Rob Riley crony Liberty Duke

Stephens Millirons law firm of Huntsville, AL

How could almost $8,000 in surplus funds from the foreclosure of our home, money that by law belongs to my wife Carol and me, wind up instead with Alabama lobbyist Liberty Duke? It apparently can only happen with the help of lawyers and mortgage bankers who are incompetent, corrupt, or both.

The banker types, in this instance, are from Chase Mortgage, which held the note on our home. The lawyers are from the Huntsville firm of Stephens Millirons, which orchestrated the foreclosure, with attorney Robert Wermuth playing the lead role.

It's not like the relevant law is hard to find or difficult to understand. That tells me that someone intentionally wanted to shuffle several thousand dollars of our money to Liberty Duke. And that leads to this question: why?

The law can be found at a number of places, but it perhaps is most succinctly and recently stated in a case styled Cheryl Williams v. Wells Fargo Home Mortgage (S.D., Alabama, 2015). You will notice that Williams is a federal case, from a district court, which generally means it would not be binding precedent in foreclosure matters that tend to be governed by state law. But Williams is based largely on two Alabama state cases -- Springer v. Baldwin Co. Fed. Savings Bank, 562 So. 2d 138 (Ala. Sup. Ct., 1989) and Davis v. Huntsville Production Credit Assoc., 481 So. 2d 1103 (Ala. Sup. Ct., 1985 --   which are binding law. 

The Williams court relied on Springer to spell out the basics on a foreclosure sale that produces a surplus:

[A] mortgagee (Chase) is, in a sense, a trustee for the mortgagor (Carol and me), and is charged with the `duty of fairness and good faith in its execution to the end that the mortgagor's property may be disposed of to his pecuniary advantage in the satisfaction of his debt.'" Springer, 562 So. 2d at 139 (quoting J.H. Morris, Inc. v. Indian Hills, Inc., 212 So. 2d 831, 843 (Ala. 1968) (emphasis added)). Thus, "[t]he mortgagee, as trustee for the mortgagor, is obligated to apply that profit realized after foreclosure and during the redemption period to the reduction of the mortgagor's debt. . . .

Consider the powerful language here. Chase, and its lawyers (Stephens Millirons) had a trustee relationship with Carol and me, with a duty to act in "fairness" and "good faith." That includes an obligation to apply any profit realized where it lawfully belongs. Where is that? The Davis case provides clarity:

The law is equally clear in regard to the issue of who gets the surplus proceeds. When property is sold at a foreclosure sale, conducted under the power of sale contained in a mortgage, at an amount greater than the indebtedness secured by the mortgage, the mortgagee (Chase) is liable to the mortgagor (Carol and me) for the surplus. Atlas, supra, 251 So.2d at 237; Bartlett v. Jenkins, 213 Ala. 510, 511, 105 So. 654, 655 (1925). The result is unchanged by the fact that the purchaser at the sale is the mortgagee. Muscle Shoals Bank, supra, at 298. See, also, Pruett v. First National Bank of Anniston, 229 Ala. 441, 157 So. 846 (1934).

Did Chase and Stephens Millirons fulfill their trustee duties by making sure that the surplus proceeds went to Carol and me? No, they did not -- not even close.  They knowingly violated the law -- or they turned a blind eye -- as someone allowed the funds unlawfully to go to Liberty Duke.

Liberty Duke

That raises questions about the winding road our home took from us (the rightful owners for 25 years) to house-flipping outfit Spartan Value Investors (which bought the house for $74,359 at public outcry, according to public documents), to house-flipping outfit JAG Investment Strategies (which bought the house from Spartan for $98,500), to Preston and Angela Gulledge Crider (who bought it from JAG for $198,000). (See related document at the end of this post.)

In a curious note, public records show that Spartan and JAG never have engaged in a transaction on any other house, at least in Shelby County. Why did our house go from one house-flipper to another?

For now, our focus is on the bankers and lawyers who made sure our surplus funds went not to us but to a party who had no lawful claim on them. How did Stephens Millirons, as Chase Mortgage's representative, respond when we inquired about the funds, and what does it say about their commitment to a "trustee" relationship with Carol and me? Were they more committed to their "thievery" relationship with Liberty Duke?

We will examine those questions in an upcoming post.


(To be continued)

JAG to Crider by Roger Shuler on Scribd

Foreclosure on our Birmingham home of 25 years produced surplus funds that belong to us, so how did they wind up with Rob Riley's crony Liberty Duke?

Liberty Duke

Given her relationship with Alabama GOP thug Rob Riley, lobbyist Liberty Duke probably could have a variety of descriptive terms affixed to her name. We recently discovered that "thief" appears to be one of them.

We're not talking about an in-your-face "street crime" sort of stealing. This is what we'll call a civil form of thievery, conducted in the white-collar environment. The result is the same as a street stick-up: A certain sum of money belonged to my wife, Carol, and me -- and Liberty Duke took it, apparently with the help of several banking/legal types.

All of this suggests two defamation lawsuits filed against me in fall 2013 -- one by Rob Riley, the other by Luther Strange minion and mistress Jessica Medeiros Garrison -- are connected to a my five-month stay in the "Shelby County Sheraton" (jail) and the foreclosure on our home of 25 years in Birmingham.

The civil theft involves surplus proceeds from what we believe was a wrongful foreclosure on our home in Alabama, on April 29, 2014. That's the event that caused us to wind up in Springfield, Missouri, where the Greene County Sheriff conducted an unlawful eviction at our apartment, with an assault rifle pointed at my forehead and a deputy breaking Carol's left arm so severely that it required trauma surgery for repair.

How could someone essentially steal funds from a foreclosure and place them with Liberty Duke, who was a co-plaintiff in the Rob Riley lawsuit and seemingly had nothing to do with the action on our home? That takes some explaining, but the key is that our foreclosure was outside the norm -- probably more outside the norm than even we realize.

In a standard foreclosure, the mortgage holder -- a financial institution of some sort -- buys the house, and the purchase price equals the outstanding debt on the house. In our research, we've found a number of articles on the Web quoting a mortgage veteran saying something like this: "I've been in the business for 35 years, and I've never seen a foreclosed property sell for more than the outstanding debt, and I've only seen a handful sold to someone other than the bank." (The price can be for less than the outstanding debt, which creates an unpleasant set of problems for the homeowner, but that didn't apply to us, so we will leave those issues off the table.)

Back to the thoughts of our imaginary mortgage professional, who would have had quite the experience at our foreclosure. The buyer was not the bank, Chase Mortgage; it was a house-flipping outfit, with roots in Tuscaloosa and an office on Birmingham's Southside, called Spartan Value Investors. (Roughly two weeks after we were out of the house, Spartan sold it to another house-flipping outfit, JAG Investment Strategies. JAG obtained a loan from Nowlin and Associates of Birmingham and apparently used that to remodel the house and get it on the market pronto, where a couple named Preston and Angela Crider bought it.)

