“Follow the money.”
Guam – Opening statements were made today in the trial of former GHURA attorney Mark Smith and his friend Glenn Wong. The two are facing charges of section 8 housing fraud.
“Follow the money.” Those words, as cliche as they may sound, are the words the prosecution is asking the federal jury to do. Painted by Prosecutor Phillip Kesaris, the money trail is where he says the jury will find a bold scheme devised by Attorney Mark Smith and his friend Glenn Wong to defraud the federal government out of hundreds of thousand of dollars in Section 8 money.
Smith, a former GHURA attorney was also serving as a Section 8 landlord in 2011. When the GHURA board discovered this apparent conflict of interest, Kesaris says he found a way to remain GHURA legal counsel while still benefiting from the Section 8 program—he would transfer ownership of his property to Wong but the true owner would still be himself.
That’s where the money lead them, according to Kesaris. Wong set up a bank account to receive Section 8 wire transfers and then gave that money directly to Smith. In fact, at one point, Wong authorized Smith to be a signor on the account so he could withdraw money from the account directly.
“He was not entitled to this money, he was no longer an owner,” argued Kesaris.
On top of that, Kesaris argues Smith and Wong never claimed rental income from these Section 8 properties in their tax return for years. It wasn’t until 2015 when a federal investigation was opened on Smith that he began amending his tax returns to include rental income.
But defense attorneys James Maher for Wong and David Lujan for Smith argued that in legal opinions issued up until trial, Wong has always been found to be the true owner of these properties. Even US Magistrate Judge Joaquin Manibusan ruled Wong to be the legal owner of the properties at one point.
So what about the purported payments Wong made from his Section 8 bank accounts to Smith? It’s a simple transaction, really.
“Wong owed Smith money for property he purchased from him. Any time he got money he would pay back Smith,” explained Maher.
In addition to legal opinions pointing to rightful ownership, the defense pointed out that even Housing and Urban Development administration and attorneys determined that there was no conflict of interest in Smith’s employment as legal counsel for GHURA.
“I think we’re bending backwards to look for a conflict where none exists,” Attorney David Lujan quoted one of the HUD executives as saying.
What about the delayed rental income Smith and Wong claimed in their tax returns? The defense says the timing of that was mere coincidence. Lujan argued that his client never knew he was being investigated by the feds.
Both Smith and Wong are facing charges of conspiracy to commit wire fraud, theft of government property, money laundering, and false statements on a loan, among other charges. Trial resumes Thursday.