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Donald Watkins, son indicted in fraud case

Brandon Moseley

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Thursday, two men, father and son, were charged with concocting a scheme that allegedly defrauded individual investors and Alamerica Bank out of millions of dollars. Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Jay E. Town of the Northern District of Alabama, FBI Special Agent in Charge Johnnie Sharp of the Birmingham, Division, and IRS-Criminal Investigation Special Agent in Charge Thomas J. Holloman announced the ten count indictment.

Criminal defense attorney Donald V. Watkins Sr., age 70, of Atlanta, Georgia, and his son Donald V. Watkins Jr., age 46, of Birmingham, Alabama, were charged in a 10-count indictment filed in the Northern District of Alabama with seven counts of wire fraud, two counts of bank fraud and one count of conspiracy to commit wire fraud and bank fraud.

According to the indictment, between 2007 and 2014, the defendants induced investors to pay millions of dollars into a bank account controlled by Donald Watkins Sr. by telling the investors that their money would be used for specific purposes related to the international growth of two companies associated with the defendants. Federal authorities allege that instead of using the money for those purposes, the defendants redirected the funds for other uses, including the payment of personal tax obligations, personal loan payments, alimony, and clothing, the indictment alleges.

“Persons who defraud investors through material misrepresentations, omissions, and lies must be held accountable,” said lead prosecutor, Lloyd Peeples. “As set forth in today’s indictment, the defendants mislead numerous individual investors and used their investments for unrelated purposes.”

For example, the indictment quotes one solicitation in which Donald Watkins Sr. represented that he needed an investor’s funds to pay for investment bankers and lawyers ahead of an anticipated business transaction, when, in fact, the funds allegedly went toward the payment of unrelated expenses. The indictment also alleges that, up until 2016, the defendants sent the investors stakeholder reports and other updates that purported to keep the investors apprised of developments related to the companies involved, but were instead intended to conceal what had really happened to the investors’ money.

The defendants are also charged with conspiring to obtain loans from Alamerica Bank through an allegedly fraudulent scheme involving the use of a third party to take out the loans on their behalf. Finally, the indictment charges the defendants for fraudulently obtaining money from Alamerica Bank by convincing one of their investor victims to apply for loans under his name, when, as they had planned, the defendants ultimately took and used those funds for their own purposes.

Watkins responded to the indictments on his website:

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“Federal prosecutors in Birmingham have worked for more than a year to bring an indictment containing false fraud allegations against my son Donald V. Watkins, Jr., a highly respected Birmingham businessman, and me,” Watkins said. “Today’s indictment was birthed by the Department of Justice that President Donald Trump has labeled as “corrupt.” It is the product of a system the President has described as “rigged” and run by a law enforcement agency filled with “rogue” prosecutors.”

“To secure today’s indictment, federal prosecutors in Birmingham and Washington had to: (a) present misleading and incomplete evidence to the grand jury, (b) ignore the plain language of bona fide business agreements and controlling principles of contract law, (c) “twist” important documentary evidence to support their theory, (d) present witnesses who provided scripted testimony to fit a pre-determined and distorted narrative, and (e) disregard a mountain of exculpatory evidence that favored my son and me,” Watkins continued. “Of course, none of the witness testimony or documentary evidence prosecutors presented to the grand jurors has been tested under cross-examination in a trial.”

Watkins claimed that, “The businesses referenced in the indictment are viable and valuable commercial enterprises today. They have tangible assets that are capable of valuation under generally accepted valuation methodologies. Every one of the so-called “victims” of the crimes is still my business partner. My businesses have survived the relentless efforts of prosecutors and FBI agents to “carpet bomb” them with grand jury subpoenas. They have also withstood the stress of an investigative process that is intent on destroying them and silencing my journalistic voice.”

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In recent years, Watkins has been an investigative journalist on his Facebook account. He (concurrently with blogger Roger Shuler) exposed the alleged extramarital affair between then Alabama Governor Robert Bentley (R) and his married top political strategist, Rebekah Caldwell Mason.

“Throughout the criminal investigation, federal agents misled my investors into believing they had lost money in my businesses,” Watkins stated. “Some investors were also incorrectly advised that their individual money in these businesses was greater than the investment dollars I contributed. This was a patently false narrative that was never corrected, but which will be corrected at trial.”

