Let's Make A Deal
Fred Rizk has known his share of blowhards over the course of his career as a real estate developer, but he couldn't help but be impressed when he first met Michael and Patrick Graham.
Mike was a large garrulous man with enormous energy and a seemingly endless store of ideas. Understated and precise, Pat shared his brother's love of the deal, but expressed it with a more measured enthusiasm. As business partners, Mike and Pat had clearly enjoyed some success. They drove expensive automobiles, lived in big houses and wore the finest clothes.
Later Rizk would recall that Mike Graham came to his office early last November with a plan to develop some land in Williamson County. The 258-acre property had apparently been in the family for years and was a source of many fond memories for the Grahams, of hunting expeditions and first kisses. Nonetheless, the family had decided that now was the time to develop a portion of the property for an apartment complex.
Always willing to entertain a good business proposition, Rizk took a look at the property and liked what he saw. The land -- a largely untouched landscape of gentle hills and flatland around a small lake in Georgetown, just north of Round Top -- was perfect for development.
Gridiron Glory: The Best of Pro Football HOF -- 10AM-3PM
TicketsTue., Mar. 28, 10:00am
Gridiron Glory: The Best of Pro Football HOF -- 3PM-8PM
TicketsTue., Mar. 28, 3:00pm
Gridiron Glory: The Best of Pro Football HOF -- 10AM-3PM
TicketsWed., Mar. 29, 10:00am
Gridiron Glory: The Best of Pro Football HOF -- 3PM-8PM
TicketsWed., Mar. 29, 3:00pm
In mid-November Rizk tentatively agreed to partner up with the Grahams to develop 25 acres. At the Grahams' request, Rizk also agreed to cover the project's start-up costs by lending $250,000 to the partnership.
Then a shadow fell across the favorable presumptions Rizk had made about his new business associates. On November 29, 1999, former Houston mayor Fred Hofheinz was indicted in Louisiana on bribery and conspiracy charges. According to news reports, the chief witnesses against Hofheinz were none other than Mike and Pat Graham, who had been moonlighting as FBI informants.
In addition to helping federal prosecutors in the Hofheinz case, Mike and, in particular, Pat were instrumental in securing an indictment in Houston against James "Andy" Collins, former executive director of the Texas Department of Criminal Justice. Collins was charged with accepting bribes from a prison contractor.
Rizk -- who, at 74, is semiretired and spends most of his time in Austin -- also learned a number of other unsettling things about the Graham brothers. Mike and Pat owed millions of dollars in unpaid debts and loans, dating as far back as the 1970s. In 1994 a civil jury found them guilty of defrauding investors in a private-prison venture and ordered the Grahams to pay $33 million in damages. In 1997 Pat pleaded guilty to felony theft after getting busted for a bizarre scheme to help a man escape from prison.
Mike and Pat also had a habit of not paying their taxes, a crime for which they each had served time in jail. In fact, when he first met Fred Rizk, Mike Graham had been a free man only a few days, following the completion of a nine-month sentence in federal prison.
Rizk immediately demanded that the Grahams return his $250,000. Apparently he was too late. In a complaint filed in March with the Harris County district attorney's office, Rizk said that Mike and Pat admitted they split the money and that most of it was gone. Rizk also learned that the Grahams may not even own the land they proposed to develop, which is tied up in a title dispute in Williamson County.
As for its sentimental value, the hill and dale so precious to the Grahams had been in the "family trust" since only July 1998, when a Graham partner put up $1.7 million to buy it from a neighbor of Mike's.
1>If not for their roles as "cooperating witnesses" for the federal government, Mike and Pat Graham would surely have been behind bars in November 1999, instead of pitching a real estate project to Fred Rizk.
Four years ago the Graham brothers were up to their well-fed necks in trouble. Pat faced an indictment for reportedly stealing $150,000 from a woman on the promise he would arrange a jailbreak for her boyfriend, who had murdered his wife. Pat was also weeks away from being charged with tax fraud, as was Mike, who was still on probation from an earlier conviction for tax evasion.
On April 30, 1996, faced with the likelihood that they'd be sent to prison, the Grahams arranged to meet with the FBI and government lawyers in New Orleans, where they offered the story that Fred Hofheinz had bribed four-term governor of Louisiana Edwin Edwards to gain political support for several projects, including a proposed youth correctional facility in Jena, Louisiana. FBI agents set up an electronic surveillance operation, which eventually led them to believe Edwards was extorting money from riverboat casino operators in exchange for state gaming licenses.
