A former vice president and senior commercial loan officer of the failed FirstCity Bank of Stockbridge was sentenced earlier this week to more than seven years in federal prison for his role in the bank’s 2009 collapse.

U.S. District Judge Steve Jones on Tuesday also ordered Clayton Coe to pay $19.6 million in restitution, a punishment shared with other banking officers who have been convicted in connection with the bank’s failure.

Coe pleaded guilty last year to charges of bank fraud and making false statements.  His attorney, Richard Rice Jr., declined to comment on the case.

Coe is the third Stockbridge bank officer to plead guilty to criminal charges associated with the bank’s demise.  Last year, Mark Conner – the bank’s former chairman, president and CEO – pleaded guilty to charges that he had conspired with Coe and the bank’s former attorney  to routinely mislead federal and state bank regulators to conceal a scheme in which he reaped more than $7 million, federal prosecutors said. Conner is currently serving a 12-year prison sentence.

Read more »

A federal judge has lifted a temporary restraining order that barred Governor Nathan Deal from suspending  six members of the DeKalb County Board of Education, removing a legal barrier that last week had also blocked the governor from  immediately replacing them.

The school system was placed on probation last December by the Southern Association of Colleges and Schools Council on Accreditation and School Improvement. The removal is seen by Deal as part of an effort to salvage the district’s accreditation.

In an order filed late Monday afternoon, U.S. District Judge Richard Story turned down a request for a preliminary injunction that would have allowed the six school board members to remain in office while they continue to challenge the constitutionality of their removal.

In a written statement, Georgia Attorney General Sam Olens applauded Story’s ruling as a “well-reasoned order affirming our position that the Governor was on solid legal ground in removing six DeKalb school board members. Judge Story correctly recognized that the students in the DeKalb school system must come first.  I appreciate Judge Story’s careful thought, hard work, and swift decision in this time-sensitive matter.”

Robert Wilson, attorney for DeKalb schools, couldn’t be reached.

Story  held  that state law issues raised in the complaint – which was filed two weeks ago  by the DeKalb County School District and board member Eugene Walker — should be decided by Georgia courts, not the federal courts.  To that end, Story said that he would certify the questions of state law  to the Georgia Supreme Court “rather than having to wait on a newly-filed state action to work its way through to appeal.”

The public has a “significant competing interest” to those of the school district and the school board, Story said in his ruling. “Though the public has an interest in its elected officials being allowed to serve in the offices to which they were elected, there is an even greater public interest at stake here,” he said. “The interest of the public in a healthy public school system outweighs the interests of board members in serving in their positions. … The harm from the loss of accreditation to the school district and the resulting harm to the students in the district are profound. To permit the board members to continue to serve while their individual claims are resolved risks substantial consequences for the school district and its students. The Court finds that this risk of harm far outweighs the risks to the board members.”

Walker and the school district had claimed that removal of six members of the nine-member board by Deal was unconstitutional.  Attorneys for the school district and Walker said the board members’ posts were a property right under the Fourteenth Amendment that could not be stripped from them without due process. A 14-hour state school board hearing on the matter, the judge said, “met the basic requirements of pre-termination due process.” The judge added that state law permits a suspended school board member to petition for reinstatement and provides for another hearing and judicial review. “Thus, there is considerable evidence that due process as required by the Fourteenth Amendment has been satisfied,” Story said in his ruling.

Story, citing Georgia and federal case law that bars political subdivisions of a state from challenging state statutes under the aegis of the Fourteenth Amendment, suggested that the school district might lack standing to sue in federal court. While he declined to decide the issue of standing, the judge concluded that the question “nonetheless creates a substantial question about whether the School district will ultimately succeed on its Fourteenth Amendment claim.”

While the school district’s attorneys identified the property right of the board members  “as an interest that cannot be denied without due process of law,” Story held that they “fail to identify any property interest of the school district that is threatened by the state’s action.”

