White-Collar Crime

2nd trial begins for ex-prosecutor accused of siphoning $52M from elderly woman's trust

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A former prosecutor who took over a lucrative trust practice from his father’s estate is now facing a second trial in one of the biggest alleged frauds in Alaska history.

Initially sentenced to eight years in federal prison after pleading guilty to 15 felonies, Mark James Avery successfully appealed his conviction, which included “honest services” wire fraud. He was released in 2013. However, he was charged with 14 counts later that year concerning the same conduct, including wire fraud under a different theory, the Alaska Dispatch reported at the time.

Jury selection in the second trial of the Anchorage case took place on Monday, reports KTUU.

Avery is accused of taking more than $52 million from the May Smith Trust for his own personal use. However, as federal public defender Michael Dieni pointed out in opening statements, Avery got permission from fellow trustees in 2005 to take a $52 million loan from the trust to start a private air charter business.

The idea was to make it easier to conduct trust business between the San Francisco Bay area, where all three of the trustees had ties, and the Bahamas, where Avery had established May Wong Smith in a $10 million mansion in 2004, according to KTUU and a lengthy 2007 article in the San Francisco Chronicle.

“He did not lie or cheat to obtain the money. It was an investment by Avenco Ltd.,” Dieni told the jury, referring to a Bahamas holding company for trust assets. The air charter business was to provide executive jet services and medical evacuations and perform military contracts, the defense lawyer said.

But, in addition to buying an Alaska air charter business, plus two corporate jets for $8 million, Avery was accused of using some of the loan money for personal expenses and making purchases that weren’t necessary for a business forwarding the trust’s interests, the Chronicle reported. They included a yacht, all-terrain vehicles, two rocket launchers from the Soviet era, 12 Czech fighter jets and a number of helicopters, among other purchases.

The spending spree, as well as the military flavor of some of the purchases, soon caught the attention of the feds.

“Anchorage is a small town,” assistant U.S. attorney Steve Skrocki told the Chronicle, adding: “This type of spending in such a short time was extraordinary. We’re talking about spending $52 million in six months.”

By 2006, Avery had been charged and agreed to plead guilty in the original case. That same year, Smith, who had been suffering from dementia for nearly 15 years, died.

In the new trial, Dieni pointed the finger at Avery’s business partner in the air charter venture, describing the man as a “remorseless liar” who wore a Philippines military uniform with fake “chest candy” medals and stripes.

“This wasn’t about making Avery rich. It was about him taking on too much and picking a partner he couldn’t trust,” Dieni said, KTUU reports.

A law graduate of Golden Gate University, Avery passed the California bar in 1990 and worked as a prosecutor in Santa Clara County and San Francisco, the Chronicle reports. After a new district attorney took office in 1996 and laid off Avery and other prosecutors, he moved to Alaska, where he also worked as a prosecutor.

In 2001, his father, Luther Avery, a well-known trust attorney, died unexpectedly after a fall. Avery took over his practice, which included a $400,000-a-year role as a trustee for the May Smith Trust and a related charitable trust.

As the son became established in his new role, “I think he got dazzled by the amounts of money involved, dazzled by the possibilities and forgot the basics of doing business,” Avery’s then-lawyer, Scott Dattan, told the Chronicle in 2007.

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