Here's how things took a left turn with our foreclosure: In the days leading to the sale on the Shelby County Courthouse steps, we contacted Robert Wermuth, of the Huntsville law firm Stephens Millirons, which was ramrodding the proceedings. We wanted to know the outstanding debt on the property, and Wermuth sent us a document stating it was roughly $66,000. That includes a bunch of "fees" that mortgage holders and their lawyers love to tack onto such documents, so the real balance probably was somewhere in the $55,000 to $60,000 range. Regardless, we were having to deal with the higher figure. If we had been able to come up with $66,000, we would still be in our house.

We're not sure what happened on the day of the sale, but the property wound up selling for $74,359, which is more than $8,000 over the outstanding debt. (See foreclosure deed at the end of this post.) Our house was in a fairly desirable area, and it was in pretty good shape considering the financial duress we had been under for years, due to loss of our jobs at UAB and Infinity Insurance, respectively. Did two or more parties get into a bidding war, driving up the price? Did some other unusual circumstance cause a sale unlike any our imaginary mortgage pro above had ever seen?

CEO Clayton Mobley, at Spartan Value Investors'
HQ on Birmingham's Southside
(From al.com)

One of many unsolved mysteries surrounding the foreclosure on our home is this: Why did Spartan Value Investors sell the property to JAG Investment Strategies for $98,500, and why did they do it so quickly? (See related documents at the end of this post.) It seems Spartan was in it to secure the sale and then intimidate us into leaving -- including unlawfully shutting off our water and having other utilities put in their name, so they could threaten to have the power, etc. also turned off. It seems JAG's role was to spruce up the property and sell it ASAP, even though Spartan, on its Web site, touts its ability to do those things. Why were two house-flipping companies involved, when it seems one could have handled the job?

This much is not a mystery: The surplus funds derived from the sale, somewhere in the neighborhood of $8,000, represented our remaining equity in the property. And by law, they belonged to us.

So, how did they wind up going to Liberty Duke, and how did that violate Alabama law? We will address those questions in an upcoming post.

(To be continued)

Shuler--Foreclosure Deed (Spartan) by Roger Shuler on Scribd

Spartan to JAG by Roger Shuler on Scribd

Trent Cowherd, of Springfield, Missouri, proves that landlords can be among the world's biggest butt-holes

My wife, Carol, and I had owned our home in Birmingham, Alabama, for roughly 25 years before having it swiped out from underneath us in a foreclosure that was dubious (at best) and criminal (at worst). The process almost certainly amounted to a civil case of wrongful foreclosure, which under Alabama law, means an action that was taken not to recover the alleged debt owed but for some ulterior purpose.

I had forgotten what it was like to be a renter, but my memory was that the experience in Birmingham (from 1978 to 1990) was generally OK -- even though friends had shared a number of horror stories over the years. I had forgotten most of those tales, or who had even told them -- but they flooded back to mind after our experience of renting a two-bedroom duplex apartment from Trent Cowherd for a little more than 13 months (July 2014 to September 2015).

We've already shown Trent Cowherd, his lawyer Craig Frederick Lowther, lawyer David Shuler (my brother, for God's sake), and Judge Kelly Ann Halford took all sorts of flagrantly unlawful actions that led to our eviction last September 9 -- an event that left Carol with an arm broken so badly that it required repair from a trauma surgeon.

But what is it like to deal with a landlord in postmodern America? If our experience with Trent Cowherd and his staff is any indication, it is grim, indeed. An Answer and Counterclaim, which I filed on August 24, 2015, might best summarize what it was like to interact with the "professionals" at Trent Cowherd's company. (The Answer and Counterclaim can be read at the end of this post.)

Trent Cowherd and his wife, Sharon
(From Facebook)

I never received any document -- and I haven't seen any in a court docket -- that counters any of the factual statements or legal arguments in my answer/counterclaim. (By the way, our counterclaim was due to be heard on October 1, 2015, but we could not attend because Carol was in severe pain from arm surgery. I'm not aware of any answer being filed to our counterclaim, which should mean that we are entitled to a default judgment, under the law.)

My primary communications came with a Cowherd employee named Megan after someone had left a Notice to Vacate on our door on July 2, 2015. (See copy of the notice at the end of this post; the lease calls for such 30-day notice to be provided on the first of the month--the notice is a classic example of Cowherd violating its own lease.)

Carol and I were a bit stunned to receive a Notice to Vacate, given that our rent had always been timely paid, and even Cowherd never suggested that we were anything other than model tenants. When I called and asked Megan what was up, she explained that my mother, Gondy Shuler, had indicated she no longer wanted to be cosigner when the 13-month term was up at the end of July and the agreement was due to continue on a month-to-month basis.

Megan stated that a Notice to Vacate had been placed on our door because Carol and I had not been qualified on our own. This presented a couple of curious issues:

(1) No one from Cowherd, prior to placing the Notice to Vacate on our door, ever contacted us to say we needed to qualify on our own;

(2) When I asked Megan to point out where such a requirement was spelled out in the lease, she was stumped. That, of course, is because the lease includes no such language.

Did Megan react well to having it pointed out that no such provision existed in the lease? Not exactly. "I don't have to renew a lease with you, and we're deciding not to renew the lease."

Notice the tone that some might describe as "snotty." Also, notice that we suddenly were not being told to vacate because we had not qualified on our own -- we were being booted at Cowherd's whim. And that whim developed when the company was informed that it was attempting to violate its own lease.

Trent Cowherd
(from Facebook)

Now, get this: Megan plainly stated that we were to vacate by July 31, based on a whim, so obviously our rent for August was not due. But when Cowherd filed a "rent and possession" lawsuit against us on August 5, it claimed we were in arrears on rent. And this came after Cowherd's own representative had essentially told us not to pay the rent -- that we were going to be forced to vacate, regardless.

Does this sound like the action of a butt-hole to you? It sure does to me.

And get this: Cowherd had the audacity to send us a bill claiming we owed more than $2,000 for new carpet, paint, and other miscellaneous items. The carpet was filthy when we moved in, so much so that we had to wash our feet every night to get the stench off. Uncarpeted areas had not even been swept, and the sinks were clogged from the moment we arrived. As for paint, we did nothing to the walls or any other painted area.

When the same landlord proceeds to unlawfully schedule an eviction inside the 10-day window when no such action can take place, under Missouri law . . . and the same landlord ignores a Notice of Appeal that had been timely filed and placed an automatic stay on the eviction . . . and the same landlord allows cops to burst into your apartment with an assault rifle and multiple handguns drawn . . . and one or more of the cops assaults your wife and leaves her arm in a shattered state -- well, that's pretty solid evidence that Trent Cowherd is a butt-hole of world-class proportions, at least when it comes to running his company.