Edwards was indicted following a two-and-a-half-year investigation. Other than triggering the wiretaps, the Grahams apparently played no role in that investigation, nor did they testify at Edwards's trial, which ended last month with the former governor's conviction on 17 counts of racketeering.
On the other hand, the corruption cases pending against Fred Hofheinz and Andy Collins are based almost exclusively on the veracity of Pat and Mike. According to government records, including affidavits and transcripts of the brothers' debriefing sessions with prosecutors, the feds appear to have little corroborating evidence in either case.
Hofheinz, who was mayor from 1974 through 1977, is awaiting trial for allegedly paying Edwards $2 million for the governor's support of several Louisiana projects, including the youth correctional facility. Collins is awaiting his day in court, too. The former TDCJ director, who retired in January 1996, was indicted two years ago for taking kickbacks from VitaPro Foods Inc. in exchange for a $33 million no-bid contract with the prison system.
Allegations that Pat and Mike bilked Fred Rizk couldn't have come at a worse time for prosecutors, who have already acknowledged the occupational hazards of working with the Graham brothers. In September 1996 Steve Irwin, the assistant U.S. attorney then in charge of the Edwards investigation in Louisiana, appeared before a federal judge in Houston. Irwin's purpose was to delay the testimony of Mike Graham in his wife's bankruptcy proceeding on the grounds that the FBI investigation of Edwards would lose the element of surprise.
At the time, Irwin had been working with Pat and Mike for only a few months. But the prosecutor already had a feeling about the brothers, and it wasn't especially warm.
"I'm not defending the Grahams as good people," he told bankruptcy Judge Karen Brown. "They're not -- they're as bad they come."
Nonetheless, Irwin testified, the FBI had been able to verify at least some of the damning information the Grahams had supplied, "and the things we were not able to independently corroborate, we believe are lies," he said. "And that's the way it has to be when you deal with the Grahams."
Before the hearing ended, Irwin uttered a comment that suggested prosecutors had heard a great many lies from the Grahams. "They are," Irwin told the judge, "the most manipulative con men probably on the face of the world."
It's too early to tell whether Irwin's nearly four-year-old assessment of the Graham brothers will come back to haunt prosecutors in the Hofheinz and Collins cases. But attorneys for the nearly dozen people who were indicted as a result of the two-state investigation have long argued that the prosecutors, like so many before them, have been conned by Mike and Pat.
"If you had to make a determination of whether someone had done anything wrong, and you had to, in any way, base it on the Grahams' testimony, I just don't see how you could do that with a straight face and in good faith," says Austin attorney William A. White, who represents Andy Collins.
In the meantime, Pat and Mike have reaped the benefit of being government snitches. In 1998, when both were waiting to be sentenced for failing to pay a combined $1.5 million in taxes, Pat and Mike instead saw their felony charges reduced to misdemeanors by Houston prosecutors. Pat, who was looking at a one-year sentence before the deal, got three months in a federal prison camp. Mike, a repeat offender, faced the prospect of ten years in jail, but received only a nine-month sentence, which ended October 28, 1999.
Moreover, three years after he pleaded guilty to the jailbreak scheme, Pat has yet to be sentenced on the felony theft charge. He could get up to ten years. But at the request of government lawyers in New Orleans, U.S. District Judge William Harmon has agreed to delay sentencing until prosecutors can offer testimony on Graham's cooperation in the Louisiana and Texas investigations.
But defense attorneys suspect that represents only a portion of the overall protection Mike and Pat have enjoyed. Collins's trial was, in fact, set to begin in January. But U.S. District Judge Lynn Hughes postponed it when he discovered that prosecutors had not put into writing what the Grahams were promised in exchange for their cooperation, other than that they would not be prosecuted for crimes they brought to the government's attention.
This deviation from standard government procedure on immunity agreements prompted the judge to order rare open-court depositions of the Graham brothers and Louisiana prosecutors. Mike and Pat began their testimony in late February and are expected to undergo additional questioning in the coming weeks. Hughes has given defense attorneys a wide berth to explore not just the immunity issue, but the Grahams' personal finances and their business dealings since becoming government witnesses four years ago.
