We Catch Federal Court Employees In A Con Game On My Wife's Lawsuit Against Infinity Insurance

Hugo Black U.S. Courthouse

My wife and I caught federal "justice officials" in a scam yesterday morning at the Hugo Black U.S. Courthouse in downtown Birmingham. In fact, we caught them so red-handed--and it confirmed our suspicions so thoroughly--that the experience was alternately infuriating and exhilarating.

The purpose of the scam was to use the U.S. mails and court process to cheat my wife in a pending employment lawsuit. My use of the word "scam" probably is too mild to describe what happened; a strong case could be made that we unearthed a criminal conspiracy for obstruction of justice.

The infuriating part of the experience was that we drove about 40 miles round-trip for a court proceeding that did not occur--and, in fact, never was intended to take place. The exhilarating part is that we foiled a  plot for now, and we are going to unmask the culprits on this blog. What happens next? We don't know, but you will be reading about any and all developments here at Legal Schnauzer.

Regular readers probably recall that Mrs. Schnauzer (MS) was unlawfully terminated from her job at Birmingham-based Infinity Insurance in October 2009, during the course of our lawsuit against various debt collectors and lawyers under the Fair Debt Collection Practices Act (FDCPA).

As the FDCPA case was reaching a critical juncture, with discovery about to commence, my wife's supervisor at Infinity told her to change her start time from 9 a.m. (central time) to 9:30, in order to assist with the company's large customer base in California, which has a two-hour time difference from Alabama. MS did as she was told and started arriving at work around 9:20 each day, only to have her supervisor allege she had been chronically tardy and fire her. When MS pointed out the directive to start her workday at 9:30, the supervisor acted as if it had never happened, even though it was given in front of about a dozen coworkers.

In a case styled Carol Shuler v. Infinity Property & Casualty et al, my wife alleges that various entities and individuals conspired to interfere with her employment because of our aggressive pursuit of the FDCPA action. Evidence also suggests that the same political/legal forces who cheated me out of my job at the University of Alabama at Birmingham (UAB) were involved in my wife's case.

The handling of MS's case has been emitting an unpleasant smell for several months, but we weren't certain about its origins--or the machinations that caused it to drift our way. The events of yesterday morning erased any doubts that we had.

Here is the issue at the heart of yesterday's attempted screw job: As a pro se litigant, MS must rely on the U.S. mail to receive court documents about her case. Electronic filing has become commonplace in American courts, but that only applies to members of the bar. If you are representing yourself--and given our experiences with lawyers, MS is not about to hire one--you must rely on snail mail.

My wife's case has proceeded at a curious pace from the outset. Her complaint was filed on September 22, 2011, and assigned to U.S. Magistrate T. Michael Putnam. Defendants filed motions to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure (FRCP), and over about a nine-month period, Putnam issued a number of orders, mostly related to those motions.

Putnam seemed to be handling matters in a relatively prompt fashion, by federal-court standards, but the case came to a screeching halt last summer. Putnam issued an order on July 11, 2012, and for the next five months, the case went dark. When MS or I were downtown, we usually would stop by the courthouse to check the file on public computers--only to find that nothing was happening. As the new year approached, my wife considered filing a motion to see if the case had somehow slipped through the cracks and been forgotten.

In early February of this year, Carol Shuler v. Infinity Insurance suddenly sprang back to life. We received a copy of an order regarding a review of Putnam's report and recommendation on the various motions to dismiss. When my wife read the order, she quickly realized that it referenced other orders Putnam had issued on December 11 and December 26, 2012.

These orders dealt with critical issues, recommending that some defendants be dismissed while others remained in the case. The December orders gave MS 15 days to file any objections to the magistrate's report, and she had a number of objections. But she never received those orders in the mail, and the deadline for filing objections had passed. (Curious note about federal courts: A judge can sit on his hands for five months, doing nothing on a case, but then give you 15 days to respond to one of his orders.)

Our noses started picking up foul odors at this point. Mail delivery to our home might not be flawless, but the possibility of us failing to receive two court orders in the span of roughly two weeks . . . well, it is  extremely unlikely. In the almost 23 years we've lived at our current address, we've never had any legal or financial difficulties that were caused by failure to receive important documents in the mail.

On February 27, 2013, MS filed a motion to stay the proceedings, noting that she had not received the December documents via U.S. mail and asking for a time extension so that she could file objections to Putnam's report. (See motion at the end of this post.)

At a hearing on March 8, Putnam gave MS 15 days to file objections. He also questioned her about the mail problems, asking if the court had her correct address on file. When she replied that it did, Putnam said records showed the clerk's office had mailed the documents, so he could not understand why they were not received. He then stated that it was the plaintiff's responsibility to keep up with her case, and if she experienced future problems with mail delivery . . . well, that would just be tough.

The gist of the the judge's message seemed to be this: "I'm cutting you a break for now, but if you miss deadlines in the future because you didn't receive mail from the court, I will dismiss your case."

Putnam filed an order, giving MS until March 25 to file objections and citing several cases that supposedly backed his claim that she would be SOL (shit out of luck) if mail did not reach her going forward. (See order at the end of this post.)

A quick review of the cited cases showed that they do not say what Putnam claimed they say. They generally deal with lawyers who fail to keep up with client cases and said little or nothing about pro se litigants. They certainly offer no support for Putnam's apparent contention that he could lawfully dismiss a case because a pro se litigant failed to receive documents via U.S. mail.

At this point, the smell surrounding MS's case officially became a stench. We began to strongly suspect that the court intentionally was not sending documents to our address, for the purpose of concocting grounds to dismiss my wife's case.

It turns out, we were right.