Cowherd--Counterclaim by Roger Shuler

Cowherd--Notice to Vacate by Roger Shuler

Court's finding for Rob Riley and Liberty Duke, like Jessica M. Garrison's $3.5-million default judgment, is worth nothing -- and here is the law that makes it so

Rob Riley

We have shown that Jessica Medeiros Garrison's $3.5-million default judgment against me is void, as a matter of law, meaning it is a "nullity" that has "no effect." In everyday terms, it is worth zero. Now, we have learned that Rob Riley's "judgment" against me also is worth zero, although for different reasons from those in the Garrison case.

The bottom line? Alabama Republican operatives have filed two defamation lawsuits against me, and they have nothing to show for it. By law, my reporting was found to be neither false nor defamatory in both cases. And the value of the judgments, combined, is worth . . . not a thing.

We hope you will follow us on a brief discussion because this is important information for anyone who might wind up representing himself in court someday.

We've shown that Garrison's judgment is void, and has no value, because I was not given three days' notice of her default application and hearing, as required by Alabama law. In fact, I received no notice at all, and it was Garrison's burden to provide notice. Lack of notice is such a fundamental violation of due process that I have an unlimited amount of time to attack her judgment  as void.

How does Judge Claud Neilson's order favoring Rob Riley and lobbyist Liberty Duke run afoul of the law? Well, there are a lot of answers to that question; an easier question would be, "Was anything lawful about Neilson's order?" The answer there is "probably not."

For example, Neilson didn't issue a final judgment, one that could be appealed at all. After all, there was no trial, no jury, no discovery -- nothing that generally is associated with a trial on the merits. After a hearing on November 14, 2013 -- and the document setting the event called it a "hearing," not a "trial" -- Neilson issued a piece of paper titled "Final Order." But here is what Alabama case law says about such matters: (See Civil Appeals 101, Christian and Small.)

With limited exceptions, an appeal can be taken only from the entry of a final judgment. Ala. Code § 12-22-2. What constitutes a final judgment may seem simple, but in fact it can be difficult to determine. As you might expect, an order adjudicating fewer than all of the claims is not a final judgment. Lloyd v. Cook, --- So. 3d ----, 2010 WL 3075280 (Ala. Civ. App. Aug. 6, 2010). The title of the order is not important. If a trial court enters an order labeled as a final judgment, but the order does not fully dispose of all claims or fully declare the rights of the parties, the judgment is not a final judgment from which an appeal may be taken. Alfa Mutual Ins. Co. v. Bone, 13 So. 3d 369 (Ala. 2009); Hall v. Reynolds, --- So. 3d ----, 2009 WL 1716912 (Ala. June 19, 2009). By the same token, a judgment that conclusively determines the issues before the trial court, even if not labeled “Final Judgment,” will support an appeal.

In the Riley matter, Neilson gave my wife, Carol, and me no opportunity to bring claims, much less have them heard and fully disposed. And he certainly did not declare the rights of the parties because we were treated as if we had no rights. (See Neilson's "final order" at the end of this post.) I was in the midst of a five-month stay at the "Shelby County Sheraton" (the jail), thanks to Riley and Duke's unlawful efforts to seek a preliminary injunction that has been prohibited by more than 200 years of First Amendment law, and the time for appeal lapsed during my incarceration. I had no access to a piece of paper or a functioning writing implement, but even if I'd had the basics for preparing an appeal, there was nothing to appeal -- because Neilsen issued no final judgment.

Liberty Duke

That takes the oomph out of any order favoring Riley and Duke. But here is the bigger issue: Neilson did not grant them money damages; he granted $33,875 in attorney fees ($24,425 for Riley, $9,450 for Duke).

That presents a slight problem: I was representing myself, and Alabama law prohibits the awarding of attorney fees against pro se litigants. Here is how Code of Alabama 12-19-272 (Alabama Litigation Accountability Act) addresses the subject:

No party, except an attorney licensed to practice law in this state, who is appearing without an attorney shall be assessed attorneys' fees unless the court finds that the party clearly knew or reasonably should have known that his action, claim or defense or any part thereof was without substantial justification.

Did the court find that I had brought a claim or defense without substantial justification? Nope. In fact, I brought no claim at all -- Riley and Duke sued me (and Carol), not the other way around. And we were given no opportunity to even bring a defense.

Here is what Neilsen's "final order" says about the only form of "damages" awarded to Riley and Duke.

Petitioners have requested attorneys' fees. The Court heard testimony and evidence that Petitioner Riley and Petitioner Duke have incurred attorneys' fees as result of this matter. Specifically, the Court heard testimony and evidence that Petitioner Riley has incurred $24,425.00 in attorneys' fees, that Petitioner Duke has incurred $9,450.00 in attorney's fees, and that those fees are usual and customary. Based on the testimony and evidence presented in support of their request for attorneys' fees, and based on the Court's equitable powers, the Court finds that Petitioners are entitled to an award of attorneys' fees in the following amounts: $24,425.00 for Petitioner Riley and $9,450.00 for Petitioner Duke.

Attorney fees are "usual and customary" against a pro se litigant? That's not what Alabama law says. The court issued these fees based on its "equitable powers"? That's funny. because Alabama law plainly states that attorney fees cannot be assessed against a self-represented party.

Just another sign that the Riley-Duke case was a joke from the outset -- and the rule of law played no role in Neilsen's handling of the case.

Riley Lawsuit Final Order, 11 14 by Roger Shuler on Scribd

The horrible fallout from a botched Alabama divorce case: Hannah Upton dies alone in the wilds of Alaska

Hannah Yeilding Upton
(From al.com)

The details surrounding Hannah Yeilding Upton's death, at age 23, are murky. But, based on our research, this much is clear: The young woman had multiple special needs and should have been living with her adoptive mother, Linda Upton, who had considerable experience with such conditions.

Through a series of dubious court decisions in the Upton v. Upton divorce case -- some rulings were by Private Judge Gary Pate; others apparently were driven by officials in Jefferson County Family Court -- Hannah Upton wound up living with her father, Birmingham steel executive Bill Upton.

Did that outcome lead to Hannah Upton's death? Does that suggest the machinations of lawyers and compromised judges -- perhaps more interested in generating sizable fees and personal favors -- can prove to be deadly?

Our answer, based on more than three years covering the Upton case, is yes.

How did Hannah Upton come to die alone in the woods of Alaska? Here is our understanding of events:

Hannah Upton faced a number of serious physical and emotional challenges. She suffered from juvenile diabetes, which was subject to spinning out of control without regular monitoring. She had a form of autism, which made it difficult for her to understand cause and effect -- to grasp how one questionable decision can lead to bad outcomes.

At some point, perhaps in early 2014, Hannah Upton struck up an online friendship with a young man who lived in Alaska. She long had loved animals and the outdoors and decided she wanted to move to Alaska. Bill Upton apparently went along with the decision, and Hannah wound up living somewhere near Anchorage, Alaska.

She enrolled at Alaska Pacific University to study large-animal marine science, and that seemed promising. But on December 10, 2014, she was found dead in a small home/cabin on the woodsy outskirts of Anchorage. It was not clear if she was living with someone at the time.