“The allegations in the indictment represent a politically motivated and self-serving narrative to portray my son and me in the most negative light possible,” Watkins claimed. “These allegations are aimed at destroying my businesses and chilling my exercise of free speech on Facebook and on this news website. Incredibly, prosecutors actually presented evidence to the grand jury about the content of this website and my strong criticisms of state and federal public officials. Ironically, while federal prosecutors in Alabama elected to prosecute me on flimsy allegations, they forgave former Governor Robert Bentley for his many acts of public corruption in spending vast sums of tax dollars, campaign money, and dark money romancing his lover, Rebekah Caldwell Mason. As the Alabama public knows, I am the journalist who broke the “sex for power” scandal between Bentley and Ms. Mason that resulted in the governor’s resignation.”

The FBI and IRS-CI investigated the case.

Trial Attorney Kyle Hankey of the Criminal Division’s Fraud Section, First Assistant U.S. Attorney Lloyd Peeples and Special Assistant U.S. Attorney Beau Brown of the Northern District of Alabama (the latter of whom is on detail from the Alabama Securities Commission) are prosecuting the case. Former Assistant U.S. Attorney Xavier O. Carter also was instrumental in the investigation.

Watkins is being represented by Birmingham attorneys James Parkman and William White.

Watkins previously made a $150 million bid to buy the Minnesota Twins that was rejected by Major League Baseball over questions about Watkins finances. Watkins has also served on the Alabama State University (ASU) Board of Trustees, the Montgomery City Council, and he was Birmingham’s City Attorney when Richard Arrington was Mayor.

The charges in the indictment are merely allegations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Brandon Moseley is a senior reporter with eight and a half years at Alabama Political Reporter. You can email him at [email protected] or follow him on Facebook. Brandon is a native of Moody, Alabama, a graduate of Auburn University, and a seventh generation Alabamian.

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Economy

New unemployment claims continued dropping last week

Micah Danney

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(STOCK PHOTO)

There were 8,679 new unemployment claims filed in Alabama last week, slightly fewer than the 8,848 filed the previous week, according to the Alabama Department of Labor.

Of the claims filed between Sept. 13 and Sept. 19, 4,465, or 51 percent, were related to COVID-19. That’s the same percentage as the previous week.

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Economy

Unemployment benefits could change for some Alabamians

ADOL will begin the review when the current quarter ends on Oct. 3. 

Eddie Burkhalter

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Some Alabamians receiving unemployment benefits could see changes in those benefits after the Alabama Department of Labor conducts a required quarterly review and redetermines eligibility, the department said Friday. 

The Alabama Department of Labor said in a press release Friday that no action is required by those receiving regular unemployment, Pandemic Unemployment Assistance or Pandemic Emergency Unemployment Compensation. 

ADOL will begin the review when the current quarter ends on Oct. 3. 

“Some may remain eligible for PUA or PEUC, OR they may be required to change to regular unemployment compensation. Weekly benefit amounts may also change. This depends on eligibility requirements,” ADOL said in the release. “Those claimants whose benefit year ends prior to October 3, 2020, will have their claims reevaluated.” 

After the review, if the claimant is determined not to be eligible for regular unemployment compensation, those who qualify may still be able to be paid under PUA or PEUC, and that determination will be made automatically and payment will be issued, the department said in the release. 

Claimants must also continue to certify their weeks.

Many claimants are not receiving benefits because they fail to file their weekly certifications, i.e. requests for payment. ADOL cannot pay benefits for weeks that have not been properly certified. Certifications can be done online at labor.alabama.gov or by calling the appropriate number:

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  • Montgomery – (334) 954-4094
  • Birmingham – (205) 458-2282
  • Not in Local Area – (800) 752-7389

PUA recipients must file their weekly certifications either by telephone or on the PUA app, at pua.labor.alabama.gov.

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Congress

Alabama Republicans praise President Trump’s SCOTUS nomination

“The confirmation process is already proving to be another brutal fight, but I am certain that this is the job for a strong, conservative woman,” Ivey said.

Brandon Moseley

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President Donald Trump, left, and his Supreme Court nominee, Judge Amy Coney Barrett. (WHITE HOUSE PHOTO)

President Donald Trump on Saturday nominated Judge Amy Coney Barrett to the United States Supreme Court, and, if confirmed, Barrett would fill the vacancy created by the death of Associate Justice Ruth Bader Ginsburg.

Trump’s nomination of Barrett was met with near universal praise among Alabama Republicans including Gov. Kay Ivey and a number of other elected officials.

“I commend President Trump’s nomination of Amy Coney Barrett to serve on the United States Supreme Court. Judge Barrett will be focused on interpreting the law, being an arbiter and not a lawmaker, as the Supreme Court demands of its justices,” Ivey said. “Based on her proven career and background, I am confident that Judge Barrett will be articulate and a fair supporter of issues important to Alabamians such as protecting the unborn and our Second Amendment rights, while applying the law impartially.”

