Wisconsin’s attorney general is asking an appellate court to overturn a contractor’s conviction on nine felonies of theft, fraud and embezzlement because the prosecutor secretly demanded the victims pay the cost of a key expert witness.
“It’s rare for the state to make a full confession of reversible error in a criminal appeal,” said Bill Cosh, a spokesman for Attorney General J.B. Van Hollen. “We can often argue that if error occurred, it was harmless. We could not make that argument in this case.”
The 2nd District Court of Appeals has not yet ruled on the case.
At the center of the case is Beth Reeves, wife of Arthur Reeves and co-owner of Reeves Custom Builders, Lake Geneva. She is appealing her conviction in Walworth County, saying the requirement that victims pay for the expert witness is a violation of established public policy.
The case involves three Lake Geneva home renovation projects and payments made between 1999 and 2002, according to court records. The core allegations are that Beth and Arthur Reeves misappropriated payments made by the homeowners.
The Reeves’ business had been in operation for more than 20 years but filed for bankruptcy in 2009, said Randall Leece, a lawyer representing the Reeves in civil lawsuits.
The first homeowners to sue were Lawrence and Sally Rayner. They filed a civil lawsuit against the contractor in 2001.
Burt and Judith Eisenhour filed a similar lawsuit in 2002. The owners of the third home, Charles and Linda Goes, have not filed a civil lawsuit against the contractors.
All of the homeowners and their attorneys were unavailable to immediately comment.
Leece said the Rayners were not awarded damages after a trial. The Eisenhour case is pending.
According to court records, the Rayners filed a criminal complaint, and police investigated for two years before referring the case to the Walworth County district attorney’s office. Two prosecutors reviewed the case and refused to issue charges, citing the cost of bringing the case and that the complaint was more civil than criminal in nature.
After a third review, District Attorney Phillip Koss issued criminal charges against Arthur and Beth Reeves. They both were charged with three counts of theft by contractor, three counts of theft by fraud and three counts of embezzlement. Arthur Reeves also was charged with forgery.
In depositions, Steven Madson, an assistant district attorney handling the case, testified he knew the prosecution would require a forensic accountant and the county could not afford to hire one.
After the preliminary hearing, according to court records, the prosecutor met with the three victims and told them the county would contribute $5,000 to the cost of the expert witness but that the homeowners would have to pay the remainder. The homeowners agreed, according to records.
Representatives from the Walworth County district attorney’s office were unavailable for comment.
A week before the criminal trial began in January 2008, Madson and Koss told the three couples the case would not go to trial without an agreement the homeowners would pay a total of $46,000 for the expert witness, according to court records. One of the homeowners refused, but the other two agreed.
After two days of a 10-day trial, Arthur Reeves entered a guilty plea. Beth Reeves continued to fight the charges, asserting she had little to do with the operation of the business, according to court records. The expert testified that, in his opinion, Beth Reeves was intimately involved in the business. She was convicted of all charges.
Beth and Arthur Reeves received identical sentences of five years in prison with all but 90 days stayed.
The prosecutors did not tell the defense lawyers or the jury the homeowners were paying for the bulk of the cost of the witness, according to court records. That information did not come out until the state sought restitution from Beth Reeves in a motion after the trial.
The judge, according to court records, said the information should have been revealed to the jury and the defense but did not overturn the conviction.
In addition to the expert witness fees, the court ordered the defendants pay the Rayners $90,637, the Eisenhours $57,644 and the Goeses $132,076 in restitution related to the criminal charges.
Walworth County filed a lawsuit against the Goeses in 2009 seeking $11,129 when they refused to reimburse the county for their share of the expert witness cost. That case was dismissed.
Defense lawyer Michael Fitzgerald argued, according to documents in the appellate court file, that prosecutors in the case abdicated the independence central to criminal justice. Private prosecutions, he argued, owe no allegiance to society as a whole and are bad public policy.
Cosh said the Attorney General’s office agrees the error is grounds for overturning the conviction of Beth Reeves.
The case raises troubling legal issues, said Chris Ahmuty, executive director of the American Civil Liberties Union of Wisconsin.
“Supposing the homeowners didn’t have the money to pay the state’s expert witness,” he said, “would justice be denied?”