(To be continued) 

Carol Motion to Stay by Roger Shuler

Putnam Order Re Stay by Roger Shuler

Press Release From Aide Jessica Medeiros Garrison Reveals Luther Strange's Hypocrisy On Gambling

Luther Strange and
 Jessica Medeiros Garrison 

Many of us probably thought no one could top former Alabama Governor Bob Riley when it comes to political hypocrisy. After all, Riley is the guy who spent the last two years of his administration conducting a crusade against gambling, even though GOP felon Jack Abramoff revealed in a 2011 book that he helped funnel some $20 million in Indian gaming cash into Alabama to boost Riley in the 2002 governor's race.

Luther Strange, Alabama's current attorney general and one of Riley's closest allies, is making a serious run for the title of "World's Biggest Political Hypocrite." Since Luther stands 6-8, he is a big hypocrite in every sense of the term.

At the heart of the storm is Jessica Medeiros Garrison, who was campaign manager for Strange's 2010 attorney general race and remains one of the AG's closest confidants.

All of this comes to mind because of a recent report from Montgomery Independent publisher Bob Martin, whose work appears in the Atmore News and a number of newspapers around the state. Martin reports that the Alabama Ethics Commission recently ruled that Strange can keep a $100,000 campaign contribution from the Poarch Creek casinos. Writes Martin:

Shortly after The Montgomery Independent reported last October that Mr. Strange accepted the money, an ethics complaint challenging the contribution was filed by Tuskegee Mayor Johnny Ford. 

Ford accused Mr. Strange of threatening raids on the VictoryLand in order to seize its electronic bingo machines, an event that occurred a few months later. 

The commission’s general counsel, Hugh R. Evans, has written Mayor Ford that the commission has now closed the case, telling Mr. Ford the commission has carefully reviewed the notebook of information he provided.

How closely did the commission examine the material that Ford submitted? Probably not all that closely. In fact, Martin writes that evidence suggests only Evans, and not the entire commission, reviewed the material.

What grounds did Evans give for rejecting Ford's complaint? He says there is "no nexus between the Poarch Creek Indians' contribution and General Strange." No nexus? Here is an online definition of the word "nexus":

A means of connection; a link or tie

Evans admits in his letter that both Luther Strange and the Alabama Republican Party received money from the Poarch Creeks. In other words, money went from Point A to Point B--and from Point A to Point C. I would call that a pretty serious nexus.

How does Jessica Medeiros Garrison enter the picture? It comes from a press release she produced on March 11, 2010, in the midst of Strange's primary contest against incumbent Troy King. (See full release at the end of this post.)

Garrison takes King to task for accepting gambling money in his campaign. From the press release:

Public records show that at least $190 thousand in campaign contributions from gambling operators, slot machine manufactures and their lobbyists were funneled to the Troy King campaign through a series of PAC to PAC transfers.

On February 18, 2010, Mr. King told radio listeners that he would return contributions made to his campaign if it were shown those funds came directly or indirectly from gambling interests. Research of public records clearly shows the trail of money from gambling interests to political action committees to King.

Garrison goes on to call for King to return the gambling funds, which she claims add up to at least $190,000. She says King might need to return as much as $400,000.

Let's see if we have this straight: In March 2010, Jessica Medeiros Garrison was exorcised over the fact that public records showed Troy King accepted campaign funds from gambling interests. But we now know that just a few months later--between July 15 and August 4, 2010, to be precise--Luther Strange accepted at least $100,000 from gambling interests, specifically the Poarch Creek Indians.

Is Jessica Medeiros Garrison calling on Luther Strange to return funds that he received from gambling interests? We haven't heard a peep out of her. As for Big Luther himself, it appears he intends to keep every dime that the Alabama Ethics Commission says has no "nexus" to the Poarch Creeks.

Jessica and Big Luther have some serious "splainin" to do. They also should be proud that their hypocrisy rivals that of Bob Riley. That, indeed, is quite an achievement.

Jessica Medeiros Garrison Gambling Press Release by Roger Shuler

Feds Promised To Release Scrushy From Prosecution If He Provided False Testimony Against Siegelman

Richard and Leslie Scrushy

Federal prosecutors offered to let Richard Scrushy out of the Don Siegelman case if he agreed to testify in a way that would "give" them the former Alabama governor.

Scrushy, the former CEO of Birmingham-based HealthSouth Corporation, said prosecutors gave him several examples of testimony that would help ensure a bribery conviction against Siegelman. None of the proposed statements was truthful, Scrushy said, so he refused the offer. He wound up being convicted and was released from federal prison last July after serving a six-year sentence. Siegelman was released from custody for several years to pursue appeals, but returned to prison last September after the U.S. Supreme Court refused to hear the case.

The latest revelations in the Siegelman saga came during Scrushy's interview last Thursday with San Francisco-based radio host Peter B. Collins. A one-hour podcast of the interview, Scrushy's first on the Siegelman case, can be heard in its entirety at peterbcollins.com. The former CEO, now a resident of Houston, Texas, makes it clear that prosecutors were willing to trample criminal procedure and simple rules of fair play in an effort to gain a conviction against Siegelman. Their tactics included a blatant effort to coerce false testimony from Scrushy, who was Siegelman's codefendant.

Scrushy called the case against him and Siegelman--and the actions of prosecutors--a "total farce, a total fraud." Perhaps nothing was more fraudulent than prosecutors' efforts to pressure Scrushy into concocting testimony that would amount to a quid pro quo ("something for something" deal) that is central to a federal bribery case, in the context of a campaign contribution.

