Posted 4/30/2012 12:00 am
Updated 11 months ago
The criminal trial of former USA Drug executive Garret Sorensen, his wife and sister-in-law is scheduled to start at 8:30 a.m. Tuesday before U.S. District Judge Bill Wilson, and the defense strategy is becoming clearer and clearer.
Wilson has blocked out four weeks for the jury trial of charges first brought in June 2009.
An affidavit and a report were filed last week by expert witness Steve Scheets, proprietor of SPI Services Inc. of Richardson, Texas. In the report, Scheets argues that Garret and Katherine Sorensen and her sister, co-defendant Shannon Walters, actually saved USA Drug more than $50,000 by setting up a company to act as a media placement agent for the drug store chain.
That savings was in addition, Scheets said, to a $371,000 settlement that USA Drug received from its insurance carrier.
Scheets disputes the work product of an expert witness hired by USA Drug, Little Rock CPA Cheryl Shuffield, who he says overstated the commissions charged by the Sorensens' Multi-Media Management.
In the affidavit, Scheets, a CPA and former criminal investigator for the Internal Revenue Service, says the Sorensens screwed up their company's income tax returns for 2005 and 2006 - and so did the CPA they hired to prepare their 2007 return, Liles Henry of Little Rock. (Henry has defended his work in sworn testimony.)
The end result, the expert witness found, was "Multi-Media Management overstated its income by almost $60,000, which resulted in the Sorensen's [sic] paying more in taxes than they were required to pay."
Equally interesting are Scheets' repeated statements that Garret Sorensen set up MMM in 2005 to handle the media placement duties formerly outsourced to two other companies "with the knowledge and approval of" Stephen LaFrance Jr., son of USA Drug's founder.
Scheets' report offers no evidence to support those statements, which are in direct contradiction to the prosecutors' claim that the Sorensens and Walters failed to disclose their ownership of MMM to his superiors at USA Drug.
That's what trials are for.
A Tangled Web
Meanwhile, you may recall, USA Drug's parent company, LaFrance Holdings Inc., filed a civil complaint against the Sorensens and Walters in Pulaski County Circuit Court that mirrored the federal charges almost word-for-word.
That case has become an albatross. After Stephen LaFrance Sr. and his sons Stephen Jr. and Jason were ordered to sit for depositions, the U.S. Attorney's Office unilaterally removed the civil case to federal court, where Judge Wilson ended up sanctioning federal prosecutors and the LaFrances' former attorney, Ryan Solomon.
And he sent it back to state court, where Circuit Judge Wendell Griffen refused to let either LaFrance Holdings or the federal government back out of the case, but he allowed the Soresens to file a countersuit.
As a result, the depositions in which LaFrance Holdings' current lawyers from the Rose Law Firm have questioned the Sorensens and Walters have been the source of considerable frustration. Garret Sorensen "claimed the Fifth Amendment privilege over 200 times in his deposition," David Martin, attorney for LaFrance Holdings, complained in a motion to Judge Griffen, and the other depositions have produced similar non-responses.
Garret Sorensen's defense attorney, Pat James, who succeeded in getting his opponents sanctioned in federal court, last week filed a motion for more sanctions against federal prosecutors in circuit court.
His complaint: The prosecutors - who are still officially intervenors in the civil case - haven't been responding to his discovery requests.
That trial is scheduled for July.