Details Begin To Emerge In Wake Schools Fraud Trial
Posted August 23, 2006
Updated November 18, 2006
Was he an outsider, as his attorney has described him? Or was he a player in the scandal, in which at least $4 million was siphoned from the school system in 2003 and 2004 for unauthorized office supplies and high-priced items for personal use?
Those are among the central questions right now in Wake County Superior Court where Estes is on trial.
His alleged role is unique among the seven people charged, and he is the only suspect who has not pleaded guilty in connection with the allegations.
He was neither an employee of the school system's transportation department nor an employee of Barnes Motor & Parts. Investigators, however, claim he was connected through his bank accounts and former Barnes manager Connie Capps, who is now his wife.
During the second day of his trial, Wake County District Attorney Colon Willoughby used bank records -- including checks ranging from $58,000 to $80,000 -- to show how Estes was getting hundreds of thousands of dollars in school money.
And former Barnes manager Bobby Browder testified as to how the relationship worked.
"Ms. Capps would always call me and tell me that Mr. Estes had purchased things for Wake County, and I needed to reimburse Mr. Estes," testified Browder, who pleaded guilty last year to one count each of obtaining property by false pretenses and conspiracy.
Capps also accepted a plea deal to the same charges as Browder in exchange for her cooperation in the investigation. A lighter sentence of five to six years in prison is contingent on her testimony in Estes' trial on Thursday, even though the defendant is her husband.
Later Wednesday, former transportation department Budget Analyst Carol Finch took the witness stand.
A confessed key player in the parts scheme, Finch testified that Estes controlled the money for many of the high-priced items that were listed in his name and said she thought she was getting gifts for doing business with Barnes.
"Did you just think Harold was doing this out of the goodness of his heart?" Willoughby asked Finch.
"I didn't know where the money came from," Finch said. "I didn't know."
Estes' attorney, David Long, however, tried to show involvement in the parts scheme centered on Finch and Capps, who were good friends.
"He had no way of know if any invoices were filed, did he?" Long asked Finch during cross-examination.
Investigators have said that former transportation department employees submitted orders for fake parts to Barnes, and in court Wednesday, Willoughby questioned Browder about that claim.
"So, by and large, this was just running up a credit balance at Barnes as a way for the school system to spend its year-end budget surplus?" Willoughby asked.
"That's correct," Browder said.
Browder testified that the money was used to buy unauthorized office supplies and personal items such as vehicles, boats, home appliances, camper homes and other high-priced items. Some of the phantom parts were marked up by 30 percent so Barnes could profit, he said.
The Wake County school system is in the process of recovering about $5 million. Barnes, which was indicted earlier this year on a charge of obtaining property by false pretense, was fined about $3 million, and it refunded another $1.3 million.
The rest of the recovered money comes from the guilty parties, who agreed to pay, as well as the merchandise that had been put up for auction.
Finch has also pleaded guilty to charges of obtaining property by false pretenses and conspiracy. She could face up to 40 years in prison when she is sentenced after Estes' trial.
During emotional testimony on Wednesday, Finch said she had been suicidal because of the fraud investigation.
"When I resigned, I knew I had done wrong and took stuff that wasn't mine," Finch said. She has admitted to using siphoned money to go on a cruise, renovate her house and purchase tens of thousands of dollars in gift cards, as well as a Chevrolet Tahoe.
Three other former transportation department employees have also pleaded guilty. Both Angela Malloy-Sanders, a former quality control manager, and Pam Stewart, a team leader, pleaded guilty to charges of accessory after the fact.
Vern Hatley, who was the department head at the time, pleaded guilty to charges of obtaining property by false pretenses and conspiracy. In January, however, Hatley filed a motion to withdraw his guilty plea. A judge, however, denied the request in February, and Hatley was sentenced to seven to 10 years in prison.