Shortly after they were both found guilty on all four counts in their federal fraud trial, Joshua Allen and Michael Cox were taken into custody by armed federal marshals in U.S. Courthouse in San Antonio Tuesday.
“I was happy with the verdict,” said prosecutor Joseph Blackwell, assistant United States attorney. Blackwell said he put close to 30 witnesses on the stand but said there were hundreds more who were “devastated and I hope this gives them some justice and peace.”
The trial was originally planned for three weeks but lasted seven days.
Allen and Cox face a statutory maximum of 70 years, according to a previous statement from federal prosecutors.
The two were convicted of:
- Conspiracy to Commit Wire Fraud
- Conspiracy to Commit Money Laundering
- Conspiracy to Launder Monetary Instruments
- Securities Fraud
Sentencing was set for Dec. 10 in front of Judge Fred Biery, who gave the convicted men – especially Cox – a stern lecture after the jury was dismissed.
Before that, he asked both to come up and asked if they had anything to say to their family and friends – also victims and media.
“I’m so sorry for putting you through all this,” Allen said.
Cox said, “I believe my God is still on the throne and is still good.”
Biery asked Cox about the Ninth Commandment about bearing false witness. Then he listed the following Scripture verses for Cox:
- Proverbs 21:3 – “To do what is right and just is more acceptable to the Lord than sacrifice.”
- Matthew 12:12-17 about Jesus and the moneychangers.
- Matthew 5:7 – “Blessed are the merciful, for they shall obtain mercy.”
Biery asked Cox if he had mercy for one of the victims who lost money he needed for a kidney transplant. Cox did not respond.
“Forging signatures – would that be merciful to your fellow Christians?” the judge asked.
Biery asked Allen about testimony about forged documents and if all his income was reported to the IRS. Allen invoked his Fifth Amendment right to stay silent.
Biery also pointed out that Allen’s dad is a CPA and the profession has standards, adding this has got to be disappointing to Allen’s father.
Blackwell was asked if he thought the men should be taken into custody. The prosecutor felt both were flight risks, had financial means and were facing long prison sentences. Then he mentioned a forged document Allen made connected to victim Pamela Herndon that she said last week in court she didn’t sign.
“Mr. Allen tried to obstruct, showing contempt for the court and both should be remanded,” Blackwell said.
(Remand means to send or send back to custody.)
Anthony Box, Allen’s lead attorney, said Allen has been free the entire time, had no violations, is not a flight risk and should remain on bond.
Michael Gross, Cox’s attorney, also told the judge his client is not a flight risk or danger to the community “given his exemplary conduct.”
“The court has also heard of their non-exemplary conduct and they are now convicted felons,” Biery said.
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Before the judge dismissed the jury he told them about Brooklynn Chandler Willy – Allen and Cox’s San Antonio affiliate. She pleaded guilty to ten federal charges in Biery’s court in March.
Her guilty plea was not mentioned during trial because before the trial began the defense asked to “prevent any alleged co-conspirator statements,” hearsay or testimonial statements.
During the discussion about remanding Allen and Cox, Biery said Willy remained on bond because she accepted responsibility and pleaded guilty.
“She turned around to her victims and showed remorse. She could have refused,” Biery said.
Neither Allen or Cox have accepted responsibility or shown remorse, the judge said – or “not what I’d call genuine remorse.”
Biery ordered them into custody. The marshals immediately took Allen and Cox out a door to the right.
Closing arguments
Before the jury came back with a quick verdict in the Ferrum Capital trial, attorneys made their closing arguments Tuesday morning.
Here’s a quick look at what they said:
Prosecutor Joseph Blackwell:
- What Allen and Cox did to people was “despicable,” said Blackwell, using a word from victim Pamela Herndon on the witness stand last week.
- The defendants “robbed Peter to pay Paul,” he said referring to money coming in from one investor to pay another.
- They had choices to tell the truth or lie and consistently lied, he said.
Allen’s lead attorney Anthony Box said:
- The government did not prove his client’s intent beyond a reasonable doubt.
- Why would Allen get his mother-in-law involved in a nefarious business?
- Why did they choose to go to the FBI?
