Gary L. Seale left a trail of furious business clients, frustrated tax collectors and more than $1 million in unpaid court judgments April 30.
That’s when he reportedly raised a gun in front of deputy federal marshals attempting to arrest him.
Shots were fired, and Seale, 58, died at the rural 32-acre property he owned at 12580 Milldale Road near Zachary.
Seale’s death occurred on the day he was scheduled to plead guilty in a federal wire fraud, tax fraud, bank false statement and money laundering case involving more than $700,000.
The problem for the alleged victims is that Seale died without honoring his agreement to plead guilty. Judging by precedent court cases, it will be difficult, if not impossible, for the victims at this point to receive restitution.
“There is no such thing as the ‘golden years’ for us,” said Zachary resident George Norwood Jr., 58.
Norwood sold a small business to Seale, who was judged to have failed to make promised payments. For five years, Norwood attempted unsuccessfully to collect from Seale a court judgment of $434,367 and attorney fees of $130,000.
“It hurts and angers me to no end, and there seems to be nothing we can do to get what rightfully and morally belongs to us for our final years,” Norwood said.
Norwood said a degenerative disc disease prevents him from working. He said his wife, Yvonne, 60, suffers from pulmonary fibrosis, a potentially fatal disease.
“There is no way in hell I can afford to spend any more money chasing after his (Seale’s) assets,” Norwood said, adding that he and his wife live on disability payments that total $2,000 per month.
“The laws need to be changed,” Norwood said, adding that he had hoped federal investigators would trace Seale’s transfers of assets in order to obtain restitution.
In Livingston Parish, Dennis M. Lee and his wife, Monica, said they lost $15,500 to Seale in 2006, when they handed him a check as a deposit on a janitorial service Dennis Lee considered buying.
“We lost $15,500 to him, and it was bad,” said Monica Lee, 46, who works as a hairdresser. “We’ll never recover anything.”
Dennis Lee said in a 2006 civil suit in 19th Judicial District Court in Baton Rouge that Seale never returned the money after Lee decided against buying the janitorial service.
On Friday, Dennis Lee, 48, said Seale promised the money would be returned if Lee decided against the purchase.
That deposit included $15,000 from Lee’s retirement account and a $500 penalty for early withdrawal of the funds, the suit shows.
State District Judge Janice Clark awarded all $15,500 to Lee on Oct. 6, 2006.
But Lee, who works at a chemical plant, said Seale proved difficult to track. Lee also said it was impossible to collect a dime from the man.
“At first, he (Seale) said: ‘It’s only going to be a couple of days,’ ” Lee said. “His promises didn’t mean anything. You tried to find him. You never could.”
Death ends all
Two decisions by the 5th U.S. Circuit Court of Appeals in New Orleans make it clear that federal court orders for victim restitution cannot be enforced against even jury-convicted felons if they have not exhausted their appeals.
Those decisions involved an alleged $1.3 million mail fraud in rural Texas and the $62 billion collapse in 2001 of Houston-based Enron, the so-called “crooked-E corporation.”
Law school professors in Baton Rouge and New Orleans said the rules from those two decisions apply in Seale’s case. Seale may have broken an agreement to plead guilty, but he was never convicted. And that means anyone holding an uncollected money judgment against Seale would have to spend more cash on a civil suit against Seale’s estate — with no guarantee the judgment could be collected.
“A plea agreement with prosecutors lays out the terms for a deal, but it cannot be enforced to require someone to plead if they change their mind,” said Tulane University law professor Tania C. Tetlow, a former federal prosecutor.
Because of Seale’s death, Tetlow said, “There is no conviction and thus no legal basis for restitution.”
Ken Levy, a criminal-law professor at LSU’s Paul M. Hebert School of Law, said none of the unprosecuted criminal allegations against Seale would be admissible in such civil suits against Seale’s estate.
“They (plaintiffs) will not be able to use Mr. Seale’s criminal indictment or the fact that he almost pleaded guilty as evidence of his wrongdoing,” Levy said. “Because Mr. Seale’s (criminal) case will be (thrown out), it is as if he had never been indicted in the first place.”
By a 9-6 vote in 2004, the 5th Circuit erased the Texas arson, mail fraud and money laundering conviction of Andrew Clyde Parsons, who died before his appeal could be decided.
The same decision nullified a federal judge’s order that Parsons pay $1.3 million in restitution to an insurance company that Parsons’ jury decided had been defrauded.
Two years later, U.S. District Judge Sim Lake, of Houston, cited the Parsons case when he erased the conviction of former Enron Chairman Kenneth L. Lay on bank fraud, securities fraud, wire fraud and conspiracy charges.
Lay died six weeks after his conviction, but before he was sentenced. He never filed an appeal.
A three-judge panel of the 5th Circuit upheld Lake’s decision in Lay’s case, and the U.S. Supreme Court declined to hear an appeal by an Enron investor of the 5th Circuit’s decision. The 5th Circuit’s decisions rule federal court cases in Louisiana and Mississippi, as well as Texas.
A grand jury indictment, obtained in June 2010 in Baton Rouge federal court by Assistant U.S. Attorney Corey R. Amundson, alleged that Gary Seale defrauded business clients of $500,000 in deposits and investments by 2009.
Seale also was alleged in the indictment to have used false statements to persuade Banco Popular to grant a $900,000 loan, guaranteed by the U.S. Small Business Administration, to a business partner, Paul S. Hickman, of Greenwell Springs.
The scheme enabled Seale to use $200,000 of the bank’s money as a cash infusion that was supposed to have come from Hickman for the purchase of three businesses, federal court records show. Hickman and Seale then became the new owners of those businesses, according to Hickman’s court-filed admission.
Hickman pleaded guilty to one count of failure to report a crime in the Banco Popular scheme, and agreed to become a prosecution witness against Seale.
Hickman, 47, was sentenced this month by U.S. District Judge James J. Brady to two years of probation.
Amundson, the prosecutor, said Friday: “This criminal investigation is concluded. Efforts to locate recoverable assets continue.”
Seale’s indictment also accused him of filing false income tax returns for 2004 and 2005. The indictment alleged that Seale falsely reported zero income in 2004.
For 2005, Seale reported income of $87,203, the indictment alleged. The indictment did not estimate Seale’s income for that year, but alleged it “was substantially in excess of that.”
Seale’s alleged fraud victims are not the only people suffering because of his death.
Reached by phone, Vicki Seale Humphreys, 56, of Baton Rouge, became emotional and would not talk about her brother, except to say: “He was a nice guy, and he didn’t deserve to be murdered like he was.”
Asked about that comment, U.S. Marshal Kevin Harrison said his office “hasn’t received any complaint from any (Seale) family member.”
Harrison added: “I don’t feel the need to dignify that (Humphreys’ allegation) with any kind of response. I stand by my original statement that my guy did what he had to do to defend himself and other members of law enforcement.”
Harrison said he asked the East Baton Rouge Parish Sheriff’s Office on April 30 to independently investigate the shooting because all shootings by deputy marshals must be investigated.
Casey Rayborn Hicks, spokeswoman for the Sheriff’s Office, said Friday no final report has been released. She said the investigation remains open but is nearing completion.