Long-Running Embezzlement Case Yields 'A Legal Perfect Storm'

by Gwen Moritz  on Monday, Nov. 21, 2011 12:00 am  

Little Rock attorney Pat James is defending Garret and Katherine Sorensen in the civil case filed against them by Stephen L. LaFrance Holdings Inc., the parent company of USA Drug.

Whether there was much enthusiasm inside the LaFrance organization for suing a fraternity brother of Stephen L. LaFrance Jr. is not clear. Court filings indicate that LaFrance Holdings pursued the civil lawsuit in an attempt to make both LaFrance Holdings and its insurance carrier whole.

It is crystal clear that the LaFrance camp had no appetite at all for answering questions.

James tried repeatedly to schedule depositions with company founder Stephen LaFrance Sr. and his sons, Stephen Jr. and Jason, but their attorneys objected on the grounds that answering questions would interfere with the criminal prosecution.

Circuit Judge Ernest Sanders Jr., however, refused to stay the civil case. Rather than sit for depositions, the LaFrances dismissed the civil case in June 2010 "without prejudice," meaning it could be refiled within a year.

Progress in the criminal case against the Sorensens and Walters slowed to a crawl while the parties waited for a ruling by the U.S. Supreme Court that limited criminal prosecution in such cases of "honest-services fraud."

The June 2010 decision, in the case of former Enron CEO Jeffrey Skilling, prompted federal prosecutors around the country to dismiss many similar cases. But the U.S. Attorney's Office in Little Rock tweaked its case against the Sorensens and Walters with a superseding indictment, and the prosecution effectively started over in August 2010.

The trial, delayed repeatedly, is currently scheduled to begin on May 1, 2012, nearly three years after the first indictment.

Summer Heat
The civil case also started over. With the one-year deadline looming, LaFrance Holdings renewed its complaint against the Sorensens and Shannon Walters in June of this year.

But, like a football coach trying to manage the game clock, their Rose Law Firm lawyers delayed serving the defendants notice of the refiled case.

Meanwhile, in federal court, Garret Sorensen's criminal defenders, Ted Boswell of Bryant and Floyd Clardy of Dallas, tried to persuade Judge Wilson to allow them to take depositions in the criminal case, including of the three LaFrances.

Generally, depositions are allowed in a criminal case only when a witness is not likely to be available to testify at trial. But Clardy argued that the FBI and prosecutors simply hadn't asked the LaFrances all the right questions - including why Stephen LaFrance Sr. personally signed more than $300,000 worth of checks to the Sorensens' business that he claimed he didn't even know existed.

They wanted records on payments made to previous advertising vendors. They also asked for the minutes of USA Drug board meetings held between October 2005 and October 2007 and the minutes of monthly meetings between USA Drug and Stephens Investment Group of Little Rock. (Click here for a related story.)

 

 

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