Alvin Clay Part 1: Guilt by Association

The Alvin Clay case is eye-opening and jaw dropping, but it sure ain’t simple.  Friends of Justice begins each new intervention with a narrative.  In this case, the story will unfold in a series of posts designed to place a deeply flawed prosecution in its full and natural context.  This is the first installment.

On May 27th, Alvin Clay goes to trial at the federal courthouse in Little Rock, Arkansas, a small city made famous by two incidents: the turbulent integration of Central High School in the fall of 1957, and the tumultuous events surrounding the presidency of Bill Clinton, in particular the Whitewater Scandal.

 

 

Both Central High School and the Rose Law Firm lie just over a mile from the federal courthouse where Alvin Clay will be tried on mortgage fraud charges.  The Clinton Presidential Library is within quick walking distance of the Rose Law Firm. These intimate geographical relationships are fitting; the Alvin Clay story has much in common with the two staggering events that made Little Rock famous.

          

 

In September of 2007, just a day or two after the historic march on Jena, Louisiana, I was on a Canadian radio program  with Billie Jean Brown Trickey, a member of the Little Rock Nine.  We were discussing the changing face of the civil rights movement.  In 1957, if you were looking for the cutting edge of the civil rights movement, you wanted to be at Central High School.  In the wake of Brown vs. Board of Education, the integration of public education was the hot button issue.

But fifty years after Billie Jean Brown and her black classmates completed their first year at Central High School, the primary locus of the civil rights movement has shifted from the schoolroom to the courtroom.  If you are trying to find the pulse of the civil rights movement today, you need to be at the Federal Courthouse in Little Rock at the end of May.

Alvin Clay stands accused of real estate fraud-charges strikingly similar to the allegations dogging Bill and Hillary Clinton for over two decades.  No one could make a direct connection between the Clintons and a specific criminal act.  But with all that smoke, there had to be some fire.  Or did there?

 There was certainly plenty of smoke.  Before the Whitewater saga ground to its exhausted conclusion, fourteen former associates of the Clintons (most of them high-ranking officials) had been convicted of a laundry list of crimes ranging from embezzlement to mortgage fraud. 

Whitewater was a case of guilt by association.  Republican partisans said the Clintons were getting away with murder.  Democratic partisans dismissed the entire affair as a baseless witch hunt.  The vast majority of Americans listened to Whitewater commentary on the evening news and said, “Huh?”   The mortgage deals at issue were so tangled and murky that normal people had no idea what it was all about.

The government is hoping the Alvin Clay case has that effect on you. The Devil hides in the details knowing that few have the patience for the kind of mind-numbing minutiae a mortgage fraud case entails. As a result, injustice flows like the waters and nobody knows.

We like simple pictures: nooses swinging from trees, grim-faced black students walking through the doors of a schoolhouse with their clothes drenched in spit, or a determined Rosa Parks refusing to give up her seat on the bus.  But the contemporary civil rights movement, if there is one, must learn to deal with Alvin Clay complexity. 

The federal government accuses Clay of sending fraudulent mortgage applications to lending companies.  That’s the primary contention.  He also stands accused of having accepted money for rehab work that was never performed. 

The government hasn’t got a single witness able to connect Mr. Clay with the mortgage fraud.  Moreover, Clay argues that he subbed out the rehab to a second party and was repeatedly assured that the work was being completed.  In other words we’ve got an old fashioned, he-said-she-said standoff.  My money’s with Alvin Clay.  To learn why, just keep reading.

What Alvin Clay knew and didn’t know is impossible to prove beyond a reasonable doubt.  But the record clearly shows that the federal government, represented by federal prosecutors and FBI agents, repeatedly and knowingly lied to grand jurors in order to secure an indictment. 

It got so bad, in fact, that assistant US attorneys with the Eastern Division of Arkansas recused themselves rather than face questioning from defense counsel. 

Evidence abounds that government officials have been engaged in a dirty-tricks harassment campaign against Alvin Clay and several of his close friends and business associates (more on that later).  In fact, realizing that their guilt-by-association case may not impress a jury, federal officials have been pressuring every drug client Mr. Clay ever represented in a desperate search for a cheap and easy path to conviction. 

 Thus far, no one has responded to the government’s crude attempts to suborn perjury; but it is just a matter of time before some pathetic soul gives federal agents what they are looking for.

 This tawdry quest for a narcotics case, though morally indefensible, is strangely appropriate.  As unlikely as it may appear at first glance, the government’s prosecution of Mr. Clay is a product of our nation’s counterproductive war on drugs.

