Jack slipped by that 1...
Stockwatch News Item
B.C. Securities Commission (C-*BCSC) - Street Wire
BCSC-known Purdy vindicated by Miami jury -- not guilty
B.C. Securities Commission *BCSC
Friday February 28 2003 Street Wire
by Stockwatch Miami correspondent
In a resounding victory for John (Jack) Purdy and the first major defeat for Florida prosecutors in the Bermuda Short sting, the veteran Vancouver penny stock promoter was acquitted on all three counts of money laundering Friday, the day after an eight-day jury trial in Miami federal court ended. The U.S. government, after an extensive sting operation, failed to prove that Mr. Purdy agreed to launder any dirty money, let alone the $25-million a year they alleged he agreed to wash for undercover RCMP and FBI agents posing as Colombian Cali cocaine cartel figures. (All figures are in U.S. dollars.)
In the dramatic moment of truth, Mr. Purdy smiled as the not guilty verdicts were read out, and appeared to have tears well up in his eyes as it became apparent he had beaten the charges brought as part of the joint RCMP-FBI sting operation.
"I'm just very, very grateful," Mr. Purdy told a Stockwatch reporter after the proceedings. "You don't ever want to go through something like this."
Two of Mr. Purdy's biggest Howe Street supporters, promoter Don Sheldon, who helped him make bail by posting a $1-million pledge on the downtown Vancouver office building they co-own and operate out of, and senior Canaccord Capital broker Graham Harris, did not return calls for comment on his acquittal.
While Mr. Purdy faces a second Bermuda Short later this year on an earlier phase of the money laundering sting, the current trial is believed to be the government's best case.
As Mr. Purdy was a major target in the money laundering sting, his acquittal may buoy the spirits of the top target, his associate Martin Chambers, who has been in jail without bail since his arrest six months ago. A Miami judge recently indicated she may release Mr. Chambers, a reputed Hells Angels associate, although the continuation of his bail review hearing, set for Friday, was rescheduled for March 14 before the Purdy verdict came out.
In a rare media comment, hours before the Purdy verdict, Miami defence lawyer Gerald Houlihan told Vancouver radio station CKNW that the RCMP is trying to "get back" at his client Mr. Chambers through "outrageous" behavior. Mr. Houlihan said he has convinced the judge the Mounties will go to any lengths to keep Mr. Chambers behind bars. He also claims the charges are unfounded, and the RCMP are bullying witnesses into testifying against Mr. Chambers.
After the verdict, Neal Sonnett, Mr. Purdy's defence attorney, was candid with a Stockwatch reporter. Mr. Sonnett said he did not know what to expect while the jury was deliberating for a total of nine hours. "After 35 years of practicing law, I've learned never to second guess juries," he said. Former prosecutor Mr. Sonnett, one of Florida's top defence attorneys, is a past president of the National Association of Criminal Defence Lawyers, and currently a high-profile critic of the U.S. Justice Department's moves to reduce individuals' legal rights in the wake of Sept. 11, 2001.
"I was able to show the jury that Kevan Garner was lying, and thank God the jury saw that," Mr. Sonnett said. The defence lawyer was referring to the testimony of the government's star witness, a former business partner of Mr. Purdy's who claimed he was acting in concert with Mr. Purdy when he set up a money laundering operation through a shell corporation.
It was a point that the jurors appeared to agree with.
"Initially we all felt bad for the guy (Mr. Garner), but afterward, under cross-examination, it looked like he was lying," juror George Romano said after the trial. (In the United States, jurors are allowed to be identified and talk to the press, unlike in Canada, where they enjoy a veil of secrecy, which is a criminal offence to pierce.)
Mr. Purdy refused to evaluate the deeds of Mr. Garner. "I just hope everybody can get on with their lives," he said.
The jurors also agreed with Mr. Sonnett's arguments that Mr. Purdy had been entrapped in the sting operation.
"The first thing we agreed on was that it was entrapment," said Mr. Romano. "We said no real drug dealer would tell you that this was drug money."
