May 24, 2001
New evidence puts trial for 3 defendants on hold
BY CARL WALWORTH
URBANA - The trial for three of the four remaining defendants
in the Omega Trust and Trading case is on hold indefinitely.
At a hearing on Wednesday, federal judge Mike McCuskey for
the second time in three weeks granted a motion to continue
the trial for Michael Kodosky, Karen Tillquist-Baibus and
James Turner. The trial for defendant Arlene Diamond, who has
been in custody since late last August, remains set for June 5.
The latest trial delay came after Kodosky's lawyer, Jerold
Barringer of Nokomis, said contents of tapes held by Gary
Holland, who prosecutors describe as an unindicted co-conspirator, could bolster the case of the defendants.
Barringer said that Holland, who has attended several court hearings with Kodosky and Baibus, recently called Barringer's office and arranged a meeting last Sunday in Taylorville. Holland told Barringer he has between 300 and 500 previously undisclosed tapes of conversations purportedly between Holland and Clyde D. Hood of Mattoon from 1996-2000, and other Omega-related items.
Hood, who is accused of having the lead role in a phony investment program called Omega, pleaded guilty in April to mail/wire fraud conspiracy, money laundering conspiracy and filing a false tax return. Omega investors were told to expect a $5,100 return on a $100 investment in about nine months. But prosecutors say no one received the promised return, and more than 10,000 people worldwide were defrauded of more than $20 million.
Barringer told McCuskey that Holland didn't say why he didn't disclose the tapes earlier. Nineteen people were indicted in the Omega case last August and 15 have pleaded guilty to some role in the conspiracy.
Holland took most but not all of the items home with him after about a four-hour meeting with Barringer.
Barringer said he believes the tapes amount to a "running record" of Hood's status in Omega. The tapes could contradict testimony of prosecution witnesses and support defense arguments that some Omega leaders believed it was a legitimate investment program.
Lead prosecutor Esteban Sanchez questioned how Barringer could obtain the tapes, noting that Holland may decline to share the information based on his Fifth Amendment right.
But prosecutors acknowledged it's clear that if new evidence could help the defendants, the judge must allow the continuance.
"It's a messy situation but it would be prudent for defendants to review it (the tapes)," said Assistant U.S. Attorney Colin Bruce.
Holland attended several Omega hearings in Urbana but wasn't in the courtroom on Wednesday to hear McCuskey's ruling and comments about the development.
"He is the fly in the ointment," McCuskey said of Holland, noting that the delay increases costs for defendants, the prosecution and the court, which has been reviewing questionnaires sent to some 375 potential jurors. "The court reluctantly and very disheartenly will grant the motion to continue."
Diamond and her attorney, Diana Lenik, must decide whether to go forward with trial on June 5 or seek a continuance. They are to make that determination in the next week, presumably after Lenik has an opportunity to review some of the information Holland gave to Barringer. Because Diamond is in custody, McCuskey said she's entitled to a June trial.
The continuance was one of a series of developments discussed in
Prosecutors last Friday took 18 boxes of documents from the Mattoon law office of Steve Ryan, Hood's longtime lawyer who was removed from the case early this year because of a potential conflict of interest. Hood, in interviews with prosecutors on April 17 and 19, waived the attorney-client privilege, opening the door for a subpoena of material from Ryan's representation of Hood.
Lenik successfully argued that prosecutors be barred from using the material for anything other than rebuttal or to impeach a witness at trial. "This has got to stop," she said of the government adding to documents that already number in the hundreds of thousands from an investigation that's at least six years old.
McCuskey had harsh words for Sanchez and Ryan on the Ryan-related issues, noting that prosecutors likely could have had Ryan removed from the case as early as last August and resolved issues related to the material in Ryan's possession months ago.
The judge also granted a motion to have Kodosky examined by Bloomington psychiatrist Robert Chapman after Barringer said that Kodosky sometimes refuses to listen to his lawyer, and is unwilling to tell all that he knows to his lawyer, in part because Kodosky thinks Omega will stay pay off.
McCuskey said he would have denied the motion for the mental
competency exam had the trial been set to go in June. But with the delay, McCuskey agreed to the examination "as a cautious exercise of discretion."
Earlier, McCuskey ruled prosecutors may use summaries of bank accounts from Turner over the objection of Turner's lawyer, John Gadau.
Gadau asked that the evidence from the accounts be narrowly tailored to the indictments, items such as a loan agreement with Hood and a $120,920 cash transaction to make a payment on the now-closed Bluebird diner restaurant in Mattoon. Gadau argued the rest of the information in the accounts is irrelevant and could be prejudicial, particularly cash-only transactions. McCuskey said the summaries are an accounting function that should simplify matters for the jury.
Among the transactions are nine checks totaling $81,000 written to William Revelle from a bank in Dubai that were deposited in Turner's account at what was the Central National Bank of Mattoon, now Firstar.