White-Collar Crime

Jury Mulls Money-Launder Case Against Ex-Clark Thomas & Winters Partner Charged re Billing Practices

A Texas jury is beginning deliberations in a money-laundering case against a former partner at Clark Thomas & Winters who is accused of padding law firm bills to conceal improper payments to individuals related to members of the client’s executive board.

Walter Demond is also charged with theft and misapplication of fiduciary property in the case, in which he is accused of funneling some $700,000 in payments from law firm client Pedernales Electric Cooperative to a lobbyist and lawyer, according to the Austin American-Statesman.

Although the government essentially agrees with the defense that the lobbyist, who was paid $5,000 a month, worked to make the co-op and his brother, Bennie Fuelberg, who was then PEC’s general manager, look good, the prosecution centers on the manner in which law firm bills were allegedly inflated to obtain money from PEC that was then secretly used to pay the lobbyist and a lawyer on retainer to the law firm, the article explains.

Attorney Bill Price, the son of another former board member, was reportedly paid $2,000 a month as a retainer to do legal work for the law firm, although that arrangement also allegedly involved secret work for PEC that would not have passed muster if performed openly.

As a result, the prosecution contends, Demond wasn’t able to keep Price busy.

However, attorney Gerry Morris, who represents Demond, argued that his client didn’t commit a theft because Demond had no intention of stealing and spent PEC’s money in a manner that benefited the co-op, because the services provided by Curtis Fuelberg and Bill Price were helpful.

“It is not stealing to do with somebody’s money what they’re telling you to do with it,” Morris told the jury. “Bennie Fuelberg had the authority to hire his brother, his neighbor, his doctor … whoever he wanted.”

As to the alleged lack of work performed by Price, the defense argued that Demond had simply failed to follow through in finding enough for Price to do, the Statesman reports.

The retainer agreement with Price “was a good relationship,” Morris said. “If you set aside for a moment that [Price] was the son of a director, there was nothing wrong.”

Earlier coverage:

ABAJournal.com: “Law Firm to Pay $4.1M to Settle Suit Over Ex-Partner’s Alleged Activities”

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