Preserve Developer Asks Judge for New Trial

July 7, 2017

File Shot: The Waterfall House at Johnson Crook, where plans for a luxury housing development called The Preserve at Rising Fawn were shown at a 2013 federal trial to be a massive land fraud. 

 

Convicted Preserve at Rising Fawn developer Josh Dobson got his day in court on Thursday, but to what avail remains obscure.

 

Dobson, serving 10 and a half years in federal prison for his role in the Dade County land scam that led to an avalanche of foreclosures, bankruptcies and civil suits, as well as to federal indictments for Dobson and one other, has hired a new lawyer and asked that his 2013 conviction be set aside on the grounds that the first lawyer did not warn him how long a sentence he might receive if he stood trial and lost.

 

His new attorney, Michael Richardson, says that that deficiency means Dobson was denied his constitutional right to effective counsel and that he should therefore be granted a new trial.

 

But judging by Thursday’s court proceedings, it may be a hard sell for the developer and his new legal representative. Judge Curtis Collier, who presided at Dobson’s money laundering and wire fraud trial, said he never agrees to plea bargains that limit his sentencing leeway, and Dobson’s first lawyer, Chris Townley, testified that one was never on the table in the first place.

 

Dobson, 39 but fresh-shaven and looking younger in olive-green prison drabs as he testified in federal district court in Chattanooga Thursday morning, told Judge Collier that 10 years is a long time to be away from one’s family. “You lose your wife,” he said. “You bury your sister.”

 

Dobson and his wife, Cristy, who have two young children, divorced following the trial. His sister, Amy, died in March.

 

Dobson had written in an affidavit filed with the court that, prior to the trial, federal prosecutors had offered him a plea bargain for a shorter sentence if he would testify against three others, including Travis Shields, his brother-in-law and business partner in Preserve development firm The Southern Group, as well as Dade County Magistrate Judge Joel McCormick, formerly a property manager and investor at The Preserve at Rising Fawn.

 

He repeated this to the judge on Thursday. Attorney Townley, said Dobson, had told him federal prosecutors would show leniency if he testified against his former cohorts. “The good news was the government wanted me to cooperate,” he said. “They wanted to go up the chain a little higher than me.”

 

Townley had told him this the day after the indictment, said Dobson. Dobson said he refused at the time. “I didn’t feel like those folks did anything wrong,” he said.

 

He didn’t think he had, either, Dobson testified when questioned by his own attorney, Richardson. “I didn’t think I did anything wrong but I wouldn’t have risked going away from my family for 15 years,” said Dobson.

 

He told Richardson that Townley had relayed to him an offer by lead prosector John McCoon to serve two to five years in exchange for his testimony against the others--an offer he said he would have snatched at had Townley told him how long he might serve if he lost at trial. “There’s no doubt in my mind I would have taken that and ran,” he said.

 

But he and Townley never had any conversations about potential prison time, said Dobson. Instead, he said, Townley had been confident they could win at trial. “I had all the faith in the world in him,” said Dobson. “I said, ‘Let’s go.’ “

 

A layman relies on his attorney, said Dobson. It was his understanding that: “I just had to stand up and say Not Guilty, and he would handle everything else.”

 

It was only after his conviction that it emerged he could be facing 15 years or more in prison, testified Dobson. The amount of loss in the Preserve scheme was one relevant sentencing factor--$26 million according to the sentencing guidelines--and another a legal term called “relevant conduct” that Dobson had never heard before the sentencing phase, but which Townley explained to him.

 

“I’ll never forget his explanation,” said Dobson. He said Townley had used a drug example: If you’re arrested for one bundle of marijuana but three others testify you sold them a bundle apiece, you can be sentenced for four bundles of marijuana, said Dobson.

 

Dobson had thought he’d be sentenced only on the amount of loss in the specific fraudulent bank loan deals for which he’d been prosecuted, he said, as opposed to the whole Preserve scheme.

 

Dobson and his business associate, Paul Gott, were found guilty of defrauding banks of multiple $150- $275,000 loans secured only by wildly overvalued building lots bought by on-paper-only by borrowers who never intended to build on the lots or repay the loans. 

 

Dobson maintained his innocence at the 2013 trial and at the July 6 hearing said again he had never realized the loans were fraudulent, with the developer Southern Group slipping the down payment to the fake buyers to fool the banks. “That wasn’t part of my job,” he said.

 

In that case, asked government prosecutor Perry Piper in cross-examination, wouldn’t it have been perjury if Dobson had said he was guilty pursuant to any plea bargain?

 

No, said Dobson, he would have entered a guilty plea and: “I would have meant it.”

 

He said he’d had three years to reflect on it now and: “I regret deeply the way we handled some of those transactions.”

 

Perry Piper was assistant prosecutor at Dobson’s money-laundering and wire fraud trial. Lead prosecutor John McCoon has since retired.

 

Dobson said he’d called his father and arranged to hire a new attorney after it became clear the sentencing process was going badly for him with Townley at the helm. “I felt like Mr. Townley was caught off guard,” he said.

 

When Townley himself testified, he agreed he’d never mentioned to Dobson a 10-, 15- or more-year sentence, but had in fact covered the dangers of going to trial sentence-wise in general terms. “I told him if he went to trial it would be a lot more.”

 

Townley had considered that prosecutor McCoon might be willing to deal, testified the attorney, perhaps agreeing to reduce charges and cap sentencing at five years, should the judge allow it. But Dobson had never been interested, said Townley. “His position was the same, that unless I could give him probation he was going to trial,” said the attorney.

 

Townley said he’d known he couldn’t swing a probation-only deal with the prosecutor, much less the judge. Lacking that, it was Dobson who had been “adamant that he was going to go to trial,” testified Townley. And in any case, said the attorney: “We never got to the point where there was a plea bargain on the table.”

 

In closing, Dobson’s new attorney, Richardson, cited case law and reiterated that Dobson’s conviction should be set aside and the developer given a new trial. “He was not fully apprised of his options,” he said. And: “He did not make an informed decision. He was denied effective counsel as guaranteed by the Sixth Amendment.”

 

Prosecutor Piper said in closing Dobson was suffering from “buyer’s regret” for going to trial but had had more than a fair shake. “Mr. Townley has done all he can and should do,” he said. Townley, said Piper, was a crafty attorney who knew his way around court, one Piper warned other prosecutors about when they had to go up against him. And he reminded the judge that the Preserve debacle had caused total losses over $40 million.

 

Judge Collier himself began proceedings in this case with what sounded like a dismissal of it: “The court would have not accepted any such agreement,” he said.

 

And he also seemed impatient of any question of attorney Townley’s competence. “Mr. Townley’s performance in the case was extremely high,” said Judge Collier. “His defense was one of the best I’ve seen in a white-collar case.”

 

During proceedings, the judge questioned Dobson, Townley and Richardson individually. One point the judge made was that Dobson had been taken through the charges against him and the possible prison time each carried by Magistrate Judge Susan Lee when he was first arraigned.

 

Another was that the indictment against Dobson had been poorly drafted by the government, but that this had worked to Dobson’s benefit rather than against him.

 

One more was that the loss amounts and other sentencing factors had been determined by what went on during the trial. “No reasonable attorney could predict in advance what the sentencing guidelines would be,” said the judge.

 

Judge Collier ended proceedings without ruling on the case or saying when he might. His clerk, when questioned, said it might take a while.

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