The testimony that prosecutors wanted had a slight problem, Srushy said; he and Siegelman did not have a "something for something" deal. In fact, Scrushy repeatedly said during the Peter B. Collins interview that he did not want the Certificate of Need Board (CON) appointment for which he supposedly bribed Siegelman. Here is Scrushy from the Peter B. Collins interview:

I found myself in a conversation with my attorney, and he had prosecutors on the other line, and they said, "If Richard will give us the governor, we’ll let Richard out." They gave me four or five scenarios, and my lawyer said to go home and think about it. I said, “This isn’t going to take much time. I can’t see me sitting on a stand and swearing this man did something wrong when he didn’t do anything wrong."

Scrushy did go home and discuss the matter with his wife, Leslie. But she apparently could not believe that officials who are sworn to uphold the law would make such a proposal:

I went home to discuss it with my wife and said, “Leslie, honey, what do you think?” And she said, "You’re not going to lie on him are you?" And I said, "No, I’m not a snitch. I'm not going to say he did something that he didn’t do." So I called them back and said no, we’ll go to trial. I couldn’t believe they would find us guilty because we didn’t do anything wrong, and there was no evidence that we did anything wrong."

Despite the weak evidence against them, Siegelman and Scrushy were convicted--and Scrushy wound up with a graduate-level education in the way America's broken justice system really works. It all was driven, Scrushy says, by Bush White House strategist Karl Rove and his plan to eliminate prominent Democrats, especially in Republican strongholds such as Alabama:

There's no doubt Karl Rove wanted the governor. If I had been willing to do what they asked me to do and say things they wanted me to say, I would have walked out and I wouldn’t have gone to prison. I didn’t know Governor Siegelman that well, but I couldn’t get up and say the things they asked me to say because they were not true. To know he’s got two children and a wife . . . I couldn’t wake up every day the rest of my life and say, “Richard Scrushy, you are a liar and you know you put that man in prison.” I’m not going to do that.

Scrushy took a principled stand, but he paid a huge personal price. Meanwhile those who did testify against Siegelman, such as former aide Nick Bailey, received reduced sentences after pleading guilty to federal crimes. Said Scrushy:

I would rather spend five or six years in prison myself. My wife and kids suffered greatly. And I was in a horrible place, a place no man wants to go. But I feel better about myself. These other people put [Siegelman] in prison. He shouldn’t be in prison today. He was innocent. There was no corruption, no bribery.

(To be continued)

Richard Scrushy: Convictions In The Siegelman Case Are Grounded In A Former Aide's Flawed Testimony

Richard Scrushy

Bribery convictions in the Don Siegelman case are based almost entirely on an aide's testimony that he saw the former governor holding a $250,000 check after a meeting with then HealthSouth CEO Richard Scrushy.

That scenario, as described under oath by former Siegelman aide Nick Bailey, has a slight flaw--it never happened, according to a man who was central to the alleged transaction.

Richard Scrushy, who was released from federal prison last July after serving a six-year sentence, says he never had such a meeting with Siegelman--and he never gave the governor a check.

That is one of several major revelations from Scrushy's one-hour interview last Thursday with San Francisco-based radio host Peter B. Collins. It was Scrushy's first interview about the Siegelman case, and the podcast can be heard in its entirety here, at peterbcollins.com. Collins invited me to assist with the interview, and I was on the phone line to hear Scrushy describe the case against him and Siegelman as a "farce" and a "joke."

In fact, Scrushy still can't seem to believe that it happened. Says the former CEO:

It's painful to grow up a Boy Scout and love your country, and your daddy is in the military, and to go through all of this--and see the corruption and dishonesty. It’s hard, as an American, to experience this in our own country.

Siegelman was released from custody to pursue his appeals, but after the U.S. Supreme Court declined to hear the case, the former governor returned to federal prison last September 11. Siegelman now resides at a facility in Oakdale, Louisiana, a fact that clearly disturbs Scrushy:

He shouldn’t be in prison today. He was innocent. He did nothing wrong, I did nothing wrong. There was no corruption, no bribery. This thing is a total farce, a total fraud.

How can Scrushy make those statements with such certainty? To answer that question, we turn to the central moment in the criminal trial. It came when Nick Bailey described his boss, Governor Siegelman, holding a check for $250,000 after a meeting with Scrushy. The check, Bailey stated, was for Siegelman's education-lottery campaign, and as part of the deal, Scrushy wanted a seat on the Certificate of Need Board (CON), which regulates Alabama health-care facilities.

Those who have closely followed the Siegelman case probably can remember Bailey's version of events word for word. We referenced it in a post last June titled "SCOTUS' Refusal to Review Siegelman Case Will Forever Stand As a Reminder of Obama's Shame." Here is how we described it, with text taken directly from an appellate brief filed by government prosecutors. At the heart of the scenario is a check written by a Maryland company called Integrated Heath Services (IHS):

Siegelman and Scrushy subsequently met in Siegelman’s office. Bailey testified that, at some point after the meeting, Siegelman showed Bailey the IHS check and said that Scrushy was “halfway there. . . . ” Bailey asked, “what in the world is he [Scrushy] going to want for that?” Siegelman replied, “[T]he CON Board.” Bailey responded, “I wouldn’t think that would be a problem, would it?” Siegelman replied, “I wouldn’t think so.”

Scrushy told Collins that Bailey's version of events was wildly off track:

I never gave the governor a dime and never had a meeting with him where we discussed that I would serve on any committee or contribute to pay down any debt or help with a lottery referendum. We never had any meetings to discuss that, and they couldn’t put me in a meeting with the governor. There is no evidence to support any of that.

