Opinion ID: 77396
Heading Depth: 2
Heading Rank: 4

Heading: Investigation and Legal Action

Text: 19 While the Bancshares board was meeting on July 15, 2000, the Marshall County Sheriff's Department searched MCC's office, seizing its computers, time sheets and other records. These records revealed the cost and billing patterns described above. In addition, MCC's records showed that on hundreds of occasions, charges that MCC had billed to Community Bank were described in MCC's records with notations such as Farm or HVF, revealing that the work had actually been performed at Heritage Valley Farms. 3 In her testimony at trial, Linda Hamaker acknowledged transferring costs incurred at Heritage Valley Farms to Community Bank accounts. 4 20 In late 2000, several Bancshares shareholders filed a derivative action alleging that Patterson, Bishop, the Hamakers, and MCC fraudulently used bank funds for non-bank purposes, principally the construction at Heritage Valley Farms. In response, Community Bank and Bancshares formed a Special Litigation Committee and hired attorney William Lafferty to investigate the allegations. 21 On May 11, 2001, Lafferty interviewed Dewey and Linda Hamaker together. Dewey Hamaker told Lafferty that MCC had never billed Community Bank for work done at Heritage Valley Farms. Dewey Hamaker acknowledged to Lafferty that MCC generally billed on a cost plus basis, but asserted to Lafferty that MCC had planned to refrain from billing Patterson for the work at Heritage Valley Farms until the completion of the project. Linda Hamaker made no statements to Lafferty either confirming or contradicting her husband's characterization of MCC's billing practices. 22 In October, 2001, FBI agents executed a search warrant at the Hamakers' residence. As the FBI agents entered the Hamakers' house, Dewey Hamaker complained, why am I the only one being punished and losing property in this thing? I wasn't the only one involved in this scheme.