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The Trial Penalty And The Case Against Preston Byrd

You’ve been indicted and you know that you are innocent. Do you go to trial or do you take a plea? It’s a difficult decision and Preston Byrd, a real estate developer, was faced with this daunting dilemma back in 2015. The National Association of Criminal Defense Lawyers (NACDL) published a report titled, The Trial Penalty: The Sixth Amendment Right to Trial on the Verge of Extinction and How to Save It, that examines specific cases, data and statistics to explain the decline in the criminal trial and the steady rise in plea deals. “Over the last 50 years, defendants chose trial in less than three percent of state and federal criminal cases—compared to 30 years ago when 20 percent of those arrested chose trial” cites the report. Preston decided to go to trial. I had the opportunity to sit down with him and learn more about his case and the outcome from going to trial. Did Preston face the trial penalty?

Let’s start at the end and go backwards. What were you indicted for and ultimately convicted? In 2015, I was indicted on charges of wire fraud, money laundering and making a false statement. I made the decision to go to trial and was convicted. 

Tell me about your job/responsibilities and how did these responsibilities impact your conviction? I am in the real estate development space and have been since 2004. My responsibilities include managing and overseeing multifamily (apartment) development projects from site selection to running and/or reviewing financial analysis and pro-forma, interfacing with both city and state governments, working closely with the projects architects, engineers, and third party vendors, to negotiating contracts with the general contractor, and managing the assets once they’ve been built. I also manage a staff that has variant responsibilities related to the development process. I believe that my job responsibilities impacted my conviction because my role required me to be involved in so many different aspects of these projects, it left room for me to overlook the details of each thing that my staff was involved with. 

Did race have anything to do with your conviction/sentencing? Why/why not? I believe that race had a lot to do with my conviction and sentencing. This is my belief because given the issues that started this exploration, had the same scenario happened to any of my white counterparts, which it often does, it’s my belief that they would have been handled very differently. Over a period of 8 years, with what started out as civil litigation and eventually turned into criminal litigation, there was one attorney on the other side that actually stated to one of my attorney’s that I had no business in this line of work and that surely given my success, I had to have been doing something illegal. I thought that to be a profound statement for someone to say. I was also told that this same attorney is the one that called on his white friends in the prosecutor’s office and asked them to investigate me. So while in a civil litigation posture, which started in 2008, in 2009 after I began to prevail in the civil matters, criminal prosecutors began investigating me.

In the simplest terms, please describe your scheme. It started out with a 120 unit development project that experienced cost over runs of about $1M. This issue was no fault of ours but was due to receiving a bad report about the land from a third party, causing the project to run out of money. My company had been paid roughly $1M of a $1.4M contract that we had in place for developing the property. After the cost overages came up, the bank that financed the construction wanted us to give back the $1M that we’d been paid even though we’d gotten the project to 86% complete by the time the money ran out, we refused to do that because we’d been paid for the work that we’d done so far, so the civil litigation began. Once they, they being the bank and general contractor, began to lose in civil courts, that’s when they reached out to their buddies in the prosecutor’s office. What finally led to me being indicted, was through their investigation of me and my company, they found that some documents that had been submitted for 2 small loans that total roughly $120K were fraudulent. They also found that they had been submitted by someone that worked for me and that I had no knowledge of it. One of my employees who’d worked for me for some time wanted to acquire ownership equity in the company. Since he didn’t have the capital to buy into the company, we setup a performance based arrangement that would allow him to earn some ownership interest. He was working on a one of the company’s development projects and in an effort to fast track his position, he submitted loan documents, using the company’s project as the borrower, so he could use the capital to buy into the company. Since he did not have complete access to the company’s financial records, he literally created the financial records that he submitted for the loan. The loan was acquired, without my knowledge, he kept some of the funds for himself and gave most of the funds to the company. When the loan became due, the lender billed the company. Of course having no knowledge about the loan, I initially disputed it. I later found out what it was after spending time with the lenders. In my effort to protect the company and even him, I made arrangements with the lenders to pay the loan back however, during the process of me trying to understand what it was, the lenders had already reported the loans to their fraud department and that’s where it all started. However, given the fact that they wanted to prosecute me, they indicted me for his actions, they did not indict him at all but had him testify against me at trial admitting that he’d done everything with the caveat of adding, “I told him to do it.”

What impact did the indictment have on you professionally and personally? Once I was indicted, the prosecutors made sure to issue press releases and involve the news media so, I was plastered all over the news in an effort to destroy my reputation and to prevent me from working in my industry again because like I was told, I had no business being in this industry in the first place. As I’m sure you know, 100’s of people in this city are indicted on a daily/monthly basis for a myriad of things, but 99% of them never make the news. People that I truly believed to be friends disassociated with me, business colleagues stop taking my calls. My wife and children were affected by how I was portrayed in the news and even to this day, many of the people that I called friends or colleagues still don’t communicate with me. Although I have continued to work in the real estate development industry, this experience has made it very challenging for me with banks and investors which is a very important part of getting deals done. On a personal note, after I was convicted and began serving time at a Federal Prison Camp, I had the opportunity to work in the education department as a GED instructor. I must say that this was the most fulfilling part of this entire journey for me. This experience was rewarding for me because I was able to make real human connections that were meaningful in a way that actually added value to someone else’s life. Being a part of that direct positive impact allowed me to see the value of actually being hands-on from a point of compassion that would have a life-long impact for someone. Over my professional career, I had given to charities and other causes but had never taking the opportunity to actually roll up my sleeves and get involved. I was fortunate enough to assist several men with obtaining their GED and actually see them have a graduation ceremony! 

