Charge Against Attorney Moser Points to Skokos Deal

by Gwen Moritz  on Monday, Feb. 9, 2004 12:00 am  

The 1996 transaction that has resulted in a federal fraud charge against Little Rock lawyer Keith Moser was the sale of Cellular One by Little Rock lawyer Theodore C. "Ted" Skokos Sr., various public records indicate.

Skokos has not been charged or named in any criminal complaint.

He told Arkansas Business in a written statement that he had not been questioned about the transaction by any government agency and that he relied "solely upon the advice and recommendation" of Moser's former law firm, Jewell & Moser, in handling the proceeds of the sale.

Neither Moser nor his attorney, former U.S. Attorney Chuck Banks, returned phone messages left last week.

Moser, 47, was charged last month with conspiracy to defraud the United States by helping "a certain Little Rock based executive" who was also described as a "licensed attorney in Arkansas" evade payment of capital gains taxes on $9,987,314 received in the sale of "a communications company to Southwestern Bell Corp." on Aug. 9, 1996.

That is the date on which Little Rock Cellular Partnership, a joint venture between Skokos and AT&T Wireless Services Inc., sold Cellular One to Southwestern Bell, according to records of the Arkansas Public Service Commission. Skokos'

10.34 percent share of the sale was $9,987,313.86, according to pleadings presented to the Arkansas Supreme Court in an appeal of Skokos' exceedingly messy divorce from Pamela F. Skokos.

Ted Skokos, 56, has homes in Little Rock, Aspen, Colo., and the U.S. Virgin Islands. On Thursday, six days after Arkansas Business began leaving telephone requests for comment, he faxed the following two-paragraph statement from Aspen:

"In 1996, shortly after reaching an agreement to sell my stock in a local communications company, I was approached by the law firm of Jewell & Moser regarding the legal structuring of the sale. I was assured by the lawyers that their law firm had both the requisite expertise and considerable experience in structuring sales such as mine. Relying solely upon the advice and recommendation of Jewel [sic] & Moser that they could and would obtain all necessary approvals for the transaction by the appropriate governmental agencies involved, I proceeded as recommended.

"Since the closing of the sale, I have heard nothing further from anyone about this particular transaction. I have never been questioned, interviewed, contacted, directed or invited to appear before any governmental agency regarding the propriety of the transaction orchestrated and prepared by the law firm of Jewell & Moser. I was shocked to learn of the indictment filed against Mr. Moser and was totally unaware of any investigations or allegations against Mr. Moser prior to the article that appeared recently in the newspaper."

Barry Jewell, Moser's former law partner, said he was not involved in the handling of Skokos' account. Jewell has sued Moser in Pulaski County Circuit Court alleging various financial irregularities in their defunct partnership.

Keith Moser

A charge of defrauding the government was filed against Moser in U.S. District Court in Little Rock on Jan. 28. According to a statement issued by the U.S. Attorney's Office in Little Rock, the case was transferred to U.S. District Court in Detroit, where apparently unrelated charges of conspiracy to launder money and obstruction of justice were filed against Moser the same day.

Moser is scheduled to enter a plea in Detroit on Feb. 17. He is the fourth and most recent defendant to be charged in Michigan in connection with a kickback scheme that has already resulted in guilty pleas by two Pulaski County residents.

Dan F. Whitt of Maumelle, a client of Moser, has pleaded guilty to conspiracy to launder money for his sometimes successful attempt to extort kickbacks from vendors doing business with Anchor Bay Entertain-ment Co. of Troy, Mich. Whitt, who will be sentenced Feb. 26, was president of the video distribution company from November 1997 until the discovery of the scheme in November 2001.

Whitt's son, former stockbroker David Whitt of Little Rock, was sentenced last month to 15 months in federal prison for wire fraud for his role in transferring the money his father received from one of the vendors. Larry E. Bennett of Plymouth, Mich., who paid kickbacks to Dan Whitt, was sentenced in December to a year in federal prison for wire fraud. He was ordered to share with the Whitts in paying the $592,667 in restitution to Anchor Bay.

Moser is charged with assisting Dan Whitt in soliciting kickbacks and with manufacturing and altering documents in response to a subpoena issued by a federal grand jury in Detroit in May 2002.

Arkansas Charge

Moser was not an attorney of record in the license transfer of Little Rock Cellular Partnership to Southwestern Bell. However, Skokos' son, tax attorney Theodore C. "Teddy" Skokos Jr., practiced with Jewell & Moser for a few years after he received his law license in 1995.

