Since being convicted of wire fraud in June of 2008, Little Rock Attorney Alvin Clay has been working hard to clear his name.
For the better part of a decade, the federal government has been trying to implicate Mr. Clay in a real estate scam run by Ray Nealy, and ex-football player, and a street hustler named Donny McCuien. McCuien lined up potential buyers while Nealy prepared fraudulent loan documents. That much is clear. But was Alvin Clay in on the game, or was he one in a long series of dupes?
Clay got involved when Ray Nealy asked if he could use Clay’s contractor’s license to rehab five houses. Clay said he was too busy running a real estate office and trying to keep a law practice going to supervise rehab work. No problem, Nealy assured him, they just needed the license to comply with state law. McCuien would be doing the actual work.
Lax regulation, and massive greed in the real estate markets made Nealy’s scam possible. Like Alvin Clay, the folks buying the houses and the people signing off on the loan applications weren’t asking too many questions. The buyers were told that a certain portion of the purchase price would go to rehab work, but most of them never checked to see that the work was done. Why should they? Each buyer was getting a kick-back from Nealy. The financial industry was also informed that rehab work was being done to make the homes sellable, but it didn’t matter. As far as the loan companies were concerned the homes were being sold as-is; the rehab work was strictly between Mr. Nealy and the buyers.
This kind of malfeasance was rife at the time. So many homes were closing and so much money was changing hands that nobody was really keeping track. The big mortgage firms bundled hundreds of mortgages together, good, bad and indifferent, and auctioned them off to the highest bidder. The federal government, by relaxing regulation in the mortgage industry, exacerbated the problem.
The feds never would have caught up with Ray Nealy had he not complained to the FBI about an unrelated financial matter. The case attracted the attention of two assistant US Attorneys, Bob Govar and George Vena, when they noticed that Ray Nealy had done business with a broad-shouldered attorney named Alvin Clay. According to attorney Mark Leveritt, AUSA George Vena contacted Kenny Wright, Clay’s accountant, and started asking probing questions. Wright assured Vena that Clay had never asked him to do anything wrong or illegal. When Alvin received money from Ray Nealy for contracting work, he immediately had Kenny Wright file a form 1099 with the IRS to establish a clear paper trail. Wright and Clay thought that would be enough to keep them out of trouble.
Bob Govar and George Vena didn’t like Alvin Clay. At the time they first learned about Ray Nealy’s fishy real estate deals, the federal prosecutors were locked in an acrimonious legal case with one of Clay’s clients. Vena was so upset with Clay’s aggressive defense work that he told one of Clay’s lawyer friends that Clay needed to back off.
Earlier, Clay had defended a confidential informant who blew the whistle on a corrupt drug sting the feds were trying to prosecute. Clay’s only viable defense was to argue, correctly, that the feds had closed their eyes to obvious malfeasance. Just another reason Bob Govar was eager to strike back at Alvin Clay.
To build a case against Clay, Gover and Vena promised a sweetheart deal to Donny McCuien if he would implicate Clay. The psychopathic McCuien was eager to cooperate. Although Bob Govar wasn’t prosecuting the Nealy scam, he made a point of sitting in on the grand jury. When things weren’t going the way he liked, Govar started asking questions. Then he perjured himself by denying at a pre-trial hearing that he had any involvement in the grand jury process. When a transcript of the grand jury session accidentally fell into the hands of defense counsel, Govar was caught in an obvious lie.
The federal government had two responses to the appearance of vindictive prosecution. First, Leon Holmes asked Govar and Vena if they were prosecuting Clay out of personal animus. They denied the charge. That proved to Mr. Holmes that everything was on the up-and-up. But just to be sure, the case was transferred from the Eastern Arkansas Division of the DOJ to the Western Division. Govar’s perjury was simply ignored.
Clay was re-indicted, tried, and thanks to the perjured testimony of Donnie McCuien, convicted.
The jury was repeatedly told that McCuien didn’t know anything about rehab work, had never performed rehab work, had never hired anyone to rehab houses and had never owned carpentry tools. Since Alvin Clay was fully aware of these facts, the government argued, he couldn’t possibly have believed that rehab work was being performed on the five properties.
This was the big issue at trial, and on appeal–did the Little Rock attorney know what Nealy and McCuien were up to. Clay didn’t have to be in on every detail, the judge told the jury, but he had to know the buyers were being defrauded.
Judge Holmes told the jury that if Clay was merely negligent, he had to be found not guilty; but if he was willfully ignorant he could be convicted.
