NewsChannel 5 Investigates: Capitol Hill Corruption
Future of Cooper Case Uncertain After Appraiser Acquitted
(Story created: 4/7/06)
A federal jury Friday acquitted a real estate appraiser accused of inflating the value of a state senator's lumber mill. That came days after an Alabama couple pleaded guilty to numerous federal charges.
The appraiser, James B. Passons, 61, declined comment after the verdict as he hugged relatives and friends outside the courthouse.
Passons admitted on the stand that he prepared an inflated appraisal of a lumber mill owned by state Sen. Jerry Cooper, D-Smartt, but with assurances by Cooper the appraisal would only be used to show the projected value of the property with a planned rail spur.
"My error was in trusting Jerry Cooper," Passons testified.
The Alabama couple who bought Cooper's sawmill, Anthony and Teresa Auyer, pleaded guilty Monday to federal bank fraud and other charges relating to the alleged conspiracy with Cooper.
Assistant U.S. Attorney Gary Humble had argued to jurors that Cooper used that inflated appraisal and his political connections with Lt. Gov. John Wilder and former economic development commissioner Bill Baxter in a borrowing scheme.
During Passons' trial, Humble told jurors that Cooper called Wilder, who is on the board of directors of BankTennessee, and faxed the bank Passons' appraisal to line up a $1.7 million loan that allowed the Alabama couple to buy the mill.
The prosecutor said Cooper then received help from Baxter, now a Tennessee Valley Authority board member, in arranging a $485,000 state loan that was not repaid.
Defense attorney Mike Galligan noted in closing arguments that while Humble was talking about political influence in the borrowing scheme that was central to the charges, the government decided to go after the "little appraiser."
Cooper and Wilder, both Democrats, and Baxter, a Republican, aren't charged in the case. The indictment identified Cooper as an unindicted coconspirator, not by name but as the mill owner, and he refused to testify at Passons' trial because he could be targeted for charges.
Cooper's attorney, Jerry Summers of Chattanooga, said after the trial that the acquittal "further supports our position that Jimmy Passons and Jerry Cooper had no intention of defrauding anybody, including the bank. We hope the government will terminate any further investigation into this matter against Sen. Cooper."
At Passon's trial, the defense also presented testimony and evidence that the bank executives and U.S. Department of Agriculture officials did not rely on the appraisal to approve the lending.
The jury of eight women and four men deliberated the bank fraud, mail fraud and fraud conspiracy charges for more than eight hours over two days.
Juror Isaac Atalla of Chattanooga said as he left the courthouse Friday that the government had "vague evidence." He said the jury was about evenly split when it recessed Thursday before resuming deliberations for about two hours Friday to go through the evidence piece by piece.
The government "did not really prove it to us, any attempt to defraud," Atalla said.
"Obviously they believed Mr. Passons when he said he had never intended to defraud anyone, and that was the truth," said defense attorney John Partin.
The indictment contends Cooper sold the property to Auyer's construction company with a commitment from the state Department of Economic and Community Development that a grant would be issued to build the rail spur.
Passons will cooperate if the government decides to pursue charges against anyone else, his attorney Galligan said. The not guilty verdict probably does raise a "question about the probable success of that prosecution," the lawyer said.
Carrigan, pastor of the congregation from McMinnville, said the verdict was a relief for Passons, his family and the church members.
"We knew he was innocent, Carrigan said. "This is about Jerry Cooper and we knew that." (Associated Press was used in this report.)