Barrett has served as a judge on the U.S. Court of Appeals for the Seventh Circuit since 2017. Before becoming a judge, she was a law professor at Notre Dame Law School and previously clerked for Supreme Court Justice Antonin Scalia.

Ivey said Barrett will embody the precedent established by Ginsburg and further prove that a woman can be a wife, a mother, a person of faith and hold strong personal convictions while still effectively performing the duties required of a justice.

“The confirmation process is already proving to be another brutal fight, but I am certain that this is the job for a strong, conservative woman,” Ivey said. “The people of Alabama overwhelmingly supported President Trump in 2016, and I commend him for performing his constitutional duty of nominating to the Supreme Court and getting the job done that we elected him to do. The late Justice Ginsburg herself noted that even in an election year, ‘a president doesn’t stop being president.’”

Before her death, Ginsburg reportedly made a request that her replacement not be nominated or confirmed until a “new president is installed.” Last week, Ginsburg became the first woman and the first Jewish person to lie in state at the U.S. Capitol.

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President Donald J. Trump and First Lady Melania Trump pay their respects to Associate Justice Ruth Bader Ginsburg Thursday, Sept. 24, 2020, as she lies in repose at the U.S. Supreme Court in Washington, D.C. Justice Ginsburg passed away on Friday, Sept. 18, 2020. (Official White House Photo by Andrea Hanks)

“I eagerly anticipate Judge Barrett’s confirmation, and I look forward to continuing to forge a strong relationship between President Trump and the state of Alabama during his next term,” said Ivey.

Democratic Senators, though they do not appear to have the votes to stop Barrett’s nomination, are vociferously opposed to confirming a new justice before the Nov. 3 election determines whether Trump will serve as second term.

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Democrats point to what they say is the hypocritical position of Senate Majority Leader Mitch McConnell, who refused to hold hearings or a vote on President Barack Obama’s nominee, Judge Merrick Garland, in 2016.

All but two Republican senators appear prepared to vote for Barrett’s confirmation, all but assuring her a seat on the court and solidifying a 6-3 conservative majority.

“I am extremely pleased with President Trump’s selection in nominating Judge Barrett to the Supreme Court,” said Sen. Richard Shelby, R-Alabama. “From her clerkship for the late Justice Scalia to her tenure on the 7th Circuit, Judge Barrett has had a distinguished career and has proven her commitment to the rule of law. Our next Supreme Court Justice must be a steadfast supporter of upholding our nation’s Constitution. I have no doubt in Judge Barrett’s qualifications, and I look forward to supporting her nomination.”

Alabama Sen. Doug Jones, a Democrat, has said he will not vote for any nominee until the results of the Nov. 3 election are decided.

Alabama Republican Party Chairman Terry Lathan:

“President Trump has nominated a superior candidate for our nation’s highest court. Judge Amy Coney Barrett is a solid constitutional jurist who has distinguished herself both on the bench during her time on the 7th Circuit Court of Appeals, in academia as a law professor at the University Notre Dame and as a clerk for the late Supreme Court Justice Antonin Scalia,” Lathan said. “Judge Barrett’s focus on following the Constitution is apparent in her opinions, in cases ranging from the 2nd Amendment to immigration. Even three Democrat Senators – Joe Manchin of West Virginia, Tim Kaine of Virginia and Joe Donnelly crossed party lines in 2017 to support her first nomination to the bench.”

“A mother of seven, including two adopted children from Haiti, Supreme Court nominee Barrett has been called a ‘powerhouse’ constitutionalist,” Lathan continued. “Her consistent rulings on applying laws to the words of our U.S. Constitution is the exact example of what the justices are tasked with in implementing their rulings. Based on qualifications and experience alone, Judge Barrett’s nomination merits a vote by the full United States Senate.”

Congressman Gary Palmer:

“President Trump has made an excellent choice in nominating Judge Barrett to the Supreme Court, and I extend my heartfelt congratulations to her and her family,” Congressman Gary Palmer, R-Alabama, said. “Judge Barrett has a stellar record of faithfully interpreting the law, training young lawyers, producing brilliant scholarship, and upholding the Constitution. Her devotion to her family, and her dedication to her students during her years as a law professor, are also commendable. There is no question that she is highly qualified and will make a fantastic Justice. I urge the Senate to confirm her quickly.”

Senate candidate Tommy Tuberville:

“I am so excited about President Trump’s nomination today of Judge Amy Coney Barrett to the U.S. Supreme Court,” said Republican Senate candidate Tommy Tuberville. “She understands that’s it’s her job to interpret the Constitution as it’s written and not to manufacture new law from the bench. Her nomination opens the door to protecting unborn life, preserving our Second Amendment gun rights, and securing the religious freedoms guaranteed to us by the Constitution.”

