Presiding Judge Kristi DuBose apologized to jurors, saying “we didn’t plan very well for this” as she adjourned court for the second day in a federal tax evasion conspiracy case aimed at Mobile County License Commissioner Kim Hastie and her husband, John Melvin Hastie Jr.
The case has been marked by numerous sidebars with the judge and what appears to be a lack of communication between federal prosecutors and the Hasties’ defense counsel. Each side has made at least one claim of not seeing specific evidence before the trial began on Tuesday.
However, both sides did manage to agree on dismissing one of the trial’s 14 jurors, a man who told the court after a day of testimony he had a possible conflict of interest with an individual discussed in the case.
When asked by the press, prosecutors wouldn’t disclose who that individual was or whether the juror’s dismissal was related to the allegations of jury tampering filed hours before the trial began.
In his first day of testimony, Michael Johnson — an accountant who works with Hastie Jr. at Cooper Marine & Timberlands — told the court he was provided documents to organize a payment to the Hasties’ daughter that were given to him by Hastie Jr.That $5,323 check made out to daughter Jordan Hastie was the result of a stumpage fee from a timber deal facilitated by Cooper Marine & Timberlands on the property of Neil McMillan, who happens to be a second cousin of Hastie Jr.
To back up their claim the payment was only made to help the Hasties with their daughter’s college tuition, the defense submitted into evidence a letter written by McMillan stating he wanted the stumpage fee for that particular piece of his property to go to Jordan Hastie.
Though later, when McMillan himself was called to the stand, he said he had no knowledge Jordan Hastie was struggling to pay for college. He also testified that he’d never helped pay for her tuition at Auburn University before, nor had he helped pay her younger sister’s private school tuition or “provided any other funds” to the children directly.
McMillan also agreed with a transcript from a telephone interview with a federal agent saying he “thought the family could use the extra money because of their recent federal indictments.” He also didn’t dispute the payment “just happened to occur right as [the Hasties] were indicted.”
Johnson and another accountant with the company both testified it’s not uncommon for landowners to defer their stumpage fees to family members, charites or banks. However, they also both testified to this being the only situation they’ve see where the child of a Cooper, Marine & Timberlands broker received cash for a timber sale.
Both of those employees also said they were never directly told by Hastie Jr. the recipient of the check would be his own daughter.
Tom Bradley, vice president of the company’s timber division, later testified Hastie Jr. had asked him directly for permission prior to organizing the payment to his daughter, but said he had no way of proving that conversation took place.
Though it’s possible Jordan or her father could be called to the stand as witnesses for the defense, so far that hasn’t happened. An FBI agent who interviewed Jordan was called to the stand Wednesday, but answered only a single question before a sidebar was requested by the defense. Afterward, the agent was dismissed with no further questioning from either side.
Later, his brief statement was read to Judge DuBose from a court reporter. According to her statements, Jordan told federal investigators that “the payments she received were for work her father had performed for John Zuckley (president of Mobile Forestry Products) and it was a gift.”
According to the prosecution, at least two payments have been made to Jordan Hastie for work she had no involvement with. Those include the stumpage fee mentioned earlier and a $10,000 check written to Jordan from Zuckley for a land deal Hastie Jr. brokered outside of his work with Cooper Marine & Timberland.
It’s possible the brief statement from Jordan the court reporter read was referring to the latter, but prosecutors never clarified the agent’s statement. Either way, prosecutors maintain the Hasties’ bank records show neither of those checks were deposited into an account Jordan has access to.
Special Agent Ketrick Kelley, the lead agent in the case, also took the stand to discuss his investigation of the Hasties’ multiple bank accounts. The defense questioned his representation of the Hasties’ records because the “demonstrative aids” prosecutors presented to the jury didn’t show all of the Hasties’ bank transactions and incorrectly labeled one of the deposits.
Kelley said the mislabeling was an oversight and that he had only followed the money derived from the funds being questioned. He testified he couldn’t possibly have memorized all of the printed bank documents, which he said were in the “tens of thousands.”
The agent also briefly made the representation there were 56 weeks in a year while answering a question about the Hasties’ 600 bank account transfers since 2009 — a statement many of the defendants’ supporters in the courtroom laughed at audibly. DuBose later advised spectators to remain silent throughout the proceedings.
There was also an issue with a coworker of Hastie Jr.’s named Tom Reddick. Like Hastie Jr., Reddick brokers the sale of timber between sawmills, logging companies and landowners. He also testified to preparing the contract between the company and McMillan, whose timber fee was redirected to the Hasties’ daughter.
Reddick told the court that despite there being two plots of timber harvested, only one was listed in the details of the company’s contract. The second — the proceeds of which were sent via check to Jordan Hastie — was not listed anywhere on the contract.
In his testimony, Reddick said that wasn’t entirely uncommon. He also said his company usually doesn’t create a new contract unless the timeline in the original contract has expired because landowners often have multiple areas they want harvested for timber.
According to Assistant U.S. Attorney Gregory Bordenkircher, Reddick met with federal investigators April 23. Bordenkircher also said his statements on the stand didn’t match what he told investigators the previous week.
Bordenkircher particularly took issue with a copy of the contract prosecutors received as the result of a subpoena to Cooper Marine & Timberland prior to Hastie Jr.’s indictment in January. The second page of that document was off center and and Reddick couldn’t account for where the copy originated.
Bordenkircher also claimed in his interview April 23, Reddick made the representation he received that copy from Hastie Jr. himself, but in court Wednesday afternoon, Reddick never agreed to making those statements.
One of the last witnesses called for the day was Ceresa M. Frenkel, a public accountant that did work for the Hasties after their indictment. That work included filing the Hasties’ amended 2009 joint tax return so that it accurately reflected the $38,400 Hastie Jr. was paid and failed to report.
During cross examination, Frenkel said she was paid directly by Hastie Jr.’s defense attorney Jeff Deen, who is also her client. As a tax professional, Frenkel was also questioned by the prosecution about the tax liability of someone who files their taxes electronically.
In her testimony, Frenkel said the signed documentation accountants have to obtain to file their clients’ income taxes electronically is more important than the signature on the income taxes themselves. She also said it’s common for electronically filed tax documents to not be signed at all.
During the trial’s first day, Kim Hastie’s defense attorney stated she didn’t physically sign the incorrectly submitted tax documents in 2009 because they were filed electronically, but Frenkel said that type of situation wouldn’t absolve someone from their tax liability or the penalty of perjury associated with submitting falsified tax statements.
However, Frenkel also said a party to a joint tax return could potentially be protected from liability under the “innocent spouse” provision, which can protect someone in certain cases where falsified or inaccurate joint returns are submitted to the IRS.
Several of Hastie Jr.’s co-workers and business associates were called by the defense as both material and character witnesses. Four character witnesses were asked about Hastie’s reputation for “truthfulness and honesty,” including Alabama Football Hall of Fame Member and former Crimson Tide halfback James Taylor.
All of those character witnesses testified to Hastie Jr. being “as good as it gets” when it comes to a reputation of honesty and truthfulness. One witness, Don Floyd, went so far as to say no evidence or fact could change his mind about Hastie Jr. He also said, in his opinion, “if he was charged with a crime, he must have been framed.”
In cross examination, all of the character witnesses testified to having very limited knowledge as to the facts of the case outside of what has seen reported in the media.
After two days of testimony, a verdict is expected Thursday in the case. Kim Hastie is expected to face a separate criminal trial for 16 counts of public corruption beginning next month.