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Barber Attorney Vaughn Knight’s Case Remains in Limbo as Conner Eldridge Considers Next Move

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Conner Eldridge, U.S. attorney for the Western District of Arkansas, said last week that he’s still deciding what to do with the case of K. Vaughn Knight, the attorney for former northwest Arkansas real estate developer Brandon Barber.

Earlier this month, U.S. District Judge P.K. Holmes III made the rare move of tossing out a jury’s guilty verdict against Knight on eight counts including bankruptcy fraud and money laundering. Holmes ordered a new trial on seven of the counts and acquitted Knight of a count involving making false statements related to a bankruptcy case, of which the jury had found him guilty in November.

Knight was a co-defendant of Barber’s. In July 2013, Barber pleaded guilty in U.S. District Court to conspiracy to commit bankruptcy fraud, conspiracy to commit bank fraud and money laundering. A sentencing date has been set for Aug. 13.

Holmes said in his 102-page order, filed on June 10, that after reviewing thousands of pages of documents and the testimony in the nine-day trial of Knight’s case, he was “left with significant concerns that a miscarriage of justice may likely have occurred.”

The move to throw out the jury’s verdict is so rare that criminal defense attorney Tim Dudley of Little Rock has only seen it “two or three” times in his nearly 33 years of practice.

“It’s highly uncommon,” said Dudley, who represented one of Barber’s co-defendants, David Fisher, a Rogers attorney who was accused of one count of conspiring to commit bank fraud. He was found not guilty by a jury.

Knight’s retrial on the seven counts is set for Aug. 4. But Eldridge said, “We’re currently evaluating the court’s order and looking at our options.”

The options include appealing Holmes’ decision to the U.S. Court of Appeals for the 8th Circuit, going forward with the retrial or dismissing the charges.

Concerns for Attorneys

Knight’s attorney, David Matthews of Rogers, said Knight is innocent of the allegations.

“He got charged because he was Brandon Barber’s lawyer,” Matthews said. “And as the judge indicated in his order, [it was] more a finding of guilty by association than anything else. It should be a troubling case for all practicing attorneys.”

The charges against Knight stem from actions he took in connection with his representation of Barber from early 2008 through 2010, according to Holmes’ order.

One of the charges against Knight involved bankruptcy fraud. The U.S. attorney’s office argued that Knight knew as far back as 2008 that Barber was eventually going to have to file for bankruptcy, which he did in July 2009.

Some of the emails the government used to support its case were “largely in the context of Knight negotiating on Barber’s behalf,” Holmes wrote. “An attorney should be able to freely negotiate on his client’s behalf without being inhibited by the fear that the issues raised during such negotiations might later expose him to criminal liability.”

These days, Knight continues to practice law at his firm in Fayetteville, where he handles general corporate law, real estate transactions, estate planning, commercial litigation and agricultural law, according to his website.

“Vaughn Knight is a good man, and he is a good lawyer,” Matthews said. “I do not believe for a minute that he had any criminal intent or that he violated the criminal law in any way.”

Eldridge, though, sees it differently.

“We think the jury got it right,” he said. The jury “deliberated and reached a verdict of all counts, and we think that speaks for itself.”

Other Defendants

The sentencing dates are coming up for Barber’s other criminal associates. James Van Doren pleaded guilty in August 2013 to a single count of money laundering for helping Barber hide money from his creditors. His sentencing date is set for Aug. 18.

Jeff Whorton, who pleaded guilty in August to conspiring with Barber, is scheduled to be sentenced on Aug. 20. Brandon Rains pleaded guilty in October to a single count of making a fraudulent representation to the FBI. He has an Aug. 21 sentencing date.

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