ATLANTA (CN) — Counsel for a former Georgia insurance commissioner argued before a federal appeals court Tuesday that his conviction for stealing more than $2.5 million from his employer should be reversed and a new trial should be held based on errors made by the district court.
After a two-week trial in July 2021, a jury found Jim Beck guilty of 37 counts of fraud, money laundering and filing false income tax returns.
The 60-year-old is currently incarcerated at the Federal Prison Camp in Montgomery, Alabama, after U.S. District Court Judge Mark Cohen sentenced him to seven years and three months behind bars followed by three years of supervised release. He was also ordered to pay $2.6 million in restitution, after Cohen said that Beck had repeatedly lied on the witness stand and betrayed the people closest to him.
From 2012 to 2019, Beck served as the general manager of the Georgia Underwriting Association, an insurer created by the state for high-risk properties that private insurance companies will not cover. During this time, Beck created fake invoices to approve payments to four different companies, which didn't actually exist outside of bank accounts created by his friends and family members.
The fake companies had no actual employees or assets and offered no services other than processing invoices for Beck, who deceived three of his friends and his cousin into creating the accounts for him. The money would ultimately end up in Beck's bank accounts under the names of Creative Consultants and GA Christian Coalition, a political organization that he was the longtime head of.
Beck also used $4,000 from the Georgia Arson Control Program, which is funded by the Georgia Underwriting Association, to pay for 1,500 signs he used in his successful 2018 campaign for state insurance commissioner. He was suspended just months into his term in 2019 by Republican Governor Brian Kemp following his federal indictment.
During his testimony at trial, Beck said he only kept 10% to 20% of the money that he received from his unaware accomplices, and paid the rest to "Jerry Jordan," an alleged computer programmer who developed data mining software for the Georgia Underwriting Association. But there was no evidence that this person actually exists, as no one including Beck could locate him and there was no proof of any computer programming work being produced for the association.
Beck said that Jordan "dropped off the face of the earth" in 2017 and testified that his bank accounts did not show any payments to Jordan because he paid with cash that he had from other sources.
Despite his bizarre testimony, Beck argues on appeal the district court committed various errors throughout the case, including providing improperly worded mail and wire fraud jury instructions that defined “scheme to defraud” by using the phrase “intent to deceive or cheat” as opposed to “intent to deceive and cheat,” the latter of which is backed by U.S. Supreme Court and 11th Circuit precedent.
Attorney Scott Grubman, who represented Beck before an 11th Circuit panel in Atlanta on Tuesday, said that while his client may have deceived the association, he did not intend to cheat.
"Can you really deceive someone without cheating them?" asked U.S. Circuit Judge Britt Grant, a Donald Trump appointee.
In his brief to the appeals court, Grubman argues that Beck didn't intend to cheat the underwriting association and deprive it of money by detailing how the state-chartered insurer saw higher profits under Beck's leadership.
He further claimed that evidence found in Beck's emails, which prosecutors described as "the smoking gun" during trial, should have been suppressed because it came from the court's second authorized search warrant, which was issued after prosecutors were unable to execute the first one because it lacked date limitations.
Grubman explained that because the government sought the second search warrant "based on the defective nature of the first search warrant," the second was not "independently sourced." He said that if it wasn't for the first failed search warrant, prosecutors wouldn't have known Beck had an active email account.
"But did they really assume that he didn't have an email address?" Grant asked.
U.S. Circuit Judge Elizabeth Branch, another Trump appointee, noted that even if the initial search warrant was too broad, the court was always going to issue a date-restricted search warrant.
According to Grubman, the district court also should have acquitted Beck on the money=laundering charges because those counts merge with the underlying fraud counts. He argued they are based on the same facts, and "having carried out an alleged fraudulent scheme of which various transactions were a central part, a defendant cannot be charged with the same transactions a second time."
Beck claimed that the deposits into his accounts could not be proceeds from wire and mail fraud, because such violations were not complete until the funds were deposited into his accounts, which then gave him control over the money.
But prosecutors contest that the district court was correct in holding that Beck's mail and wire fraud offenses were completed when he sent the emails or checks in the mail.
"Evidence of his guilt is so overwhelming that any error was harmless," Assistant U.S. Attorney William Traynor told the 11th Circuit judges.
The panel was rounded out by Senior U.S. District Judge Harvey Schlesinger, a George H. W. Bush appointee sitting by designation from the Middle District of Florida. The judges did not signal when they intend to issue their decision.
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