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

Heading: Defendants’ other fraudulent conduct

Text: The government also presented evidence that Bishop directed other contractors to bill Community Bank for work performed on HVF and Patterson’s other personal properties.
The architectural firm of Coker, Anderton & Cosper (“CAC”) provided services for HVF and for various Community Bank projects. In early 1998, when CAC was first approached by Patterson and Bishop to work on HVF and Community Bank projects, CAC set up separate billing numbers and separately invoiced the work it performed for HVF and Community Bank. However, Wesley Anderton, one of the principals of CAC, testified that in May 1998, CAC was instructed by defendant Bishop to combine all work for HVF and Community Bank on one invoice. CAC complied with Bishop’s directive, although Anderton testified that CAC found Bishop’s request “rather strange.” As such, CAC began to combine its charges for HVF and Community Bank on one invoice as directed by Bishop, but CAC persisted in submitting cover sheets in which the charges were separated by each job. 11 Bishop then removed the explanatory sheets from the invoices, approved them, and submitted them to Community Bank for payment.5 The government submitted evidence that Community Bank paid approximately $35,000 in charges for CAC work on HVF projects between May 1998 and November 1998. In approximately November 1998, at Bishop’s request, CAC began to provide separate invoices for Community Bank and HVF work. Bishop also asked CAC to provide a separate breakdown of costs incurred on Community Bank and HVF projects between May 1998 and November 1998. Anderton testified that Bishop told CAC that the original, lump-sum billing arrangement had been a “mistake.” By approximately March 1999, the money originally paid by Community Bank for CAC work at HVF had been refunded to the Bank. However, the government presented evidence that in approximately November 1998—i.e., at the same time Bishop instructed CAC to ignore his original lump-sum billing directive and to start separating HVF and Community Bank charges again—certain Bancshares stockholders threatened and then filed a shareholder derivative lawsuit. This lawsuit, known as the “Townes litigation,” questioned the general manner in which Community Bank funds were being spent. 5 Occasionally, the combined invoices would contain relatively small charges that were specifically attributed to miscellaneous expenses incurred at HVF. Bishop paid those amounts by separate check; the government’s theory is that Bishop did this “so as not to arouse suspicion by Community Bank’s accounts payable department.” 12 William Caughren, who was the general counsel of Community Bank in 1998, testified that he met with Patterson and Bishop in November or December 1998 to discuss the Townes litigation. According to Caughren, during that meeting, Patterson said to Bishop that “the next thing that . . . Townes would raise a concern about was the building of [Patterson’s] house.” Caughren further testified that Bishop agreed with Patterson, and that Caughren then assisted Patterson “in draft[ing] some statements for the contractors to sign, stating that they were keeping the two projects [i.e., HVF work and Community Bank work] separate.”
Lighting and Lamp Wholesalers, Inc. (“L&L”) provided light fixtures for HVF and for Community Bank projects. When Bishop began doing business with L&L, he did not request separate accounts, and when L&L supplied fixtures for HVF, the invoices for the fixtures were submitted to and paid by Community Bank. In November 1998, after commencement of the Townes litigation, Bishop opened a separate account for HVF, and thousands of dollars were refunded to Community Bank’s L&L account. Moreover, on an L&L invoice from September 1998, charges were specifically marked as having been incurred by L&L at the “Arena” at HVF. 13 Nevertheless, Bishop crossed out the “Arena” designation and wrote in “Demopolis,” which is the name of a Community Bank branch that was under construction in Demopolis, Alabama. Bishop approved the invoice for payment by Community Bank, and Community Bank paid accordingly.
C.A. Langford Company, Inc. (“Langford”) provided stone materials for both Community Bank projects and HVF. In October 1997, Bishop opened a single account with Langford, in the name of Community Bank. Bishop routinely asked Langford to provide materials to be billed to that account, and Bishop then provided driving directions to the specific locations where he wanted the materials delivered. The directions often led to HVF. Moreover, Langford drivers often were directed to deliver materials to Community Bank’s headquarters in Blountsville and then re-directed to HVF upon their arrival. In December 1998, shortly after the Townes litigation began, Bishop directed Langford to create separate accounts for Community Bank and HVF.
Sheffield Electrical Contractors, Inc. (“Sheffield”) also provided construction services for HVF and Community Bank projects. In December 1998, Bishop directed three Sheffield employees to travel to Auburn, Alabama to 14 perform services on a trailer then occupied by Patterson’s son. Patterson’s son testified that he did not hire or pay Sheffield for the work that was performed. At the time Bishop directed Sheffield to perform the work for Patterson’s son, neither Patterson nor Bishop maintained personal accounts with Sheffield; Community Bank had the sole account. Bishop never told Sheffield’s personnel to bill the Auburn work separately, and the services provided at Auburn were billed to and paid for by Community Bank.
Avant Painting (“Avant”) also provided construction services for HVF and Community Bank projects. In September 1998, Bishop directed Avant to paint Patterson’s son’s trailer in Auburn. Avant did so, and the cost was billed to Community Bank and paid after Bishop’s approval. Patterson’s son testified that he never hired nor paid Avant for the painting work.