Opening arguments began Tuesday in the federal fraud trial of Casey David Crowther touching on his purchase of a nearly $700,000 boat, his company’s use of the Paycheck Protection Program and, from his defense attorney, the “absolute truth.”
The trial got started in earnest before Judge John Steele in U.S. District Court in Fort Myers on Tuesday after the first day was dedicated to seating a jury and a surprise plea of guilty on two counts by the Fort Myers roofer.
At a hearing before the trial started Monday morning Crowther entered a guilty plea to two of six counts of the federal fraud indictment. Crowther’s decision to enter the plea was made on his own and not part of a plea deal.
Crowther could get up to 30 years in prison and have to pay millions during sentencing on the two counts, to be scheduled later.
Crowther, 35, of North Fort Myers and president of Target Roofing, is under a federal indictment for COVID-19 Paycheck Protection Program fraud.
During the opening arguments federal attorney Michael Leeman said the prosecution would show how Crowther misused the PPP program in a way that allowed him to purchase the 40-foot catamaran and a waterfront million-dollar home in Saint James City.
Leeman showed a timeline that claimed Crowther manipulated the PPP funds to get him the boat and the house.
The prosecution also said it would prove allegations that Crowther faked the hiring of 39 employees at his roofing company that did nothing more than shred papers and then fired them not long after when federal PPP program rules changed to make it easier for the alleged fraud.
Leeman said, except in one instance, which he said was Crowther, none of the “fake” employees ever cashed a check.
“That’s the case folks,” Leeman said after touching on several other financial areas of alleged fraud. “You’re going to hear a lot of evidence.”
Crowther’s lawyer, Nicole Hughes Waid of Naples, in her opening, said: “Facts matter. All of the facts matter … not just the parts the government wants you to hear.”
Waid said that the prosecution, which bears the burden of proof, was selectively using information to make the situation appear illegal.
“There’s been no loss to the bank,” she said. “Casey Crowther remains in good standing with Sanibel-Captiva Bank.”
She said the money Crowther got was truly a loan from Sanibel-Captiva Bank to Target Roofing.
“That’s indisputable,” she said. “It’s not government money.”
She said also indisputable was that Target paid its employees.
She said that rule changes for the PPP program since it was put into place have made things confusing.
“The government confuses the loan with the forgiveness,” she said, referring to an aspect of the program that allows loan recipients to not have to pay back the funds if they meet certain criteria.
“They are two different buckets,” she said. “Target never applied for forgiveness. The money was utilized for what it was intended.”
On the topic of the boat, Waid said Crowther has a history of buying and selling boats and had a “knack” for making money off the sales. She said Crowther used the boat to entertain clients, vendors and employees and for charity events.
The craft, worth around $800,000, was purchased by Crowther at “fire sale” prices, Waid said, and had plans to resell the boat and would have made a profit had he not been arrested and the vessel seized by the government.
She also said the purchase of the boat may have been a bad idea at the time but that bad ideas were not illegal.
Waid concluded her opening saying the federal government was trying to distract from the facts of the case.
“They’re throwing things against the wall,” she said. “Remember the facts.”
The first witnesses
The prosecution began calling witnesses mid-morning after a late juror delayed the trial until 9:40 a.m.
Two prosecution witnesses, employees who formerly worked at Sara Bay Marina in Sarasota, testified to the purchase of the catamaran by Crowther and how they said he told them he was going to use the craft.
Ryan Bradley, a former salesman, and Brian Peterson, a former sale manager, talked about Crowther’s interest in the boat and the fact that he got a good discount on the 40-foot Invincible.
Bradley said Peterson took over the sale when the discount offered exceeded his limit to work on the deal although he was responsible for the final contract.
Bradley confirmed prosecution evidence that the boat sales receipt and the title were both in Crowther’s name with his signature, not Target Roofing.
Both men said Crowther told them the boat was to be used for recreational uses. Peterson said Crowther specifically wanted a long-range boat to do fishing far from shore, which became an issue when the craft had a smaller fuel tank than first advertised.
On cross-examination, Bradley disagreed that Crowther could have made a profit on the boat. “He likely would have broken even,” he said.
Waid also got Peterson to agree that Crowther had mentioned he had been interested in the boat in January, before the pandemic started.
Before the noon break, the prosecution called Steve Adkins, who partnered with Crowther to form Target Roofing seven years ago.
Adkins said Crowther and him have had a 10- to 11-year friendship and close family ties with his wife and Crowther’s wife as friends and business connections with other family members.
Adkins said Crowther and he settled on a $750,000 buy-back of Target Roofing in 2019 and two other LLC businesses they owned together. He was being paid about $6,000 to $7,000 monthly in interest on his portion of the business with a balloon payment due at the end of the seven-and-a-half-year agreement.
Adkins said the $750,000 was principal and did not represent a salary except for $20,000 he was paid for tax purposes in 2019. For 2020, he said, none of the money owed was in salary.
A $100,000 payment to Adkins by Crowther in April 2020 was termed a payment on principal by the former co-owned, not an interest payment, he told prosecutors.
Adkins did confirm that he contacted Crowther and mentioned the PPP program as a low-percent interest way to possibly pay off the note.
He said he was concerned, due to COVID-19 and a business slowdown, that Crowther and Target may have had payroll problems but confirmed he did not know that for sure.
“I didn’t know his numbers,” Adkins said.
Adkins replied “yes.” when asked by prosecutors that if someone had told him the April 2020 payment was for payroll would that have been a false statement.
On cross examination, Adkins said that his thinking about the PPP program was strictly to see if Crowther could benefit from a lower interest rate.
“I didn’t know much about (the PPP),” he said. “I put it out there as a way to payback, at 1%.”
He said he had no fears, short of a negative outcome in court, that Crowther would continue to pay him.
Adkins also confirmed a defense question that Crowther bought and sold boats and used them to entertain clients, vendors, employees and for charity events.
Steele also heard arguments on mentioning the two counts Crowther has already pleaded guilty to during the trial and reserved making a rule until later.
Nearly all those jurors who said they had applied for PPP funds were challenged and dismissed. Jury selection finally wrapped up shortly after 6 p.m. Monday.
Crowther pleaded not guilty to the indictment in October and now faces the remaining four counts including bank fraud, making a false statement to a lending institution, and illegal monetary transactions.
He was accused of falsely acquiring $2 million in COVID-19 relief funds, was arrested and charged Sept. 2, and released on $100,000 bond Sept. 3.
Crowther pleaded guilty on the two counts that related to mortgage fraud, telling the court that he doctored mortgage documents to make it appear he had more funds so he would qualify for a mortgage on a home on San Carlos Drive in Saint James City.
A seventh count involving illegal money transaction has been dismissed.
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