Thursday Oct  6 2022

SAN ANTONIO — The office of then-Constable Michelle Barrientes Vela collected fines and fees from defendants who had outstanding warrants without arresting them or bringing them before a judge, witnesses said Wednesday in a sentencing hearing in her evidence tampering trial.

The violation of criminal justice procedures was routine and continued even after Vela was warned by then-District Attorney Nicholas “Nico” LaHood that she needed to stop it, said one of the witnesses, Justice of the Peace Roberto Vazquez, whose Bexar County Precinct. 2 court the constable was elected to serve.

The jarring allegations also were detailed by Renee Garza, a longtime clerk and court manager in Precinct 2, who testified that Vela’s deputies collected fines and fees while executing 93 warrants but that much of the money had to be refunded, “because they didn’t have a chance to go before a judge.”

Elizabeth Zavala, Staff writer

Oct. 5, 2022Updated: Oct. 5, 2022 5:05 p.m.

 

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SAN ANTONIO — The office of then-Constable Michelle Barrientes Vela collected fines and fees from defendants who had outstanding warrants without arresting them or bringing them before a judge, witnesses said Wednesday in a sentencing hearing in her evidence tampering trial.

The violation of criminal justice procedures was routine and continued even after Vela was warned by then-District Attorney Nicholas “Nico” LaHood that she needed to stop it, said one of the witnesses, Justice of the Peace Roberto Vazquez, whose Bexar County Precinct. 2 court the constable was elected to serve.

The jarring allegations also were detailed by Renee Garza, a longtime clerk and court manager in Precinct 2, who testified that Vela’s deputies collected fines and fees while executing 93 warrants but that much of the money had to be refunded, “because they didn’t have a chance to go before a judge.”

A jury convicted Vela in September of two counts of tampering with evidence related to her office’s handling of cash. Vela will be sentenced by state District Judge Velia Meza, and Wednesday’s allegations, which had never been made public, came from prosecution witnesses in the sentencing phase of the trial.

Tuesday Oct 4 2022

Hi, Professor.

Hope you're doing well.

I'm writing about another bookkeeper/office manager accused of embezzling more than $1.6 million from a San Antonio-area architecture firm. (The employee has not been charged but the firm has filed a lawsuit against her.) These stories about employees stealing from their employer seem to happen sporadically here.  Here are the intros from a few that I've written about in the last year:

Ex-Centro employee handed 33 months for fraud
Publication date:  8/6/2022 Page:  B001 Section:  BEdition:  State
Byline:  Patrick Danner
A bookkeeper who embezzled $291,000 from Centro San Antonio expressed remorse for her criminal conduct at her sentencing Friday, but that didn't spare her federal prison time.
Alicia Henderson, 60, who now goes by Alicia Padilla, pleaded guilty in 2020 to charges of wire fraud and making a false statement on an income tax return and received concurrent 33-month sentences on each charge. She also must serve three years of supervised release and pay about $356,000 in restitution.

Law firm ex-staffer sentenced in thefts
Publication date:  1/26/2022 Page:  B001 Section:  HearstEdition:  State
Byline:  Patrick Danner
In early 2020, after San Antonio's Shelton & Valadez learned its longtime bookkeeper Irene M. Scott had been stealing from the law firm, she confessed but refused to disclose the extent of her embezzlement — nearly $1.7 million.
The following year, before she was ever charged, Scott found another job and allegedly fraudulently claimed unemployment and obtained weekly payments from the Texas Workforce Commission for about 18 months.
At Scott's sentencing hearing Tuesday, her lawyer asked U.S. District Judge Fred Biery to sentence Scott to 63 months — two years below the low end of the sentencing guidelines — because she had accepted responsibility for her crimes while at Shelton & Valadez and had agreed to make restitution to the firm.

Doctor's manager heading to prison; Woman embezzled $345,000 over 8 years after given 'second chance' for earlier crimes
Publication date:  11/9/2021 Page:  B007 Section:  Edition:  State
Byline:  Patrick Danner
Not long after Dr. Steven Davis hired Patricia Ann Doucet to work in his dermatology practice in 2004, he learned she had a criminal past. But he decided to overlook it and give her a "second chance."
It was a decision he would come to regret.
Doucet, 74, bilked more than a combined $345,000 from Davis' Dermatology & Laser Center San Antonio and StemBioSys Inc., a biomedical firm he co-founded, from 2012 through early 2020.
On Monday, Senior U.S. District Judge David A. Ezra sentenced Doucet to 46 months in federal prison after she pleaded guilty to 10 counts of wire fraud. She also must serve three years of supervised release and make restitution.

Do you have any thoughts on why  this crime seems to happen regularly here? I'm writing today about this latest case.

Thank you.

Patrick Danner
Business writer
San Antonio Express-News

Monday Oct 3 2022

Credit Suisse CS 2.17%▲ risks getting caught in a doom loop as worries flood into a strategic vacuum while investors wait for a new turnaround plan. Management needs to act quickly to break the cycle.

The beleaguered lender’s share price fell around 8% in early trading on Monday. The apparent trigger for the latest selloff was nothing more than its bankers calling customers and investors this weekend to reassure them that all is in hand despite a jump in its credit-default swaps on Friday.

