Everyone into the Poole (except the jurors)
After a short delay involving some courtroom equipment, the bench trial of US v. Joseph Poole got underway in Judge Bennett’s courtroom this morning at around 9:40.
Judge Bennett was his personable self, welcoming both sides and explaining to Ms. Renee Bronfein Ades, who along with Andy Radding, is representing the defendant, that if he mispronounces her name, she should feel free to call him Judge Benay. As an aside, I should note here that while I have appeared before Judge Bennett several times, never with an “e” at the end of my name, I have never taken advantage of His Honor’s similarly generous offer to me, though I could have.
With the aide of a rudimentary powerpoint presentation during his opening statement, Assistant US Attorney Steve Schenning, dressed in a khaki suit, attempted to persuade Judge Richard Bennett, dressed in a black robe, that defendant Poole conspired with another to obstruct the IRS function of assessing and collecting taxes. The “other,” according to prosecutors, is Stan Mavroulis.
Specifically, the government alleges that Mr. Poole, an accountant for Bay Area Accounting and Management, served as an accountant for Stan Mavroulis, the owner/operator of Fidelity Home Mortgage Company (FHMC). FHMC, according to prosecutors, was a mortgage brokerage company that earned fees through the financing of real estate transactions and the selling of mortgage-backed securities to investors. According to prosecutors, Stan Mavroulis and FHMC failed to report these earned fees as taxable income on various tax forms.
Among the allegations, AUSA Schenning suggested that Judge Bennett would see evidence that Mr. Mavroulis’ personal expenses were paid for with company funds, thereby lowering the company’s net profit, resulting in an understatement of income and an underpayment of taxes. Mr. Schenning then provided the Court with some examples: a $67,000 personal trip to Greece; tuition bills for a family member’s attendance at Towson University; $19,000 for water and electric bills for Mr. Mavroulis’ house; a $3200 cable bill (if anything, that’s evidence that it’s time to buy bottled water and switch to DirecTV).
AUSA Schenning then outlined other areas of Mr. Mavroulis’s alleged misconduct by suggesting that company funds were used to purchase $290,000 worth of personal stock through E*Trade.
But since this is US v. Poole, and not US v. Mavroulis, AUSA Schenning had to eventually return to Mr. Poole’s own alleged actions. And he did, stating that Mr. Poole had complete access to all of FHMC’s books and that Poole’s knowledge of the false returns would be proved through contradictions in various returns and disclosures, prepared by Mr. Poole, as well as Poole’s own statements when confronted by law enforcement officers investigating the matter.
AUSA Schenning thanked the judge and returned to his seat, at which point Andy Radding stood, drank a little water and then told the judge in very clear terms that he promised to be more brief than the government because he wanted to get to the evidence. Mr. Radding stood by his word, finishing up in 9 minutes (about 20 minutes shorter than the government), but making some very deliberate points in those 9 minutes.
To sum up his defense, Mr. Radding explained to the judge that Mr. Poole relied on FHMC’s accounting department to do its job and that he, Mr. Poole, accepted FHMC’s information at face value. Simply put, Mr. Poole had no knowledge that this alleged misconduct was ongoing. Mr. Radding portrayed Mr. Poole as a competent accountant who was simply not qualified to handle FHMC’s books with the sophistication required. According to Mr. Radding, Bay Area Accounting did not have sufficient support or staff to handle FHMC’s books as FHMC expanded into a nationwide organization.
Mr. Radding promised Judge Bennett that, “if we have to hear a defense case,” (possibly suggesting that this case is an appropriate candidate for a successful Rule 29 motion), then he would hear from Mr. Poole himself. There was no reaction from AUSAs Schenning or Jonathan Biran, though one might guess that they’ll be tossing a quarter later to see who gets to cross the defendant.
Mr. Radding returned to his seat, and the government called its first witness, an IRS CID agent, who preliminarily testified that he was a graduate of Towson University. Presumably, he paid his own way.