Star-Telegram.com: Dallas

Cuban says he'll fight SEC's insider-trading lawsuit

Mon, 17 Nov 2008 22:40 CST

By TREBOR BANSTETTER

The case against Mark Cuban begins with a seemingly innocuous e-mail sent four years ago with the subject line "Call me pls."

The e-mail, from Canadian search engine Mamma.com, in which Cuban, owner of the Dallas Mavericks, was the largest investor, sparked a flurry of angry phone calls over the next few hours that ended with Cuban allegedly committing securities fraud, according to government regulators.

On Monday, the Securities and Exchange Commission accused the outspoken entrepreneur and sports maven of insider trading, saying he illegally sold his investment in Mamma after learning of a planned stock offering that would reduce the value of shares. The commission filed the lawsuit in U.S. District Court in Dallas.

Cuban strongly denies the allegations. He said in a statement that the suit has no merit and is "the product of gross abuse of prosecutorial discretion."

"I am disappointed that the commission chose to bring this case based upon its enforcement staff’s win-at-any-cost ambitions," he said. "The staff’s process was result-oriented, facts be damned. The government’s claims are false and they will be proven to be so."

Cuban, 50, could face civil penalties and restitution that could top $3 million plus interest. The court could also order him to refrain from any violations in the future, a move that would expose him to contempt charges if he were convicted in any additional cases.

Cuban could also face criminal insider-trading charges if federal prosecutors pursued the case. There was no indication Monday that prosecutors are investigating, and a spokeswoman for the U.S. attorney for the Northern District of Texas declined to comment.

SEC officials declined to comment on whether the case could result in criminal charges.

Phil Stern, a lawyer who has worked as an enforcement official for the SEC as well as a special assistant U.S. attorney, said criminal cases are usually pursued "when they’re viewed to be egregious in terms of the number of people affected or if there’s something out of the ordinary."

Stern said Cuban’s high profile "in and of itself wouldn’t cause the U.S. attorney to step in." Many cases are handled by the SEC without criminal charges being filed, he said.

The charges could taint Cuban’s business deals, such as his bid to purchase the Chicago Cubs.

"I would think this does reflect on his integrity, and that’s something the [Major League Baseball] owners might consider when they look at who they want to own a major league franchise," Stern said. "Keep in mind, of course, that these are just allegations at this point."

Cuban said he plans to contest the allegations and "demonstrate that the commission’s claims are infected by the misconduct of the staff of its enforcement division."

'Upset and angry’

Scott Friestad, the SEC’s deputy director of enforcement, said the commission first learned of the potential insider trading last year "through normal investigative channels."

The commission laid out its case in great detail in its court filing. SEC officials said the problems began June 28, 2004, when Guy Faure, chief executive of Mamma, sent Cuban the e-mail. At the time, Cuban held 600,000 shares of Mamma, based in Montreal.

Four minutes later, Cuban called Faure from the American Airlines Center, according to the SEC complaint. During the call, which lasted eight minutes and 35 seconds, Faure told Cuban that he was about to disclose confidential information, and Cuban agreed to keep it secret. Faure then invited him to invest in a new stock offering, for private investors, that the company was planning.

Cuban was told that the new shares were being offered at a discount, which tends to drive down stock prices — a move that would reduce the value of his holdings.

Cuban "became very upset and angry during the conversation," according to the SEC. At the end of the call, he told Faure: "Well, now I’m screwed. I can’t sell."

In an e-mail to Mamma board members that day, Executive Chairman David Goldman wrote that Cuban "flew off the handle" at the news of the private offering.

Plano man pleads guilty to misspending his elderly mother’s money

Mon, 17 Nov 2008 23:07 CST

By MARTHA DELLER

FORT WORTH — A Plano man admitted Monday that he improperly spent money entrusted to him by his 74-year-old mother.

But he disputed the state’s allegation that he improperly spent more than $87,000 of his mother’s money over four months in 2004. Next month, a judge will determine how much was spent.

John Michael Hook, 54, was sentenced Monday to 10 years’ probation after he pleaded guilty to misappropriation of property by a fiduciary, someone who acts on another person’s behalf. Because the victim was older than 65, the charge is a second-degree felony with a punishment of two to 20 years in prison.

