The ugly truth in black and white: the legal lynching of Alvin Clay continues

(Background information on this post can be found here.)

The federal  justice system is predicated on a simple assumption: reasonable people facing a long stretch in prison without parole will do whatever it takes to stay in the free world.  When the government has a gun to your head guilt and innocence counts for little; you say what the government wants you to say.

Of course you ca always roll the dice with a federal jury.  Unfortunately, only 3% of those who take this route are satisfied with the outcome.

This explains why 97% of federal cases are settled outside of court. 

Ray Nealy was thrilled to accept a plea agreement that will likely keep him out of federal prison.  He had to tell a little white lie to get the deal; but hustler’s like Nealy don’t sweat the small stuff.

All of this has placed Judge Leon Holmes in a dicey position.  A devout Roman Catholic, Holmes doesn’t enjoy being party to sleazy legal machinations.  Holmes can’t be written off as a jaded rubber-stamp functionary; the record suggests that he is a dedicated jurist committed to the highest ideals of his profession.

Nonetheless, the transcript of Ray Nealy’s plea hearing on March 13 shows a judge shifting uncomfortably in his leather easy chair.  The documents presented during Alvin Clay’s trial in 2008 leave little doubt as to Nealy’s guilt: his signature is all over loan applications were riddled with fraudulent claims.  Nealy had literally no chance at trial.

So why is the government letting him walk?

Only one theory makes sense.  Ray Nealy’s attorneys told the government that they were prepared to put Donny McCuien on the stand if their client went to trial.

Questioning McCuien couldn’t possibly help Nealy, but it would broadcast to the great wide world that an FBI agent and a federal prosecutor knowingly sponsored perjured testimony.  Not surprisingly, Steven Snyder and agent Rodney Hays would rather keep that fact under wraps.

Alvin Clay doesn’t take sweetheart deals.  Not when he is innocent.  Clay scares the federal government because he defies their assumptions.

The black Little Rock attorney could have avoided prison time by taking a pre-trial plea deal.  He knew the government had no interest in putting him behind bars, they just wanted to bump an aggressive defense attorney out of the legal game.  Clay had repeatedly embarrassed and frustrated federal prosecutors and no it was pay-back time.  If Clay had simply plead guilty to a second-rate felony and surrendered his legal credentials the government would have been satisfied.

The government wasn’t too worried by Donnie McCuien’s bizarre perjury parade during the Clay trial.  The jury was too mesmerized by the mind-numbing detail of a complicated case to catch most of the inconsistencies, evasions and downright lies.  Jurors believed McCuien just enough to convict Clay. 

That was sufficient.

Alvin Clay didn’t have the money to bankroll an investigation of the government’s star witness, and the government knew it.

They forgot that Alvin Clay is a trained attorney with time on his hands. 

After weeks of tedious toil, Clay had lined up a score of witnesses willing to testify that Donnie McCuien had been bilking home buyers, real estate agents, bankers and contractors before he met Ray Nealy.  Moreover, like the psychopath he is, McCuien had continued to work his favorite hustle even after the federal government was on to his game. 

The man can’t help himself–his brain ain’t wired right.

None of this made the Little Rock paper, of course.  Apart from an annoying blogger in Texas, no one has been paying the slightest attention.

Nonetheless, the government couldn’t afford another trial featuring Donnie McCuien. 

AUSA Steven Snyder was sitting across the table from Ray Nealy holding a royal flush.  Nealy bluffed and Snyder folded.

Panic is written all over the transcript of Ray Nealy’s plea hearing.  The former NFL player was admitting to “misprision of a felony”: that is, he knew felonious behavior was going down and failed to report it. 

That’s it.

Highlights from the hearing appear below with my analysis in bold italics. 

“The Court”, of course, is federal Judge Leon Holmes.

THE COURT: The Court has an obligation to consider and can either reject or accept the plea agreement because of the terms. What I want from you — I mean, I’ve heard your case in chief in the trial against Mr. Clay. I have not heard Mr. Nealy’s defense, of course. But I’d like for you to explain to me why I should accept the plea agreement in this instance, from the government’s standpoint, moving from the charges, the conspiracy charges down to misprision of a felony. And I have every confidence that you and Mr. Webb and Ms. Stanley have a good reason for it, but I have no idea what it is. So I would like for you to tell me what it is that you can tell me. There may be things that you can’t tell me. But I need to hear something that makes me see that this is a plea agreement that’s in the public interest and something that I should accept.

Judge Holmes needs to hear “something that makes sense” because the plea agreement, on its face, makes no sense at all.

MR. SNYDER: It’s kind of hard for me to put it into words. I probably am not doing a very good job of articulating it. And we’ve, again, weighed the strengths and the weaknesses,and based upon those and in talking to Mr. Nealy and his attorneys, we just feel that it would be in the best interest of the government to proceed with this information.

Thus far, Mr. Snyder hasn’t given the judge the slightest justification for the sweetheart deal.