“The school district has no interest in any particular person serving on the school board,” he wrote. “Rather, the interest  of the school district is that a duly constituted board be in place so that it can conduct business. The school board suspension statute assures continuity of operations through appointments by the governor to fill vacancies created by the suspensions. Thus, the loss of any property interest by the school district is not apparent to the Court.”

Story said that the only harm to the plaintiffs “is their temporary inability to perform the duties of the office to which they were elected. Because they are presently suspended with pay, they are suffering no monetary loss,” and any permanent removal of board members “can only occur after they have been afforded the process provided” established by state law.

“In the event plaintiffs ultimately prevail in the case, they will be reinstated to their positions and will receive compensation to which they are entitled,” Story said. “Thus, if they ultimately prevail, they will have only suffered the loss of the opportunity to serve in their elected office for a limited period of time.”

Jake Waldrop, a federal public defender, was found yesterday afternoon dead in an apparent suicide, an Atlanta Police report said.

The police Wednesday released a report from an officer who responded to the scene on the 10th floor of the State Bar of Georgia’s parking garage, where Waldrop was said to park regularly. His office was across the street.

Waldrop had a gunshot wound in his chest, the report said. ”There were no signs of a struggle or foul play and the scene appeared to be consistent with that of a suicide,” it added.

Bar president Robin Frazer Clark confirmed Wednesday that Waldrop’s body was found in his car in the garage.

“The State Bar is obviously saddened at the loss of one of our members, especially one so young,” Clark said. ”We will be working on new ideas to make our members and their office mates and family and friends more aware of the risk of suicide and what we can each do to help prevent it.”

The chief judge of the federal appeals court based in Atlanta said Monday that he may not take senior status on Aug. 1 if the president and the Senate have not filled two Georgia-based vacancies on the court.

The Daily Report and other news outlets reported Friday that Chief Judge Joel Dubina of the Eleventh U.S. Circuit Court of Appeals would enter the federal judiciary’s version of semi-retirement on Aug. 1. Dubina couldn’t be reached Friday, but the website of the Administrative Office of the U.S. Courts said Dubina’s seat would be vacant on that date because he would take senior status.

But on Monday, Dubina told the Daily Report that the Administrative Office may have acted too soon. He said he had notified Chief Justice John Roberts that he would relinquish the title of chief judge on Aug. 1 and planned to take senior status that day. He said Roberts needed to know because the chief judge chairs the U.S. Judicial Conference, on which circuit court chief judges serve.

But Dubina said taking senior status “is not a done deal until you tell the president,” an action he has not made yet because of the delay in filling the two Georgia-based seats on the Eleventh Circuit.

President Obama has twice nominated Atlanta litigator Jill Pryor to fill the seat vacated by the retirement of Judge Stanley Birch in August 2010, but she has been blocked by Georgia’s senators, Saxby Chambliss and Johnny Isakson. Another seat was vacated last summer by Judge J.L. Edmondson, who took senior status.

Dubina, who was appointed in 1990 and whose seat is based in Alabama, said he didn’t want to leave his colleagues “in the lurch” with only nine active judges.

He recalled early in his appellate career when the court had several vacancies and only nine judges—with about half the caseload of today. “Nine judges is extremely difficult,” he said, noting that the court suspended its rules requiring two Eleventh Circuit judges on each three-judge panel. Instead the court allowed only one Eleventh Circuit judge on a panel, joined by two visiting judges—a solution that risked the consistency of the court’s precedents, he said.

A law professor at the University of Richmond writes today in The Hill’s Congress blog that U.S. District Judge Charles Pannell’s assumption of senior status in the Northern District of Georgia brings to 72  the number of  vacant federal judgeships nationwide.

The openings make up more than 10 percent of the total 677 district judgeships and a quarter of the Northern District’s active judges, said Professor Carl Tobias. And he called on President Barack Obama to nominate and U.S. senators to confirm judges to fill the empty posts.

President Obama is getting a third vacancy to fill on the U.S. Court of Appeals for the Eleventh Circuit.

Chief Judge Joel Dubina will take senior status on Aug. 1, according to the website of the Administrative Office of the U.S. Courts. Dubina hinted last year he was considering going into the federal judiciary’s version of semi-retirement when he became eligible. Dubina was unavailable for comment on Friday.