How twelve legal amateurs were supposed to negotiate a distinction that subtle I have never understood.
In the end, it didn’t matter. The jury believed Clay was in on the scam because Donny McCuien claimed that he, “Ray and Clay” would split up the money after every deal went down.
After trial, Clay carefully researched Donny McCuien’s professional history. The government, and Clay’s defense attorney, could have made these inquiries pre-trial, but neither party thought it important. Clay learned that McCuien had been doing rehab work for the better part of a decade, that he regularly hired men to work for him, and that he regularly started work he failed to complete.
As a real estate broker, Alvin Clay has closed hundreds of real estate deals. The feds went through his files with a fine-tooth comb and found no evidence of malfeasance. Donnie McCuien, on the other hand, has operated a home rehab hustle for years. Who are you going to believe?
The government chose to believe McCuien. Why? It was the only way to nail Clay.
To understand how crucial McCuien’s testimony was to the government’s case, consider the happy fate of Ray Nealy. The feds had decided to try Clay first, then use McCuien, and copious documentary evidence, to nail Nealy. Once the truth about McCuien came out, the feds gave Nealy a sweetheart deal. Nealy had to admit that he was aware that Clay was operating illegally but failed to inform the authorities. The government could easily have convicted Nealy using documentary evidence–they didn’t need McCuien’s testimony to make the case. But that wouldn’t have stopped Nealy from calling McCuin to the stand and showing the world that the government had sponsored a psychopathic liar.
The feds were so desperate to dissociate themselves from the now-toxic McCuien that they essentially dropped their case against Ray Nealy.
It was just as well–from the begtinning, the only target in this investigation was Alvin Clay.
Since Mr. Holmes has to work with the feds and doesn’t have to work with Alvin Clay, he made the expedient decision.
Holmes tried to salve a troubled conscience by sentencing Alvin Clay to a mere five months in federal prison. That’s cold comfort to an innocent man who will never be able to practice law again.
And now the Eighth Circuit Court of Appeals, represented by justices Loken, Bright and Melloy has rubber stamped Judge Holmes deal with the devil.
The ruling makes for disturbing reading if you know anything about the case. The judges assert that Alvin Clay’s accountant blew the whistle by running to the feds (a patent untruth). They discount the notion of vindictive prosecution by noting that Bob Govar and George Vena assured the court that they were guided by the purest of motives (what else were they going to say?). Most distressing of all, they show little interest in Donny McCuien’s credibility issues and blithely assert that the jury could have convicted Clay without McCuien’s testimony.
This ruling forces the three justices to first guess what Alvin Clay knew and then guess how the jury would have reacted had the credibility of the government’s only meaningful witness been exposed at trial.
There is only one way to answer these questions? You retry the case.
Everyone associated with this imbroglio knows what the government would do if they had to retry the case–they would dismiss all charges against Mr. Clay and limp away in disgrace. But it likely won’t come to that.
On the first day of Alvin Clay’s trial in May of 2008, I walked from Central High School to the Arkansas Legislature, then continued on to the federal courthouse. Central High School, you will remember, was the site of incredible racial tension when nine African American students integrated the school in 1957. The Arkansas Legislature features Jim Crow era tributes to the Confederacy on one side of the building and an impressive commemoration of the Little Rock Nine on the other.
My one-mile walk was designed to carry me from sites associated with the Old Jim Crow to a federal building complicit in the New Jim Crow regime of mass incarceration. A black man born in the 196os has a 59% chance of ending up in prison if he didn’t finish High School. A white drop out born in the 1960s has an 11% chance of ending up in prison.
For college graduates the figures are much rosier. College educated black men have a 5% chance of ending up in prison while their college educated white counterparts have just a 1% chance. In both cases, however, a black man is five times more likely to end up behind bars than a white man of similar educational attainment.
Bob Govar and George Vena couldn’t have worked their magic if Alvin Clay was white. And yet the prosecution was officially colorblind. Clay wasn’t prosecuted because he was black; he was prosecuted because white men in power didn’t like him. The animus may have been strictly professional; but Mr. Clay’s black skin provided the opportunity.
Alvin Clay should have known better than to do business with Ray Nealy and Donny McCuien. The same can be said for the buyers, the banks and the finance companies who signed off on these two-bit real estate deals. But you won’t see anyone from the financial industry going to prison for doing business with unscrupulous individuals. If the moral bar is raised that high our prisons would soon be bulging with white men in $800 suits.
This is how the New Jim Crow works.