 THE COURT: I think you know what my question is. You put on a case in the Clay trial, and without hearing Mr. Nealy’s defense, I mean, the case in chief was very compelling, and the jury convicted Mr. Clay of conspiring with Mr. Nealy. And really and truly, the evidence was stronger against Mr. Nealy than against Mr. Clay. I think everybody knew that. That was part of the defense, that the case that you put on was primarily aimed at Mr. Nealy, not Mr. Clay. So now that we have Mr. Clay convicted, we’re in here pleading Mr. Nealy to a substantially lesser offense. And it’s not that I’m going to reject it, and I never have rejected. I’ve been here four and a half years. I have not rejected a plea agreement. I let the lawyers try their cases and do their things, and you all are good lawyers, and Ms. Koehler and Mr. Perroni are good lawyers, and I’m confident there’s a good reason for it. But I am bothered some by it. Part of it is the fairness of the whole thing, because we have different parties being treated substantially different, at least on what’s been presented to me, not based on anything related to culpability.

Judge Holmes explains the reason for his discomfort (as if anybody needed an explanation).   Clay’s trial primarily consisted of documentary evidence that Alvin Clay had never seen.  Clay knew nothing about the fraudulent loan applications and  Donnie McCuien couldn’t tie Clay to the loans because McCuien had never seen the applications.  The only link between Alvin Clay and illegal behavior was McCuien’s insistence that “Me, Ray and Clay” talked about the details of the fraudulent scheme behind closed doors. 

Again, the government needed McCuien to convict Clay; but they could convict Nealy on the strength of the loan applications alone.

MR. SNYDER: Well, I would say some things have come to our attention since the Clay trial that possibly could be detrimental to our case.

THE COURT: Do they have to do with a key witness?

MR. SNYDER: Yes, sir.

Holmes and Snyder are talking about Donnie McCuien.  McCuien is the sole justification for the government’s change in plans.  Holmes, reluctantly, goes along.

MR. SNYDER: Your Honor, on August 28, 2002, Alvin Clay received a check in the amount of $33,939.51 from Stewart Title in connection with a loan closing involving the sale of a home to Linda Jones. After receiving the check, Alvin Clay, with the defendant’s knowledge, deposited the check into the Clay Construction checking account at Simmons Bank. Alvin Clay then wrote a $33,939.51 check, cashed the check, and received $33,939.51 in cash. Alvin Clay owed Raymond Nealy $22,339.51. In order to avoid the currency transaction reporting requirements of Title 31, U.S. Code, Section 5313(a), and with the defendant’s knowledge, Alvin Clay structured his repayment to the defendant by purchasing three cashier’s checks in the amount of 9,000, 9,000, and $4,339.51, which totalled $22,339.51. Those three cashier’s checks were given to the defendant, Raymond Nealy, who, in turn, gave them to his mother. The defendant’s mother deposited the three checks into a joint account at the Capitol branch of the Arkansas Federal Credit Union in Little Rock.

Every word of the preceding paragraph is accurate except the alleged motivation.  Alvin Clay repaid an outstanding debt to Ray Nealy in three separate checks because that’s the way Nealy wanted the money.  Nothing in the law Snyder cites suggests that Alvin Clay had any obligation to report the repayment of a loan (although Judge Holmes can be forgiven for not knowing the minutiae of the relevant law).  The title company had already told the IRS that it had tendered a check to Alvin Clay.  Clay dutifully reported that income on his income tax return.  The onus for reporting the money he received from Clay was entirely on the shoulders of Ray Nealy.

THE COURT: And I neglected to ask you earlier about the restitution in the plea agreement. Is that where the sum comes from, the restitution, the $22,000?

MR. SNYDER: Yes, sir.

THE COURT: I mean, is it going to go to the victims of the four or five transactions?

MR. SNYDER: Right.

THE COURT: It will go to them?

MR. SNYDER: Correct.

THE COURT: The amount that comes from that $22,000, the amount is the three checks?

MR. SNYDER: Yes, sir.

THE COURT: And that’s going to be paid to the victims, the people that we heard from in the Alvin Clay trial who came up and said, “I borrowed money”?

MR. SNYDER: Actually, it will only be paid to four individuals. Rodney White’s house burned down, and he had insurance on it, so that took care of that debt. So it would be —

THE COURT: The other four.

MR. SNYDER: Robin Seals, Linda Jones, Marcus Patillo. The three.

THE COURT: All right. Thank you.

Robin Seals, Linda Jones and Marcus Patillo weren’t innocent dupes.  All three were paid kickbacks in exchange for their willingness to participate in a fraudulent scam.  When Nealy put money into their bank accounts then immediately withdrew the funds, the buyers knew the mortgage company was being defrauded, yet they allowed Nealy to proceed.  Now they are regarded as victims.  Alvin Clay had no way of knowing what Nealy and McCuien were up to–the same cannot be said for the buyers.

Finally, Ray Nealy takes the stand.

THE DEFENDANT: Actually, me and Alvin had did a prior investment earlier that year, which had something to do with a boxing match. And I had loaned him a substantial amount of funds, and it was actually a little more than what he owed — I mean, actually, what I loaned him and what he paid me back was more than what I loaned him. But when we had this deal go through, which was a construction deal where he was supposed torehab the homes, he took the money from that and he paid me back. And when he paid me back, he said that he didn’t want to report it to the government, so he wanted to make sure that he drew the checks up under the legal amount to where people could trace it. So when he paid me back, he paid me in the sum of 9,000, 9,000, and $4,000 to keep from the government finding out, rather than just paying me the whole $23,000, or $22,000, in one lump sum.