We have not been able to determine a precise cause of death, but it appears Hannah was not able to manage her diabetes on her own. Her blood-sugar levels likely spiked, causing her death.

Judge Gary Pate
(From Facebook)

Was it wise to let a young woman with serious special needs go off more or less on her own to Alaska? A reasonable observer likely would say no. Bill Upton apparently saw no problem with it. But without a series of strange decisions from Alabama courts, it would not have been his decision -- Hannah would have been under her mother's care.

This is from Hannah Upton's obituary:

Hannah Yeilding Upton, 23, passed away on Wednesday, December 10, 2014.

Hannah was attending Alaska Pacific University in Anchorage, Alaska. Hannah was pursuing her dreams majoring in large animal marine science. She treasured her family and enjoyed animals. Her joys included reading, drawing, knitting, and caring for children and animals. She was loyal to her friends. She lived a life that made those around her love her. She will be remembered by her family and friends as a daughter, sister and friend who gave to others with all her heart and strength. May we all remember Hannah Upton for the brave and loving life she lived. She was open-hearted and accepted people as they were, loving others more than herself. She was quick to forgive and give hugs. She found joy in life and was able to laugh. We will miss her so much.

And then, there is this, which hints at the challenges Hannah faced in her much-too-brief life:

Hannah is survived by her father, Bill Upton (Gincie); mother, Linda Upton; brothers, William David Upton III (Arden Ward), David Bridges Upton and Brandon David Sherrill Upton; sisters, Breelynne Christine Bice and Polly Ameline; and grandparents, William David Upton and Annie Lou Yeilding Upton. Hannah is also survived by numerous aunts, uncles, cousins and other loved ones.

A reception will be held in memory of Hannah on Tuesday, December 16, 2014 from 11:30 until 1:30 at Southern Heritage Funeral Home. In lieu of flowers, the family asks that donations in memory of Hannah be made to the Juvenile Diabetes Research Foundation, 600 Beacon Parkway West #860, Birmingham, AL 35209.

Killing of Terence Crutcher in Tulsa, OK, shows the ability of law enforcement to escalate problems, not solve them -- and to lie flagrantly in the process

The shooting of Terence Crutcher by Tulsa cops
(From bearingarms.com)

(Update @4:30 p.m. CDT on 9/22/16 -- Tulsa police officer Betty Shelby has been charged with first-degree manslaughter in the shooting death of Terence Crutcher. In a New York Times article published roughly 20 minutes ago, Tulsa County DA Steve Kunzweiler said: "Although she is charged, she is presumed innocent until a judge or jury determines otherwise. I don’t know why things happen in this world the way they do.” Will federal civil-rights charges be next? We recently had such a case in Alabama. Here is a link to our six-part series about the issues that arose in the case of Officer Eric Parker and Sureshbhai Patel. A link in the first paragraph goes to the full series. A similar case is likely to unfold in Oklahoma.)

In the two-plus years since police in Ferguson, Missouri, shot and killed Michael Brown, America's news pages have been filled with stories of cops gunning down or otherwise abusing citizens, leaving a trail of death and serious injury in their wake. But no case might be more sickening than the shooting last Friday of Terence Crutcher in Tulsa, Oklahoma. Some have called it an "execution"; others have called it "cold-blooded murder." Police admit that Crutcher had no weapon in his possession,  and he is seen on video walking toward his vehicle with his hands in the air. A few moments later, he is lying in the street with blood pouring from a chest wound, courtesy of officer Betty Shelby.

What is most disturbing about this case? Given the horror of it all, that's hard to say, but this jumps out to us: Terence Crutcher was not part of any crime, no call of a crime involving him had even been called in. Tulsa police reportedly had received an unrelated domestic-violence call and were on the way to check on that when they came across Terence Crutcher's vehicle stalled in the road. Next thing you know, Mr. Crutcher was lying on the pavement next to his vehicle, dying from a chest wound.

Democratic presidential candidate Hillary Clinton, calling the Crutcher killing "unbearable" and saying it needs to be "intolerable," plans to develop national standards to prevent police shootings. Clinton pointed to systemic racism as part of the issue, and we certainly agree with that. But my wife, Carol, and I know from first-hand experience that cops can abuse white people, too.

I was beaten up in my own garage, doused with pepper spray, and dragged off for a five-month stay in an Alabama jail -- all by an officer who never said he had a warrant, never showed a warrant, and never even stated his reason for being on our property. During an unlawful eviction in Springfield, Missouri, officers told Carol she could enter our apartment to gather belongings, But Carol had been able to gather only one handful of items when an officer slammed her to the ground and yanked on her limbs so viciously that her left arm was snapped in two -- all during an eviction that, by law, was stayed because we had timely filed a notice of appeal. Terence Crutcher wound up dead because his car conked out.

We see two deeply troubling issues running through all three of these cases:

(1) Police officers start issuing inappropriate commands in situations where no commands, of any kind, are called for;

In my case, Shelby County deputy Chris Blevins tried to cut me off with his vehicle from driving into my own garage. When that failed, Blevins walked inside the garage as I was exiting our vehicle and preparing to lower the garage door. "Why don't you step outside?" he said. Knowing Blevins had stated no reason for his presence on our property, I said, "Why don't you get out of my garage?" I soon was violently being pushed three times to a concrete floor and doused with pepper spray.

(For the record, I have not studied the possible effects of pepper spray on human eyeballs, but mine were filled with the stuff that night. With the Shelby County Jail about 25-30 miles away in Columbiana -- and with Officer Blevins writing his report while I sat in the back seat of a squad car -- I had a heavy dose of pepper spray in my eyes probably for more than two hours. It stayed there until I was stripped and told to enter a decontamination shower at the jail. My eyes and my vision have not been the same since that incident. Even with my glasses on now, my vision is blurry, and I'm struggling to see the computer screen, and my eyes frequently get dry and sore.)

Did I have reason to follow any of Blevins' commands? Well, he violated Alabama law the moment he stepped into our home without stating his purpose for being there. (See Livingston v. Browder, 285 So. 2d 923, Ala. Civ. App., 1973.) Without stating his purpose for being there, and without showing a warrant or making any reference to a warrant, Blevins gave me no reason to believe he had grounds for issuing commands.

In Carol's case, I was sitting right next to her when an officer said she could enter the apartment to retrieve belongings, and when she was done, I could do the same. Carol had brought out a handful of items in one trip and was about to return when three cops surrounded her, and one brutalized her. I still don't know why he did it, and whether he was high on some substance at the time. He certainly acted like he was juiced on something. But I do know that cops on the scene seemed to be making up rules as they went along, even though they had no lawful grounds to be conducting an eviction that, by law, had been stayed.

As for Terence Crutcher, he can be seen on video holding his hands in the air so he appears to be obeying an officer's command. And yet, officers claimed he would not obey commands. Here is the bigger question: Why were officers issuing commands, treating Crutcher as a criminal, when they had no probable cause to believe he was involved in a crime. Heck, his vehicle had just broken down, and they could have determined that -- and perhaps offered assistance -- with one simple question.