Defense attorneys have taken advantage of that judicial generosity to zero in on the allegations by Fred Rizk. Armed with subpoenaed bank records, the attorneys were able to show how the Grahams spent almost the entire $250,000 from Rizk in less than three months. None of the money was used for "start-up costs," as Rizk claims he was told. Instead, the Grahams and their families used the loan to make their house payments, buy jewelry and gifts, pay legal fees and otherwise cover the expense of living day to day.
So far, the brothers haven't been very forthcoming on the Rizk matter, for the most part choosing to express their Fifth Amendment right against self-incrimination. Pat and Mike did admit, however, that none of the Rizk money went to pay down some $3 million in back taxes they owe between them. Pat acknowledged that he owns his $400,000 house in Kingwood free and clear, but the government has yet to file a lien against the property. Likewise, Mike Graham testified that other than a few letters, the Internal Revenue Service has made no real effort to collect his unpaid taxes.
When asked at his deposition if he and his brother have been excused from making good on the debt as part of their agreement with prosecutors, Pat Graham could only speculate.
"Well, my theory is this," Pat declared, "until all the investigations are over with, I just don't believe that they're going to be real aggressive in attacking those assets."
No kidding, say defense attorneys, who maintain that prosecutors have entered into an unspecified financial arrangement with the Grahams vis-à-vis their tax problems. Mike Ramsey, an attorney for Yank Barry, the Canadian businessman accused of bribing Collins, says he'd be "very surprised" if the Grahams ever pay their back taxes.
"It amounts to legalized bribery," Ramsey says. "If I got to bribe witnesses, if somebody just told me, 'Okay, you can pay witnesses anything you want to, any way you want to,' I'd never lose another case. It's a nasty system, but the feds do it as a matter of routine."
1>Gary Cobe, a low-key, straight-shooting lawyer with the U.S. attorney's office in Houston, is almost as interested as defense attorneys in knowing what prosecutors in Louisiana have promised the Grahams.
After all, as lead prosecutor in Collins's pending case in Houston, Cobe will have to contend with the Graham brothers' motivations, not to mention their credibility, when the former TDCJ director finally stands trial. Though the feds in New Orleans objected to having prosecutors deposed on the immunity issue, Cobe has so far supported the proceedings.
"I'm just trying to find out what [the agreement] is," Cobe says. "From what I understand, there isn't anything in writing, so I'm hoping these depositions will let us know."
At some point local law enforcement officers such as Cobe might have a real need to know the details of Mike and Pat's immunity arrangement. That's because, in addition to the recent criminal complaint filed by Fred Rizk, there is evidence of possible perjury and forgery committed by the Graham brothers in two state civil cases.
One revolves around Pat's agreement with the Louisiana Coushattas to build a golf course and hotel at the tribe's Grand Casino, near Kinder. When the Coushattas dropped the project, Pat filed a lawsuit, claiming the deal fell through because he had refused to pay kickbacks demanded by representatives of the tribe. Pat also produced a copy of the contract that stated all disputes between the parties would be settled by a Texas court. The tribe denied that and produced its own copy of the agreement, which clearly stipulated that the state of Louisiana had jurisdiction.
Before the case could go to trial, a document expert hired by the Coushattas filed an affidavit expressing the opinion that Pat's version of the contract was a fabrication. Apparently Pat had cut out the Coushatta's signature from the original contract and pasted it onto a modified copy. At a January 1999 hearing, Pat's son, an attorney (Pat himself was in jail on the tax charge), acknowledged the cut-and-paste job, but told the judge it was done with the tribe's permission. The judge threw the case out.
In documents filed with the court, the Coushatta attorney asked the judge to refer the matter to state and federal authorities for possible prosecution. U.S attorneys in Houston won't confirm or deny the existence of an investigation.
But in a December 7 letter to Gary Cobe, Jim Letten, the lead prosecutor in Louisiana, suggested that Pat Graham may already have immunity against the forgery allegation. That's because, at some point, Graham told prosecutors that a Coushatta representative had solicited a bribe from him. Letten told Cobe that based on "information supplied in part by Patrick Graham, as well as evidence gleaned from intercepted conversations by the FBI, an investigation is ongoing regarding the Coushatta Indian Tribe."