Peter B. Collins

Press reports repeatedly have stated that Scrushy and HealthSouth gave Siegelman $500,000 to help pay down debt from the failed education-lottery campaign. But Scrushy said the figure was $250,000, and the request never came from Siegelman. Former Alabama Power CEO Elmer Harris, who served as head of Siegelman's transition team, twice asked Scrushy for financial assistance. The first was for a contribution to the education-lottery campaign itself, and Scrushy refused to get involved. The second was to help pay down a debt once the lottery campaign had failed. Scrushy agreed to help with that, and he told Collins:

They had to pay off a debt to the Democratic Party . . . , and wealthy businessmen in Alabama had signed on that note. Elmer Harris again came to see me and said Alabama Power was putting in $100,000, and ALFA Insurance was putting in a bunch, and he named a bunch of other companies that were paying it down. He said you’ve never helped the governor, and never given him a dime, you’ve never done anything in the state of Alabama to help this guy, can you help these businessmen get off this note? And I said, “OK, I will put in $250,000."

Now, I already was leaving CON. We wrote a check to help pay down that debt to the Alabama Democratic Party, which was all we ever put in. But it’s still everywhere that I gave the governor $500,000.

Scrushy still seems to have a hard time believing that he went to prison under such circumstances:

The governor and I get indicted for bribery to be on a volunteer board I didn’t want to be on. And I never gave him any money. The whole thing was a farce. We thought it was a joke, and I thought it would go away.

Scrushy proved to be wrong about that. But he is not backing away from the legal battle. Even though Scrushy has served his sentence, he has an appeal before the U.S. Eleventh Circuit, seeking discovery that might help prove misconduct on the part of judges, prosecutors, and jurors in the case.

The Collins interview marks the first time Scrushy has talked extensively about the Siegelman case. The former CEO winds up providing stunning insights into what likely is the most notorious political prosecution in American history.


(To be continued)

New Report Reveals That Alabama Coach Nick Saban Stood Watch Over An Academic Scandal At LSU

Nick Saban

University of Alabama football coach Nick Saban presided over an academic scandal that mostly was covered up at LSU in 2001-02, according to a new report from USA Today.

The Saban revelations are part of an investigative series about NCAA President Mark Emmert. Before assuming his current position, Emmert served as chancellor at the University of Connecticut and LSU. USA Today reports that Emmert played a prominent role in limiting damage from an academic scandal that happened on Saban's watch at LSU.

Saban's connections to scandal should not come as a surprise, given that he was brought to Alabama by a man with documented ties to massive insurance fraud. Saban was head coach at LSU from 1999 to 2004 and won one national championship before leaving to spend two seasons as head coach of the Miami Dolphins in the National Football League. He became Alabama's coach in November 2006 and has led the Crimson Tide to national titles in 2009, 2011, and 2012.

Paul Bryant Jr., the current president of the University of Alabama Board of Trustees, played a major role in luring Saban to Tuscaloosa. Bryant, the son of late Hall of Fame Coach Paul "Bear" Bryant, long has been considered one of the most powerful boosters in college athletics. Despite his role as head of UA's governing body and kingmaker in the athletics program, Bryant Jr. keeps a low profile, rarely granting interviews.

That might be because of ugliness in his past as CEO of Greene Group Inc., an umbrella firm for Bryant's business interests in casino management, dog tracks, catfish farming, ready-mix concrete, and insurance.

Alabama Reassurance, one of Bryant's companies under Greene Group, was implicated in a $15-million insurance-fraud scheme that drew a 15-year federal prison for a Philadelphia-based lawyer/entrepreneur named Allen W. Stewart. The case was tried in 1997, with Stewart found guilty on all counts, and he only recently was released from prison. Bryant, meanwhile, managed to escape scrutiny, even though an Alabama-based probe was planned if the Pennsylvania case resulted in convictions. (A court document from the Allen W. Stewart case can be viewed at the end of this post; a footnote on page 11 outlines Alabama Re's connections to the case.)

G. Douglas Jones, a UA graduate who has done legal work for Bryant, had been named U.S. attorney for the Northern District of Alabama by the time the Stewart case drew to a close. Once Jones took office, the planned Alabama Re investigation mysteriously was canceled. We have asked Jones multiple times about his apparent role in protecting Paul Bryant Jr. from a federal investigation, and Jones has refused to answer our questions.

The bottom line? Public documents show that scandal lurks in the background of Alabama's lead trustee and No. 1 football booster. Thanks to USA Today, we now know that scandal also has touched Nick Saban, the coach Paul Bryant Jr. helped bring to UA. Here is how reporter Brent Schrotenboer describes Mark Emmert's role in covering up the academic scandal at LSU:

At LSU, an academic fraud scandal emerged in the football program under then-coach Nick Saban in 2001-02. Emmert oversaw an investigation into the allegations made by a university instructor that eventually acknowledged five minor and isolated violations and declared most of the claims "unfounded."

Emmert even met on LSU's behalf with the NCAA, which accepted LSU's findings. But after Emmert decided to leave LSU in 2004, a witness testified in a deposition that the instructor was telling the truth and that the problems were far more systemic than the school admitted, even extending to grades being changed for football players, according to court records.

Court records show that grades were changed for football players while Nick Saban was head coach at LSU? Amazingly, the Alabama mainstream press, so far, has not picked up on this story.

How bad was LSU's academic environment while Saban was football coach? From USA Today:

The culture was "appalling" and "like Romper Room," the employee said in 2004 testimony.

Mark Emmert

According to USA Today, Emmert became a "God-like figure" at LSU, partly because of his ability to raise money and boost the football program:

At LSU, Emmert made changes to help turn around the football program, saying "success in LSU football is essential for the success of Louisiana State University."