(2) Officers immediately tend to lie upon realizing they have stepped in doo-doo;

In my case, Blevins says in his incident report that he had two warrants for my arrest on contempt of court charges, but he never showed them to me and never said anything about them to me. (That's probably because, even if he had the warrants, he knew I had filed a motion challenging service, and there had been no ruling on that. Since plaintiffs' Rob Riley and Liberty Duke had not met their burden of proving service was conducted lawfully, the court had no authority over me -- and any warrant Blevins had -- was meaningless. My guess is that Blevins had no warrant because he -- or someone in his chain of command -- knew it would be pointless to have one. They just wanted me locked up and did not care how it was done.)

Unbelievably, I was charged with resisting arrest, and a judge at that trial told Blevins and prosecutor Tonya Willingham to produce copies of any warrants. They said they didn't have any. My conclusion: Blevins lied about having a warrant. (Note: I didn't do any of the things that, by law, define resisting arrest in Alabama. In fact, Blevins did not even allege that I engaged in such actions. Also, you cannot resist an arrest that is unlawful to begin with.)

In Carol's case, Greene County Sheriff Jim Arnott was standing about five feet away as her arm was being broken and promptly declared that she had "assaulted a police officer." Based on Arnott's blatant lies, Carol was handcuffed, placed in the back of a squad car, and transported to the Greene County Jail. She probably would have been booked in, charged with a felony, and hit with a high bond had someone not noticed that she was in severe pain, and both of her arms were a deep purple. In other words, she was the victim of an assault, not the perpetrator of one.

In the Crutcher case, officers described him as appearing to be on drugs and claimed they had found PCP in his vehicle -- after he was already dead, of course. Does this stand the smell test? Not according to Carlos Miller, publisher of the Photography Is Not a Crime blog (PINAC). Writes Miller:

Shelby’s attorney is saying the shooting was justified because Crutcher was trying to reach into his car and into his pockets, but not only does the window appear closed, it is likely he was only trying to reach for his identification.

But we know that is never a guarantee you won’t be shot.

Shelby is also now claiming that she believed Crutcher was high on PCP because she had recently taken a training class that gave her expertise in drug recognition.

But she never once mentioned this to dispatch before she killed him, so we can assume she is lying.

Based on our experience, that would be a logical assumption. We also would guess that many of these deadly incidents start or escalate when cops start making commands they have no lawful grounds for making.

Here is a motto that has come to rule in our household: Cops don't resolve problems, they escalate them. If you want a problem solved, calling a cop likely will only make it worse.

Thoughts of gasoline boiling up under house, from pipeline leak near Birmingham, is enough to make Alabama conservatives sound like tree huggers

Site of Alabama pipeline leak, about 15 miles from
where we used to live in Shelby County
(From inusanews.com)

The ongoing pipeline leak near Birmingham, Alabama, suggests God has a wicked sense of humor.

The leak, in a line owned by Colonial Pipeline Company, originated in a remote area of Shelby County, a few miles from the suburbs of Helena and Alabaster. An estimated 336,000 gallons of gas have leaked so far, and the line provides approximately 40 percent of the gasoline to the East Coast.

As you can see, this is not just an Alabama problem. But it does help illustrate the hypocrisy beneath the state's supposedly firm Republican roots. Shelby long has been known as Alabama's most conservative county, with Baldwin County (near Mobile and site of likely election theft that cost Democrat Don Siegelman in 2002) perhaps a close No. 2.

Shelby County also was home to my wife, Carol, and me for 25 years -- and we probably hold the distinction of being among the handful of people in the county who twice voted for Barack Obama. We still would live there had I not been arrested and shipped to jail for five months, almost certainly at the directive of GOP political elites, for daring to publish accurate articles about sensitive topics on this blog. The moment I got out of jail we were faced with a foreclosure that surely was driven by considerations other than collecting any debt on our property. That's why we currently live in Springfield, Missouri, although we beseech any progressive God who might be listening to help us get the hell out of here, sooner rather than later.

Bottom line? Shelby County, Alabama, in its current state, is a glorified police state, where concepts like due process and a free press go to die. It also is a place where white suburbanites reflexively vote Republican -- meaning they believe in low taxes, limited government regulation, anti-environmentalism, "rugged individualism," and any number of other fairy tales that gained steam during the Reagan era.

But it seems a pipeline leak is the kind of event that can turn a Shelby County conservative into a tree-hugging liberal. Consider this from a recent al.com article titled "Alabama pipeline leak: What we know so far about the spill, gas shortages and more." The leak is in the William R. Ireland Sr. Cahaba River Wildlife Management Area, and that means Birmingham -- even if it dodges this bullet -- has come close to an environmental and social disaster.

In fact, certain scenarios are so disturbing that some of the folks who live near the leak, don't sound so conservative and self-sufficient all of a sudden:

Despite the assurances of Colonial Pipeline and state and local officials, people living near the site of the spill are concerned about possible impacts to their drinking water, or to wildlife in the Cahaba.

Billy McDanal lives less than 500 yards from the edge of the Wildlife Management Area in the small community of Maylene. He and his son have hunted, hiked and ridden four-wheelers throughout the management area and its surroundings for over a decade.

McDanal says he is nervous leaked gas could enter the water table and end up in his basement, where water often collects when it rains.

"What's got me worried with the gas is that it's going to go ... underneath my house and am I going to get gas coming under my house?" he said.

Yep, the thought of gasoline bubbling up under your house is enough to upset a feller's equilibrium. But the potential for catastrophe goes well beyond Billy McDanal's property. The leak site reportedly is about one mile from a tributary of the Cahaba River. How important is the river, and the surrounding area? From al.com:

The Cahaba River is home to 135 known species of fish, according to the Alabama Department of Conservation and Natural Resources, as well as 35 snail species, 10 of which are not found anywhere else in the world. Ten species of fish and freshwater mussel in the Cahaba are listed as threatened or endangered under the Endangered Species Act.

A few miles downstream from the leak location lies the Cahaba River National Wildlife Refuge, which is known nationally as a viewing spot for the Cahaba Lily in the spring. A major drinking water intake for the Birmingham Water Works is upstream.

Colonial has completed construction of a bypass that reportedly will allow the pipeline to resume operations today -- 12 days after the leak was discovered. Does that mean Alabama and other states that rely on the pipeline for gasoline are out of the woods? It probably is too early to say.

But we have learned this: A gas-pipeline leak can be scary enough to make Alabama conservatives sound a lot like liberal environmentalists -- and no one seems to be saying, "Keep the government out of our lives."

Hannah Upton pays with her life for the corrupt actions of lawyers and private judge Gary Pate in her parents' contentious Alabama divorce case

Hannah Yeilding Upton

How can the decisions of a corrupt judge affect those connected to a divorce case? It can cost an individual her life. We know because we've seen it happen in Birmingham, Alabama.