If Hook successfully completes his probation, he will not have a felony record.

Prosecutors Sabrina Sabin and David Lobingier said Hook’s mother, Phyllis Parish, gave her son her power of attorney in 2002. Two years later, Sabin said, Hook moved his mother into his home and began using money from her bank account to pay bills and buy things for himself.

While using his mother’s money to pay his mortgage, Hook charged her rent, Sabin said. He also paid his credit card bills and bought a variety of items for himself, including a motorcycle, she said.

Hook continued to reassure his mother that her money was safe until June 2005 when it ran out, Lobingier said. That’s when Hook sent his mother to live with his former wife in Las Vegas, he said.

The Tarrant County district attorney’s office’s economic crimes unit began investigating after Parish contacted her bank and learned that her money was gone, Sabin said. The case was handled by Tarrant County because that’s where Parish signed over her power of attorney and that’s where her bank was, she said.

Sabin said it took investigators about 19 months to put together the case through bank, credit card and other records.

A restitution hearing has been set for Dec. 18 to determine how much money Hook must repay his mother.

Plano man pleads guilty to misspending his elderly mother’s money

Mon, 17 Nov 2008 18:12 CST

By MARTHA DELLER

FORT WORTH — A Plano man admitted Monday that he improperly spent money entrusted to him by his 74-year-old mother.

But he disputed the state’s allegation that he improperly spent more than $87,000 of his mother’s money over four months in 2004. Next month, a judge will determine how much was spent.

If Hook successfully completes his probation, he will not have a felony record.

Hook continued to reassure his mother that her money was safe until June 2005 when it ran out, Lobingier said. That’s when Hook sent his mother to live with his former wife in Las Vegas, he said.

Sabin said it took investigators about 19 months to put together the case through bank, credit card and other records.

A restitution hearing has been set for Dec. 18 to determine how much money Hook must repay his mother.

Dallas County district attorney reconciles opposition to death penalty with the law

Sun, 16 Nov 2008 00:01 CST

Dallas County District Attorney Craig Watkins created a conviction integrity unit. He invited law students into his office to help probe for wrongful convictions. And there is at least one other way Watkins differs from most other prosecutors: He is personally opposed to capital punishment. In recent interviews, Watkins discussed those feelings and how he reconciles them with Texas law and the policies of his office.

Why are you opposed to capital punishment?

I’m a human being, and as a human being, I will not kill anybody. I don’t want to use my position to take a life, even though you may go out and do a heinous crime. I may be even worse than you because I have the full weight of the government behind me. For me to use the full weight of the government to do the same thing that you did, is that justifiable?

We just agreed to seek the death penalty against a guy that raped a 3-year-old girl and strangled her and left her under a bed. When I see that, the human side of me says, "Yeah, that guy should be killed." But then the government is the supreme being, right? You’re in a supreme position. You’re higher than human existence and you should carry yourself as such.

Given your feelings, when your office seeks the death penalty, do you personally sign off on that?

Professionally that’s something I have to do . . . for the citizens I represent. . . . It’s the law and I have to implement it. I can’t let my personal views get in the way of what the public wants.

Will your feelings about the death penalty ever affect the policy of your office?

I would like to think that I have the courage to stand up and say no [to capital punishment]. But I’m not at that point. I don’t know if I ever will be. It’s so early in my career as DA. I don’t have any seniority. I don’t have any credibility. . . . That might be a fight that I should fight, but at this point it’s too early.

Do decisions on capital cases cause you any sleepless nights?

All the time. Not just the ones that I make the decision on. Every time I read in the newspaper that someone is going to the death chamber, I don’t sleep. . . . They just did one last week with one of the Texas Seven. I pay attention to that. That’s something I struggle with, even though the person did something really bad.

Are you concerned your position on capital punishment will hurt you politically?

I think it will, obviously. I can foresee the attacks that will come my way. But at the end of the day, the public wants honesty and openness. The fact that I am publicly trying to come to a conclusion on this is good for the system, and it’s good for politics. I don’t think politicians are honest enough. — Tim Madigan

For Dallas DA, a celebrated pursuit of justice also brings anguish and anger

Sun, 16 Nov 2008 00:35 CST

On a rainy Tuesday morning in late summer, Craig Watkins’ mood seemed as dark as the day outside. His 6-foot-5-inch frame was slumped into a chair in his 11th-floor office, and Watkins, the Dallas County district attorney since 2007, was clearly exhausted. During a long interview that morning, he eventually explained why.