THE COURT: And you knew that he was writing the checks in that amount for the purpose of avoiding to have any kind of reporting go to the government?

THE DEFENDANT: Yes. That’s what he said.

Is there any way of knowing whether it was Clay or Nealy who suggested that the loan be repayed in three smaller sums?  As an attorney, Alvin Clay knew he could lose his license for failing to report income.  He had watched other attorneys disbarred for precisely this reason.  If Nealy had asked for repayment in nickels, Clay would have made a good faith effort to comply.  The lender dictates the terms of repayment, not the borrower. 

So where do we go from here?  The government has already convicted Alvin Clay on the testimony of a thoroughly discredited witness.  Moreover, they knew or should have known that McCuien was radically unreliable. 

I know it, you know it, and now Judge Leon Holmes knows it. 

What are they going to do about it? 

If Judge Holmes won’t hold the guilty parties to account, who will?

7 thoughts on “The ugly truth in black and white: the legal lynching of Alvin Clay continues

  1. Sounds like both defendants were probably offered a deal to turn on the other. Clay didn’t want to lose his law license and being an arrogant lawyer, as most of them are, assumed he could get acquitted at trial. The other guy took the deal. Also, being an attorney I assume he was probably held to a higher standard just like police officers, etc. are…an officer of the court especially knew better.

    You have a unique way, Alan, of grazing over the fact that Clay knew he was breaking the law by getting these smaller three money orders as to not tip off the IRS. It’s called “Smurfing” anything under $10,000 deposited doesn’t notify the IRS. So it goes back to what my Momma always said…”Two wrongs don’t make a right.”

    Clay is responsible for his own actions, as we all are. Moral of the story…if you don’t want to go to jail, don’t be a crook.

    But great job as usual deflecting from the criminals and blaming it on “The Man.”

  2. Thanks for your comment, Keith.
    As an attorney, I’m sure you understand that the person making the deposit (in this case, Nealy) is responsible for reporting. Clay’s $33,000 check was reported to the IRS by the title company and he reported the amount to the IRS at the end of the year. Only Nealy could benefit from breaking the checks down; Clay initially deposited the entire amount in his account so he couldn’t have benefited. In addition, Clay was never asked to flip on Nealy or Donnie McCuien because the entire prosecution was designed to clip Clay’s wings. The government just wanted Clay’s law license. For the backstory on this I would direct you to my early posts (Google, Alvin Clay, 1, Alvin Clay 2, etc.) I have nothing against the Man when the Man plays by the Rules; but when the Man decides to make up the rules as he goes along we are all at risk. Please stay tuned; this story will clarify considerably in the coming months.

    Alan Bean

  3. Keith, do you realize that after investigating Alvin Clay for seven years and spending over a million dollars in man hours – the government has yet to produce a single soul to testify that Clay had any personal knowledge of fraudulent loan documents. You heard me correctly! – no one has ever testified that the man so much as touched a fraudulent loan document.

    Keith, do you realize that Alvin Clay was never indicted for “smurfing.” The man was never accused of violating the $10,000 reporting requirement. Do you understand that? Alvin Clay was never charged with the felony that Nealy said he witnessed. Do you realize that?

    Keith, do you know that the only witness that implicated Alvin Clay of any wrong doing was Donny McCuien? Do you understand that Mr. McCuien has been shown to have lied about everything except the spelling of his name? For those who care about justice review the transcripts of the two post trial hearings.

    Keith, do you realize that even Donny McCuien never testified that Alvin Clay had anything to do with fraudulent loan documents? Seven years and over a million dollars spent on this case and not even the main and primary government witness said that the man had any knowledge of fraudulent loan documents.

    You did get one thing right when you suggested that Clay should be responsible for his own actions. Clay’s actions have not been proven to be criminal.

  4. Another disaster brewing. A new picture is coming out and I thought of you the whole time I was watching the preview. American Violet is said to be a true story and sounds like what you do everyday. Injustice to black people. This time in Texas and a woman who stands up to the system. Thank you for all you do, Alan.
    Frances Miller

  5. Frances:

    American Violet was inspired by the story of Hearne, Texas. In 2000, inspired by the stand Friends of Justice had taken in Tulia, residents of Hearne decided to take a stand against a bogus drug bust. Eventually it was revealed that Derrick Megress, a crack addict, had agreed to set up 20 residents of his housing project in exchange for leniency. All the cases were faked. The case came to the attention of the world when Jeff Frazier, working with the Texas ACLU, convinced a New York Times reporter to check out the story. Jeff, a good friend of Friends of Justice, was fresh from investigating Tulia. Eventually, Tulia and Hearne were linked together in three proposed Hearne-Tulia bills. One bill called for the corroboration of confidential informant testimony and was directly related to the story American Violet tells. Hope this helps.

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