Former CEO George Manlove’s 170 convictions for defrauding Vann’s Inc. should be upheld, federal prosecutors wrote in a filing to the 9th U.S. Circuit Court of Appeals.
Manlove has been at a federal prison in Sheridan, Oregon, since June, when he began serving the prison sentence of five years and three months handed down after he was found guilty after a three-week trial in February 2017.
Prosecutors said Manlove created holding companies that bought buildings and leased them back to Vann’s without approval from his board of directors. He was also found guilty of using more than $67,000 in company funds for personal expenses, including jewelry and family trips, as well as an executive MBA degree, again without approval by the board.
On top of his prison sentence, Manlove was ordered to forfeit $2.4 million in property determined to be ill-gotten gains from his fraud scheme.
In his appeal, filed at the end of January, Manlove’s attorney argued only a single issue: that prosecutors should not have been allowed to use what he termed inappropriate and leading questions during their examination of former Vann’s chief financial officer Paul Nisbet.
Nisbet was at one point charged with almost all of the same counts leveled against Manlove, but eventually pleaded guilty to a single count of conspiracy as part of an agreement with prosecutors that included Nisbet's cooperation in their case against the ex-CEO. Nisbet originally was sentenced for 14 months in federal prison, but was released from custody at a prosecutor’s request shortly after Manlove’s trial.
Daniel Donovan, Manlove’s attorney, argued in his appeal that prosecutors repeatedly used questions that included the answer, often requiring Nisbet only to give one-word affirmative response to “rubber stamp” what the prosecution wanted to get from him. Donovan argued that Chief U.S. District Court Judge Dana Christensen, who presided over the trial, “sat silently by” and allowed the leading questions.
Without being able to use them, Donovan contends that the government would not have been able to convict Manlove.
Not so, federal prosecutors countered in their response, filed Monday. Everything testified to by Nisbet was corroborated by the dozens of witnesses and thousands of pages of documents supplied at trial, Assistant U.S. Attorney Adam Duerk wrote in his answering brief.
Even after he agreed to cooperate, Nisbet was still a “difficult witness” and before the trial even started, Duerk wrote that prosecutors told the judge and Manlove’s attorney that they intended to treat him as an adverse witness, which allowed the use of leading questions.
“Notably, the defense never objected to this approach in any pretrial briefings or motions. Furthermore, the defense conceded that Nisbet was adverse at trial. When the Judge indicated that he intended to designate Nisbet as adverse, defense counsel did not object stating merely ‘all right,’” Duerk said.
The use of leading questions with Nisbet didn’t change the outcome of the case or deny Manlove the right to a fair trial, with Duerk adding that the evidence against the former CEO was “overwhelming.”
“Even if Nisbet’s testimony were to be stricken in its entirety, the facts presented at trial still clearly support the defendant’s conviction.”