Acquitted lawyer sees politics behind DoJ prosecution

As originally posted (see update appended at end):

Having won a long and expensive fight to clear his name of criminal charges, Alan Saturn is now questioning what led to his prosecution for income tax evasion and conspiracy to defraud the government.

Were he and longtime law partner Alan Mazer caught up in a scheme by government officials to put away their real estate client Jerry C. Pendergrass, a notorious pornographer who has bested various authorities over and over in the courtroom?

Or did Saturn's left-leaning politics have something to do with the decision, made at a senior level within the now-embattled U.S. Department of Justice, to put him on trial in Nashville's federal court?

"If you study it carefully, there has got to be some political motivation," Saturn said in an interview Saturday, after the jury returned verdicts late Friday of not guilty on all charges against him and Mazer. Pendergrass, who still faces trial on other counts, was also acquitted of conspiracy charges but was convicted of tax evasion.

"I'm certain that nobody likes the business that Mr. Pendergrass is in," Saturn conceded. "But notwithstanding all that, it's America, you know? If it's pornographic and against the law, then you lock him up. If it's not, he's got a right to sell whatever he wants. If you don't like it, don't buy it. If you don't want to see it, don't read it."

Pendergrass owns the highly visible "World's Largest Adult Bookstore" along Interstate 40 at the edge of downtown, along with numerous other adult-oriented businesses in Nashville and elsewhere. He has had multiple scrapes with the law over the years. In 1988, he was convicted in Chattanooga of six counts of possessing obscene materials with intent to distribute, and in the 1990s he was involved in local controversies over adult bookstores he owned in Louisiana and Illinois.

In 1996, Pendergrass was again charged with obscenity-related crimes in Chattanooga. An appeals court eventually threw out his conviction in that case. He was also involved during the 1990s in a lawsuit against the city of Nashville over a Metro ordinance designed to restrict adult-entertainment businesses. Pendergrass and other defendants obtained an injunction to keep the law from being enforced and were awarded more than a half-million dollars in legal fees, an award upheld on appeal by the Sixth Circuit in 2005 (although the injunction was eventually lifted after other anti-smut legislation passed legal muster). He prevailed in a similar case against the city of Paris, Tenn. in 1997.

In other words, Pendergrass has not proved to be an easy target for those who would prefer not to have his sort of enterprise as part of the local business community.

Saturn, meanwhile, has established a clear record as a supporter of causes inimical to the Bush administration. "I have always been a liberal and involved in Democratic politics — a big Gore supporter, a big ACLU contributor," he said.

Federal campaign finance records show that Alan Saturn and wife Nancy, proprietor of the American Artisan craft boutique and chair of the Metropolitan Nashville Arts Commission, gave to the presidential campaigns of Bill Clinton in 1996, Al Gore in 2000 and both Howard Dean and John Kerry in 2004, among other Democratic causes. They have given a total of $8,300 in federal donations since 1993.

"In order for this case to be brought, there had to be a special approval by the tax division of the Department of Justice," Alan Saturn said. "Who knows? It's so crazy up there now.... I don't want to think this way, but in this administration, the way the law is administered lately in this country, you have to question whether some little bureaucrat up there said 'A-ha!'"

There is historical precedent for Saturn's suspicion. The House Judiciary Committee, calling for Richard Nixon's impeachment in 1974, included the singling out of political opponents for IRS audits as one of the charges against the president. And although Saturn made no reference to his Jewish faith in discussing his case, it is now known that Nixon specifically went after Jewish contributors to his opponents' campaigns. In a portion of the Watergate tapes released in 1996, Nixon is heard telling an aide: "Please get me the names of the Jews. You know, the big Jewish contributors to the Democrats. Could we please investigate some of the c---s---ers?" (audio available at this link [2])

Saturn, who has not previously made any public comment about his legal case, said it arose out of an Internal Revenue Service investigation begun in 2003. The tax authorities came to his law and title insurance firm, which primarily handles the closings of real estate transactions, and asked for information on its dealings with Pendergrass. Saturn said he and Mazer handed over a large number of case files to investigators without receiving a subpoena: "We just said, 'Of course, we'll be happy to give you our files. We have nothing to hide.'"