His departure from the active ranks means that the president will have a third vacancy to fill on the court, this one from Alabama. Two vacancies exist for Georgia-based seats, and Obama has nominated Atlanta litigator Jill Pryor for one. But she has not received support from home state Senators Saxby Chambliss and Johnny Isakson, a key to winning Senate confirmation.

A federal grand jury has charged a former Murray County sheriff’s deputy with lying to state law enforcement agents and attempting to obstruct their investigation of a false arrest linked to a former Murray County magistrate judge.

Federal authorities on Wednesday unsealed a Jan. 3 indictment of former Deputy Joshua Greeson that stems from Greeson’s arrest of last summer of Murray County resident Angela Garmley. Greeson arrested Garmley Aug. 14 on a felony drug charge, the night before then-Murray County Magistrate Judge Bryant Cochran resigned to end an ethics investigation by the state Judicial Qualifications Commission. Garmley had publicly accused Cochran of attempting to trade favorable legal rulings for sex and was, according to the JQC director, its “principal informant” in the probe of Cochran.

Within a week of Garmley’s arrest, the drug charge was dismissed on the recommendation of GBI agents who said they had determined that the illegal drugs Greeson found under Garmley’s car had been planted. The Georgia Bureau of Investigation then launched a probe of the circumstances leading to Garmley’s arrest.

The federal indictment accuses Greeson of lying to the the GBI about information that federal prosecutors said  he had been
given concerning a police lookout for Garmley’s vehicle. The indictment also charges the former deputy with destroying a record with the intent to obstruct the GBI investigation. Federal prosecutors said Greeson deleted information relevant to the GBI investigation from his cell phone. Read more »

A disbarred Cedartown attorney pleaded guilty  Tuesday to defrauding more than 50 of his workers’ compensation clients out of settlement funds they were owed, the U.S. Attorney for the Northern District of Georgia announced.

Disbarred lawyer Miles Lamar Gammage, 59 – who lost his bar license last year — entered the plea to one count of mail fraud in U.S. District Court in Rome, said U.S. Attorney Sally Quillian Yates. Gammage had been a member of the State Bar of Georgia since June 1979, the U.S. Attorney said.  He was a graduate of Cumberland Law School in Alabama, according to the State Bar.

Gammage specialized in workers’ compensation cases, often representing people who were seriously injured, Yates said. “This former attorney has now admitted his blatant and extensive misuse of his clients’ money,” she said. “By his own admission, instead of helping his clients receive the compensation that they were owed and that they needed for the treatment of their injuries, he used their settlement money for his own selfish purposes – and hurt people who were already hurting.”

Gammage’s attorney, Christopher Twyman, could not be reached for comment.

Federal prosecutors said that for four years from January 2008 to January 2012, Gammage converted more than $2.5 million of settlement funds intended for his clients to pay for his own expenses, including his law firm’s payroll and operating costs. As part of the scheme, Gammage would settle claims on behalf of clients without their authorization, fail to notify them that he had received their settlement checks, forge their names  on settlement checks and deposit the funds into bank accounts he controlled, prosecutors said.

Gammage also commingled his clients’ funds with his own funds, refused to provide his clients with a full and accurate accounting of the disposition of their settlement money, and withheld settlement funds from clients for extended periods of time, prosecutors said.

If and when clients questioned Gammage about their cases, Gammage would blame what he claimed were settlement delays on others, prosecutors said. If clients insisted that they needed the money for medical bills and prescription drugs, Gammage would dole out partial payments which he labeled as cash advances or interest-free loans, prosecutors said.

In doing so, Gammage “lulled clients into a false sense of security” and prevented them from complaining to law enforcement authorities, prosecutors said.

Gammage voluntarily surrendered his law license last year after two complaints were filed against him by the State
Bar of Georgia alleging he had lied to clients, forged their signatures on settlement checks and used the money for himself.