For three decades, Alvin Clay was a poster child for the success of the civil rights movement.  Growing up in Blytheville, a predominantly African American community of 18,000 in northeastern Arkansas, Clay led a charmed life.  His mother was a schoolteacher and his father was a high school vice principal.  Alvin was always big, athletic, friendly, academically gifted and popular. 

“Everybody always loved Derrel (Alvin’s family name),” his father told me on the ride from the airport.  “He kind of grew up with the idea that you could trust people; that folks would look out for him.  I guess that’s why he bought himself so much trouble.”

An outstanding student, Clay was student body president in his Senior year.  No one was surprised when he won a football scholarship to Austin Peay University in Clarkesville, Tennessee.  Alvin weighed 245 pounds and could bench press almost twice his weight when he graduated in 1990.  He had also been a member of the university debating team, earned an advanced commission with ROTC and lettered in football four years running.  After giving brief consideration to an NFL career, Clay opted for law school, enrolling in the University of Arkansas in 1991.

“Football is a rough game, and an injury can end everything in a heartbeat,” Alvin told me when I sat down with him over a beer in Little Rock last month.  “My parents had always wanted me to be a doctor or a lawyer-something like that.  Academics came natural to me, so I decided I’d be an attorney.”

Clay passed the Arkansas bar in 1995 and was licensed a year later.  “But I never wanted to limit myself,” he says.  “I got a real estate license while I was still in law school, then I became a broker.  Finally, just to keep all my options open, I picked up a contractor’s license in 2000.” 

The government can make one valid claim,” Clay admits.  “To get a contractor’s license you needed to pass a test (which I passed easily), but you also needed to document some experience.  If you were new to the business, the experience of people in your company could be imputed to you.  But I wasn’t working for a company.  I was told that the experience of people I intended to employ could be credited to me, as well, and I used that as a way to get around the requirement.”

“At the time, I was serious about starting a construction company,” Clay explains.  “I used the experience of a gentleman that agreed to assist me with construction projects.  We had talked to several individuals about building homes.  And I used the experience of a gentleman that I intended to hire once I actually had work for him to do.  But at the time I filled out the application I didn’t have anyone working for Clay Construction.  The application was completed a year and a half before I met Nealy and over two years before the first real estate transaction.  So the government can’t link that application to the furtherance of a conspiracy.”

“If I had just stuck to my law practice I’d be a millionaire by now, for sure,” Clay says.  “But I wouldn’t settle for base hits; I was always going for the grand slam.  High reward come with high risk; I understand that now.”

In 2001, Clay promoted a fight featuring a promising Arkansas middle weight, Jermain “Bad Intentions” Taylor  at the Alltel Arena in Little Rock.  “It was supposed to bring me a big payday, but it ended up destroying me financially,” Clay says.  “For a while there I let my law practice go-all my energy went into the fight.”

That’s when Clay met the man who would change his life dramatically.  “Kevin Howard, one of my real estate agents, introduced me to Ray Nealy because we needed an investor for the fight,” Clay recalls.  “HBO required us to have a $150,000 escrow account that would only be used if debts weren’t covered.  At the conclusion of the fight we were short $9,000 and Nealy had to cover that because it was his escrow account.”

In the late 1990s, Ray Nealy made good money riding the bench as a little-utilized running back with the Miami Dolphins.  When an injury ended his football career, Nealy launched a more promising career as a show-me-the-money entrepreneur. 

“Ray didn’t come up like I did, with all the advantages,” Alvin remembers.  “He was street smart and kind of rough around the edges, but he was full of business ideas and he helped me out a lot, giving me the money for the fight.  From the outside, the Jermain Taylor fight was a big success.  It played on HBO and everybody got paid.  But, financially, it set off a downward spiral that cost me my home and both my cars.  I was using public transportation and living with friends-it was a hard time.”

Clay was eager to revive his law practice and his real estate business.  He had six realtors working under him when Ray Nealy asked him if he’d like to put his contractor’s license to work.  As Nealy explained it, little real work would be required.  He had a few houses that needed some rehab work.  Clay would be the official contractor, but the actual labor would be subbed out to a former Burger King Manager named Donny McCuien.

Between August 2nd of 2002 and February of 2003, Alvin Clay received five separate checks from title companies.  “Ray and I worked it so that I got most of my portion of the money on the first deal and small amounts after that.  Ray wanted to put some money in my pocket so I could pay him back. After I got that first check I cut a business check to Donny McQuien, I cut a check to Clay Construction, I bought a car, and I repaid the money I owed Ray.”

