Jerry and Wynonne Hart Sure Don't Seem Like Ponzi Schemers, Say Friends and Business Associates
Pals of and folks who did business with Jerry and Wynonne Hart, who once ran Houston's top fine art and antiques auction house, say there's no way the two ran a Ponzi scheme that left consignors more than $200,000 poorer.
Two years ago, Jerry, 67, and Wynonne, 64, claimed that they were unaware that sales money was supposed to be kept in an escrow account. The couple threw themselves on the mercy of the court. In exchange, they hoped prosecutors would 86 all theft and laundering charges levied against them.
"Mr. Hart, you are a thief in a suit," said state district judge Randy Roll on April 28, 2009. "Mrs. Hart, you are a thief in a dress."
The Harts, painted as classic Ponzi schemers by the District Attorney's office, were convicted on first-degree felony charges and sentenced to 14 years in prison, even though 160 prominent Houstonians (many of whom lost money in the Hart collapse) had written letters urging probation for the couple.
At the time of writing, the Harts' fate remains up in the air.
In July, the couple's attorney won a retrial, partially due to an exposed conflict of interest between Judge Roll and grand jury foreman Bob Ryan. However, the order granting the new trial was turned down. The Harts, who were not available for comment, have appealed that decision.
Charlie Baird, an appeals lawyer who is currently representing the Harts, tells Hair Balls that petitions for discretionary review with the Court of Criminal Appeals (submitted last September) are still pending.
"We are hopeful that the Court of Criminal Appeals will find our arguments compelling and will agree to consider the Harts' cases," says Baird.
Steve Zimmerman, owner of the La Colombe d'Or hotel on Montrose, has been doing business with Jerry Hart for about a half-century. He explains that he never ran into any problems during his business dealings with the Harts.
"There was never anything out of the ordinary, other than to say I had a lot of confidence in them...I was as shocked as anybody to hear that they were having some problems when this issue first came out," says Zimmerman.
Madeleine McDermott Hamm, a former home-furnishings editor for the Houston Chronicle who eventually opened her own antiques business, thinks it's absurd that the Harts have been labeled as con artists.
"I'm sure there were difficulties along the way, and some missteps, but I never heard them complain. No one will ever convince me that the Harts ever intended to hurt anyone," says Hamm. "I think the business just got away from them, and it snowballed. The floundering economy did not help things. The harder they tried to dig out, the deeper it seemed to get. There is no way it was an intentional 'scheme.'" Hamm explains that the D.A.'s office moved in with criminal charges after the Harts filed for Chapter 11 bankruptcy. The subsequent liquidation sale was "a travesty," remembers Hamm.
"Loyal customers came to the sale expecting to see Hart merchandise, hoping to make purchases to help, and found most of the items were added by the liquidators and not the quality of merchandise Hart Galleries usually auctioned. Profits from the liquidation sale went to the lawyers and the liquidators, not the creditors, not the Harts.
"If this bankruptcy had happened ten years earlier, it would have been treated just as what it was -- a bankruptcy. But, unfortunately, it happened in the wake of an international scandal created by New York financier Bernie Madoff, and a Houston prosecutor decided to exploit the Harts' case as the same type of situation. It was not. Their bankruptcy was actually no different than hundreds of other cases handled in bankruptcy court -- not criminal court."
About Judge Roll's ruling, Zimmerman, who used to practice civil trial defense and international law, called the 14-year sentence heavy-handed.
"Based on what I knew and what I heard and everything that went on at the courthouse, I would've thought, based on scuttlebutt, maybe a probation and a chance to pay back anything that was owed," says Zimmerman. "I think the whole thing was blown out of proportion and that the punishment was not commensurate with the supposed actions."
Zimmerman concludes, "It's definitely an oddball situation."
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