A Texas holding company that operates six metro Atlanta nursing homes has agreed to pay $613,300 to settle a whistleblower suit in which it was accused of fraudulently billing Medicaid for substandard nursing services that harmed patients  at two of its nursing homes — Golden LivingCenter Glenwood and Golden LivingCenter Dunwoody (formerly known as Golden LivingCenter Northside), according to the U.S. Attorney of the Northern District of Georgia.

GGNSC Holdings LLC of Plano, Texas – which also operates Golden LivingCenter –Briarwood, Golden LivingCenter –Decatur, Golden LivingCenter-Kennestone, and Golden LivingCenter – Medical Arts) – also signed a corporate integrity agreement with the U.S. Health and Human Services Department’s Office of the Inspector General requiring it to implement policies that will insure compliance with federal regulations governing patient care, federal prosecutors said.

In addition, an independent monitor will oversee operations at the six metro Atlanta nursing homes for as long as five years to make certain that patients will receive appropriate care, prosecutors said.

In announcing the settlement, U.S. Attorney Sally Quillian Yates said that her office is committed to protecting and improving the lives of nursing home residents.

“By failing to provide adequate wound care services to its nursing home residents, Golden Living placed at risk the life and health of individuals who were entrusted to its care,” Yates said. “This type of threat to the health and well-being of the elderly in our communities will not be tolerated.”

The settlement resolved claims against  GGNSC Holdings laid out in a lawsuit filed by physician Joseph L. Micca. Micca was the medical director of subacute services at Golden LivingCenter Northside from September 1998 until he was terminated in November 2009, according to the suit. Subacute patients are those who require skilled nursing care and have usually been admitted to a nursing facility from a hospital, according to the suit.

Injuries suffered by patients included hip dislocations; injuries from gastronomy feeding tubes that were either improperly inserted or traumatically removed when patients were moved improperly; the failure to provide patients with chronic obstructive pulmonary disease with the supplemental oxygen they required; improperly administered unprescribed narcotics to a patient, leaving her in danger of respiratory suppression and death; the failure to care for bed-ridden patients so that they developed blisters and bed sores that were ignored and became infected; and failure to care for wounds that led in at least one case to extensive gangrene, according to the suit.

As a federal whistleblower,  Micca will receive a share of the settlement payment. The government’s share of the settlement is $423,544, prosecutors said.

Federal judges tend to stay out of legislative battles until a case on the issue comes before them. But the judge who sentenced Tucson shooter Jared Lee Loughner–who murdered a federal judge and five others, severely wounding U.S. Rep. Gabrielle

Giffords–calls for an assault weapons ban in an opinion article in the Los Angeles Times.

In “The conservative’s case for assault weapons ban,” Judge Larry Alan Burns of the Southern District of California, a 2003 appointee of President George W. Bush, writes:

“I say all of this as a gun owner. I say it as a conservative who was appointed to the federal bench by a Republican president. I say it as someone who prefers Fox News to MSNBC, and National Review Online to the Daily Kos. I say it as someone who thinks the Supreme Court got it right in District of Columbia vs. Heller, when it held that the 2nd Amendment gives us the right to possess guns for self-defense. (That’s why I have mine.) I say it as someone who, generally speaking, is not a big fan of the regulatory state.

“I even say it as someone whose feelings about the NRA mirror the left’s feelings about Planned Parenthood: It has a useful advocacy function in our deliberative democracy, and much of what it does should not be controversial at all.

“And I say it, finally, mindful of the arguments on the other side, at least as I understand them: that a high-capacity magazine is not that different from multiple smaller-capacity magazines; and that if we ban assault weapons and high-capacity magazines one day, there’s a danger we would ban guns altogether the next, and your life might depend on you having one.

“But if we can’t find a way to draw sensible lines with guns that balance individual rights and the public interest, we may as well call the American experiment in democracy a failure.

“There is just no reason civilians need to own assault weapons and high-capacity magazines. Gun enthusiasts can still have their venison chili, shoot for sport and competition, and make a home invader flee for his life without pretending they are a part of the SEAL team that took out Osama bin Laden.”