James Van Doren freely admits he was weak and didn’t do the right thing. The New York investment banker isn’t talking about his involvement in financial dealings that culminated in his being sentenced last week to 15 months in federal prison.
Van Doren is referring to his decision to accept a plea agreement and admit to a crime he didn’t commit.
“I regret I wasn’t stronger,” Van Doren said. “I should have stood my ground and took my chances with the jury. I shouldn’t have signed. I just shouldn’t have signed the plea agreement.”
But he did.
As it stands now, that decision will cost him his law license and his career on Wall Street. His change of heart and attempt to withdraw the plea may have earned him federal prison time.
The 17-page agreement Van Doren signed on Aug. 20, 2013, with the U.S. attorney sealed a guilty plea to one count of money laundering as part of a conspiracy to defraud creditors of Brandon Barber, the once high-flying northwest Arkansas developer.
In exchange, the government didn’t pursue six related counts against Van Doren, charges that included bankruptcy and wire fraud related to his business dealings with Barber in the months preceding his former friend’s Chapter 7 filing.
Van Doren faced a maximum of 10 years in prison and a $250,000 fine when he was sentenced in U.S. District Court in Fort Smith on Nov. 3, the day before his 39th birthday.
“Not my best birthday,” Van Doren said.
The now-disputed plea agreement was used as the foundation for his 15-month prison sentence, even though he vainly tried to withdraw it and federal prosecutors vainly pushed for the maximum 37-month sentence.
U.S. District Judge P.K. Holmes III decided the just thing to do was enforce the plea agreement as intended by both parties but hold Van Doren accountable for declining to accept the statement of facts behind the charge as described in the plea agreement.
Van Doren believes he might have gotten probation if he had just played out the plea agreement according to script. His politely defiant stance to refuse to admit in open court that he did what the plea agreement said he did cost him literal sentencing points.
“I don’t have to agree to a statement of facts that isn’t true,” Van Doren said. “I didn’t conspire with anybody to defraud anyone.”
He intends to file a notice of appeal soon but is still deciding whether to go ahead and report for prison Jan. 5. He has the option of remaining free on bond during the appeal process.
“It’s a real consideration,” Van Doren said. “I’m very eager to get on with my life. It’s a decision that my wife and I will have to make. We’re trying to get our heads around it.”
Based on what he’s been told, Van Doren likely won’t serve the full 15 months and could be in and out of federal prison before his appeal is even heard.
He remains baffled that he is being punished for defrauding creditors out of money when the money in question went to creditors. The details surrounding the one count in his plea agreement raises a literal $64,000 question about what it takes to cross the threshold of criminality.
The criminal charge that Van Doren is answering for began in September 2008 with a $64,000 check to Brandon Barber. The payment represented Barber subleasing his interest in a skybox at Texas Stadium, home of the Dallas Cowboys at the time.
“I thought it was a good thing that Brandon had decided to give up his luxury box, lease it to someone else and use the proceeds, not to do something stupid or frivolous, but to do exactly what he asked me to do with the $64K, which was to use it to pay people to whom he owed money,” Van Doren said in an email.
“I never saw anything wrong, then or now, with me helping Brandon pay his creditors (including me) because that was exactly what he should have been doing at that time, and it’s exactly what he asked me to do with the $64K.”
Barber signed the check over to Van Doren, who deposited it in his personal account. Over the next few weeks, Van Doren disbursed $42,000 to three people to whom Barber owed money: $22,000 to Barber’s assistant, Christy Bennett; $10,000 to Barber’s lawyer, K. Vaughn Knight; and $10,000 to real estate broker Stacey McSpadden.
Van Doren kept the remaining $22,000 as partial payment for money Barber owed him. The $22,000 forfeiture included in Van Doren’s plea agreement isn’t connected with the money Van Doren kept.
The forfeiture is tied to the $22,000 that went to Bennett via a Barber Group account.
“They never alleged the money went to Brandon, even though he controlled the account,” Van Doren said.
The $64,000 check came under scrutiny, along with all of Barber’s financial dealings during the previous 12 months, after he filed for Chapter 7 bankruptcy on July 31, 2009.
Barber wasn’t allowed to get shed of debts that totaled $53.2 million because of bankruptcy fraud, which he would later answer for. The order kicking Barber out of bankruptcy court noted that Barber used Van Doren to avoid paying creditors, but the bankruptcy court didn’t pass judgment on Van Doren’s role.
“Van Doren’s deposition is useful because it corroborates other evidence and provides straightforward responses. In contrast, many of Barber’s responses were evasive and only sometimes definitive,” said a footnote in the order dismissing Barber’s bankruptcy filing.
Van Doren thinks that footnote helped prompt an angry phone call from Barber on Nov. 9, 2010.
“Thanks Jim. You screwed me because of all your lies, lies, lies. You’re going to get what’s coming to you,” remembers Van Doren.
It represented a bitter end to a friendship that dated back to their teenaged years in Jonesboro, although Van Doren said for his part the relationship ended in early 2009.
“He was probably drunk when he called, and he called me three times that night after his bankruptcy case was dismissed,” said Van Doren, who had served as a groomsman in Barber’s wedding.
Jill Jacoway, a veteran bankruptcy attorney and U.S. Bankruptcy Court trustee in Arkansas since 1980, was poised to testify as an expert witness for Van Doren.
In a four-page affidavit, Jacoway said Van Doren’s alleged criminal dealings with Barber detailed in the third superseding indictment were “neither illegal nor a violation of U.S. Bankruptcy Code.”
“Based on my review of this case, I find no evidence of any unlawful intent on Mr. Van Doren’s part to defraud any of the creditors in Mr. Barber’s bankruptcy case, or the U.S. Bankruptcy Court; and it is my opinion that Mr. Van Doren was candid and truthful with all creditors that sought information in the post-judgment collection proceedings, namely Legacy National Bank, and such candor was noted by the United States Bankruptcy Court in Mr. Barber’s case,” Jacoway stated in her sworn affidavit dated June 24, 2013.
“If I found or believed otherwise, I would not agree to testify at trial, on Mr. Van Doren’s behalf.”
But Van Doren caved to the what-if pressure of going to trial and signed the plea agreement two months later.
In March 2014, he filed to withdraw his plea agreement.
In June, Judge Holmes set aside a Nov. 18 jury verdict against Barber’s bankruptcy attorney, Vaughn Knight, where he was convicted of eight counts including conspiracy to commit bankruptcy fraud, bankruptcy fraud-concealment of assets and money laundering. In a 102- page ruling, Holmes acquitted Knight on the charge of making false statements and ordered a new trial on the other seven counts.
Later in June, the judge ruled Van Doren couldn’t withdraw his plea agreement.
Holmes said Van Doren didn’t meet the burden of showing “a fair and just reason” for requesting the withdrawal and that the withdrawal motion was based solely on a claim of factual innocence.
And the judge rejected that claim.
Holmes also noted in his lengthy ruling that Van Doren had testified at Knight’s criminal trial in November that he admitted he was guilty of money laundering. Van Doren said that “admission” was tied to his now-recanted plea agreement.
Holmes didn’t think much of the government’s case against Knight, noting “significant concerns that a miscarriage of justice may have occurred.”