During the deliberations, the jury asked to view a surveillance video tape in which Mr. Purdy met with undercover agents on a luxury yacht in Fort Lauderdale and was told about the drug money.
Assistant U.S. Attorney Richard Hong had played excerpts of the tape in his closing statement, and had argued that this was the evidence "in black-and-white" of Mr. Purdy's knowledge -- and acceptance of -- the fact that he was dealing with drug money.
"We were actually able to watch the parts cut out," said another juror, Sihan Silva, which gave the jurors a different perspective on six-hour conversation on the boat.
"The way it was originally presented, I don't want to say it was deceiving, but we got a different feel for it by watching four hours of the tape," agreed Mr. Romano.
Mr. Romano and Ms. Silva said they relied on the expertise of fellow juror Melanie Castillo, a certified public accountant, to explain some of the financial transactions described in the trial.
The government's attempts portray Mr. Purdy's involvement in Redmond Capital and Redcell, two Howe Street penny stock promotions, as evidence of previous wrongdoing backfired, Ms. Castillo explained. "As a matter of fact, it cleared any doubts we had in that he wanted to do legitimate business," said Ms. Castillo.
Mr. Sonnett announced in court that he would be asking for a bail modification so that Mr. Purdy would be able to return to Vancouver instead of being restricted to Southern Florida while he awaits a second trial on further Bermuda Short money laundering charges.
Prosecutor Mr. Hong did not show much emotion after the verdict was read.
"The jury verdict speaks for itself," Mr. Hong said. "We're disappointed."
Later, while the jurors were standing on the steps of the courthouse speaking to reporters, Mr. Sonnett and Mr. Purdy emerged from the building and greeted the jurors, who exchanged pleasantries back.
"Your defence attorney helped you quite a bit," Mr. Romano told Mr. Purdy.
Mr. Purdy agreed wholeheartedly.
The not-guilty verdict also vindicates defence attorney Mr. Sonnett, who tried Thursday, after the prosecution rested its case, to get a directed order of acquittal. (Unlike in Canada, such motions are commonplace in the U.S., and losing them is not a big deal.)
A recorded conversation of Mr. Purdy complaining that he was unaware of the money laundering practices of his partner Mr. Garner was not enough to get the judge to acquit him for lack of evidence.
Judge Moore declined to grant the motion for a judgment of acquittal from Mr. Sonnett, allowing the two sides' closing arguments to proceed, and for the case to go to the jury.
Judge Moore said the determining factor in his decision not to grant the motion may have been the testimony of Mr. Garner. Mr. Garner was a business associate of Mr. Purdy's and was a co-defendant in the case until he pled guilty in early December.
"If we were without Mr. Garner's testimony, it might be a bit more troubling for me at this stage in the trial," Judge Moore said about Mr. Sonnett's concerns about the evidence. "Mr. Garner's testimony puts us in a little different standpoint of evaluating the evidence at this stage."
"So what we need to do is determine whether a reasonable jury can establish the credibility of Mr. Garner," the judge said.
Mr. Sonnett told the judge that an Aug. 12 tape of a telephone conversation between Mr. Purdy and an undercover RCMP officer, code name Bill McDonald, was illustrative that Mr. Purdy was not involved in Mr. Garner's dealings. (The undercover officer was luring Mr. Purdy to his subsequent arrest Aug. 14 in New York as part of the broad Bermuda Short arrest operation.)
"One, I can't deal with cash money. And two, then I find out my people unhappy yelling and screaming around ... ####### bonehead Kevan Garner was doing a deal with you that I didn't know about. I don't want to do this Bill," Mr. Purdy said in the recording.
Mr. Moore said he would leave it to the jury to decide whether Mr. Purdy was being sincere, especially since Mr. Garner suggested during his testimony that Mr. Purdy had begun to suspect that he might be the subject of sting operation.