"Tanya, she will tell you," he said, referring to his wife. "Every night at 3 o’clock in the morning I wake up, and I wake her up and I say, 'You’ve got to make me feel better about all this.’ And so she talks to me and says it’s going to be all right. But it’s every night."

Make Watkins feel better about what, exactly? Wasn’t this the same history-making Craig Watkins, the first black district attorney in Texas, the guy celebrated on 60 Minutes for helping right the wrongs of Dallas County criminal justice?

Yes, same guy. But on this August morning, despite all that, Watkins was clearly a man in despair. And a man who was very angry.

"That’s the side you don’t see," Watkins said.

Such is the enigma of the Dallas DA, who turns 41 today.

On one hand, there can be no doubting his political courage. For 35 years, the legendary, cigar-chomping DA Henry Wade had dictated local justice, and his philosophy could be summarized as convict-them-all-and-let-God-sort-them-out. Watkins was the first of Wade’s three successors to openly acknowledge that the innocent had suffered as a result.

The new DA created a conviction integrity unit. He invited law students from the Innocence Project of Texas to help review questionable convictions of the past. He reminded underlings that the role of the prosecutor was to seek justice, not lofty conviction records.

"That’s why he’s getting such national attention," said Angela Davis, a law professor in Washington, D.C., and author of Arbitrary Justice: The Power of the American Prosecutor. "What he’s doing is unheard of."

'I was very naive’

So why so morose? That has to do with the other part of the Watkins enigma, his seeming naivete, his political skin that seems paper-thin.

More-seasoned politicians would certainly have anticipated the sharp elbows in response to policies that reversed the old ways. But the new DA says he’s been surprised by the hounding of local reporters, surprised that he and his office have been deluged by open-records requests. He says he feels as if he’s been stalked by television news crews looking to turn up some dirt.

Not that the local media have criticized the 11 exonerations of wrongfully convicted men in Dallas County since Watkins took office. Instead, Watkins says, reporters nibble around his edges.

"I was very naive when I got here," Watkins conceded. "The things that we’re doing, I thought that would be very difficult for people to criticize because it’s the right thing. But I’ve found that even though this is the right thing, there are certain elements out there that don’t want to see this happen, and they are finding ways to discredit me. It’s disheartening to deal with that."

Most irritating to Watkins, it seems, has been KDFW/Channel 4, which began broadcasting a series of investigative reports on him this summer. He says he also feels that The Dallas Morning News has given white Dallas Mayor Tom Leppert preferential treatment.

"I have to think about when I swipe my card when I come into the garage in the morning . . . because they might do an open-records request to see what time I’m getting to work, what time I’m leaving," he said. "I have to account for every place that I go. If it were someone else sitting in this seat, they wouldn’t have to deal with that. But because I’m the first African-American, there is a microscope on me."

But veterans of Dallas politics, including the city’s first black mayor, Ron Kirk, say that Watkins’ angst may have more to do with his relative inexperience than race.

"There are different levels of comfort and discomfort with public scrutiny, and Craig came pure out of having run a solo law practice," Kirk said. "It takes a while. It’s fun to wake up and read the good stuff. Then you realize the criticism comes with the praise."

Terri Moore, Watkins’ top assistant, has been through the wars herself. The tough-minded veteran prosecutor from Fort Worth twice tried to take on the establishment, running unsuccessfully against longtime Tarrant County District Attorney Tim Curry. In one respect, Moore agrees with Watkins, the man she calls "the Boss."

"I feel like we’re in the White House," Moore said one day in her office next to Watkins’ in the Crowley Courts Building. "You’re constantly having to answer somebody’s request for public information on something that is ridiculous."

More trouble for runaway boy who boarded airplane for Texas

Sat, 15 Nov 2008 17:19 CST

A boy who ran away at age 9 and talked his way onto airplane flights to Texas has blown too many chances to clean up his act and must live with a felony record for a prior car theft, a judge has decided.

