Entrepreneur wins knockout in court
Case against Montreal native ‘ doesn’t pass the smell-good test’
It would be an understatement to say Yank Barry has had a colourful business career. In his 20s, the Montreal native ran a record company and was convicted for helping the Mafia extort $82,000 from his partner. He later toured with the Kingsmen, famous for their hit Louie Louie, became a music producer and sports agent, and befriended boxing legend Muhammad Ali. Fifteen years ago he got into the business of selling meat substitutes by the tub to North American jails through his firm, VitaPro Foods Inc. — with Mr. Ali acting as his pitchman.
Then in 2001 he was convicted by a jury in Houston on bribery, money laundering and conspiracy charges after allegedly bribing former Texas prisons chief James A. Collins with US$20,000 to push through a five-year US$33.7million deal to supply the prison system with VitaPro’s soy-based product.
Mr. Barry, now 57 and living in the Bahamas (after making most of his US$40-million fortune trading commodities and currency futures), has always maintained his innocence and claimed to be the subject of a conspiracy by the FBI, U.S. Justice department and former Texas governor, and now U.S. President, George W. Bush.
“ I’m not a saint, but I definitely wasn’t a sinner on this deal,” said Mr. Barry, born Gerald Barry Falovitch, in an interview this week. “They literally destroyed us.”
As it turns out, the judge in the case largely agrees with him. Two weeks ago, U.S. Judge Lynn Hughes with the Southern District of Texas overturned the jury’s verdict and acquitted Mr. Barry and Mr. Collins with a blistering, 49-page ruling that upholds many of Mr. Barry’s claims.
Furthermore, Oliver “Buck” Revell, a former associate deputy director for investigations and counterintelligence at the U.S. Federal Bureau of Investigation who testified for the accused, says the whole case “doesn’t pass the smell-good test. Mr. Revell, now a Dallas-based consultant, said in an interview “there are serious indications of misconduct on the part of several justice department officials. It’s a matter that needs to be scrutinized.”
Judge Hughes’ ruling is almost as colourful as Mr. Barry’s past. For starters, he notes the appeal was delayed by a year after the court reporter had a nervous breakdown and turned in a transcript riddled with errors. Hours of tape also vanished; she was later convicted of contempt of court.
Mr. Barry initially sued when the Texas government cancelled the 1995 contract a year later – at the urging of Mr. Bush following his election as governor. Mr. Barry testified after he pressed on with his case, but Allen Polunsky, chairman of the Texas Board of Criminal Justice, warned him to “drop the civil case, or your troubles are going to start.”
Two weeks later he and Mr. Collins were indicted.
Their charges stemmed from the fact Mr. Collins, who had negotiated the contract, ordered his staff to finalize the deal with VitaPro two days before he was forced to quit as head of the Texas prison system for an unrelated matter. He was then hired by VitaPro on a $1,000 a day consulting contract to sell its products outside Texas.
In fact, the court heard it was Mr. Collins’ successor who approved the deal and signed the contract, which led to complaints from the beef industry – a major supporter of Mr. Bush’s campaign – the judge said. Both accused testified they acted appropriately and no bribes were involved in the deal, which aimed to save money on food costs for Texas prisons (the product, produced for VitaPro by outside contractors, cost the prison system 59% less than beef and 76% less than chicken).
Meanwhile, the prosecution’s star witness was Patrick Graham, a convicted swindler and tax cheat who had worked for VitaPro selling the product to Louisiana prisons. He told authorities the deal was a bribe scheme when he was arrested in January, 1996, for taking US$150,000 from a woman on a false promise to break her boyfriend out of prison.
Mr. Graham was offered immunity from prosecution or reduced sentences on a number of illegal deals by a senior U.S. attorney for the eastern district of Louisiana, Jim Letten, for his testimony in the VitaPro case.
In the ruling, the judge attacked Mr. Letten’s conduct regarding his dealings with the witness, saying the prosecutor has an “inability to shoot straight.”
Furthermore, he reduced Mr. Graham’s testimony — the only incriminating evidence offered by the government — to ash, calling him a “totally unbelievable” witness who “simply knew nothing” about dealings between the two accused.
“ The government knew or should have known that Graham was lying; his deceit was manifest. But for Graham’s perjured testimony, it is unlikely that the jury would have convicted the defendants.”
Nancy Herrera, a spokeswoman for the U.S. Attorney’s office for the southern district of Texas, said it has filed a notice of appeal and is “considering” its options. “Beyond that, there’s nothing more I can say,” she said.
But the loquacious and flamboyant Mr. Barry has plenty to say. His name has been besmirched and his business — it had close to $100-million in annual revenue before he was charged — ruined after his customers backed out. He was dropped as a client by two banks, asked to resign from three charity boards, and couldn’t get home or life insurance, he says. Adding to his woes, his daughter, a heavy drug user in her 20s, died of heart failure at age 35 last year.
Mr. Barry intends to have the last word. He is writing a book called Bushwhacked, in which he plans to vilify those involved in his case, including the President. And he is preparing to launch a malicious prosecution lawsuit against U.S. authorities.
“It’s not for people to do this and not be held accountable, and I’m going to hold them accountable,” he says. “I’ve said this for six years, and I have some pretty powerful friends. And this is not going to go away. I’m not going to be vindictive. I’m not going after money. If my legacy can be that I stopped them from doing this to someone else, that’s enough.”
Financial Post ssilcoff@ mon. nationalpost. com