Did the Coushatta really try to bribe Pat Graham? Or did Pat just tell prosecutors that to prop up his bogus lawsuit? Whichever, the situation closely mirrors a dispute between Mike Graham and Fred Hofheinz in 1996 that immediately preceded the Graham brothers' decision to become government informants.
1>Hofheinz first met the Grahams in 1992, when the brothers asked the former mayor to help them develop the youth correctional facility in Jena. Hofheinz formed Viewpoint Development Inc. and "hired" the Grahams as consultants. Later Viewpoint would bring in Professional Care of America, a company formed by Andy Collins, to operate the future facility.
A few months after Hofheinz became involved in the Jena project, Mike Graham was indicted for tax fraud. Unable to afford a lawyer, he asked to borrow $250,000 from Hofheinz for his legal fees. Hofheinz refused to lend the money but offered to use proceeds from his mother's trust to buy Mike's large house at 2214 Bluff Creek in Kingwood, with an option to purchase the furnishings for an additional $135,000. Mike agreed.
A little later Mike Graham pleaded guilty to tax evasion, and in June 1993 he was sentenced to six months of home confinement and three years' probation. Hofheinz was among those who urged the judge to go easy on Mike, asking the court in a letter to "consider all the good this man has done in his life."
By the end of 1995 Hofheinz's opinion of the Grahams -- of Mike in particular -- had changed considerably. For one thing, the brothers were found guilty in 1994 of defrauding investors in a scheme to develop six private prisons in West Texas. The untimely conviction of his partners interfered with Hofheinz's efforts to attract investors for the Jena jail project. Hofheinz was also smarting over the failure of Top Rank of Louisiana, led by Hofheinz and Las Vegas promoter Bob Arum, to buy the Minnesota Timberwolves basketball team and move it to New Orleans.
This was a deal apparently conjured out of thin air by Mike Graham, who somehow had secured the lease on a yet-to-be-constructed arena in late 1993. How did he do it? In typical Graham fashion, Mike alluded to connections in high places, namely Edwin Edwards in the Louisiana Governor's Mansion.
"It was always a wink and a nod and 'the guv,' or 'the guv's son,' " recalled one prospective investor in the team, who met with the Graham brothers and Hofheinz in New York in the spring of 1994. "The only problem was, these guys were full of shit. This guy, [Mike] Graham, if you mentioned rocketship-to-the-moon, I'm sure he had a rocketship-to-the-moon deal."
Apparently the National Basketball Association felt the same way. The league's board of governors rejected Top Rank's proposal to buy the Wolves, citing the "speculative nature" of the group's financing.
Between the troubled prison venture and the failed bid for an NBA team, Hofheinz was down about $1.5 million, a good portion of it paid to Mike and Pat Graham and their bad reputations. On top of that, the former mayor had expected to sell 2214 Bluff Creek back to Graham after three years, but Mike couldn't swing it. Graham and his family were "renting" the house, at a cost equal to the annual property tax bill. But Graham didn't pay the taxes, and the Irene Cafcalas Hofheinz Foundation, the trust that bought 2214 Bluff Creek, had already been sued twice for nonpayment.
On April 25, 1996 -- just five days before Mike and Pat went to New Orleans and were deputized by federal prosecutors -- Hofheinz filed papers in court to evict Mike and his family.
Hofheinz declined to be interviewed for this story, citing a gag order issued by the judge in Louisiana barring defendants, witnesses and attorneys from discussing the Edwards-related cases. But in the past Hofheinz has claimed that Mike became a government informant to keep from losing his house.
That was also the reason Rosalind Graham filed for bankruptcy in July 1996. She claimed the house was purchased in 1989 by an entity called Bluff Creek Corporation, of which she was the sole shareholder. According to Rosalind's testimony, Mike sold 2214 Bluff Creek to the Hofheinz foundation without her knowledge.
1>In the Grahams' initial meetings with the FBI, Pat apparently provided most of the information. Pat's story was that shortly after he hooked up with Hofheinz on the Jena jail project, the Grahams were introduced to a Eunice cattleman named Cecil Brown, who was a good friend of Governor Edwin Edwards's. Pat met with Brown and was told Edwards's endorsement of the jail could be bought for $350,000.
Shortly after that first meeting, Brown took Graham to Baton Rouge to have lunch with Edwards. Pat told the governor that Louisiana prison officials had indicated they wanted the project to move forward but were stalling on an agreement. Edwards reportedly said he'd take care of it.