"In a money laundering conspiracy, the source of the funds are obscured, they want a wall between themselves and the source," Judge said. "The money launder wants plausible deniability, a willful blindness to the funds, so if anybody accuses him, he can say, 'I don't know.'"
In a preview to his closing arguments, Mr. Sonnett also argued that his client had been entrapped by law enforcement officials.
Mr. Purdy's original intent had been to sell the undercover agents two boats, not for cash, but for fully traceable wire transfers, Mr. Sonnett said. Mr. Purdy had refused their efforts as early as 1999 to give him cash, Mr. Sonnett argued.
"Mr. Purdy said he wasn't interested. They should have let it go then, in 1999, but they carried on," Mr. Sonnett said, repeating earlier claims that it was only when "goons" appeared in the Vancouver offices shared with Mr. Garner that he found out about the details of the deal.
"Mr. Purdy's later involvement can be very easily explained. His life had been threatened and he was told after the appearance of the goon that he was being held accountable," Mr. Sonnett said.
Prosecutor Mr. Hong was not impressed.
Mr. Hong said that Mr. Purdy was told early and often about the source of the funds that he was designating his partners to deal with.
Referring to a February, 2001, video tape shown during the trial of a meeting between Jack Purdy and two undercover agents, Bill McDonald and Ricardo (the FBI undercover agent), Mr. Hong pointed out that the source of the funds were clear.
"During that meeting, agent (Ricardo) Pagan said, 'were not forcing to you to anything, you can back out.' But Mr. Purdy said 'no,' and did not turn back and did not back out," Mr. Hong told the judge.
"The next event is that he introduced Kevan Garner to Bill and Ricardo. If not for Jack Purdy, Kevan Garner would not have met them. Then, in the meeting in the restaurant, Kevan Garner told Jack Purdy of the source of the funds, giving him another chance to back out."
Mr. Sonnett disputed what the reaction should have been.
"In the February tape, Mr. Purdy says, 'If I know it was cocaine money, I'd thank you for the shrimp and leave,'" said Mr. Sonnett.
"After that he stalls and doesn't take the money, even though he was offered the cash right then. ... That's February 2002 and what does he do after that? Nothing. There is a lot of evidence that this is Mr. Garner's deal," the defence lawyer told the court.
"So he doesn't jump up and leave when they tell him it's cocaine money? But this is after they 'dogged' him for months to come down to this boat. And when he comes down they tell him it's cocaine money. He didn't leave. I don't know I would leave, I'm not sure Your Honour would leave. These are cocaine dealers, it shouldn't be surprising that Mr. Purdy waited until the meeting was over and then took himself to safety," Mr. Sonnett said.
"There's no duty to withdraw from a conspiracy that you are not a part of," Mr. Sonnet reiterated.
"The boats -- the only reason that Mr. Garner got involved -- were supposed to be bought with wired funds."
Mr. Sonnett went back to the transcript of the Aug. 12 telephone conversation between Mr. Purdy and Mr. McDonald.
"I understand you've been covering Kevan's sorry ass," Mr. Purdy is recorded as saying.
"Yes, I have, actually," responds Mr. McDonald, in what Mr. Sonnett described as an admission by the undercover agent that Mr. Purdy was not involved.
"He knew it was being recorded, why didn't he say something like 'come on Jack, you know what's going on,'" Mr. Sonnett argued.
"I told you last time when, when we went through this ... Kevan does not communicate directly with me and he is one fellow in my office that I have done two or three deals with," Mr. Purdy is recorded as saying to Mr. McDonald.
"You know he's a good guy, he's out there working, he's doing stuff, but I don't babysit him, and I don't run what he does," stated Mr. Purdy.
These discussions, however, took place just days before Mr. Garner and Mr. Purdy were arrested in the U.S., and after the point where Mr. Garner claimed that Mr. Purdy began to suspect a sting operation might be in the works.
Judge Moore perhaps put the prospects most succinctly.
"If the jury chooses to believe Mr. Garner, it seems to me they convict. If they don't, they acquit," Judge Moore said. |