He hired Saban as coach in 1999 and helped make him the nation's highest paid coach ($2.3 million) after the Tigers won the BCS championship in January 2004. Two years earlier, Emmert himself had become the nation's highest-paid head of a public campus when his compensation was increased to about $500,000, a portion of which was paid by the Tiger Athletic Foundation.

Supporters justified his salary in part because he oversaw a fundraising drive that was on its way to bringing in $255 million.

Public records, however, show that football success came at the expense of academic integrity:

Scandal broke in 2001-02. A university instructor accused the school of having systemic academic fraud in its football program, including plagiarized papers on bobsledding players were turning in and un-enrolled students showing up to take notes for football players, who often slept through class. A graduate assistant also spoke out about the plagiarism problem.

At the time, LSU already was on NCAA probation for a recruiting scandal in men's basketball that happened prior to Emmert's arrival. Findings of more major violations typically would trigger harsh penalties.

Led by Emmert, LSU investigated the fraud allegations and said they found only five minor isolated problems, resulting in a self-imposed penalty of two lost scholarships in football. "Despite isolated incidents, the allegations were largely unfounded," says LSU's 82-page report on the allegations.

Court documents eventually would show that the incidents were not "isolated," and the allegations were not "largely unfounded":

The NCAA accepted LSU's findings in May 2004 and declined to put the school on probation. But the two female accusers had sued LSU, claiming they were forced from their jobs at the university in retaliation for blowing the whistle on the powerful football program.

Shortly after the NCAA case was settled and Emmert announced he was leaving for Washington, another LSU academic counseling employee backed up the women's claims under oath, saying there were numerous examples of favoritism for football players in academics, including changed grades and having papers typed for them, according to court documents obtained by USA TODAY Sports.

LSU later paid the two women more than $110,000 each to settle their lawsuits.

Did Mark Emmert conduct a serious investigation of Nick Saban's football program? It doesn't look like. From USA Today:

A person who worked for LSU as an academic counselor in athletics at the time told USA TODAY Sports the investigation was a whitewash designed to minimize damage. The person asked not to be identified for fear of reprisals.

"They'd interviewed the people they wanted to," the person said. "It was typical, let's get together and do damage control and construct a narrative that will allow us to say, 'OK, we've done something wrong here, but it ain't that bad.'"

The attorney for the accusers, Jill Craft, told USA TODAY Sports, that "LSU's self-report was way downplayed to what they were originally told and what my clients reported. In fact, the evidence that shook out over time revealed that the academic issues, especially in football, were systemic."

What could this mean for Saban and Alabama? John Pennington, of the Web site Mr. SEC, touched on that question in a post titled "USA Today Digs Into Emmert, Digs Up Issues For LSU, Saban." From Pennington:

Whether Emmert was guilty of a cover-up or not, LSU is back in the news today. So is Nick Saban, who will have to answers about this situation and how it might pertain to his current program at Alabama.

Alabama Re Memorandum Opinion by Roger Shuler

Campus Crest Remains A Major Hit On Wall Street, But The Firm Is A Dud With Its Unhappy Customers

Copper Beech Townhomes

A growing body of evidence suggests Campus Crest Communities is a poorly run company that turns out an inferior product. But that hasn't kept similar companies from cutting deals with it--or Wall Street investors from throwing dollars at it.

Do corporate big dogs see something in Campus Crest that everyday consumers can't see? Is the investment world unconcerned about the company's questionable ethics and shaky operations as long as the bottom line produces favorable numbers?

The answer to both questions appears to be yes. But perhaps its time investors put themselves in the shoes of employees and customers who have seen the real-world view that Campus Crest has successfully hidden from Wall Street.

Charlotte-based Campus Crest has developed student-housing complexes, under The Grove banner, near some 40 public universities around the country. The company is of special interest here at Legal Schnauzer for three primary reasons: (1) It has Grove sites operating or planned at four Alabama institutions (South Alabama, Troy, Jacksonville State, and Auburn); (2) CEO Ted Rollins played a central role in a Shelby County divorce case that caused his ex wife, Sherry Carroll Rollins, and their two daughters to wind up on food stamps; (3) Campus Crest's chief corporate law firm is Birmingham-based Bradley Arant.

We have reported, along with the mainstream press, on all sorts of operational problems at Campus Crest. Those include discrimination lawsuits at corporate headquarters; a balcony collapse that led to serious injuries in Denton, Texas; and mold, heating, and water problems at Orono, Maine.

For good measure, we have reported extensively on Ted Rollins' personal ethical lapses--including a conviction for assault on his 16-year-old stepson, an investigation for child sexual abuse of the same stepson, and perjury in his Alabama divorce case.

If the business community is concerned about any of this, it's hard to tell.

First came reports that Campus Crest had reached agreement to acquire Copper Beech Townhome Communities, which has been a major player in the student-housing sector for about 20 years. Lawyers from Bradley Arant helped orchestrate the transaction. Here is what made Copper Beech an attractive target for Campus Crest:

Copper Beech, which was founded in 1994, is the fifth largest student housing operator in the United States, with a portfolio of approximately 16,645 beds. For 20 years, it has been a vertically integrated developer, owner and operator of a unique, market-tested, branded town-home student housing product. The Copper Beech portfolio consists of 35 student housing properties, including two phase II development properties scheduled to open in fall 2013, plus one undeveloped land parcel in Charlotte, NC and Copper Beech's corporate office building in State College, PA. Copper Beech has utilized its vertically integrated platform to develop 30 of its 35 properties. As of February 13, 2013, the operating portfolio had an average occupancy of 98.5%, marking three consecutive years with occupancy levels in excess of 98%.