A month later the Louisiana Department of Corrections agreed to provide juvenile offenders and funding for the finished facility.
The state's review of the project, however, found that it would cost $35 million, more than twice the original estimate. That meant bond financing, which required additional approval from a state commission. Brown told Pat the price for Edwards's support had gone up, from $350,000 to $2.5 million. Brown said Edwards wanted half the money up front, according to Pat, with the rest due when the financing had been completed.
Pat told the FBI that in late 1992 Hofheinz borrowed $245,000 from the "Asian community." Pat then took the cash to Louisiana, whereupon he and Brown proceeded to the Governor's Mansion. In the parking lot, Brown transferred the cash from a briefcase into a plastic trash bag. Pat waited outside while Brown took the bag to Edwards's office. He returned empty-handed.
This is pretty much the same story Steve Irwin, an assistant U.S. attorney from New Orleans, told Karen Brown, the judge hearing Rosalind's bankruptcy case, in September 1996 -- except for one significant detail: the source of the $245,000. In a closed-door session with Judge Brown, Irwin said that according to Mike Graham, the $250,000 from the Hofheinz trust in October 1992 didn't go to Graham's lawyers, but instead "was directly paid to a sitting public official in Louisiana." This is clearly the same payment Pat was talking about, simply because, according to the Grahams' story, it was the only payment made at that time.
The original source of the alleged payoff is significant because what Irwin told Brown that day wasn't true, at least according to Mike Graham himself. In February 1997 Mike admitted in sworn testimony that the money from the Hofheinz trust did, in fact, go to his lawyers. Mike would reverse course again a year later, but for purposes of the bankruptcy case, the damage had been done. Brown's order dismissing Rosalind's claim on 2214 Bluff Creek pointed out that bank records proved the $250,000 had gone to Mike's attorney.
Indeed, Brown found little, if anything, credible about Rosalind's attempt to keep 2214 Bluff Creek by filing for bankruptcy protection. The judge ruled that Mike accepted the $250,000 from the Hofheinz trust and then, with Rosalind's cooperation, decided to lie and say the house had been sold without his wife's knowledge. The judge also found that Mike had forged his wife's name on a Bluff Creek stock certificate, as well as a 1991 bankruptcy petition filed on Rosalind's behalf.
"The Court finds that neither Michael Graham nor Rosalind Graham is a credible witness," Judge Brown declared in her order.
Perhaps the judge's most significant comment, however, concerned the testimony of prosecutor Steve Irwin in September 1996. At the time, Irwin acknowledged that while the Grahams were "manipulative con men" of the first order, their story was verified on at least four occasions through monitored phone conversations and face-to-face meetings.
Brown saw no evidence of that. In her final order, the judge wrote that Louisiana prosecutors "had no first-hand knowledge of the facts and relied on statements and information derived from Michael Graham."
It may yet turn out that for all Mike and Pat's credibility problems, they have provided enough information to show that Edwin Edwards was bribed as part of the effort to build the Jena jail. The key question, though, is whether Fred Hofheinz actively participated in the alleged crime, or even knew about it.
According to court documents, some of which quote the transcripts of FBI wiretaps, Hofheinz appears never to have taken or received a phone call from Edwin Edwards during the investigation. If he did, nothing significant -- such as Hofheinz's need for the governor's assistance or Edwards's desire for money in return -- was discussed, apparently.
The recordings, most of which document conversations between Pat Graham and Cecil Brown, do not seem to directly implicate Hofheinz as the source of the alleged payments, either. In fact, his name is rarely mentioned. The only clear evidence that the accusations are true is the Graham brothers' testimony that they were Hofheinz's bag men.
It's worth noting as well that Hofheinz wasn't indicted until November 1999, a year after Edwards. The federal statute of limitations, which determines how much time can elapse between an alleged crime and an indictment, is five years. In addition to the questionable 1992 payment of $250,000, the Grahams told the feds that Hofheinz gave another $845,000 to Edwards. But that allegedly happened in 1994. Likewise, any bribes Hofheinz supposedly paid to get Edwards's support of Top Rank of Louisiana's pro basketball proposal had to have occurred in 1994 as well. The NBA rejected Top Rank's offer to buy the Timberwolves in June of that year.
