Opinion ID: 57320
Heading Depth: 2
Heading Rank: 3

Heading: Discovery of the conspiracy

Text: On June 20, 2000, at a Community Bank board meeting, several directors raised questions about the progress of the Guntersville project. Michael Alred, an executive vice president and board member, noted that over $700,000 had been spent on the site (beyond land acquisition costs), yet nothing had been built aboveground. Defendant Patterson expressed his surprise and pledged to investigate. 15 On July 11, 2000, Patterson asked Community Bank director Wayne Washum to come to Patterson’s office. Patterson recorded their conversation, unbeknownst to Washum. Patterson asked Washum several times for the identity of those who were raising questions about the Guntersville project, and after learning that Alred was among the group, Patterson stated several times that Alred “need[ed] to be fired.” On July 15, 2000, at Patterson’s request, the board of Bancshares (the holding company for Community Bank) convened a special meeting. Bishop, Childers, and Dewey Hamaker (one of MCC’s principals) attended, and each denied that there had been any wrongdoing in the invoicing of Community Bank. Notably, Dewey Hamaker stated at this meeting that he invoiced Patterson “about every six months” for the work that MCC performed at HVF. In actuality, as noted supra at note 4, over the approximately thirty-month period between January 1998 and July 2000, MCC billed Patterson twice, and one of the invoices was never paid. During the July 15, 2000 Bancshares board meeting, local sheriffs executed a search warrant at MCC’s offices, seizing time sheets, other documents, and computers. MCC’s computer records and time sheets were admitted into evidence in this case. 16 On July 17, 2000, MCC invoiced defendant Patterson for approximately $50,000 of work performed at HVF—the first invoice that MCC had sent Patterson since April 1999. MCC then sent Patterson twenty-nine invoices over the next five months, totaling over $460,000. These invoices sought payment for construction services performed years earlier, as far back as 1998. Patterson paid each of the invoices. On July 18, 2000, the Community Bank board met, and three board members—Alred, Michael Bean, and George Barnett—voiced concerns about the Guntersville project. Defendants Bishop and Childers, along with Dewey Hamaker, attended this meeting as well. Hamaker told the board that MCC had not billed Community Bank for services provided at HVF; Childers told the board that he had not billed Community Bank for HVF services; and Bishop assured the board that no improper conduct had occurred. Immediately thereafter, defendant Patterson met with Community Bank’s general counsel, Bancshares’s general counsel, and an outside lawyer for Community Bank, and sought approval to fire Bean. It was strongly recommended that Patterson not fire Bean; nevertheless, Patterson convened a meeting of Community Bank’s executive committee and raised concerns about the ability of Alred and Bean “to perform their normal duties during the investigation” into the 17 Guntersville project. Shortly after the Community Bank executive committee meeting, Alred and Bean were reassigned to new positions at Community Bank. In September 2000, Alred, Bean, and Barnett were removed from the board, and in November 2000, Alred and Bean were fired. In a deposition given in a civil suit filed by Alred and Bean, defendant Patterson asserted that he did not know why Alred and Bean were fired and that he tried to remove himself entirely from the firing process. In July 2000, several Bancshares shareholders filed a derivative action against the company (the “Benson litigation”), in which it was alleged that Patterson, Bishop, the Hamakers, and others harmed Community Bank by fraudulently using bank funds for non-bank purposes. The Community Bank and Bancshares boards formed a committee (the “Benson Special Litigation Committee”) to investigate the allegations raised in the Benson litigation. The three defendants in this case—Patterson, Bishop, and Childers—were interviewed and deposed in connection with the Benson litigation and other ensuing lawsuits and investigations, and their statements in those interviews and depositions are relevant to the allegations in this case, as follows. During his interview with the Benson Special Litigation Committee, defendant Patterson asserted that he did not pay MCC on an ongoing basis for their 18 work at HVF because the parties agreed that MCC would “hold the bill” until the work was completed. Patterson reasserted this claim during a deposition, stating that defendant Bishop told him that the Hamakers preferred a lump sum payment at the conclusion of the job. Financial statements prepared by the Hamakers and Patterson during the relevant time period contradict this claim. The Hamakers never listed any account receivable for HVF on any financial statement. In fact, when they applied for a general contractor’s license in December 1998, the Hamakers had an incentive to declare the highest amount of accounts receivable possible, in order to qualify for a license on larger projects, but the Hamakers still listed no money owed by Patterson. Likewise, Patterson’s financial statements for 1998, 1999, and 2000 list no account payable to MCC or the Hamakers, and Patterson’s accountant testified that when he communicated with Patterson to prepare those financial statements, Patterson never stated that he owed the Hamakers any money. When defendant Bishop was asked about MCC’s December 1998 invoice sent to Patterson, he first told bank regulators, in August 2000, that he could not speak to MCC’s billing practices. Then, in a later deposition, Bishop stated that he had personally requested that the December 1998 invoice be sent. Finally, Bishop 19 told an FBI special agent that he had not requested the invoice. As for defendant Childers, the two false charts discussed earlier (created by Speegle, at Childers’s direction) were submitted to the Benson Special Litigation Committee. Finally, when asked in a civil deposition about the nature of his relationship with Dewey Hamaker, defendant Patterson stated that he barely knew Hamaker and could not recall any conversations with him. However, the government adduced evidence in this case that after the Hamakers were indicted in May 2002 and received court-appointed counsel, Patterson took numerous steps to help the Hamakers be able to afford private counsel. Patterson first contacted a law firm that provided outside legal services to Community Bank and secured an opinion from the law firm that payment of the Hamakers’ legal expenses by Bancshares would not be illegal. The proffered reason for payment of the Hamakers’ legal fees was that publicity resulting from their prosecution could lead to a fatal run on Community Bank. The Bancshares board was presented with this idea at a board meeting on July 2, 2002, and ultimately rejected it. Nevertheless, Patterson continued to work toward funding the Hamakers’ defense. On July 11, 2002, Patterson informed the same outside law firm that he had been approached by the pastor at his church with an offer to 20 help the Hamakers. The law firm then put Patterson’s pastor in contact with Colonial Bank, another of the firm’s clients, to see if Colonial Bank would loan money to the church to pay the Hamakers’ fees. In early August 2002, Colonial Bank agreed to make a $200,000 loan to the church, the stated purpose of which was “to begin improvements to church property.” Colonial Bank was not told that the purpose of the funds was to pay for the Hamakers’ defense. After the loan was funded, Patterson’s pastor disbursed $50,000 to Hamaker Construction Company (“HCC”), an entity formed by the Hamakers’ son. HCC purportedly had a contract to perform construction services at Patterson’s church, but HCC never performed any such services. Instead, HCC transferred the money to Walter Braswell, the Hamakers’ trial counsel.6