Since his headline-making escapade in January 2007, Semaj Booker, now 11, has attempted to repeat his airline runaway act, broken curfew, lied to police, burglarized an apartment and destroyed a mattress in juvenile detention, Pierce County Deputy Prosecutor Fred C. Wist said Thursday.

The boy seemed to feed off the attention from his initial escapade, the exasperated prosecutor told Superior Court Judge Frank E. Cuthbertson on Thursday.

"Mr. Booker has never been held accountable for his actions," Wist said. "The time has come, your honor, for this court to say enough is enough."

Cuthbertson agreed, revoking a deferred disposition of the boy's conviction for stealing a neighbor's car and leading authorities on a high-speed chase on State Route 512, crimes he committed a day before he slipped out of his home again, made it onto two flights and got as far as San Antonio, Texas, in an attempt to visit his grandfather in Dallas.

The boy also was ordered to pay $100 to a crime-victim compensation fund, make $3,000 in restitution to the car owner, April Kettner, whose Acura he totaled, and perform four hours of community service.

Wist said the boy won't face more time in detention, but for the rest of his life will be obligated to reveal the conviction to potential employers unless he later persuades a judge to seal his juvenile record.

Arguing that Booker is a "product of the dysfunction" in his family, defense lawyer Brett A. Purtzer asked in vain that the judge put off a decision for three months pending civil proceedings on whether the boy and three siblings should be returned to the custody of their mother, Sakinah Booker.

The children have been placed in foster care at Cuthbertson's request pending a dependency hearing next month.

"It's time for you to step up and stop all the drama and stop all the nonsense and stop making these bad decisions and be a person who's going to help your family and is going to help our community," Cuthbertson said. "For some reason, I still believe you can do it."

Confusion could have delayed response to wreck near D/FW

Fri, 14 Nov 2008 21:04 CST

By NATHANIEL JONES

Inclement weather, an incorrect address and confusing jurisdiction delayed emergency response to a Euless man who wrecked his car while driving to the Dallas/Fort Worth Airport, according to 911 recordings released Friday.

By the time emergency crews reached Tommy Nix, the Transportation Security Administration officer had died of what family members say was likely a heart attack.

"I don’t care whose district it was, whoever got the 911 call should have rolled," Tommy Nix’s wife, Debbie Nix, said Friday. "Save his life -- we can fight over who has to pay the bill later."

Fort Worth police said Friday that the matter is under investigation. D/FW said it responded in a timely and professional manner.

Jack Eads, executive director of the Metropolitan Area Ambulance Authority, also known as MedStar, said these jurisdictional matters have come up before and that records show that MedStar wasn’t involved in this case.

Tommy Nix was driving to work at the airport shortly before 5 a.m. on Oct. 6, when his 2008 Toyota pickup slammed into a guardrail on the overpass to the south entrance of D/FW Airport.

A witness told police that at no time did Nix put on his brakes, which indicates he had suffered from some kind of ailment, Debbie Nix said.

That witness who made the initial phone call to 911 was automatically connected to D/FW Airport's 911 system, Nix said.

Instead of sending help, Nix says, the caller was transferred to the Fort Worth 911 dispatch, a statement D/FW officials dispute.

The Fort Worth dispatcher, assuming she had already fielded calls on the same wreck, then assured the D/FW dispatcher that an ambulance was on its way.

Meanwhile, time was passing, Nix said.

The witness described Tommy Nix as being conscious and having shallow breathing.

Because of the early morning rain that fell that morning, there were several wrecks in the vicinity of Texas 360 and State Highway 183.

A second D/FW dispatcher called Fort Worth dispatchers back after a MedStar ambulance had not arrived.

An ambulance from the airport, which took the initial 911 call, arrived at least 18 minutes after the call, according to D/FW officials. The Nix family says it took 35 minutes for an ambulance to respond.

Ken Capps, vice president of public affairs at D/FW Airport, issued a statement Friday saying a D/FW Department of Public Safety officer was dispatched as soon as the 911 call came in, and was first on the scene. The caller was transferred to the Fort Worth 911 dispatch as a matter of protocol, Capps' statement said.

"The D/FW Department of Public Safety was timely and responsive to the emergency and performed their duties professionally throughout the incident," the statement said.