Not that Hofheinz shouldn't be worried, of course. Edwards was, after all, found guilty last month. And so was Cecil Brown, for extortion. Those convictions were based on the testimony of three men who had already pleaded guilty, including the former owner of the San Francisco Forty-Niners, Edward DeBartolo.
So, what ever happened to the youth correctional facility in Jena?
The jail was built, all right, but not by Hofheinz and the Grahams. The scenario Pat laid out for the feds -- $1.25 million to Edwards up front, another $1.25 million when the financing closed -- never transpired. The only person who got paid was Fred Hofheinz, who split $1.5 million with Raintree Capital Company, a Houston mergers and acquisitions firm that negotiated the sale of the project to Wackenhut Corrections Corp. Hofheinz has testified that the $750,000 he received was close to what he had invested in the project.
In a prologue that could have been written only by Mike and Pat Graham, the brothers sued Hofheinz, Raintree and others, including Andy Collins. The suit claimed the sale to Wackenhut was supposed to go like this: $1.3 million to the Grahams, another $1.3 million to Cecil Brown, and $1.5 million to Hofheinz. Instead, Mike and Pat had been "screwed" out of their share, as was Cecil Brown -- and, presumably, so was Edwin Edwards. The lawsuit was eventually dropped.
1>Andy Collins first met the Graham brothers in 1990, when Pat and Mike were trying to convince TDCJ to use the six jails they had built in rural areas of West Texas. As it happened, the state took a pass on the Grahams' jails, a fact that eventually prompted investors to sue them for fraud.
Collins didn't hear from Pat Graham again until early 1995, when Pat called and asked Collins if he wouldn't mind going over his plans for the Jena project. Collins agreed, and before long he was negotiating with Hofheinz and the Grahams to handle the day-to-day operation of the jail once it opened.
Collins formed a shell corporation and, in late July 1995, signed an agreement with Hofheinz to manage the future facility. Collins had planned to retire at some point before the jail was finished. But when Governor George W. Bush caught wind of his contract with Hofheinz, Collins announced he would leave TDCJ on December 31, 1995.
Until the LaSalle Parish jail was built, Collins planned to work as a consultant for VitaPro Foods Inc. to market the company's soy-based meat substitute. Collins and VitaPro were a neat fit. The company had been selling its product to Texas prisons for two years and had even cut a deal to have TDCJ distribute VitaPro to other U.S. customers.
Collins began his consulting gig for VitaPro, at $1,000 a day, on January 1, 1996. Three days later, at around noon, Pat Graham was arrested while sitting in a parked car in north Houston, trying to fit $150,000 in cash into his briefcase.
Investigators from the Harris County district attorney's office had been monitoring Pat's every move for a month, ever since a Dallas woman told them he had offered to help her boyfriend escape from a maximum-security TDCJ unit. In a case of the con getting conned, Graham was nailed collecting the down payment on his proposed fee of $750,000.
Pat's explanation was simple: It was all a big misunderstanding. Pat told anyone who would listen that he was actually engaged in an amateur sting operation, trying to expose a scheme cooked up by a couple of TDCJ inmates to free convicted wife-murderer Dana McIntosh. Pat even told people that the executive director of TDCJ, Andy Collins, would testify in his defense.
Graham's relationship with Collins became a matter of immense curiosity to investigators of the jailbreak scheme, as well as the Internal Affairs division of TDCJ. Graham was arrested with a VitaPro business card in his pocket, identifying him as broker for the company. That tipped TDCJ officials to VitaPro's five-year, $33 million contract with TDCJ, which was approved one month after Collins announced that he planned to retire at the end of 1995.
A report on TDCJ's investigation found that Collins may have violated state purchasing laws by pressuring subordinates to award VitaPro a long-term contract without taking bids. According to the report, Collins "personally instructed" TDCJ's purchasing and food service divisions to use VitaPro's exact ingredients and formulations as specifications for a bid request. Collins also reportedly ordered purchasing personnel to call VitaPro's chief executive Yank Barry and "explain exactly how he should submit his bid," the report said.
Prosecutors believe TDCJ's findings support Pat Graham's story, which he began telling FBI agents in June 1996, about six weeks after he and Mike became informants in Louisiana. Pat claimed both Collins and Barry told him that while Collins was still employed by TDCJ, he had been paid $10,000 a month in cash, for many months, by VitaPro.
