COLUMBIA, S.C. (AP) - Several witnesses previously barred from testifying
against a former HomeGold Financial Inc. executive may take the stand at his
trial, the South Carolina Supreme Court ruled Monday.
The court unanimously overruled a lower court's decision preventing four
former Carolina Investors officials from testifying at the trial of former
HomeGold chairman Jack Sterling.
More than 8,000 investors lost about $275 million when Carolina Investors
and parent company HomeGold Financial collapsed in 2003 in one of the largest
bankruptcies in South Carolina history.
Sterling's attorneys had argued that his securities fraud indictment should
be thrown out because Sterling had been represented by Bill Bannister, an
attorney who later represented the Carolina Investors officials when they
testified before a grand jury.
The Supreme Court disagreed. Chief Justice Jean Toal wrote that Sterling
failed to show that Bannister operated under a conflict of interest after the
criminal case had started.
In March, Sterling's current attorneys had argued that their client was
deprived of his right to counsel because of a conflict of interest. Prosecutors
said no conflict existed because Sterling hired a new legal team long before he
was indicted and there is no proof Bannister improperly shared information from
Sterling with his other clients.
Bart Daniel, an attorney representing Sterling, did not immediately return a
phone message left at his office.
The executives blame Sterling for the failure of Carolina Investors and
HomeGold. They are former Carolina Investors board members Don Bobo and Danny
Sharpe, who were never charged in the case, and former president Larry Owen and
his wife, former vice president Anne Owen. The Owens have both pleaded guilty to
securities fraud.
Sterling has pleaded not guilty to three counts of securities fraud and
could face up to 25 years in prison if convicted. His trial has been delayed
pending the Supreme Court's ruling.
Sterling is the sixth former executive of Carolina Investors and HomeGold to
come to trial on fraud charges. The five others have pleaded guilty or been
convicted, including former South Carolina Lt. Gov. Earle Morris, who was
sentenced to 44 months in prison after his 2004 conviction on 22 counts of
securities fraud.
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