Fraud-case lawyer seeks legal fees
Petition: Ex-bank exec’s trial ‘conducted in bad faith’
In an unusual move, the attorney for one of two former One Bank & Trust executives acquitted of bank fraud charges Oct. 31 is asking a judge to order the government to pay the man’s litigation expenses.
Citing the Equal Access to Justice Act, attorney Gary Corum of Little Rock asserted in a petition filed Thursday that the award is appropriate “because the position of the United States in the prosecution of Michael Heald was vexatious, frivolous, and conducted in bad faith.”
The petition doesn’t say how much Heald’s defense cost him.
Heald, 56, a former chief operating officer of the Little Rock-based community bank, and Bradley Stephen Paul, 54, a former executive vice president at the bank, were tried by a federal jury for three weeks in October
on charges of conspiring to break federal banking laws, conspiring to conduct an illegal financial transaction, and aiding and abetting a false report submitted to the Federal Deposit Insurance Corp. Paul also faced an additional charge of aiding and abetting a false entry by One Bank to the FDIC.
Jurors found both men innocent of all charges after six hours of deliberation. Heald and Paul had been under indictment since March 2015, and under scrutiny for years before that, on accusations of helping to hide a bad $1.5 million loan from federal regulators to help the bank obtain a $17.3 million government loan.
During the course of an investigation led by the IRS, Heald left banking altogether to go into business with a friend, while the FDIC allowed Paul to continue working as a banker in Pea Ridge, though he quit that job to prepare for his trial.
Two other men who were
indicted alongside Heald and Paul negotiated agreements in exchange for their testimony about behind-the-scenes maneuvers at the bank while it was under the direction of Layton Stuart, who died in 2013, several months after regulators removed him from the bank’s helm.
One of the two men, Gary Rickenbach, 59, a former senior executive vice president, is to be sentenced at 1:30 p.m. Wednesday on a charge of misprision of a felony, or failing to report a crime about which he had knowledge. The other, Tom Monroe Whitehead, 60, who admitted helping Stuart illegally obtain bank money for personal expenses, was given immunity from prosecution, and his charges were dropped.
Corum asserted in the petition that “the criminal case relentlessly pursued against Michael Heald was objectively deficient. The position of the United States lacked legal merit and factual foundation, and the government’s conduct, when viewed objectively, manifests maliciousness or intent
to harass or annoy.”
Attached to the seven-page petition are numerous exhibits totaling hundreds of pages, including documentation that Corum had investigated the allegations himself and shared evidence from that investigation with prosecutors. Corum cited “a massive evidentiary record of extensive interactions between the government and Mr. Heald and his counsel for more than three and one-half years.”
“The government was provided with virtually unprecedented amounts of evidence and rational explanation that would dissuade any reasonably objective prosecutor from pursing the charges against Mike Heald,” Corum wrote.
The case was prosecuted by assistant U.S. attorneys Pat Harris and Angela Jegley, who are expected to file a written response.
It is common for prevailing parties in civil cases to seek reimbursement for attorney’s fees and other litigation costs, but the request isn’t common in criminal cases.