- Why wasn’t Collins Asset Group on trial, instead of Allen.
Eddie Mendoza, another Allen attorney, said:
- Bad things happened, but it wasn’t proven Allen did it.
- The government did not answer what he said were important questions, leading to what he called “evidentiary breadcrumbs” that should lead the jury to reasonable doubt.
Michael Gross, Cox’s attorney said:
- The jury’s instructions showed they could use character – Cox’s Monday defense was five people who praised him – which could help create reasonable doubt.
- Gross also questioned what happened in Ferrum’s back office, saying Cox didn’t work there – casting aspersions on Allen and his mother-in-law, Connie Curry, who handled administrative details.
Blackwell rebuttal:
- As to Collins Asset Group, Blackwell pointed out it had nothing to do with Ferrum II and Ferrum IV, repeating there was more than enough evidence for the jury to convict the men. The jury agreed a few hours later.
Cox’s family was distraught and left the courthouse surrounded by supporters.
Outside, two married couples from Lubbock who lost money talked to LubbockLights.com.
Retired dentist Jay Adkins privately recorded Allen when he started to have concerns and was the prosecution’s final witness Friday.
He’s known the Allen family for years.
“I’m actually relieved. I might let go of some of my anxiety and anger because I think the jury made the right decision. They’re going to have to pay the consequences of the unethical choices they made,” said Adkins.
“But it’s a sad situation. I feel bad for Josh’s family. I feel bad for Mike Cox’s family. But I think when they were remanded it showed how serious the judge felt the charges were,” he added.
His wife DeeDee said, “I thought it was handled well on both sides. I felt like both defendants had an opportunity to have their stories told,” she said, adding she was surprised the verdict came so fast.
“You hear the wheels of justice turn slowly,” she said, referring to how long it took to build the case.
“Once they got the pieces together, it fell into place and showed the story,” she said, adding “the verdict seemed fast today and I’m sure it felt fast for the defendants.”
Terry Hunter was in court with his wife Susan.
“Relief to see it come to an end … feel like justice was done. The jury definitely didn’t take very long to deliberate. I didn’t think they would given the evidence they were given,” he said.
“I think the judge, the words he read before he read the verdict and … afterwards, I thought those were very, very strong, meaningful words. I’m just elated this part is over,” he said.
Susan felt vindicated.
“We didn’t get to tell our whole story on the witness stand. I was shocked they even wanted a jury trial, didn’t plead guilty and own up to everything they’ve done,” she said.
“I’m just glad the system worked,” she added.
Susan mentioned talking to Allen when they got bankruptcy notices mentioning Cox.
“Who is Mike Cox?” she said they asked Allen.
“Oh, he’s a good guy,” she said Allen said. “And I said, ‘Well, so was Benny Judah.’”
They then asked Allen how they could pray for him.
“And he said, ‘Just pray for the truth.’ I said, OK and that’s what we’ve been doing. We’ve been praying for the truth and he got it,” she said.
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Terry Hunter referred to the judge’s words before the verdict was read in court – starting with his way of thanking the jury.
He asked if people remember Johnny Carson, who hosted “The Tonight Show” on NBC from 1962 to 1992. Carson had a bit called “Carnac the Magnificent,” where he would hold up an envelope and say the answer for the question in the envelope.
Biery held the manila envelope with the jury’s verdict up to his head.
“It’s the right answer because this system works. I have great faith in the wisdom of the jury. I’ve been doing this for 48 years,” he said, mentioning he’s only had to take over a trial three or four times.
“You have a collective wisdom from the 14 counties region,” Biery said.
He told the jurors they learned about forensic accounting and then said if you have your money in a safe investment at 4 percent and someone offers you 12 percent and it seems too good to be true, it probably is.
Biery told the story of a school friend of his named Fred May, who he called “the straightest of straight arrows.”
After a decorated military career he got into investments and, Biery said, got greedy. He took $500,000 from Henry Cisneros, former San Antonio mayor, but kept it because he wanted a bigger house. Cisneros got his money back because the investment firm was bonded, but May went to prison.
“Don’t lie, cheat or steal and you’ll be OK,” he said before the verdict was read.