Alvin was a little surprised when he was asked to make the checks payable to Nealy’s mother, but he figured his friend knew what he was doing.  “It was a debt I owed,” Alvin explains.  “If he had asked for the money in nickels, I would have paid it in nickels.  It was his call.”

By this time, Clay’s law practice was picking back up and he was having a hard time keeping up with six real estate agents.  “I delegate too much,” he admits.  “I’m a big picture guy who leaves the details to other people.  No one had ever violated my trust before and that made me naïve.  Ray would stick his head in the door and say, ‘another house closed.’  I’d say, ‘great,’ and that was that.”

Clay was careful to have his accountant file a 1099 with the IRS after each transaction.  “I’m a working attorney and I know that what you put on paper is forever.  There is no way I would knowingly stipulate to something that wasn’t true.  It’s not just wrong, it’s stupid.  I thought I would be covered with the government if I made a full disclosure of every transaction.”

Ray Nealy had no such scruples.  He was working in the midst of a sub-prime bubble and lax oversight was the order of the day.  Lending institutions were accepting applications from sketchy applicants, then bundling several mortgages together and selling them to the highest bidder.   The buyer bought the risk along with the mortgage.  The system encouraged fraud and Ray Nealy, like thousands of other real estate hustlers across the nation, couldn’t resist cashing in.

Nealy worked the lowest rungs of the real estate ladder, hooking up buyers with bad credit and sellers with homes that only people with bad credit would want to buy.  Buyers knew how much they wanted to pay and sellers knew how much cash they wanted out of the deal–apart from that, neither party had much interest in the details. 

This scheme, though unscrupulous, was legal as far as it went.  Buyers, sellers and lenders all signed off on the particulars.  Apart from allowing Nealy and McCuien to use his contractors license, Clay had no involvement in the real estate deals.  He had no time for anything beyond law and his own real estate enterprise.  

“I honestly believed that the work was being done,” Clay insists.  “I had a guy coming into my office with his overalls covered with paint and grass stains assuring me that everything was fine.  Ray Nealy and Donny McCuien both told me everything was above board.”

From a strictly legal perspective, it didn’t matter.  The loans were all made on an as-is basis–the lending institutions never heard about Clay Construction.  Nealy was working with sellers eager to sell; buyers eager to buy and lenders eager to lend-nobody was asking questions.

Unbeknown to Alvin Clay, none of the loan applicants came close to qualifying for a mortgage. Nealy was doing whatever it took to overcome the buyers’ deficiencies: placing money in applicant bank accounts and withdrawing it the same day, inflating incomes, entering fake Social Security numbers and, on at least one occasion, forging signatures. 

“You accuse me of being a bad businessman, I’ll have to plead guilty,” Clay says.  “I have been very naïve in my dealings with other people.  I have made very bad decisions in business and in my personal relationships, and I have lived to regret my mistakes.  But the government’s charges against me simply aren’t true; I didn’t break any laws, and that’s a fact.”

Like Bill and Hillary Clinton, Alvin Clay finds himself in the crosshairs of a guilt-by-association inquisition.  How likely is it, the government will ask at trial, that Alvin Clay didn’t know what Ray Nealy and Donny McCuien were up to?  After all, prosecutors will point out, Nealy and Clay worked on the same floor of the same office building.

Bill and Hillary Clinton were never indicted by the federal government.  It takes real, hard evidence to convict a former governor or a sitting president.  Smoke alone doesn’t cut it; you need real fire.

But Alvin Clay isn’t Hillary Clinton.  He has no friends in high places.  If he did, the government’s illegal actions against him would be the stuff of raw scandal. 

It is difficult to know if the Department of Justice asked the FBI to investigate Clay, or whether it worked the other way around.  But one thing is certain: the investigation was launched without any evidence that the Little Rock attorney had broken the law. 

The case against Alvin Clay began as a fishing expedition.

Why was the United States Government so desperate to dig up dirt on a relatively obscure defense attorney?

 When you learn the answer you will understand why I want a standing-room-only crowd in the federal courtroom in Little Rock for Alvin Clay’s trial, and why I am calling for a solemn march from Central High School to the federal court house on morning of May 27th.

Go to Alvin Clay, Part 2: “Everybody’s Got Standards”

 

2 thoughts on “Alvin Clay Part 1: Guilt by Association

  1. They were both given sweetheart deals. Once Donny McCuien’s testimony was exposed as perjury they couldn’t try Nealy. Clay’s case is on appeal.

Comments are closed.