Defense begins presenting evidence in fraud case

Defense begins presenting evidence in fraud case

April 16th, 2013 by Todd South in Local Regional News

The Preserve at Rising Fawn, Ga.

The Preserve at Rising Fawn, Ga.

Photo by Laura McNutt /Times Free Press.

Prosecutors in a federal fraud trial here want to keep the story simple.

In the alleged money laundering, wire fraud and conspiracy case involving a $45 million Dade County, Ga., land development, the government's attorneys have shown diagrams tracing money transactions from individuals to banks and back to defendants Josh Dobson and Paul Gott III.

But defense attorneys Chris Townley and John McDougal are looking at the details and telling jurors things are much more complicated than the diagrams would have them believe.

The prosecution's final witness, FBI agent Stan Ruffin, sparred with both defense attorneys on particulars of his investigation on Monday, the fourth day of the trial in U.S. District Judge Curtis Collier's courtroom.

Townley pressed Ruffin on possible errors about dates and company names in the diagram.

McDougal repeatedly questioned Ruffin on whether his client, Gott, was an employee or contractor for Southern Group.

The company was considered the "umbrella entity," Ruffin said, that ran the five or more divisions that did land deals and financing work for The Preserve near Rising Fawn, Ga., and other properties.

Throughout the trial, prosecutors John MacCoon and Perry Piper have alleged that Dobson and Gott told land buyers that the company was using their credit to obtain bank loans for lots in The Preserve. As part of the deal, Southern Group would pay the down payment and monthly mortgage payments for the buyer and then exercise a "buyback option" on the lot at the end of the three-year deal.

The buyer would then be paid up to $20,000 for having signed the mortgage without having paid any money into the property.

But Southern Group ran into money problems along with many real estate companies in 2008 and soon stopped making payments.

This left the rest of the mortgage the responsibility of the signee, or buyer. Many could not pay and defaulted or declared bankruptcy.

The Preserve is "belly up," Piper confirmed with defense witness Larry Ziegler, a former employee of Dobson.

Ziegler worked as a real estate agent from June 2007 until early 2009. He was not charged and testified that he never made any of the down payment or mortgage promises.

Townley had Ziegler review emails and letters he typed up for Dobson that were then sent to Sam Moody at Cornerstone Community Bank clarifying that the buyback provision was an option and not guaranteed.

"Southern Group is under no obligation to exercise this option," according to the email presented in court.

Dobson explains the buyback option in the deals to Moody and bank officers in the letters. The banks did not stop the transactions or change the contracts.

But when Piper questioned Ziegler, he presented the allegations of the fraud scheme to the former real estate agent and asked him if it sounded "deceptive."

"Yes sir," Ziegler replied.