As former attorney Ira Hatch’s fraud trial grinds on over the next few months, the weight of whether he is convicted on any of 46 charges ranging from grand theft to racketeering rests squarely on the investigators from the city of Vero Beach police and the state attorney’s office.
The case is by far the biggest white-collar crime case the local state attorney’s office has taken on in recent years, and never before have investigators dealt with such a complex case involving missing cash, estimated to be in the $4.5 million range, from up to 800 victims.
Those funds, prosecutors say, were client funds for real estate transactions that somehow evaporated while under the control of Hatch and his company, Coastal Escrow Services.
But the proceedings are moving forward at a snail’s pace. On Monday, the first day of jury selection, so many potential jurors cited hardships or were eliminated due to familiarity with the case that Senior Judge James Midelis was less than happy.
“As you can surmise we need jurors and we are not getting any,” a frustrated Midelis said to one candidate.
And this after Hatch’s defense team asked Midelis to recuse himself from the case, arguing that he was biased toward prosecutors. The judge denied the motion.
Much new evidence has come to light since Hatch was arrested in January 2008, and the court has repeatedly slapped prosecutors for not having enough specific information on a number of charges.
Just earlier this month, the court learned there were additional files on computer hard drives not seized by police in the initial sweep of the Vero Beach office of Hatch & Doty, Hatch’s law practice. Copies of those files were turned over to the defense last week, as part of the discovery process. And, in January, the Quickbooks files for Coastal Escrow were located and turned over to State Attorney Bruce Colton’s office.
Defense attorney Robert Berry, who is working as co-counsel with Greg Eisenmenger, said their preparation for the trial has been frustrated by the constant trickle of new information, new records and names of new victims that appeared less than two weeks ago.
The defense has objected to the state adding these items after the court’s deadlines for discovery, and some of the new victims have been placed in a separate case to be tried after the one at hand.
“It’s like we’re being blamed for not asking for it earlier but Mr. Doty (Hatch’s former law partner) had said that everything, all the files, were turned over and we didn’t know that these other files existed,” Berry said. “We can’t ask for things that we don’t know are out there.”
Midelis has repeatedly said he will err on the side of admitting all evidence he deems relevant -- even if it comes in past discovery deadline.
Getting at as much evidence as possible is important, as is how prosecutors present the complicated world of financial data to jurors, at least some of whom won’t have any background in finance, accounting or perhaps even the business world.
The last-minute files, for example, may or may not be very important, says forensic accountant Clay Price of Harris, Cotherman, Price, Jones & Associates in Vero Beach. Price is not working on the Hatch case, but has nearly 20 years as a forensic accounting specialist in Indian River County.
“The Quickbooks files can be extremely important or not important at all,” Price said. “If it (the alleged theft) was not planned, then you might find good information. If it was planned, it could be all messed up and the file could be useless.”
He said copies of deposits and checks themselves will be more compelling than the electronic files.
The defense has indicated it would challenge anything less than original documents – but Price doesn’t think that will fly with the judge.
“In a perfect world you would have the actual check, but how many banks send your checks back anymore?” Price said.
While prosecutors have purportedly amassed a roomful of paper evidence in the case, Price thinks the key to swaying jurors will be to keep things simple.
“You can get bogged down in the minutiae of all of this,” Price said. “But the bottom line of this case for the prosecution is to prove that people placed their money with Hatch for an intended purpose -- whether it be a rental deposit or money to be used for the purchase of a house -- and it was not used for that intended purpose…”
It does not matter, Price said, how the money was actually spent as long as prosecutors prove it wasn’t for the real estate transactions they were backing.
Price also dismissed concerns about whether prosecutors and investigators here are up to the task of a case this size.
“They’re used to dealing with cases where maybe $10,000 was stolen,” he said. “In this case it’s $5 million or $3 million, but it’s the same thing. It’s just the volume that’s different. “You’re looking for a few things -- did the money come in, did it go out and who did it go out to,” Price said.
“You can’t pinpoint exactly when the money from one person was stolen because it all gets deposited and it’s all fungible at that point. But they know that it didn’t go for the intended purpose and that was Ira’s responsibility,” Price said.
He said he too will be watching this case with interest.
“People are interested to see how the prosecution will handle this and how the defense will handle this, but the thing that is of the most interest is all those people, those 800 people who lost their money.
“Those people are interested and so are their friends.”