Software firm lawyers innocent in fraud suit
Posted on Saturday, November 15, 2008
A Little Rock lawyer awaiting sentencing on a federal tax conviction and his former law partner — in prison for stealing from clients — were acquitted Friday of civil claims that they secretly took over a client’s software company then deliberately ruined a multimillion-dollar licensing deal.
The six-woman, six-man jury deliberated just under two hours before a nine-member majority agreed to reject Little Rock software developer Bob Bomar’s lawsuit charging breach of fiduciary duty and fraud against Barry Jewell and Bobby Keith Moser.
Bomar, 47, sought compensatory damages representing what he said the licensing deal with a Boeing Co. subsidiary would’ve been worth, combined with 10 years of lost wages for a job he said he’d been promised by Boeing.
Friday’s verdict in the fraud lawsuit against the men represents the second time that Jewell has been cleared of any wrongdoing over his involvement with Bomar’s now-defunct Scanning Technologies Inc.
A federal jury in September cleared him of a mail-fraud charge stemming from accusations by federal prosecutors about his relationship with Scanning Technologies.
The jury instead convicted Jewell on an unrelated charge of aiding and abetting tax fraud. He faces up to five years in prison and a $ 100, 000 fine. A sentencing date hasn’t been set.
Bomar claimed that Jewell, his attorney at the time, and Moser had secretly funded dummy corporations using money stolen from client accounts to take control of Scanning Technologies in 1997.
Jewell told jurors that Bomar knew the law firm was funding the business through the corporations. Jewell said the lawyers used the corporations to put money into Scanning Technologies because the tactic would make it easier for them to recoup their losses if the firm went bankrupt. He said no client funds went to Scanning Technologies.
“I’m so tired of people lying about me,” Jewell said. “I’m being sued because I worked myself to death for my law firm to loan his company $ 1. 5 million. Don’t be caught up in all of this deceit.”
A self-described “desk attorney,” Jewell, a tax attorney for 24 years, asked jurors not to hold his performance in court against him, saying he’s seldom appeared before a jury and never cross-examined a witness before jurors.
Moser, serving a 15-year federal sentence, was prohibited by federal authorities from leaving prison for the three-day trial before Circuit Judge Jay Moody and didn’t put up any defense. The 52-year-old Moser pleaded guilty to federal charges in 2004 for stealing $ 2. 2 million from clients to pay for his lavish lifestyle. He is scheduled for release in November 2017.
Bomar claimed that Moser and Jewell put $ 415, 000 of their own money into Scanning Technologies, then put up another $ 1. 1 million pilfered from client accounts, disguising the source of the funds through the dummy corporations. Bomar told jurors that the company’s paperwork showed that Jewell never disclosed his financial stake in the corporations, instead claiming them to be clients of Moser’s who wanted to invest in the company.
“I was told by you this [ corporation ] is Keith’s client,” Bomar said during cross-examination by Jewel.
“Barry, you told me all along this was Keith’s client putting in money, plain and simple.”
“Bob, that’s not true,” Jewell responded.
Jewell told jurors that the lawsuit was part of an effort to make him a scapegoat for Moser’s crimes. He said Bomar was a poor businessman with a dying company who was willing to cut corners to keep the business afloat, even if that meant borrowing money from Jewell and Moser at 22 percent interest.
Bomar, represented by attorney Timothy Dudley, countered that Jewell and Moser duped him so they could take control of Scanning Technologies, which had a $ 1 million contract with Coca Cola. Dudley contended that the pair then deliberately scuttled Bomar’s efforts to license the company’s bar-code reading software to Boeing North America because Boeing’s offer didn’t include enough upfront money to cover the funds they’d taken from the client accounts, their own money they used for the company, plus make them a profit. Bomar said he’d reached an agreement with Boeing to hire him for $ 100, 000 a year, plus pay Scanning Technologies $ 9 million in royalties over 10 years to use its software.
Jewell’s co-counsel, Shelly Hogan Koehler, argued that Bomar was exaggerating the Boeing offer. She said the licensing offer was a “bad, bad” deal and didn’t carry any promises of a job for Bomar. She said Bomar’s claim that Jewell and Moser scuttled the Boeing deal didn’t make sense because they lost their money too.
“Nobody would loan him any money, so he went to his friend Barry. He had no place else to go,” she said. “Barry and Keith invested over $ 1. 4 million into Scanning Technologies and what do they get in return for that ? Absolutely nothing. It didn’t matter to Bob Bomar where the money came from. It could’ve come from Santa Claus. It could’ve come from the Tooth Fairy.”
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