The opening statements for the Mark Smith trial began like this:
-Prosecutor William Doolittle told the jury he can prove Smith defrauded the federal government.
-Defense attorney Mike Phillips said the government doesn’t have a shred of evidence Smith committed any crime. He is innocent. The substance of the trial is now beginning to unravel.
Mr. Doolittle addressed the jury and said, “This case is about a lawyer who lied so he could keep being a landlord. It really is that simple.” The prosecutor added that as a landlord of Section 8 tenants and legal counsel for GHURA, which administered federal housing funds and tax credits, Mr. Smith had intended to “double-dip.” The alleged conflicts of interest were highlighted in the government’s argument. Mr. Doolittle alleged that GHURA staff had no knowledge of Mr. Smith’s conflict of interest until four months after he was employed as GHURA’s legal counsel, which suggests he intended to deceive GHURA.
Glenn Wong, Smith’s deceased co-defendant, was implicated in a scheme to conceal Mark Smith’s interest by transferring ownership of property to Mr. Wong. Mr. Doolittle painted a picture for the jury, “That’s our theory as to what this transfer was. It was putting it on title so it would look like Mr. Wong had ownership of the property but all the benefits and payments and ultimately the properties themselves were going to end up back in Mr. Smith’s hands. So, it’s the same story here. This was never an arms-length transaction. And the defendant kept benefitting from the HAP [Housing Assistance Payment] payments Mr. Wong received. It was never the plan for Mr. Wong to keep the properties or pay them off. But they got the money passed GHURA and HUD and up into their bank accounts.” According to information both the prosecution and defense believe are facts, in 2011 and when Smith was GHURA legal counsel, he sold a group of properties to Wong for $1.6 million dollars. The arrangement between Wong and Smith was for Wong to make payments in increments of $10,000 every month for four years to Smith. At the end of the four years, Wong would make a balloon payment of a little over a million dollars to Smith. The only way Wong was able to make these payments would be through the Section 8 rental assistance payments.
Mr. Phillips followed up with a compelling opening statement. The story, as told by Mr. Phillips, is much more involved than the prosecution is telling the jury. “Probably the most important fact is Mr. Smith sold his property to Mr. Wong. It’s simple. The government would look at the exact same thing and tell you ‘Ah-ha! They were trying to pretend that they sold the property to Mr. Wong.’ And they will explain a simple, very simple, quitclaim deed wasn’t that simple. But they will never ever be able to contest that quitclaim deed.” Contrary to the prosecution’s version of the story, Mr. Phillips told the jury GHURA approved the assignment of Mark Smith’s leases to Glenn Wong. Mr. Phillips illuminated, “I’m sure one of the documents they’re going to be concerned about is what is called a mortgage. Because you know what nobody has mentioned until right now, the slides when my client sold the property to Glenn Wong? Glenn Wong owed him money. It’s no different from the bank when you get a loan. You owe the bank money. You make payments to the bank. What Governor Lou (Leon Guerrero) and others who own the bank do with it, it’s up to them. You’ll see. The only thing you won’t see is evidence of him buying toothpaste. But oh yeah, they traced those funds to different accounts. He’s paying bills. He owes. He has what is called a line of credit and it’s no different from a mortgage. And that’s what he’s doing. Think about that when you’re following the money.”
In a point-by-point counter to Mr. Doolittle’s arguments, Mr. Phillips provided the jury with background information to help jurors to understand Mr. Smith’s case. The property in question, Phillips said, was in fact Mr. Wong’s, confirmed by a title company, Department of Land Management, and acknowledged by the District Court of Guam, so Wong could get a warranty deed. Mr. Phillips continued saying, “Remember that part that I said that they forgot to tell you about Glenn owing money to Mr. Smith because he bought the property? That’s in the purchase agreement that they have. That they had about four years, I think. They talked about the balloon payment in the end. How’s Glenn going to do that? He’s going to get a mortgage. And that’s what he does.”
“What’s important right now is the Bank of Guam approves,” Phillips continued to the jury. “We all know the Bank of Guam. There’s no way that they’re going to…lend Glenn Wong money unless they’re convinced that Glenn Wong owns the property. Prosecution is still not believing that. They’re still saying, nope, that’s Mr. Smith’s property.”
Phillips reasoned that when the money from GHURA was paid to Glenn Wong as a landlord, that is now his money and how it is spent is at Wong’s discretion.
Mr. Phillips said, “It used to be GHURA money. When it’s in the GHURA account, it’s GHURA money. But when GHURA pays, it doesn’t matter what they pay–Section 8, employees, contractors—it’s not their money anymore.” The defense explained Mr. Smith had no ill intentions and said, “Real easy to make allegations but where’s the proof?”
Phillips then went after the so-called whistleblower of the case. Ray Topasna, the current GHURA director and a witness in this trial, had initially submitted a letter to GHURA stating that a waiver request was unnecessary for Mr. Smith to submit since he did not have a conflict of interest, according to Phillips. Mr. Topasna later changed his tune and Mr. Smith’s lawyer said it was because, “He was in trouble himself.” Phillips said that Topasna was fired previously from GHURA and that after being fired, he started making claims that there were other corrupt people at GHURA. As an informant, Phillips said, he will be receiving between 15-25 percent of money collected in the cases made with his information under a whistleblower statute. According to his lawyer, Mr. Smith took all the necessary steps to address the conflict of interest aside from putting in a waiver request and the determination fell on GHURA to issue the HAP payments.
Phillips then showed the jury an email from the Director of Housing Voucher Management and Operations Division, Laure Rawson. In it, she wrote: “Honestly, it seems like we are bending over backwards to identify a conflict that may not be there. At least from what we can see.” In another email from Phyllis Smelkinson, the Housing Voucher Program Specialist in Washington DC for the US Department of Housing & Urban Development, she said, “I recall that Hugh said a waiver wasn’t needed for this person since he didn’t own the units anymore.”
Mr. Phillips reminded the jury that they must return with a verdict of not guilty if the government cannot prove beyond a reasonable doubt that he is guilty.