B. Don James is going to federal prison.
U.S. District Court Judge Todd Campbell Friday afternoon in Nashville sentenced James to a total of ninety seven months (8 years and 1 month) in prison on each of fifteen counts of wire fraud totaling $1.8 million dollars, the minimum sentence under the plea agreement's advisory guideline range The sentences are to run concurrently or together as one sentence.
James, who pleaded guilty to all charges in March, must report to federal prison by 2:00 p.m. on June 25th.
After serving his sentence, James will be on supervised probation for another two years on each count to run concurrently.
Special conditions of his supervision require James to make restitution to the victims in the amount of $8,808,716, but any amount the victims have received or may receive from last year's circuit court judgment against Douglas Hodges will be subtracted from the $8.8 million dollar restitution figure.
James must also pay an assessment of $1,500 in criminal monetary penalties.
While each count carries a maximum penalty of twenty years imprisonment Judge Campbell announced during the plea hearing in March that the anticipated recommended sentencing range, under the plea agreement, was 97 months (8 years and 1 month) to 121 months imprisonment (10 years and 1 month).
Before the sentence was imposed by Judge Campbell Friday, James addressed the court saying \" I apologize to my family for the embarrassment. I apologize to all these people (investors). Why it happened, I don't know.\"
In the \"Sentencing Memorandum\" filed with the court prior to Friday's hearing, prosecutors argued that \"between 1995 and 2004, James never earned less that $60,000 a year and earned over $80,000 in 2003. Assuming these earnings were legitimate, James had no financial need to engage in criminal conduct to support himself. The calculated and lengthy nature of this crime, and James' lack of any excuse for committing it, both weigh in favor of a serious sentence.\"
Assistant U.S. Attorney Sam Williamson told the court Friday that \" this is an extremely serious offense and by his own admission, James admits he stole over eight million dollars. He was a successful businessman who should have known better.\"
James' attorney, Hilton Conger asked for a lesser sentence than 97 months, possibly a two to three year term. Conger insisted that a sentence of 97 months to 121 months would amount to a life sentence for James, in view of his poor health. Conger says James could still be a productive member of society and should be allowed to continue working so he could repay the victims.
Conger further stated, in his motion for Downward Departure\" that James was very cooperative with the investors' attorney H. Naill Falls, in their civil case against Hodges. He cooperated and assisted his victims in pursuing recovery from an individual who has aided and abetted and unjustly benefitted from James' scheme. Falls, attorney for 70 of the investors, credits James' cooperation and testimony as being significant in prosecuting the claims which ultimately resulted in a verdict of $8 million, which represented the full amounts invested with James. Attorney Falls is of the opinion the investors will recover the majority of their funds as a result of the verdict obtained.\"
Judge Campbell agreed with the prosecutors stating that \"This was a very serious crime and that incarceration is necessary. The seriousness of the crime outweighs (James) having freedom and the ability to make restitution. The crime was very lengthy, complicated, and involved repeated conduct.\"
Five of the victims (investors) testified during Friday's hearing including Donnette Pack, her father Donald Pack, Haskel Hawkins, Jr., Ronnie Mac Davis, and Nell Beshearse. Ms Beshearse also read a written statement by Lewis Knowles, another victim in the case.
Donnette Pack told that court that \" I cannot describe to you the pain and anguish Mr. James has put on our family. He has confessed to the crime but has shown no remorse. He has wreaked havoc on so many families and diminished our quality of life. He deserves no leniency and should serve the maximum sentence allowed by law.\"
Her father, Donald Pack testified that \"He (James) has destroyed my family and took what I worked fifty years for.\"
Haskel Hawkins, Jr. said he lost his $1.9 million dollar investment or $2.5 million including interest because of James. \" He totally destroyed my life and my family's lives. There is no way to describe the pain and suffering he has caused. I believe he should pay us the principal, interest, and punitive damages, or spend the rest of his life in prison. He's enjoying his life, but I can't enjoy mine anymore. I was going to send my grandchild to college, but I can't now. He took everything I ever worked for.\"
After the investment scheme became public, Ronnie Mac Davis testified that he talked with James who told him that \"I wouldn't blame you if you took a bat and beat me. I knew when I took your money it was gone.\"
Nell Beshearse told the court that she made an investment with James only a few months before his operation went belly up, and lost money like many of the other investors. She said James assured her that she couldn't lose unless he took the money and went off to some lsland.