  

You had a trial. Why did you decide to fight? Did you think you would win? I went to trial believing that I would win because I was naïve enough to believe that this justice system would be fair and play by the rules. I was wrong! The prosecutors lied. The prosecutor knew that the man that worked for me committed this crime. He wasn’t interested in justice, he was only interested in pursuing me. I later found out that this same prosecutor had been looking into my affairs since 2010 trying to find something one me. So, he went along with the story of, I told my employee to commit the crime. Even if that had been true, which it was not, the prosecutor knew without a doubt that my employee had committed the crime but chose not to charge him with anything. That was not justice, it was something else! And cheated throughout the whole process because they wanted a win, they needed a win. I prevailed in civil courts over their buddies.

I was initially out on bond. The prosecutor asked the court to revoke my bond “citing that I had been having conversations with the employee, who was now their witness.” Yes I had conversations with him because we were wrapping up his employment and there were questions that I had about projects that he’d worked on. So, my bond was revoked and I was taken into custody. During the 7 and a half months that I was being held in the county jail while we prepared for trial, they were obviously listening to all of my phone calls, even calls that I had with my attorney’s, that they used to their advantage. Some of our strategies and theories that were discussed. So much so, that my attorney’s told me that we could no longer talk over the phone about my case because the prosecutors had provided them with hundreds of hours of phone records from the jail that included my calls with them. They’d run press releases and gotten the media involved in tearing me down so losing wasn’t an option. 

How did your colleagues/community treat you during the indictment/trial? During this period of my life, I felt very alone. I felt closed off from the world. My career had taken a dive, my reputation was marred and my friend group shrunk down to almost no one. At one point, I even consider suicide because I felt so overwhelmed. But considering the impact that that would have had on my three children and my wife, I fought through it. Going through this experience allowed me to see that we don’t live in a society that presumes us innocent until proven guilty but we are convicted in the eyes of the public long before a trial ever takes place. I now work with an organization called “Project Restart”. Project Restart is a 10 week program that targets returning citizens and offers workshops that cover entrepreneurship, developing a business plan, business strategies, marketing and much more. At the end of the workshop, participants are given the opportunity to pitch for capital for a business that they are starting up from starch or one that they already have that they want to expand.

Looking back, are there any decision you would have made differently. If so, can you name three? Yes. Looking back and knowing what I know now, the first thing that I would have done differently was to have developers insurance in place because it would have covered the $1M in cost over-runs which would have stopped everything that took place after that. The second thing that I would have done differently would have been to have in house counsel on payroll because some of the issues that lead to the cost over-runs actually started in the deal documents. I would have also had better control protocols and procedures in place particularly as it related to financial documents going out the door. Looking back, I also realize the value of creating a working environment that encourages teamwork, fair play and maintaining a healthy respect for the rule of law. It was my naïve belief that these ideas were understood by all. That they were displayed in actions, in our daily interaction with each other. That you don’t have to tell an adult to be fair or be respectful or play by the rules. So taking those ideas for granted, it was never an intentional focus. Having gone through this experience, I now realize that it has to be a very intentional conversation that is also reduced to policies, procedures and protocols.

What’s the next for you? Looking 3 years out? Currently, I’m still picking up the pieces. I’m moving forward in my career in real estate but it is not without challenges. Because of my convictions, I have literally lost millions in opportunities. I’ve had many people tell me that they can’t work with me because of what they’ve read about me once they googled me. I’ve gotten to the closing table with new projects on several occasions since my convictions with the other parties walking away right at the end. I’ve had lenders that would ordinarily fund my projects to turn me down. But I keep pressing forward believing in the spirit of redemption. I continue to do good deeds for others and spread a message of encouragement, hope and new beginnings

What advice can you offer someone facing a conviction? Never give up and never allow the narrative of others determine how you see yourself. Life will challenge you but we get to choose how those challenges are faced. Having gone through it, one piece of advice that I would give someone now would be to surrender to the process. I know that this may sound odd but really when you think about life, we are often placed into situations that we do not have any control over e.g. having a heart attack, or getting hit by someone while driving, or something happening to a loved one. We control none of these experiences but, we do control our responses to them. I was so tense and upset and angry and sad while I was going through, what I would say was a horrific experience, that initially I did not take the time to find my peace. But, once I yielded to the experience, once I realized that there was something in it for me to get out of it, I found my peace which allowed me to share my gifts and skill set with others in an effort to add value to their lives. So, surrender to life’s experiences and as the old adage goes, “this too shall pass”.

Continue to check back with my interviews with whistle-blowers, white-collar offenders and victims of fraud.

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