The case in question is Upton v. Upton, a divorce case involving Linda Upton and her husband of more than 30 years -- multimillionaire industrialist Bill Upton, president of Vulcan Steel Products in Pelham.

The Uptons have one biological child, an adult son, and took several adopted and foster children, most of them with special needs, into their Mountain Brook home over about a 20-year period. One of those adopted children was Hannah Yeilding Upton, who was almost 20 years old when Bill Upton sued for divorce in 2010.

Bill Upton eventually admitted in court documents to having an extramarital affair with Gincie Walker, whom the Uptons had raised as their daughter since she was about 11 years old, and that was the driving event that tore apart the Upton family.

Bill Upton and Gincie Walker Upton, now in her early 30s, are married and live in Mountain Brook. According to court documents, Gincie Upton grew up in an abusive home in Shelby County and has been diagnosed with multiple-personality disorder, including roughly 30 distinct personalities. Her biological father is Dr. William Flynn Walker, who currently is serving a 27-year sentence at a federal prison in North Carolina following his guilty plea on charges of child sexual abuse and sodomy.

Linda Upton has remarried and still lives in the former marital residence on Shook Hill Road, although she had to pay Bill Upton for his half of the property -- despite his admitted egregious marital misconduct. But that is far from the most dubious decision Private Judge Gary Pate made in the case. In fact, the sprawling record in the Upton case, which includes proceedings related to the children in Jefferson County Family Court, indicate Alabama's dysfunctional "justice" system betrayed the Upton children -- with tragic consequences.

We've seen nothing in the court record that indicates Linda Upton was an unfit mother -- and it's undisputed that she did the majority of the parenting in the household, while Bill Upton focused primarily on business matters. At one time, Bill Upton was a prominent figure in Birmingham's conservative religious circles, attending Briarwood Presbyterian Church and supporting the "pro life" movement. (Dr. William Flynn Walker also attended Briarwood Church.)

What kind of parent was (and is) Bill Upton? Well, he admitted in court documents to having a sexual relationship with a young woman who had called him "Daddy" for years. Aside from that, it appears Bill Upton, as a parent, is uncaring, out of touch, lacking in common sense -- or a combination of all three.

Judge Gary Pate

With nothing we can find in the record to support it, Judge Pate granted sole physical custody of the Upton's three minor children (David, Brandon, and Polly) to Bill Upton. A fourth minor child, Breelynn, is not mentioned in the final divorce judgment, but she also wound up living with Bill Upton and Gincie Walker Upton, who is Breelynn's biological mother.

Hannah Upton, probably because she was an adult, also is not mentioned in the order, but she, too, wound up living with Bill Upton. The reasons for that are unclear, although Family Court might have played a role in that determination.

The Pate order putting most of the children in Bill Upton's care is dated December 4, 2012. (See order at the end of this post.) Almost exactly two years later, Hannah Upton was dead.

Would that have happened if Hannah had continued to live with her mother, Linda Upton? Did the lawyers who pushed for the children to live with Bill Upton, and the judge (or judges) who went along with it, contribute to Hannah Upton's death? Did they pretty much cause it?

We will examine those questions in an upcoming post.


(To be continued)

Upton Divorce--Final Judgment of Divorce by Roger Shuler

Luther Strange's efforts to convene a special grand jury in JeffCo won't mean much unless he goes after Bob Riley and other cockroaches who hide in dark corners

Luther Strange and his campaign manager/minion
Jessica Medeiros Garrison
(From marieclaire.com)

Alabama Attorney General Luther Strange has filed paperwork to convene a special grand jury in Jefferson County. That suggests corrupt public officials in the metro Birmingham area -- and there is no shortage of them -- should be facing sleepless nights in the coming weeks and months. Heck, al.com even noted in a headline that this is the same corruption-fighting unit that successfully nailed former House Speaker Mike Hubbard and turned him into a convicted felon.

We can think of at least three reasons citizens might not want to get too excited about whatever Strange has planned in the Birmingham area:

(1) Strange is part of the corruption problem, not the solution, in metro Birmingham; I've seen evidence of that with mine own eyes;

(2) The Hubbard prosecution was politically tinged, and anything in and around Jefferson County likely will be even more so -- plus, we also look for it to have racial overtones;

(3) Early reports from al.com's John Archibald indicate the investigation will center on the Birmingham Water Works. (Wake me up when that one's over.) The Water Works board probably poses problems, but it hardly is the seat of corruption in the metro area. The heart of darkness in the Birmingham area beats loudest in its courthouses, law firms, and any entity that benefits from the Bob Riley Political Machine.

If Team Strange will not look into those three dark corners, it isn't going to accomplish much. My guess is that Luther and Co. have no intention of accomplishing much, other than to send a few black politicos to prison so that Luther can curry favor with white voters and enhance his chances at becoming governor in 2018. In fact, you can take this to the bank: Any "investigation" will leave the impression that the majority-white suburbs surrounding Birmingham -- Mountain Brook, Vestavia Hills, Homewood, Hoover, Trussville, etc. -- are led by noble public servants who never have an impure thought (except when they are on Ashley Madison). My guess is that the Strange Gang won't even look for any possible corruption in the white suburbs; this will be all about nailing a few dark folks.

Why is Strange part of the problem? Just consider the defamation lawsuit that his former campaign manager, Jessica Medeiros Garrison, filed against Legal Schnauzer and yours truly. Here are several undeniable facts from that case:

(1) Garrison committed perjury in a hearing when she falsely claimed, under oath, that I had reported Strange was the biological father of her son. Strange also testified in the hearing, and if he made the same false claim under oath, he also committed perjury.

(2) Strange has every reason to know Garrison did not provide lawful notice of her default application and hearing, meaning the $3.5 million judgment she received is void -- a nullity that is worth zero. Has Strange spoken out on the subject? Absolutely not.

(3) Strange has every reason to know that Jefferson County Circuit Judge Don Blankenship acted corruptly in failing to vacate Garrison's default judgment. Strange also has every reason to know that Garrison attorney Bill Baxley acted corruptly -- or turned a blind eye to corruption happening right under his nose. Again, has Strange brought this to public attention? Nope.

Speaking of speaking out, Strange is planning to investigate the area where a journalist was arrested less than three years ago -- in Shelby County -- for writing a blog. The case was so wildly outside the law that it made international news, and the journalist was the only member of his profession in 2013 to be incarcerated in the western hemisphere. He was the only U.S. journalist to be incarcerated since 2006, and based on our research, the only journalist in U.S. history to be imprisoned based on a preliminary injunction that has been prohibited under the First Amendment for more than 200 years.

That journalist, of course, is me. A Shelby County sheriff's deputy unlawfully entered our home, beat me up inside my own garage, doused me with pepper spray and hauled me for a five-month stay in the county jail -- all for writing a series of posts that never have been determined to be false or defamatory under the law. It's hard to imagine a more glaring example of corruption -- blatant criminality -- in the Birmingham area. Will Luther Strange investigate the lawyers, judges, and law-enforcement types who were behind it? Don't hold your breath.

