TEXARKANA, Texas - A federal judge in Texarkana ordered a Maud, Texas, couple to some pay costs and attorney fees for a forestry investment company suing them for alleged fraud at the end of a hearing Friday.
U.S. District Judge Robert Schroeder III described April Thompson and James Thompson as "brazenly" violating a court order prohibiting them from liquidating assets.
Georgia-based Forest Investment Associates complains in a civil suit filed in May that April Thompson and James Thompson conspired over an eight-year period to defraud the company of more than $4 million through phony invoices generated at a local timber management company where April Thompson once worked as an account manager. Kingwood Forestry Services maintains offices in Texarkana, Texas; Monticello, Arkansas, and Arkadelphia, Arkansas, according to the company's website.
The suit accuses the Thompsons of submitting fraudulent invoices for forestry work James Thompson never performed. The Thompsons have denied all the allegations and filed a motion to dismiss the lawsuit. Earlier this month an 11-count indictment was unsealed in the Northern District of Georgia accusing the couple of conspiracy and mail fraud.
At a hearing Friday morning in Texarkana's downtown federal building, FIA lawyer Lawrence Polk of Georgia argued that April Thompson and James Thompson are guilty of repeatedly violating an order signed by U.S. District Judge Robert Schroeder III in May which prohibits the couple from liquidating assets or spending money beyond what is reasonable and ordinary for daily living.
Following the filing of an amended complaint in mid-June, the order concerning the preservation of assets was modified to include the couple's businesses, James Thompson Trucking and James Thompson Racing. FIA's lawyers have briefed the court multiple times concerning the couple's spending and filed a motion asking the court to find the Thompsons in contempt.
Polk mentioned Friday that the Thompsons never paid any tax on the $4,097,666.65 it claims the Thompsons siphoned from FIA clients from 2011 to April 2019.
"So the question is, where is the money," Polk said.
Polk listed expenditures including the construction of a house and swimming pool, the acquisition of a time-share condominium in Branson, Mo., the purchase of race cars, vacations to Hawaii and Las Vegas and the acquisition of large amounts of gold and silver. Polk complained that the day after the court first issued a temporary restraining order, the Thompsons -along with nine others including family, friends and the children of friends -traveled on the Thompsons' tab to Dallas and Hawaii, spending thousands.
The Hawaiin vacation allegedly included the Thompsons paying the bill for jet ski rides, dolphin swims, hotels, food, booze and souvenirs, Polk said. Polk said the Thompsons' lawyer told them that the Thompsons were going on a prepaid vacation for Labor Day.
Polk said FIA has been forced to subpoena third parties -such as a Texarkana gold and silver dealer -to get information about the Thompsons' spending and assets. Specifically Polk referred to the liquidation by James Thompson of more than $12,000 in valuable coins which was not disclosed until FIA's lawyers confronted the Thompsons' counsel with proof of the coin sales by James Thompson in June and July.
Polk said FIA's legal team sent a third-party subpoena to the precious metals dealer seeking documents pertaining to the Thompsons as a "shot in the dark" and that finding such evidence has been like "searching for a needle in a haystack."
Polk said April Thompson recently filed supplemental documents listing the coin sales and said that April Thompson claims she "forgot" about them and that the cash was used to make payroll for James Thompson trucking.
Schroeder asked Texarkana lawyer Darren Anderson, who represents the Thompsons along with Texarkana lawyer Sean Rommel, if he has bank statements that show the money from the sale of the coins was deposited into an account used to pay James Thompson Trucking employees. At the end of the hearing, Schroeder gave the defense seven days to provide documentation concerning the money from the coin sales.
Polk also mentioned a recent sale by James Thompson of a race car for $7,000. Polk said James Thompson directed the buyer to deposit the money into one of his accounts.
Anderson argued that the car in question actually belonged to James and April Thompson's daughter and was therefore not subject to the court order. Polk scoffed at the notion that the liquidated race car was purchased by the Thompson's daughter as she is 17 or 18 years of age.
"This is like a shell game," Polk said, complaining that other assets have been allegedly transferred into the names of friends or friends' children and that he is dubious of handwritten bills of sales provided by the defense.
Polk mentioned that he would have called the Thompsons as witnesses to inquire as to their disposition of assets but that he has been told they will invoke their Fifth Amendment right not to testify in light of the criminal indictment pending in federal court in Georgia.
In addition to giving the defense seven days to provide documentation concerning the cash the Thompsons received from the sale of coins in June and July, Schroeder also gave FIA seven days to provide any supplemental information on the issue to the court as well as a briefing identifying possible remedies to address the Thompsons non-compliance as a receiver has already been appointed to take over management of the Thompsons' accounts and finances.
FIA will also provide the court with an accounting of how much it has spent on legal and other fees in bringing the motion for contempt and described his award of attorney fees and costs a "preliminary ruling."
Jury selection in the civil case pending in the Texarkana Division of the Eastern District of Texas is scheduled for June 2020. A date for the Thompsons to appear before a federal judge in Georgia in the criminal case has not been set.