NewsChannel 5 Investigates: Capitol Hill Corruption
Appraiser's Attorney Says 'Little Guy' Charged
Posted: 4/5/2006 9:00:00 PM
Updated: 4/7/2006 8:11:25 PM
A real estate appraiser charged with fraud got his turn in court Wednesday, a day after a federal prosecutor described a borrowing scheme and a web of political favors involving two legislators and a former state economic development official.
It all involves a land deal first exposed by a NewsChannel 5 investigation.
James B. Passons, 61, of McMinnville testified that the only thing he did wrong was trust a longtime friend, state Sen. Jerry Cooper, D-Smartt.
"I never intended to defraud anybody," Passons told the jury of eight women and four men. "My error was in trusting Jerry Cooper."
Passons, crying at times as he testified on the second day of his trial, said he prepared an appraisal of Cooper's lumber mill on 13.6 acres in Warren County.
That appraisal included a railroad spur that was not there, but was planned. Passons said Cooper had assured him that the 1998 appraisal would only be used to show the projected value of the property with the spur built.
"You don't know how many times I have kicked myself," Passons testified before his attorney rested the defense case.
U.S. District Judge R. Allan Edgar said he would instruct jurors Thursday on the bank fraud, mail fraud and fraud conspiracy charges against Passons.
Assistant U.S. Attorney Gary Humble said the inflated $1.5 million appraisal showing the rail spur was part of a scheme that helped Cooper arrange a $1.7 million loan for Huntsville, Ala., businessman Anthony C. Auyer to buy the mill.
Humble also said Cooper asked Lt. Gov. John Wilder for help getting that loan and then received help from Bill Baxter, then the Tennessee commissioner for economic development, getting a $485,000 state loan.
Neither Cooper, Wilder nor Baxter, now a Tennessee Valley Authority board member, are charged in the case. Cooper refused to testify at the trial, with his attorney saying prosecutors identified him as a possible target of the ongoing investigation.
Passons' trial started one day after mill buyer Auyer and his bookkeeper wife, Teresa R. Auyer, pleaded guilty to charges of fraud, money laundering and conspiracy. Prosecutors said the Auyers falsified invoices to get some of the borrowed money.
Defense attorney Michael Galligan told jurors that bank executives and U.S. Department of Agriculture officials knew the rail spur was not already built and did not rely on the appraisal to approve the borrowing.
Galligan said that while Humble made references to possible political influence in the loan process the government decided to go after the "little appraiser."
"Don't let the government push you to guess somebody guilty," Galligan told jurors in his closing argument.
Wayne Rodgers, a former BankTennessee lending executive in Collierville, testified he did not recall seeing the appraisal by Passons and on a visit to the lumber mill property saw there was no rail spur before the loan was made in November 1999.
Rodgers said he considered the loan to be shaky and it was approved "probably" because of the involvement of Cooper and Wilder, a member of the bank holding company's board.
"I certainly felt pressure to continue processing it," Rodgers said.
Wilder initially said he spoke with Cooper about the loan but later said he hadn't spoken with the senator. The prosecutor showed jurors a copy of an April 13, 1999, letter reaffirming the inflated appraisal that was faxed to the bank from Cooper's Senate office.
David Maynard, a former U.S. Department of Agriculture rural business specialist who worked on the loan, testified he was aware the rail spur was not yet built on the property. Maynard said he never saw the appraisal but received a telephone call from Wilder. He said Wilder had questions but there was "no pressure."
Maynard said a pending grant for the rail spur was halted by the state.
Although the 2005 indictment doesn't name Cooper, the property owner is identified as an unindicted co-conspirator. Cooper's attorney, Jerry Summers, has said prosecutors have identified the senator as a "potential target" in the ongoing investigation. Cooper has said he did nothing wrong.
The indictment contends Cooper sold the property to Auyer's construction company with a commitment from the state Department of Economic and Community Development that a grant would be issued to build the rail spur, records show.
Baxter has said Cooper called him about a 1998 economic development grant for a railroad spur in Warren County but never mentioned it would benefit him financially by connecting the senator's property to a railroad. (copyright 2006 The Associated Press.)
Click here for a list of all NewsChannel 5 Investigates stories
NewsChannel 5 Investigates: The Ticket Fix
Mount Juliet Psychic Leaves Trail of Victims
New Law Doesn't Handicap Parking Abuses
Hidden Cameras Turned on State Inspector's Work Habits
Lottery Vendor Hands Lucrative Contract to Politically Connected Businessman
School Bus Tape Offers New View of Seat Belt Debate
NewsChannel 5 Investigates: Capitol Hill Corruption
NewsChannel 5 Investigates: NHC Fire
NewsChannel 5 Investigates: High-Dollar Highways
NewsChannel 5 Investigates: Friends in High Places
Continuing Coverage Of Capitol Hill Corruption: Operation Tennesseee Waltz
The NewsChannel 5 Investigates team has received national recognition for its efforts to act as watchdog for our viewers. It has received a Peabody Award, a duPont-Columbia Award, a George Polk Award, National Headliner Awards, Sigma Delta Chi Awards and IRE Awards. More
Read what viewers say about NewsChannel 5 Investigates
Tell us about a situation that needs to be investigated:
Home | News | Weather | Sports | NewsChannel 5+ | Talk of the Town
© 2004 NewsChannel 5.com