"I had nothing to do with that transaction. Teddy worked for Jewell & Moser, and Teddy probably set Ted up with Keith for tax planning," Barry Jewell said last week.

Teddy Skokos declined to comment for this article.

The Information — a charge filed by a prosecutor as opposed to an indictment by a grand jury — against Moser describes the relationship between Moser and "the executive" only as a conspiracy to defeat the payment of taxes in the Southwestern Bell transaction. It also states specifically that "other individuals both known and unknown to the United States Attorney" were involved in the plot, although no one besides Moser has been named.

The Cellular One transaction, which was completed by the first week of 1997, does not appear to be related to the Anchor Bay kickback scheme, which began in 2000. The simultaneous charges against Moser and transfer of the Arkansas case to Michigan has led to speculation in the legal community that Moser "threw up" information on the alleged tax evasion in negotiations with federal prosecutors.

The charge filed against Moser by Assistant U.S. Attorney Sandra Cherry of Little Rock gives no hint as to how the conspiracy was uncovered. It does say, however, that Moser's plan "would be sufficiently complex to insure that the Internal Revenue Service would not be able to trace the taxable funds back to the executive."

The charge alleges that Moser created a plan of "complicated transactions" that would make it appear to the IRS that "the executive" sold his company to Southwestern Bell for $2.8 million rather than more than $9 million. The balance of the sales price was funneled into a trust represented as a qualified retirement plan on which no taxes would be due until the money was distributed.

"It was further part of an object of the conspiracy that (Moser) would develop a means whereby the executive could gain access to the funds placed in this trust by making it appear that the funds were in the control of a disinterested third party when, in fact, they were under the control of the executive," according to the Information.

Wyoming Connection

While the Information filed against Moser describes 14 "overt acts" in hiding the taxable income from the sale of the cellular phone company, there is not enough information to explain the entire strategy.

Specifically, he is accused in the Information of creating a series of corporations, trusts and partnerships in Wyoming in order to obfuscate the fact that "the executive" retained access to more than $7 million in untaxed proceeds from the sale of Little Rock Cellular Partnership.

Wyoming has been a favorite venue for Moser incorporations. The company he allegedly set up to receive kickback payments for Whitt was incorporated there as well.

A $2.8 million loan from Mercantile Bank (now U.S. Bank) in North Little Rock was also apparently part of the plot, although the Information says only that it was the subject of a meeting that included Moser, "the executive" and "others known to the United States Attorney" on Dec. 16, 1996. That the amount of the loan was identical to the sales price provided to the IRS may or may not be coincidental; it is not further explained in the Information.

Value Judgment

Pam Skokos filed for divorce from Ted Skokos on June 1, 1993, and the decree was granted in March 1995. But issues involved in the financial settlement of the 26-year marriage were still being appealed as late as 2001.

One of the main points of contention was the valuation of two cellular phone businesses — Little Rock Cellular Partner-ship and New Hampshire-based Atlantic Cellular/New Hampshire RSA One LP.

At the time of the divorce decree, expert witnesses testifying for Ted Skokos appraised the couple's shared interest in Little Rock Cellular Partnership for between $2.89 million and $3.1 million and then applied hefty discounts because they controlled only a bit over 10 percent of the stock.

Pam Skokos' experts, meanwhile, testified that LRCP was worth between $5.68 million and $9.86 million and advocated smaller discounts for minority control.

The trial court found Ted Skokos' expert to be "more credible" and valued the two companies together at $5.4 million. Pam Skokos was awarded half that amount.

LRCP was sold a year and a half after the divorce was final, and Ted Skokos' share was the almost $9.99 million referred to in the federal charge against Moser. The New Hampshire company was sold three and a half years after the divorce, and Skokos' share of that was $16.22 million.

Pam Skokos appealed the divorce court's earlier, much lower valuations. The state Supreme Court ruled in April 2001 that the valuations at the time of the divorce were sound and that she was not entitled to share in the subsequent appreciation in the value of the properties.

Virgin Islands

When Ted Skokos resigned from the Arkansas State Bank Board last May, he said he had become a legal resident of the Virgin Islands sometime in 2002. The office telephone number he listed in his letter of resignation belongs to Clearwater Consulting Concepts LLLP on the island of St. John; its chief operating officer, Kirk Boeger, said last week that Skokos was no longer affiliated with the company.

Last year, his wife, attorney and former Miss Arkansas Shannon Boy Skokos, was granted a franchise from the Miss America pageant to conduct a qualifying pageant in the Virgin Islands, and Ted Skokos was identified as its vice president of business and finance.

 

 

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