A 59-year-old Methodist minister who'd never bought land in her life testified in federal court Tuesday that she was left holding $600,000 in mortgages and had to declare bankruptcy after Josh Dobson and Paul Gott III stopped making promised payments on three Dade County, Ga., land parcels.
Patricia Daniels said she'd signed for the parcels under a "no down payment" deal in which Dobson explained his company, Southern Group, would pay the money down and monthly payments for three years. At the end of the three-year period the company would buy back the land and pay out up to $20,000 for signees who'd vouched their good credit to get the bank loans.
Dobson and Gott face a 12-count indictment on charges of conspiracy, wire fraud and money laundering in an alleged $45 million land sales development deal called The Preserve near Rising Fawn, Ga.
Prosecutors are highlighting five buyers in the trial but estimates range in the dozens of people affected by the costly land deal.
In the second day of the trial Tuesday, Jim Tobin completed testimony and Daniels took the stand for the prosecution.
Tobin, who attended Daniels' Miami, Fla.-area church, first approached Daniels with the land deal after he'd begun working with Dobson and seen the payments made for six months.
So Daniels signed on the dotted line for three land parcels in mid-2008.
Tobin and Daniels testified that Southern Group sent checks to her that then were routed through Tobin to pay the down payments to the bank. The bank then issued the full loan to Southern Group, the seller.
But prosecutors John MacCoon and Perry Piper explained that was illegal.
The banks are being defrauded, and buyers and sellers have to sign documents saying how much money they're putting into the purchase, they said.
When the money is not coming from the buyer, the bank doesn't know the full credit strength of the buyer.
But Gott's attorney, John McDougal, challenged Tobin repeatedly on the stand as to how the money got to the bank.
"I didn't make down payments with my money," Tobin said.
"Well, you were supposed to do that, weren't you," McDougal replied.
"No sir, the deal was explained as no money down and no monthly payments for three years," Tobin said.
McDougal pressed Tobin for the next 15 minutes on that question and Tobin's role with Innovative Capital Ventures, a Florida-based investment company that worked with Southern Group.
"Yes sir, you're the liaison, how does the information go to [ICV] except through you?" McDougal said.
Tobin said he wasn't a lawyer and didn't know the specifics of what each company did, only that he was to gather the information and pass it along. For this he received commission payments in the thousands of dollars.
The questions thrust at the heart of defense attorneys McDougal and Chris Townley's argument on the first day of the trial Monday -- that Tobin and other buyers circumvented rules to get into the property investment without paying the down payment themselves.
The trial is scheduled to resume in U.S. District Judge Curtis Collier's courtroom today.