D/FW gave this timeline of its emergency response:

■ 0503 – The first 911 call was received by D/FW DPS dispatch office. Per the established protocol, the call was immediately referred to Fort Worth 911 for response. D/FW DPS dispatchers immediately sent a police unit to the scene to assess the situation, with the understanding that a Fort Worth ambulance was en route.

D/FW dispatch then follows up with a call to Fort Worth dispatch to check on its response and estimated time of arrival. Fort Worth dispatch confirmed to D/FW dispatch that an ambulance was on the way but that it had no ETA.

Woman found fatally stabbed in Irving apartment

Fri, 14 Nov 2008 14:45 CST

BY DOMINGO RAMIREZ JR.

IRVING -- An Irving woman was found fatally stabbed at an apartment Friday morning after a man who claimed to be her husband walked into the complex office covered in blood and announced that he had just killed his wife, police said Friday.

When officers arrived at the scene, the man was found in the apartment office, suffering from cuts to his wrists and throat, police said.

The man, who police did not identify, was taken into custody and transported to Parkland Memorial Hospital in Dallas where he was undergoing surgery. His condition was unavailable.

Police identified the victim as Anna Luisa Martinez, 32, who was pronounced dead at the scene.

Police received a call shortly after 9:30 a.m. Friday from the office at the Island West Apartments in the 2700 block of W. Rock Island Road.

The caller told police that a man told them about the killing and was lying on the office floor.

After officers arrived and took the man into custody, they followed a blood trail from the office to an apartment in the complex where they found Martinez, police said.

Authorities believe Martinez had suffered a stab wound to the chest.

Police did not release any details on a motive for the slaying.

Dallas officers fired upon at accident scene

Fri, 14 Nov 2008 08:47 CST

BY NATHANIEL JONES

Two police officers working an accident west of Dallas Love Field were shot at early Friday morning.

The incident happened on Interstate 35E near the Empire Central exit in the southbound lanes.

Seven or eight shots were fired, according to broadcast reports.

The officers were not injured in the 2 a.m. shooting. Two men in the vehicle were stopped shortly after the incident and were taken into custody, according to Dallas police.

The men, who are described as being in their 20s, were being questioned by police.

A semi-automatic weapon was found in the car when it was stopped, according to Dallas police.

Dallas County Jail checking each inmate's immigration status

Wed, 12 Nov 2008 23:46 CST

By PATRICK McGEE

All Dallas County Jail inmates will have their fingerprints run through a massive federal database to identify immigrants who can be deported.

The jail, one of only seven nationwide to participate in the Secure Communities program, began running fingerprints through the immigration database Wednesday.

Last month, Harris County joined the program, which is run by U.S. Immigration and Customs Enforcement. Harris and Dallas are the only participating Texas counties. North Carolina has four counties taking part, and Massachusetts has one.

ICE wants to offer the Secure Communities program in every state by spring.

The new database link automatically checks the criminal and immigration history of all Dallas County Jail inmates, said Pablo Campos, ICE assistant field office director in Dallas.

The database contains 90 million names, including those of immigrants who have been arrested before and those who have been deported. Also listed in the database are would-be immigrants who have had their visa applications rejected.

The Secure Communities program also searches for legal immigrants who became eligible for deportation because they were convicted of certain crimes.

The program is the latest development in the federal government’s increasing number of deportations. Many of them have come from the Criminal Alien Program, or CAP, in which ICE checks the backgrounds of inmates suspected by local jail officials of being illegal immigrants.

The Irving and Farmers Branch jails have implemented the Criminal Alien Program.

ICE spokesman Carl Rusnok said Secure Communities is "like CAP on steroids" because it does a background check on every inmate and taps into such a massive database.

ICE officials will continue to put the highest priority on immigrants who have committed crimes, especially serious crimes, Campos said. Illegal immigrants arrested for minor crimes will have the least priority, but all illegal immigrants identified in local jails are being deported, he said.

Kim Leach, spokeswoman for the Dallas County Sheriff’s Department, said the new initiative grew out of ICE having a full-time officer working in the Dallas County Jail, looking for deportable immigrants, since 2006.

PATRICK McGEE, 817-548-5476

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