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August 29, 2001 DAWN HOUSE Attorney Responds To Charges; Claims he was victim of outlaw broker; Attorney Faces Charges Of Fraud Attorney Paul Young says he remembers getting stuck with the bill after businessman Kirk Koskella promised an all-expense-paid trip to the Isle of Man to introduce Young to offshore banking. A few months after traveling to the historic island off Britain, Koskella abruptly packed up his Springville office he had rented from Young, leaving Young with months of unpaid rent and long-distance telephone calls. Young says his practice took another financial hit when his partner left to work for Koskella. Still, when Koskella's mother and wife pleaded with Young to return to the Isle of Man to represent Koskella, who had been arrested and was supposedly being tortured, Young says he agreed. Young got stiffed again, he says in an affidavit detailing his contacts with Koskella, a burly, boyish looking businessman Young says passed himself off as a former officer in the Korean military, CIA operative, sheriff's deputy, martial-arts expert, movie producer, actor and financial consultant. But rather than an unwitting victim of a skilled manipulator, prosecutors believe Young was a willing participant. Koskella, 43, pleaded guilty last December to defrauding the government and investors out of millions of dollars in a conspiracy that allegedly involves five other Utahns -- including Young. "I always told my clients that I knew how they felt when they had been charged with a crime," says Young, who continues to practice law in Springville while his own case is pending. "I was wrong. I had no idea." A grand jury indictment accuses Young, Provo attorney Ozy J. Neeley, accountants Stacie Batemen and Chad L. Mercia and Utah County residents Rebecca Zabriskie and Kevin Crockett of encouraging clients throughout the United States to put their assets in bogus offshore "trusts" to conceal incomes from the Internal Revenue Service. The charges also allege that the defendants, working through Anglo-American Investments Ltd. and Anglo-American International, defrauded more than 50 people in several states of an estimated $ 15 million. Documents in the case are so voluminous that prosecutors have agreed to place all the information on CD-ROMs. In a hearing before U.S. District Magistrate Sam Alba on Tuesday, attorneys said the digital imaging should be completed by Friday. Because of the complexity of the case, the trial has been postponed indefinitely. Motion and status hearings have been scheduled for early October. Koskella has admitted to leading the criminal conspiracy, and has promised to testify against the other defendants. He faces up to 10 years in prison. Young maintains he did legal work for Koskella, but was never involved in any of Koskella's business dealings. Koskella is living out-of-state and was unavailable for comment. His attorney, Douglas McNabb of Houston, said his client is fully prepared to testify against Young. "We have agreed that [Koskella] was an an organizer or leader of the enterprise," says McNabb, "but that certainly doesn't negate the culpability of his co-conspirators." This month, the Securities and Exchange Commission accused Koskella and Neeley of taking part in an unrelated scheme of issuing $ 500 million in phony corporate bonds. The pair claimed the bonds were backed by assets of JMC International Inc. and Northstar Corp., but the SEC says no such assets exist. The two also tried to use the bonds as collateral for buying stocks on margin, says Dan Gregus of the SEC's Chicago office. (Neeley maintains his innocence and McNabb says he has no comment on the SEC accusation at this time.) Young says he accepted the invitation to the Isle of Man because his wife had "never been any farther east than Utah." During the trip, however, Young said his wife informed him of overhearing Koskella telling another man that taxpayers could get out of paying any taxes by opening trust accounts. Young says when he confronted Koskella, he was assured that his wife had been mistaken. "I became suspicious but Koskella was absolutely convincing," Young claims. Young returned to the Isle of Man after Koskella had been arrested there in March of 1997. Koskella eventually was freed from jail after paying back three disgruntled investors, according to Young. Young says he agreed to move into Koskella's Provo office to recoup some of the money owed him and because Young was struggling to support his large family of nine daughters and one son. In November 1997, Young says a couple asked him to assist them in transferring by wire $ 750,000 through his attorney trust account. Young says the couple told him they had assigned power of attorney to Koskella's company, Anglo American, and that Young was to prepare checks in order to distribute the funds -- at Koskella's direction. "I was a little concerned that the funds, as per the checks, had been distributed to some unusual payees and not to some account offshore," says Young. "However, since I had not distributed funds offshore before, I had no idea how to do it or to what source it would be sent." The following January, Young says, his bank informed him that he was $ 50,000 overdrawn. Koskella paid $ 30,000 of the overdraft and a couple of days later, the entire balance, according to Young. "The whole episode cost me my account at the bank," says Young, "was reported as a banking incident, and once again stressed out my life and that of my family." | |