Then came news that Campus Crest had closed on a $300-million stock offering, designed primarily to fund investment in the Copper Beech portfolio. By our unofficial count, that brings Wall Street's total investment in Campus Crest to about $730 million.

All of this comes with a load of irony. Copper Beech is based in State College, Pennsylvania, and its founders and CEOs are John and Jeanette McWhirter. In 2010, the McWhirters were among the largest donors to Penn State University.

Why is that ironic? We will examine that question in a series of upcoming posts.


(To be continued)

The Presence of Firearms Did Not Keep Texas DA From Being Assassinated In His Own Home

Texas prosecutor Mike McLelland

A common belief among many Americans seems to be that the possession of firearms somehow makes us secure in a dangerous world. Some have argued that the Newtown massacre in Connecticut might have been averted if teachers had been armed in their classrooms.

Those who hold such beliefs might want to consider the experience of Mike McLelland, who was district attorney of Kaufman County, Texas. I say was because McLelland and his wife, Cynthia, were shot and killed on Saturday by an intruder at their home some 20 miles southeast of Dallas. The slayings came less than two months after one of McLelland's chief assistants, Mark Hasse, was killed by one or more gunmen in the courthouse parking lot.

In the wake of Hasse's murder, McLelland made a number of tough public statements, vowing to apprehend the "scum" who were responsible. McLelland even made it clear that he had taken extra precautions to protect himself. The message that McLelland sent, in so many words, was this: "I am heavily armed, and I am a professional who knows how to use weapons."

Did that help keep him alive? Not exactly. Authorities say McLelland was shot multiple times while wearing his pajamas. Here is how The Dallas Morning News described McLelland's mindset after the Hasse murder:

McLelland himself had said he was taking no chances after Hasse was assassinated.

He said he carried a gun everywhere he went and always took extra care when answering the door of his home.

“I’m ahead of everybody else because, basically, I’m a soldier,” the 23-year Army veteran boasted less than two weeks ago.

How could a heavily armed "soldier," on high alert, wind up being shot to death in his own home? Here are details of the crime scene from The Dallas Morning News:

Investigators said little publicly about the crime or possible suspects. But a law enforcement official, speaking only on condition of anonymity because of the sensitivity of the case, called the attacks at the McLellands’ home “brazen.”

The shootings appeared to be premeditated, well-orchestrated and anything but a random burglary that went bad, several law enforcement officials said.

Cynthia McLelland’s body was found near the front door, and it appeared she had answered the door, the officials said. At least two officials said Mike McLelland’s body was found toward the rear of the house. He was dressed in pajamas.

Both were shot more than once, apparently with a large-caliber assault-style rifle. “They found the bodies and a lot of shell casings,” a law enforcement official said.

“It’s a bad deal. This is brazen. It’s revenge. You don’t go in there and do the stuff that’s been done if it’s not revenge motivated.”

Texas is known for its gun-toting, cowboy culture--and McLelland seemed to revel in his tough-guy image. But that did not help much--not when a bad guy with an assault weapon made him, and his home, a target.

Is Luther Strange Taking Advantage Of A Pipeline That Bob Riley Built To The Alabama Supreme Court?

Luther Strange

How does the Alabama Supreme Court continue to rule in favor of Attorney General Luther Strange and against non-Indian gaming interests--regardless of the law and facts placed before it?

A reasonable Alabamian might pose that question, especially in the wake of reports that Strange is asking the high court to force Macon County Circuit Judge Thomas Young to step down from the VictoryLand seizure case. Strange's request seems goofy, coming on the heels of his petition to ensure that Houston County Circuit Judge did NOT recuse himself from a similar case involving the Center Stage casino near Dothan.

To the casual observer, this might seem like nonsense, with neither Strange nor the Supreme Court showing any common sense or consistency. But Alabamians should remember that justices on the state's high court have been issuing questionable rulings on gambling-related issues for almost five years now. It dates to the last two years of the Bob Riley administration, and our research points to evidence of dark activity that cuts at the heart of the state's justice apparatus.

We are talking about unlawful communications with the court regarding pending cases. If proven, this probably would amount to federal crimes--the kind that might earn prison sentences for some of the state's most powerful officials.

First, we know that Luther Strange and Bob Riley are allies, thanks partly to their mutual connections with the Birmingham right-wing law firm Bradley Arant. In his last days as governor, Riley cut a deal with Strange in which he would help raise $2 million for the AG's possible gubernatorial run in 2014. In return,  Riley wanted "protection" and the procurement of business for his children.

That, of course, is the kind of "something for something" deal (quid pro quo) that amounts to bribery under federal law. But the story gets uglier from there.

In February 2010, less than a month after Riley had left office, the Montgomery Independent reported on evidence that the administration had engaged in unlawful communications with the Supreme Court on gambling-related cases. We covered the story, based on the reporting of Independent publisher Bob Martin, in a post titled "Was Monkey Business Involved In Supreme Court's Bingo Ruling?" From that post:

Lawyers for VictoryLand were surprised by a citation in a motion to vacate an injunction that had halted raids by the governor's task force at the Macon County facility. The citation was to a case styled Surles v. Ashland, and that was curious because the decision in Surles had not been released at the time the task force's motion was filed.

The episode suggests that someone at the Alabama Supreme Court was working in conjunction with the governor's office. This would not be the first time we've seen reports about possible improper communications between Riley's office and the Supreme Court. It also is not the first time we've seen signs that Alabama's highest court is fully capable of acting in a corrupt fashion.