2022Oct.-70-60-50-40-30-20-1001020%KBW Nasdaq bank indexStoxx Europe 600 banks​index Credit Suisse Group

Even after its recent history of scandals and profit warnings, the bank finished the June quarter with a solid 13.5% core capital ratio. Management insists it is well-capitalized and that its brand remains strong. But banking is a confidence business where worries can become self-fulfilling prophecies. The challenge and expense of sorting things out will likely rise the longer it takes for the lender’s new management to take decisive action.

Ideally, Credit Suisse would reassure the market with solid third-quarter results well before the planned reporting date on Oct. 27. Strong numbers seem unlikely, though. Seesawing markets have made it a tough quarter for wealth management. In investment banking, revenues are down across the sector and the business mix has been unhelpful for Credit Suisse in particular: Leverage loans were hard hit, while fixed income—specifically foreign exchange and rates—was the main bright spot. The bank is also likely nursing losses from underwriting the disappointing Citrix leveraged buyout.

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That leaves bringing forward Credit Suisse’s new strategy announcement, currently scheduled alongside the coming results, as the best option. The broad outlines are already known: a scaled-back investment bank and some swinging cost cuts. A key unknown is whether they will quickly cut the investment bank, which will likely require raising capital at a painfully low valuation, or try to self-fund the cull, which would therefore need to be slower and narrower.

Whatever the bank chooses, it must actually deliver on the strategy this time and end the string of profit warnings and disappointments. Getting the plan right does take time, but strategies are art as well as accounting. Waiting to nail down the details risks losing more good people and prolonging the current drip-feed of leaks that are jangling investors’ nerves and chipping away at the bank’s share price.

It should be possible to outline a strategy and set targets that give investors the broad direction and some metrics for measuring progress while leaving room to calibrate the details as the multiyear plan is delivered. In the confidence game of banking, delays are expensive.

Friday Sept 30 2022

The sad saga of now disgraced Chris Pettit continues. He applied for a malpractice insurance policy in the amount of  $2M.   The insurance company maintain he lied on the application as follows.  But the Bankruptcy Trustee maintains the policy is an asset of the bankrupt estate, he wants the insurance company to pay off. It appears to me the insurance company was defrauded by Pettit. We are studying evidence in the audit class. Looks like the insurance company should have done a lot more investigating,n gathering evidence, before issuing the policy. If Pettit claimed there had been no complaints on him for five years, why was he buying the policy?  That question alone should have suggested the need for more investigation.

_______________

National Liability filed its complaint in San Antonio’s U.S. Bankruptcy Court, where Pettit and his firm sought refuge from creditors in massive cases filed June 1. The filings, which have been consolidated, came after his clients filed about a dozen lawsuits alleging he had collectively misappropriated tens of millions of dollars that belonged to them.

Pettit’s firm reported $13.8 million in assets and $112.8 million in liabilities in its latest bankruptcy schedules. He specialized in estate planning and personal-injury cases, but also provided financial advice and investment management services. Pettit surrendered his law license in lieu of discipline and shuttered his law offices.

RELATED: Ex-San Antonio lawyer Chris Pettit is sent to jail after being found in contempt for violating a judge’s order

He’s been in jail on a contempt of court charge since Sept. 9, when a judge found he had not been truthful during his bankruptcy proceedings. On Thursday morning, several Pettit creditors and their representatives dialed in to a conference call to once again question him. But he did not call in from the Karnes County Detention Facility.

An attorney for the U.S.trustee’s office declined a request to schedule another meeting given Pettit has already submitted to more than seven hours of questioning. Plus, Pettit is scheduled to be questioned by some creditors’ representatives next week.

In its lawsuit, National Liability seeks a court ruling declaring the insurance policy void and that it’s entitled to rescind the policy.

When Pettit induced the insurer to issue the policy, the suit says, he represented in the application that no claims had been made in the past five years against him or his firm. He also asserted he was not “aware of any act, error, omission or incident that could be reasonably expected to result in a claim or suit” against him or his firm.

Those representations were false, National Liability alleges.

READ MORE: Some of the real estate Chris Pettit transferred ahead of bankruptcy will be returned under deal

That’s because eight days before Pettit filled out a form as part of his application for the policy in September 2021, the insurer alleges he acknowledged in writing that he had received a copy of a lawsuit that was subsequently filed against him and his firm by Dr. Salvador Ortiz.

Ortiz had retained Pettit for some estate planning, including creating a will and forming two trusts. The doctor alleged Pettit misappropriated about $10.9 million, but paid back $8 million before the payments stopped, prompting the doctor to sue for fraud and breach of fiduciary duty.

Ortiz’s complaint and the other lawsuits against Pettit and his firm indicate their “wrongful conduct…began long before the debtors applied for professional liability insurance” with National Liability in 2021, it says.

The insurer adds it never would have issued the policy had Pettit disclosed that he and his firm had “misappropriated millions of dollars of their clients’ assets and monies.”

National Liability says it notified the trustee on Aug. 15 that it was rescinding the policy due to “material misrepresentations and false warranties.” It offered to to turn over to the trustee the full amount of the premium paid for the policy, but the trustee’s counsel rejected the offer, the insurer adds.

A lawyer for National Liability didn’t immediately respond to a request for comment.