In fact, Collins set up a company, Certified Technologies Corporation, just before he left TDCJ. Investigators traced two $10,000 payments from VitaPro to the company's account in December 1995. Attorneys for Barry and Collins acknowledge the existence of Collins's company and the two payments. But they maintain that Collins actually left TDCJ on December 1, when he began using vacation time and other leave he had accrued.
More significantly, key parts of Pat's story have changed somewhat over the past few years, when he gave several interviews to FBI agents, as well as more recently in his deposition testimony. For example, when Pat first went to see the FBI, he recalled a specific meeting at the old Ritz-Carlton Hotel in spring 1995, where Barry allegedly told him, "We're paying Andy $10,000 a month." At first, Graham said he, Collins and Barry were at the Ritz-Carlton that day, as well as former TDCJ director Charlie Terrell, who had set up the meeting. A year later Pat told the FBI that he couldn't remember if Collins was there or not. Pat also contradicted his initial story, saying Barry didn't tell him about the payments until much later, when Collins was "tendering his resignation" from TDCJ. At his deposition in March of this year, Pat changed the story of the Ritz-Carlton meeting again, saying nothing incriminating was said at the time.
Pat told the feds that Yank Barry complained about having to pay Collins in cash. At one point, Pat explained that Barry's "preferred method" was cash because there was "nothing traceable there." At another, Pat said Barry often made it known that he wanted Collins to set up a corporation to receive the money so Barry could save on taxes.
That, perhaps, explains the existence of Certified Technologies Corporation, but it begs a couple of questions: If Yank Barry was actually bribing Andy Collins, would he really care that much about the tax implications? And if Barry wanted Collins to set up a company to take bribes, why do it 30 days before Collins would retire from TDCJ?
Defense attorneys say they'll be able to show that Collins, in fact, set up a legitimate company that received two legitimate $10,000 payments from Yank Barry. For jurors to find anything wrong with that, especially in Barry's case, they'll have to believe Pat Graham.
"The whole case really hinges upon his credibility," says Kent Schaffer, an attorney for Barry. "If the jury doesn't believe Pat Graham, the case is over. If the jury believes Pat Graham, we're in trouble."
1>The Louisiana prosecutors, Assistant U.S. Attorney Jim Letten and FBI agent Geoffrey Santini, are scheduled to be deposed on the Grahams' immunity agreement in Lynn Hughes's court June 5, which also happens to be Pat's next sentencing date on the felony theft charge.
Letten and Santini are also expected to make an appearance at that hearing before Judge William Harmon, who has delayed sentencing Pat more than a dozen times since 1997, at the request of the prosecutors. In a recent written plea to the judge, Letten cited a "legal and moral obligation" to testify about "the full nature, extent, duration and quality" of Pat's cooperation.
If the June 5 date holds for both proceedings, it could provide an interesting spectacle. In Hughes's court, defense attorneys will likely drill prosecutors on what they know about the alleged scam on Fred Rizk, as well as whether they knew Pat and Mike have apparently lied and committed forgery in the bankruptcy and Coushatta cases, respectively.
Meanwhile, over in Harmon's court, those same prosecutors will presumably talk about what an honest, hardworking "cooperating witness" Pat Graham has been.
To be sure, until Hughes sets a new date for the Collins trial, and until Fred Hofheinz is tried in Louisiana, the credibility of Pat and Mike Graham will be under continued attack. Prosecutors may also have to deal with an investigation of Fred Rizk's allegation that the Graham brothers scammed him for $250,000. If the established pattern continues, prosecutors will likely at least attempt to delay any indictments that may result.
However, unlike the feds, the Harris County district attorney's office appears to have had its fill of the Graham brothers. In December Assistant U.S. Attorney Gary Cobe asked the D.A.'s office if anyone over there had promised Pat Graham a break on his felony theft conviction.
Assistant D.A. Chuck Noll replied that while Pat Graham had sought favors from his office, "I personally advised Patrick Graham's attorney that the state would still seek pen time on Mr. Graham's case even if Mr. Graham made a case for federal prosecutors on the president."
E-mail Brian Wallstin at brian.wallstin@ houstonpress.com.
Get the ICYMI: Today's Top Stories Newsletter Our daily newsletter delivers quick clicks to keep you in the know
Catch up on the day's news and stay informed with our daily digest of the most popular news, music, food and arts stories in Houston, delivered to your inbox Monday through Friday.