Is Luther Strange now using an unlawful pipeline that Bob Riley put in place? If so, how profound is all of this? It means we have a court system that cannot be trusted, that is infested with unlawful political machinations. More from our earlier post:

Bob Martin, editor and publisher of the Independent, says the task force's motion was time stamped at 1:55:15 on January 29. The Surles decision was not released until 2:04 on January 29. Writes Martin:

According to Supreme Court Rules and policies no one, including attorneys in a case, are permitted to see or be told the details of a decision other than the justices and the court staff. Although attorneys for both sides are notified the result of a case two hours prior to its release, they are not told the details and lawyers with whom I talked said it would take clairvoyant skills for a lawyer to be confident enough to cite a case by only having knowledge about which side won or lost.

This conduct might go way beyond violations of Supreme Court rules. If the U.S. mails or wires were used, it likely would constitute obstruction of justice under federal law. Obstruction might be just the beginning of federal charges that could be brought in such a case.

Of course, that would require a U.S. Justice Department that is attentive and competent--and the Obama DOJ, under Eric Holder, has proven so far that it is neither.

How far are Luther Strange and the Alabama Supreme Court willing to push it with Bob Riley's "underground railroad" of judicial and political chicanery?

If the high court forces Judge Young off the VictoryLand case, we probably will have our answer.

It Takes Assassination Of A Prosecutor And His Wife For Texans To Recognize A Crisis In Justice System

The home of Texas prosecutor
Mike McLelland

Based on the comments of Texas law-enforcement officials over the weekend, the state's justice system officially went into crisis mode on Saturday.

That's when the bullet-riddled bodies of Kaufman County District Attorney Mike McLelland and his wife, Cynthia, were discovered at their home about 20 miles outside of Dallas. The slayings came less than two months after Kaufman County Assistant District Attorney Mark Hasse was killed in a parking lot a block from his courthouse office. Authorities apparently have no solid leads in either case, although they suspect the killings might be connected.

A quick search on the Web reveals that the Texas justice system has been in crisis for years, especially if you are a citizen who has seen your constitutional rights trampled or your tax dollars wasted because of public corruption. But that reality apparently did not hit home to elites in the justice system until some of their own started turning up dead.

Consider this report from The Dallas Morning News, quoting Kaufman County Sheriff David Byrnes:

Authorities had worked frantically Saturday night to confirm that other officials were safe, and sources confirmed that security was being provided at the homes of others who authorities feared might be targets.

However, Byrnes repeatedly declined to discuss specific concerns about security, though he acknowledged “taking precautions to protect other elected officials. . . . ”

And though he would not discuss what protection for officials may be in place, he acknowledged the slayings of the McLellands and Hasse were worrisome.

“It’s unnerving to the law enforcement community and the community at large, which is why we’re striving to ensure the community we are providing public safety,” he said. “We’re meeting all our duties, plus our investigative duties.”

So Sheriff Byrnes finds the assassinations of two prosecutors and one spouse to be "worrisome," and the law-enforcement community finds it "unnerving." That's understandable, of course, but have Byrnes and his colleagues been unnerved about the following headlines I pulled off the Web in about five minutes' time?

* Texas gets near failing grade for corruption risk (March 20, 2012)

* Corrupt Texas judges going to jail this month (April 27, 2011)

* Judge, DA, and lawyer accused in Texas corruption case (September 7, 2012)

* Texas sheriff arrested, charged in corruption investigation (March 6, 2013)

I found those cases of Texas-sized sleaze, plus several others, in a Web search of less than five minutes--covering only the past couple of years. Geez, what if I had searched for 10 minutes and gone back, say, to 2005? I probably still would be sorting through all the material.

The point, however, seems clear. Texas' justice system is a cesspool of corruption, but as long as it affects regular citizens, elites like Sheriff Byrnes don't much seem to care. In fact, you don't hear a peep out of them--and that's because sheriffs, judges, DAs, and lawyers are the ones benefiting from that criminal activity.

What happens when a criminal turns the table, and heaps suffering upon the elites? It's time to yell, "Sweet Jesus, we got a crisis on our hands!"

I can imagine such a reaction if similar events transpired here in Alabama. Let's consider the following scenario:

Over the course of five weeks, five lawyers from large Birmingham firms turn up dead, their corpses filled with bullet holes. These slayings occur at a rate of one per week, and authorities quickly pick up on a pattern. One lawyer is gunned down while he works in his yard. Another dies while having sex with his mistress. One is killed while checking under the hood of his Mercedes. One dies in a hail of gun fire while cleaning debris from his pool. Finally, one is slain while having sex with his wife. (This, of course, is an unmistakable sign that our scenario is fictional.)

I can hear the howls of alarm and concern from the usual high-profile lawyers who tend to be quoted in the local press. Doug Jones of Haskell Slaughter, Matt Lembke of Bradley Arant, and Drayton Nabers of Maynard Cooper Gale would be among the local lawyers fretting over "a crisis in our justice system."

"Something must be done," they would screech. "Someone is trying to keep the wheels of justice from turning."

Jones, Lembke, and Nabers, of course, are well aware that Alabama's justice system has been marked for years by corruption--in both state and federal courts. In fact, Jones, Lembke, and Nabers are just three of many lawyers who have helped create our dysfunctional justice system.

But you never hear them raise a concern as long as everyday Alabamians are the ones suffering at the hands of corrupt judges, prosecutors, lawyers, and the like. But let a few members of the justice elite experience some suffering and . . . well, Jones and Co. would be in panic mode, just like the one now gripping justice elites in Texas.

The killings in Texas are unmistakably alarming, and they have all the trappings of a terror campaign. One prosecutor was killed near his office, and another (plus his wife) was killed at his house. That seems to send this message to certain authorities: "You are not safe at work, you are not safe in your homes, and your loved ones aren't safe either."