The IRS eventually focused on the sale in August 2000 of a residential property at 1049 Hickory Hollow Road. In 1999 and 2000, Pendergrass had two large federal tax liens against him. The indictment claimed Saturn and Mazer were involved in a ruse to hide Pendergrass' ownership in the property. The two title attorneys were alleged to have prepared paperwork to facilitate the hidden ownership so that the IRS could not come after it as a way to satisfy the liens.

In 2001, Saturn and Mazer handled another transaction for Pendergrass in which he sold parcels south of Broadway for about $1 million. "If he were still holding that land today, it would have tripled or quadrupled in value," Saturn noted. From those proceeds, Pendergrass paid the government some $758,000 in back taxes. "So when they started this investigation, he didn't owe Uncle Sam a nickel."

The indictment of the lawyers and their client, handed down in August 2006, charged Saturn and Mazer with aiding a scheme by Pendergrass to avoid paying the tax liens he had owed in 2000. Also accused, and awaiting a separate trial along with Pendergrass, was former IRS agent James M. Hammonds, who prepared tax returns for Pendergrass. Saturn testified at trial that faults in the paperwork on the deal were innocent mistakes, made during a very busy period for the firm. He told the court that the transaction was worth about $1,000 in fees to his firm, asking rhetorically: "Why would I jeopardize my career and reputation for that kind of money?"

In a trial lasting eight days, federal prosecutors presented evidence confirming that Pendergrass had owned the property and that he had received the proceeds from its sale. But Saturn noted after the verdict that the feds' case included "no evidence anywhere that we did any conspiring or plotting."

Even though Saturn said he and Mazer "knew from the beginning that we had done nothing wrong," they did consider whether it would be best to settle the case. "We discussed a plea at one point, and then it made my wife and Alan's wife very unhappy," he recalled. And Pendergrass was completely unwilling to consider pleading out, Saturn said noting that "he's got a much bigger problem still," with 14 counts remaining to be tried separately.

Saturn feels confident that Pendergrass did not deceive him and Mazer about the transaction. "I really believe that he and the real estate agent did not know of those tax liens," he said. "If you factor in that one difference, then everything falls into place as totally proper."

Saturn would not reveal what he and Mazer have paid in legal fees. Peter Strianse of Tune, Entrekin & White represented him, while David Raybin of the Hollins, Wagster firm in Nashville represented Mazer. Sole practitioner Whitney Kemper is counsel to Pendergrass.

The firm of Saturn & Mazer continued to do some business with the case ongoing, but often had to schedule closings for nights and weekends. By and large, however, it did not lose business on account of the legal cloud hanging over its principals. "You would think that being in a fiduciary situation, people would immediately take you off lists because you're handling lots and lots of bank money," Saturn said. But as far as he knows, only one lender, RegionsBank, took the firm off its approved list of title agents.

Mazer, who could not be reached over the weekend, did not go out to celebrate his acquittal on Friday night, Saturn said. Instead, he "ran from the courtroom" to do a closing for a client who is taking chemotherapy and needed to time the closing around his treatment. According to Saturn, his law partner then rose at 5 a.m. Saturday to help set up a Special Olympics event.

David Raybin, attorney for Alan Mazer, this evening offered these comments by e-mail on his client's behalf:

My take is that the DoJ did not go after Mr. Mazer because of his politics. Unlike Mr. Saturn, Mr. Mazer is not a political person.... No, I firmly believe the DoJ “went after” Mr. Mazer because the DoJ in Washington did a terrible investigation and jumped to conclusions and made the facts fit their theory. They spent years investigating this matter and missed obvious evidence which established innocence in light of sloppy investigation and preconceived ideas.

I spent the entire trial pointing this out and offering legitimate explanations for everything Mr. Mazer did. Every explanation was supported by independent evidence and proof that DoJ had but failed to consider or was dead wrong about. It’s a travesty. If I could sue the government for false arrest I would do so in a heartbeat. Unfortunately, the US DoJ is immune from a lawsuit, and thus there is no incentive for them to "do it right."

I am not allowed to tell you how much the defense cost (you can only imagine: a two-week trial plus massive pre-trial investigation). The equally important question — which DoJ will never tell you — is how much this outrageous prosecution cost the taxpayers.