In a written statement read by Beshearse, Lewis Knowles wrote that \"I would have trusted him (James) with my life. I had known him for years. I would never have believed that he would have been a party to such a scheme. He robbed us and took our dignity and the ability to take care of ourselves in our later years.\"
Three people testified on behalf of James including his son-in-law and family physician Dr Kevin Rhody; his employer, local nursery owner James Pirtle; his long time friend and clergyman Terry Little; and another friend of the family, Janice Stewart.
Dr. Rhody testified that James suffers from multiple health problems including coronary artery disease, hypertension, hernia, abdominal aortic aneurism, and a pre-cancerous lesion of the colon, among others. He says James is a high surgery risk and that he will have a significant (medical issue), if not a fatal outcome, in five to ten years \"on the lucky side\".
After James went out of business, Pirtle testified that he hired James to work for him as a salesman in his nursery operation. Pirtle says James has learned a lot about the nursery business and has developed into a remarkably good salesman. Pirtle says other salesmen who work for him have made $300,000 to $400,000 a year and believes James has the ability to earn that kind of income. Pirtle says he believes in James' honesty.
Terry Little testified that he is a very close friend of the James family and that when Donny lost his home, he allowed James and his wife to move into a home he owns, next door to him, rent free. James and his wife still reside there. Little told the court that up until this matter came up, everyone in the community thought of James as a model citizen. He says James sponsored local athletic teams, supported his church, and did everything he could to make the town and county a better place to live. Little says James is still a good family man and could still be a productive citizen.
Janice Stewart testified that James is a long time friend of her family and that he took special interest in her brother when he played sports many years ago, serving as a mentor and supporting him financially as a sponsor on ball trips, etc. Stewart says Donny is a kind man and goes the extra mile to help people in need. She says he still has a lot to give.
In March, Investigator Terry Hembree of the 13th Judicial District presented a summary of the prosecution's case against James, led by the Federal Bureau of Investigation and Assistant U.S. Attorney Sam Williamson.
Hembree told the court that \"From on or about 1997 up to and including on or about 2004, James defrauded investors by telling them that their funds would be used to purchase premium financing contracts when in fact James did not intend to use the funds in that manner. In fact, from at least 1997, Investors Insurance Finance did not invest any funds in premium financing contracts.\"
James operated an insurance-related business known as \"B. Don James & Son's Insurance\" and another business known as \"Investors Insurance Finance\" which was brokering investment in insurance premium financing.
According to Hembree, \" James made additional representations to potential investors that if they invested their funds with Investors Insurance Finance, he would invest their funds in premium financing contracts, that the investors would receive fixed and guaranteed rates of return, and that the only way that the investors could lose the money that they invested with Investors Insurance Finance would be if James himself stole it.\"
\"In fact, James knew that there were no guaranteed rates of return because he was not investing the money in the manner promised, and that even if he had invested the money that way, he could not have guaranteed the rates of return promised. In order to convince his investors that their money was invested in the manner James represented, he made payments to his investors which he represented to be interest payments accruing as a result of premium finance contracts that James had purportedly purchased on the investors' behalf when, in actuality, the funds used to make the supposed interest payments were other investors' funds that James was using to disguise the fact that he had not invested any funds in premium financing contracts.\"
Hembree explained that on at least fifteen occasions, James caused interstate wire communications to be transmitted from Tennessee to Alabama in order to make deposits of investors funds totaling more than $1.8 million dollars although the total loss caused by the instant fraud, including conduct not charged in the indictment, exceeded $7 million dollars. In addition, more than 50 people were defrauded by James' scheme.\"
The wire fraud apparently amounted to James making deposits in a local bank, which were later electronically transferred to a bank location in another state.