After Geddings Conviction, Focus Shifts To Black
Posted October 12, 2006
RALEIGH, N.C. — Former state lottery commissioner Kevin Geddings, charged with failing to disclose his work for a leading supplier of scratch-off tickets and lottery systems, was convicted of federal mail fraud charges Thursday.
The jury, which deliberated for more than six hours, found Geddings not guilty on a single count of wire fraud.
"Today's verdict sends a very, very clear message that public servants in North Carolina may not lie to the people, they may not hide the truth from the people, and they may not profit on the backs of the people," U.S. Attorney George Holding said.
The verdicts came after a three-week trial that included testimony from Gov. Mike Easley, House Speaker Jim Black and other state lawmakers. Prosecutors said Geddings defrauded the state of honest services by failing to disclose more than $250,000 in payments his public relations firm received from lottery systems maker, Scientific Games Corp.
He faces up to 20 years in prison and thousands of dollars in fines for each count. A sentencing hearing was scheduled for Feb. 5, and Geddings will remain free until then.
Geddings, 42, and his lawyer left the courthouse without commenting to reporters and did not immediately return telephone calls.
The government will continue its investigation into other possible wrongdoing surrounding the passage of the lottery in North Carolina, Holding said. Former Scientific Games executive Alan Middleton and former company lobbyist Meredith Norris, once Black's political director, have already been charged in state court with lobbying violations.
Assistant U.S. Attorney Dennis Duffy declined to discuss either of them Thursday.
"The key point in this case ... is that public officials serve the public," Duffy said. "People are sick of public officials serving their own interest and the interests of their friends."
Defense attorneys argued Geddings was innocent because he stopped working for Scientific Games before his appointment to the commission and did not believe he needed to report past dealings with the company to the state Board of Ethics.
Prosecutors argued the omission of that work on financial disclosure forms filed with the ethics board was a deliberate attempt by Geddings to hide his past. In closing arguments, Duffy called Geddings a "very crafty individual" who used his experience as a media consultant to try to manipulate opinion about the case.
Duffy also described Geddings, a former chief of staff for South Carolina Gov. Jim Hodges, as someone desperate for money after his annual income fell from more than $1 million earlier this decade to as little as a tenth of that during some years. His pay from Scientific Games was very important, Duffy said.
Thomas Manning, Geddings' lead attorney, challenged that notion, arguing during his closing statement Wednesday that Geddings earned $1.3 million in 2005.
"That's suffering, I would say," Manning said mockingly. "It's a misdirection," he said of the prosecution argument. "Don't be fooled by that."
Geddings was originally charged with nine fraud counts. One was dismissed before the trial started, and U.S. District Judge James Dever threw out two wire fraud charges on Tuesday, ruling they concerned actions that occurred before Geddings was appointed to the lottery commission and therefore were not subject to the state's ethics rules.
Geddings testified in his own defense, telling jurors during his fourth and last day on the witness stand that he "was not as precise" as he should have been when filing the state ethics disclosure form.
Named to the lottery commission on Sept. 22, 2005, Geddings resigned Nov. 1, 2005, hours before Scientific Games disclosed it had paid him $24,500 that year for communications work. The payment was among those Geddings did not reveal on the financial disclosure form he submitted to the ethics board.
Scientific Games was one of the companies vying for business with the new lottery, although it lost out during the bid process to rival GTECH Holdings Corp.
Black, who in testimony defended his decision to give Geddings a seat on the state lottery commission, said he didn't know about Geddings' past work with Scientific Games and that no one from the company persuaded him to select Geddings.
Former prosecutor Dan Boyce told WRAL late Thursday that the Geddings conviction will embolden federal prosecutors to go after other public officials.
"There's a common thread running through that web, and it appears to be leading in the direction of Speaker Jim Black," Boyce said.
"As I've said numerous times during the past year, and as I testified under oath last week, I regret appointing Kevin Geddings to the lottery commission," Black said in a written statement released early Thursday evening. "I wish that I had known all of the facts last September that we know now so all of this could have been avoided."
Prosecutors refused to comment Thursday about anyone else who might be targeted by their public corruption investigation.
A representative with the governor's office issued the following statement on behalf of Easley: "The jury has rendered its verdict."
Both Black and Easley said Geddings was a late choice for the commission after Easley wanted Black's first choice, Charlotte attorney Bob Cordle, to remain on the State Board of Elections.
Defense attorneys argued the last-minute appointment was evidence Geddings didn't have had a long-term plan to hide his work with Scientific Games in order to win a seat on the panel and steer business with the nascent North Carolina Education Lottery to the company.
Following his indictment, Geddings moved from Charlotte to Florida, where he worked at a St. Augustine radio station owned by his wife.