Federal Judge Curtis Collier, in a 35-page ruling, has thrown out one conviction against Josh Dobson and Paul Gott involving an alleged land fraud in Dade County, Ga., but he upheld six other convictions.
A jury in April ruled them guilty of seven of 12 counts. Judge Collier said venue was not shown sufficiently on one of the convictions.
They face sentencing by Judge Collier on Oct. 10 at 2 p.m. They remain free on bond until the sentencing.
Dobson and Gott were ruled guilty on the most serious charge - that they were involved in a land fraud conspiracy. The pair were found guilty of counts involving deals in which "gift letters" were used. They were found not guilty on charges in which they claimed that they were providing money to buyers as part of "buy-back option" arrangements.
A number of buyers testified that they were told they could get valuable lots at The Preserve at Johnson's Crook at Rising Fawn, Ga., without making a down payment and without making mortgage payments.
The buyers said the transactions went through as promised - with money coming from the Southern Group for the down payment. They said the mortgage payments continued for just over a year, then they stopped and the banks started calling. Several said they had to file bankruptcy.
Lot sales to the "buyers" were at prices as high as $250,000. One person who wound up with two lots said he cannot sell them now for $4,000.
Both Dobson and Gott took the witness stand in their own defense, denying they were involved in any fraud. They said the payments to lot buyers stopped because the economy went sour.
They were found guilty of count 1 - conspiracy, counts 5, 6, 7 and 8 and 11 and 12. Count 5 involves Gott wiring $22,000 to a woman in Florida who posed as the "cousin" of two different buyers. Count 6 involves Gott wiring $40,130 to the same woman on March 1, 2010. Count 7, which was thrown out, involves an email from Gott to a Head Start director in California who had good credit and agreed to be a "buyer" on Jan. 26, 2010. Count 8 involves Gott wiring $22,000 to a Virginia relative of the California woman on Jan. 26, 2010. Counts 11 and 12 were for money laundering. Count 11 involves a deposit to Southern Group for $166,487 on Feb. 23, 2010, and Count 12 involves a deposit to Southern Mountain Resorts for $67,000 on April 29, 2010.
It was announced last week that the Georgia Land Trust is acquiring much of The Preserve. The preservation group is buying some 1,200 acres out of a bankruptcy.
Judge Collier said in the ruling, "The evidence demonstrated both Defendants willfully participated in this scheme. Dobson was a member of the family that controlled the Southern Group entities and may have been an owner of some of the entities. Gott, on the other hand, received money from the transactions and had a personal financial interest in the scheme. He was also a close friend of Dobson’s.
"Both Defendants spoke with Keith Smartt about the gift-letter program. Dobson was also copied on a number of emails, which discussed the details of these fraudulent letters and stated he was a point of contact for further information. Moreover, wire monetary transfers were made in furtherance of the scheme from Gott to Tania Malik and Shirlene Connor."
Judge Collier also wrote, "The Indictment in this case was extremely poorly drafted with very little attention given to setting out the scheme to defraud to any degree. During trial, the Court characterized the drafting as shoddy. One of the responsibilities of supervisors in a United States Attorney’s office is to review and approve indictments. Line Assistant U.S. Attorneys because of the press of other obligations, lack of experience, or inattention may do a substandard job in drafting an indictment. In such cases the supervisor must ensure that the indictment meets reasonable standards. That is especially true in a case of this sort where the monetary loss is large and there is a great public interest in the case. It is obvious in this case that the necessary review process did not work. In cases of this type a bare bones indictment is an invitation to problems with proof, notice to the defendants, and evidence. All those problems occurred at the trial of this case."