Luther Strange has proven, without doubt, that he is a political animal, and a Birmingham grand jury under his purview is likely to be filled with political and racial overtones.

Mike Hubbard, for example, is a despicable human being, and he undoubtedly was guilty of the ethics charges against him. But Hubbard also was the No. 1 threat to Strange's goal of becoming governor, and there is little doubt Hubbard was prosecuted in order to get him out of the picture. Based on that -- and it pains me to say this -- the Hubbard convictions should be overturned on political-prosecution grounds. What was wrong when used against Don Siegelman at the federal level also is wrong when used against Mike Hubbard at the state level.

What does Strange hope to accomplish with the Jefferson County grand jury? My guess is that "Big Lutha" knows his Hubbard prosecution has pissed off a fair number of voters in his primary constituency -- white, pro-business conservatives. Strange probably hopes to win back such voters by shipping a number of black public officials off to prison, whether they have done anything wrong or not.

Matt Hart and Alice Martin, former colleagues in the U.S. attorney's office for the Northern District of Alabama and now a tag-team duo for Luther Strange, made a habit of going after people with dark faces and Democratic Party affiliations during the George W. Bush years. They know how that game is played, and I look for them to spearhead a re-run -- all in the name of furthering Luther Strange's political career, which likely will also further the political careers of Matt Hart and Alice Martin.

Here is the funny thing (as in ironic) that I'm sure has not occurred to Luther Strange: While Jefferson County probably has some corrupt black officials, the area's corruption problem overwhelmingly is driven by white conservatives -- especially those with links to former Governor Bob Riley. That corruption spreads into other parts of the metro area, especially Shelby County and Walker County and . . . well, just about every county that's anywhere near "the Ham." (Don't even get me started on Chilton County; Judge Sibley Reynolds represents a one-man assault on the U.S. Constitution.)

What are the chances that Luther Strange will go after even a few of the white sleazebags who actually drive corruption in Alabama's largest (and most important) metro area? The term "zero" comes to mind. In fact, I'd say "sub zero" might be a better description of the chances.

But if you are a black guy or gal, with ties to Birmingham Water Works or some other entity that might have left its mildly dirty laundry open to exposure, you probably should begin thinking about how you might look in an orange jumpsuit.

Donald Trump contributed more than $40,000 of ''in-kind" services to Florida AG Pam Bondi's campaign, violating state election laws, according to complaint

Donald Trump and Pam Bondi
(From nytimes.com)

Donald Trump violated election law by giving a campaign contribution of more than $3,000 to Florida Attorney General Pam Bondi, according to a Boston attorney's complaint.

J. Whitfield Larrabee also alleges that Bondi violated the law by failing to certify and publicly disclose Trump's illegal contribution to the Florida Division of Elections. (See full complaint at the end of this post.)

What are the possible implications for Trump, the Republican Party's 2016 presidential nominee? The answer is not immediately clear, but Larrabee already has filed complaints alleging a donation to Bondi's campaign constituted bribery and involved tax evasion and political corruption.

Is Trump withholding his income-tax information because it would reveal criminal activity related to the Bondi donation? Did Bondi withdraw from an investigation of Trump University after receiving a $25,000 campaign donation? Based on Larrabee's complaints, and reporting from a number of Florida news outlets, the answers appear to be yes. Heck, even The New York Times is starting to treat it as a real story.

Now, Larrabee is addressing possible election-law violations, and they go well beyond the $25,000 campaign contribution. Here is how Larrabee describes them in his complaint:

On March 14, 2014, Bondi held an event at the Mar-a-Lago Club in Palm Beach, Florida, in which she solicited campaign contributions in support of her campaign to be re-elected to be the Florida Attorney General.

[Fifty] or more individuals attended this event, including Trump. The minimum contribution to attend the event was $3,000 per person.

The Mar-a-Lago Club is a private club in Palm Beach located on 20 acres of gardens with ocean views. In includes an enormous mansion, beach, pool facility, spa and fine dining.

Space at the resort is expensive to rent. Trump has charged his own presidential campaign roughly $140,000 per event for use of the mansion.

The value of using the Mar-a-Lago Club for Bondi’s fundraising event was approximately $15,000 or more. The value of the use of the venue, the service of drinks and other amenities could not reasonably be less than $300.00 per person. The value of Trump’s attendance at this event was a service that further increased the value of the in-kind gift above $15,000.

In light of the $140,000 that Trump paid for use of the venue for his own events, it is highly likely that the value of the in-kind gift was far in excess of $15,000. As a professional entertainer, the value of Trump’s attendance was at least $25,000. The total value of the in-kind services provided to Bondi was over $40,000.

How do the numbers add up, and what do they mean? Larrabee sums it up:

Donald J. Trump and The Trump Organization made an in-kind contribution to Bondi by allowing her to use the club, its liquor and dining services, and its other amenities for the fundraising event. In-kind contributions are gifts of goods or services, other than monetary gifts.

The Republican Party of Florida paid only $4,855.65 for use of the Mar-a-Lago Club on March 14, 2014.

Bondi received an in-kind contribution from Donald J. Trump and The Trump Organization of approximately $35,144.35 or more. This is the difference between the $4,855.65 paid by the Republican Party for use of the facility and the $15,000 minimum actual value of the use of Mar-a-Lago resort together with the $25,000 entertainment value for Trump’s attendance.

In filings with the Florida Division of Election, Bondi failed to report the $35,144.35 in-kind contribution from Trump and The Trump Organization.

How does this edge toward unlawful activity? Larrabee explains:

In-kind contributions are subject to the same limits as are cash contributions under Florida law.

Florida Statute, 106.08, provides in relevant part:
Contributions; limitations on.—
(1)(a) Except for political parties or affiliated party committees, no person or political committee may, in any election, make contributions in excess of the following amounts: 

1. To a candidate for statewide office or for retention as a justice of the Supreme Court, $3,000.

By contributing more than $35,000 to Bondi, Donald J. Trump and The Trump Organization violated Florida Statute, 106.08(1)(a)(1) and other applicable provisions of Florida Statute 106.08.

Oops!

Aside from its obvious national implications, this story has special ties to Alabama, as we noted in an earlier post:

How do Alabama and Jessica M. Garrison enter the picture? Until January of this year, the Birmingham-based Garrison was senior advisor to the Republican Attorneys General Association (RAGA) and the affiliated Rule of Law Defense Fund (RLDF). Before that, she was executive director of RAGA and President of (RLDF). Why has Garrison backed away from RAGA and its affiliated groups? That's a post for another day, but it's curious that Bondi is a major figure in RAGA -- and she has been at the heart of several controversies.

In fact, a major part of Garrison's job at RAGA apparently was to defend Bondi, who serves on the organization's executive committee as immediate past chair.