“My opponent, Democrat Doug Jones has a very different opinion,” Tuberville continued. “He’s already announced his opposition to any candidate offered by President Donald J. Trump, and he said even meeting and listening to Judge Barrett would be useless. When it comes to giving fair consideration to President Trump’s Supreme Court nominee, Doug Jones is a lost ball in high cotton. But that comes as no surprise. He voted against Brett Kavanaugh and said he would have opposed Neil Gorsuch if he’d been in the Senate at the time. Democrat Doug even voted twice to remove Donald J. Trump from office. Since becoming our placeholder senator, Doug Jones has opposed everything most Alabamians support and supported everything most Alabamians oppose. Instead of representing our conservative Alabama values, he’s represented the Hollywood and New York values of his high-dollar, out-of-state campaign donors.”

“There’s no telling what kind of dishonest tactics Doug Jones, Chuck Schumer, Kamala Harris and the other Senate liberals will use against a woman who is imminently qualified to sit on our nation’s highest court,” Tuberville warned. “So I’ll close by asking you to join me in praying for Judge Barrett and her family as she faces what promises to be a tough and partisan confirmation hearing. With your prayers and support, America will soon have a strongly conservative Supreme Court, and Alabama will have a new senator who actually represents the citizens of this great state. May God bless Judge Barrett. May God bless President Donald Trump. And may God continue to bless the greatest nation mankind has ever known.”

Congressional candidate Barry Moore:

“I applaud the President for making this nomination now, as the Constitution mandates,” said Congressional candidate Barry Moore. “I’m confident that the Senate will also take up Judge Barrett’s nomination in a timely fashion and not delay the process until after the election. The Constitution doesn’t state anything about waiting until after an election to fill Supreme Court vacancies, despite what the Democrats want us to think.”

“I’m pleased that President Trump has chosen a strong pro-life woman for the Supreme Court,” Moore continued. “I’m also impressed by Judge Barrett’s credentials and experience. I am certain she’ll make an exceptional addition to the Supreme Court, and will serve us well for many years to come.”

“We, as a nation, must act now by praying for President Trump, Judge Barrett and their families,” Moore concluded. “They need to have a shield of favor and protection prayed over them. I truly believe we are in a spiritual battle for our nation and the Democrats will stop at nothing to destroy the character of Judge Barrett, as they’ve done for the last 4 years with President Trump.”

Alabama House Majority Leader Nathaniel Ledbetter

“I join the members of the Alabama House Republican Caucus in praising President Trump’s decision to nominate Judge Amy Coney Barrett to the vacancy on the U.S. Supreme Court,” said Alabama House Majority Leader Nathaniel Ledbetter, R-Rainsville.

“Judge Barrett clerked for one of the court’s greatest conservative jurists, Judge Antonin Scalia, and she understands that her job is to interpret the Constitution as the founding fathers wrote it, not to invent new law out of thin air,” Ledbetter said. “The suit against Alabama’s strongest-in-the-nation pro-life law is currently working its way through the federal courts, and it could be argued before the U.S. Supreme Court in the near future. Having a conservative majority on the nation’s highest court will be essential to the Alabama Legislature’s efforts to protect unborn life from harm. We encourage the Senate to hold confirmation hearings as soon as possible and to hold an up-or-down vote on Judge Barrett’s nomination immediately after they conclude.”

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National

23rd Alabama inmate dies with COVID-19

There have been 409 total positive COVID-19 cases among inmates and 392 total among employees as of Sept. 26.

John H. Glenn

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(STOCK PHOTO)

The Alabama Department of Corrections on Friday reported the 23rd COVID-19 death among inmates in the state’s prisons.

Christopher Nalls, a 59-year-old inmate serving a 15-year sentence, died Sept. 10 at a local hospital in Hamilton, Alabama.

Nalls was moved to the local hospital on Aug. 31 to receive treatment for pre-existing health conditions unrelated to COVID-19.

His admission test upon entering the hospital was negative, and after treatment, Nalls was discharged Sept. 4.

Upon return, Nalls’s condition worsened, and he was readmitted Sept. 10. He died later that same day. A postmortem COVID-19 test showed Nalls died with COVID-19.

ADOC did not report any other positive COVID-19 cases among inmates in correctional facilities. But in the same report Friday, ADOC reported six new positive cases among staff, bringing the staff total to 28 active cases.

ADOC’s Office of Health Services initiated investigations into possible prolonged exposures between positive staff members and inmates or employees.

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There have been 409 total positive COVID-19 cases among inmates and 392 total among employees as of Sept. 26.

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