Was the messenger wronged by someone in the Kaufman County criminal-justice system? Does the messenger perceive that he was wronged, even though his issues were handled correctly under the law? Is the messenger a madman who has decided to target officials in one county for no apparent reason? Could the messenger be affiliated with a white supremacist group called the Aryan Brotherhood of Texas, as reported in The New York Times?

Perhaps we will learn the answers to those questions before too long. But for now, justice elites in Texas are in a state of siege, and they are feeling terrorized. That's ironic because that's exactly how it feels to be on the receiving end of a court-related cheat job.

My wife and I know that from 12 years' worth of personal experience. I know it from reporting on cases involving fellow Alabamians--some well known, others relatively unknown. I'm talking about people like Sherry Carroll Rollins, Don Siegelman, Bonnie Wyatt, Richard Scrushy, Angela Drees, Sue Schmitz, and more. I know it from reporting on cases next door in Mississippi, involving people like Paul Minor, Wes Teel, John Whitfield, and Oliver Diaz.

A great philosopher once said, "Karma's a bitch." Someone seems to be driving that point home right now for justice elites in Texas. Perhaps their brethren in other states would  be wise to pay attention.

The Remnants Of Alabama High Court's Credibility Will Be Riding On Luther Strange's Recusal Petition

Judge Thomas Young

To no one's surprise, Attorney General Luther Strange has filed a petition asking the Alabama Supreme Court to force the recusal of Macon County Circuit Judge Thomas Young in the VictoryLand seizure case.

Will the state's high court grant the petition? Well, that probably depends on how the justices answer the following questions:

* Do they care about retaining what is left of their tattered credibility?

* Are they concerned about signs that they are engaging in a criminal conspiracy?

In other words, do the justices of the Alabama Supreme Court have any shame? We already know the answer to that question regarding Luther Strange. He is one of the most shameless judge shoppers in the history of the American justice system.

Strange proved that last week when he filed a petition for a writ of mandamus that would force Judge Young off the VictoryLand case. That comes on the heels of Young's denial of a search warrant application from Strange's office, a Supreme Court writ forcing Young to approve the search warrant on VictoryLand property, and Young's refusal to recuse himself from the case.

How ironic is all of this? Strange's office, in a similar case involving the Center Stage facility in Houston County, has been fighting to make sure Circuit Judge Mike Conaway does NOT recuse himself. What's the difference between Judge Conaway and Judge Young? Former Governor Bob Riley, one of Strange's close Republican allies and an avowed gaming opponent, appointed Conaway to the bench. Sonny Reagan, who now is Strange's chief lieutenant in the attorney general's office, interviewed Conaway for the judicial position while serving in the Riley administration.

Translation: Mike Conaway is a friendly judge for Luther Strange; in fact, a reasonable observer could find plenty of grounds to question Conaway's impartiality in the Center Stage case. But the Supreme Court has allowed him to stay on board.

Meanwhile, we've seen no sign that Judge Young is biased toward one party or another, but he did refuse to rubber stamp a search warrant for the attorney general's office, on the grounds that he could find no probable cause that criminal acts were being committed at VictoryLand. Still, Luther Strange wants Young off the case, and few observers will be surprised of the high court sides with the AG.

The irony of all this has not gone unnoticed in Houston County, even in the mainstream media. In a piece titled "Tables turned in Macon County judge bingo battle," Dothan Eagle reporter Lance Griffin writes:

According to court documents, the Attorney General argues that Young’s refusal to sign a search warrant for the VictoryLand raid, his initial reluctance to sign the warrant after being ordered to do so by the Alabama Supreme Court, and written comments placed on the warrant itself indicate a bias against the state.

“On the face of the search warrant, Judge Young wrote that he was signing with ‘the greatest judicial reluctance’ and ‘did not believe that (the) application for search warrant provides sufficient probable cause.’ He ended his note by declaring the State’s case and the Supreme Court’s order was ‘improper according to the law,’” the Attorney General states in his motion for Young’s recusal. 

The motion goes on to allege Young made statements to investigators that questioned the Attorney General’s motives for obtaining the warrant.

None of that, of course, proves bias or "the appearance of impropriety" on Young's part. The judge's comments only show that (a) He disagrees with the AG's contentions that probable cause exists in the VictoryLand matter--a reasonable finding given that no court has found the facility's electronic-bingo machines to be illegal; (b) He believes the state's high court is setting a dangerous precedent by issuing an "extraordinary writ" to override the ruling of a local judge.

If the Alabama Supreme Court's actions in the Center Stage case mean anything, its ruling on the VictoryLand matter should be a no-brainer. Last December, the high court denied a petition from the Houston Economic Development Association (HEDA) to have Conaway removed from the Center Stage case; in fact, Conaway is expected to rule soon on motions involving the seizure of cash and machines at the casino near Dothan.

How did the Supreme Court deal with efforts to get Conaway off the case in Houston County? It simply declined to hear the appeal, with no explanation.

For the sake of consistency, we should expect to see the high court act the same way in the Macon County matter, right? A reasonable person should expect a decision stating that the court declines to hear the appeal, offering no explanation and leaving Young on the case, right?

Well, yes . . . if the court cares about maintaining some semblance of credibility with the public. But we've signs that court doesn't care one iota what the public thinks. It's main interest seems to be serving the interests of its political soul mates, such as Luther Strange and Bob Riley.

As for the possibility, however slim, that the court might get nabbed in a criminal conspiracy . . . we doubt the justices are concerned about that, either. But the public should be concerned about it--and a ruling that forces Judge Young off the Macon County case will add to the mounting evidence that something smells mighty foul with the Alabama Supreme Court.

We will address that issue in an upcoming post.


(To be continued)