When Bondi was criticized in the Florida press for her cozy relationship with out-of-state lobbyists and corporate lawyers, Garrison came to her defense. . . .

Did Garrison break ties with RAGA earlier this year because she knew the Trump-Bondi story was a bombshell that could explode at any moment? If someone heeds calls for an investigation of the matter, perhaps we will find out.

Whitfield Larrabee, of Massachusetts, might be just the guy to do it.

Larrabee is pushing for prompt action, based on these words from his complaint:

The complainant requests the Florida Elections Commission expedite the investigation of this complaint. Said investigation is urgent because this complaint concerns the corruption of the elected and presently serving Florida Attorney General by the candidate nominated by the Republican Party to be President of the United States. Corruption of this nature interferes with the functioning of the governments of Florida and of the United States and undermines the public’s confidence in our democratic institutions.

Complaint Re Trump and Bondi With Florida Election Commission by Roger Shuler on Scribd

Donald Watkins demands SEC dismiss lawsuit against him, claiming the agency knowingly brought false allegations and doctored evidence in the process

Donald Watkins

One of Alabama's most prominent attorneys and businessmen is demanding the Securities and Exchange Commission (SEC) dismiss a lawsuit against him, claiming the agency knowingly brought false allegations and even doctored evidence.

Donald Watkins, in a letter from his Georgia-based attorney Mario Williams, said SEC lawyers face possible sanctions under Rule 11 of the Federal Rules of Civil Procedure if they do not dismiss the lawsuit against Watkins and three of his companies. (See letter at the end of this post.) Writes Watkins in a post yesterday at his Facebook page:

Under Rule 11 of the Federal Rules of Civil Procedure, a complaint that contains false allegations and which was filed for the purpose of harassing the Defendants, must be withdrawn within 21 days after notice of the Rule 11 violations, or the party filing such a lawsuit faces the risk of sanctions and monetary fines.

In his Rule 11 Letter, Attorney Williams detailed 19 pages of egregious violations of the Rule in which the SEC asserted false allegations in its complaint as true statements of fact. Based upon documents in its possession, the SEC knew or should have known that these allegations were false prior to filing the lawsuit.

In the past couple of years or so, Watkins has become almost as well known for his citizen journalism as for his legal and business pursuits. From his base at Facebook, Watkins has reported numerous investigative articles about corrupt Alabama political figures -- including Gov. Robert Bentley, former House Speaker and convicted felon Mike Hubbard, and former wife-beating U.S. judge Mark Fuller. Has someone sicced the SEC on Watkins in retaliation for his journalistic endeavors? That seems like a reasonable question to ask, especially in light of new information in Watkins' dismissal letter. From Watkins' Facebook post yesterday:

Additionally, the SEC deliberately altered a key section of an email written by me to change its context as well as the message that was being conveyed to the recipient. In doing so, the SEC failed to inform the Court (and public) that it had doctored the email in question, as required ethically and legally. As such, the SEC knowingly presented a false “fact” to the Court that it knew the Court would be bound to accept as “true” if and when the Defendants filed a motion to dismiss the complaint.

That sounds a lot like fraud on the court, and it suggests someone has gone to considerable lengths to discredit Watkins (at best) and cost him huge sums of money (at worst). In its complaint filed September 1, the SEC alleged Watkins defrauded professional athletes and other investors out of millions of dollars.

A Waste Management truck
(From reuters.com)

The SEC alleges that Watkins and his companies, Masada Resource Group and Watkins Pencor LLC, falsely informed investors their funds would be used to support waste-to-energy ventures. At the heart of the fraud, according to the SEC, were Watkins' assurances that Waste Management Inc. (WMI), a large international waste-treatment firm, was poised to acquire the Watkins companies in a deal alleged to involve a purchase price of more than $2 billion.

The SEC claims Watkins knew the deal was not going to happen. Watkins says the SEC had documents proving the deal was in the works. From Watkins dismissal letter:

[The SEC] knew from documents in its possession that former Texas Lt. Governor Ben Barnes, a well-known and respected businessman, formed a limited liability company with Masada on May 3, 2011, for the specific purpose of pursuing the deployment of Masada waste-to-ethanol facilities throughout the United States and internationally in an alliance with WMI and Waste Corporation of America (WCA). [The SEC] also knew that: (a) Barnes was the lead partner on getting the WMI-Masada strategic alliance deal done, and (b) WCA CEO Tom Fatjo was assisting Barnes in this transaction. 

[The SEC] knew that Masada and Barnes believed in good faith that the value of the contemplated WMI business alliance or acquisition transaction could exceed $2 billion because Section 4.6(c) of the Masada-Barnes Operating Agreement specifically provided a formula for calculating Barnes' compensation for a WMI investment or acquisition transaction in excess of $2 billion. Additionally, [the SEC] knew that Barnes received voluminous due-diligence documents on Masada that were transmitted to WCA and WMI, including detailed financial modeling prepared by a New York City financial analyst with impeccable credentials and no relationship with Watkins. The financial model entailed a 10-facility deployment plan with WMI over a 5-year period that had an estimated economic value to Masada of $2 to $4 billion. 

Watkins then provides details on developments beyond his control that caused the deal to fall through. The most crucial hurdle proved to be the departure of Carl Rush from WMI in 2012. Writes Watkins at Facebook:

Rush was WMI’s Senior VP for Organic Growth and the executive who oversaw WMI’s biofuels investments/acquisitions. Rush was also WMI’s designated point person for the Masada transaction. His unexpected departure was announced after Barnes advised Masada that WMI was arranging a second meeting with Masada’s CEO for the purpose of presenting the contemplated business alliance transaction to WMI’s CEO and Lead Director in late August or early September 2012. Even then, Barnes conveyed to Masada in writing that Rush could still get the Masada-WMI deal done from outside of WMI. As it turned out, he could not.

Where is SEC v. Watkins, et al headed? That's hard to say, but Watkins' dismissal letter includes the following language about the Alabama political scene:

The investigation was . . . an accommodation to influential third parties who are personal adversaries of Watkins who had access to top officials in the Atlanta Regional Office. This access allowed these third parties to improperly impact the course and outcome of the investigation.

Will these third parties be identified during the course of litigation? Could Watkins take legal action against them? Were their actions criminal? If so, it could provide more insight into the ugly realities of Alabama politics.

For now, near the end of his Facebook post on the matter, Watkins fires a shot at the SEC that seems to squarely nail its target:

The SEC complaint achieved its intended result. The lawsuit has harassed the Defendants’ businesses and damaged their good reputations among business partners worldwide and in the general public.

As it turns out, the biggest fraudster of them all is the SEC, the regulatory agency that slept through the Great Recession of 2008 and that is missing in action in the wake of a massive fraud scheme announced last week at Wells Fargo, in which 2 million bank and credit card accounts were fraudulently opened at a publicly traded bank.

Zing!

SEC -- Donald Watkins letter by Roger Shuler on Scribd