May 8, 2010 in City
Officer accused of using divorce to hide assets
Prosecutor in Zehm case wants jury to know about ‘fraudulent transfer’ to ex-wife
Spokane police Officer Karl F. Thompson Jr. divorced his wife to shield his assets and force taxpayers to foot the bill for his criminal defense, the federal prosecutor in the Otto Zehm case alleged in court documents filed this week.
Assistant U.S. Attorney Tim Durkin filed a motion asking U.S. District Court Judge Fred Van Sickle to allow the government to tell the jury in Thompson’s upcoming trial about the divorce agreement, which Durkin called a “fraudulent transfer” under Idaho law.
Thompson’s attorney, Carl Oreskovich, called the fraud allegation “unsubstantiated.”
What’s more, he said, federal agents are pressuring other Spokane police officers to testify against Thompson by continuing to investigate their roles in the 2006 confrontation that resulted in Zehm’s death.
“I think they are trying to put incredible pressure on this defendant to not exercise his right to go to trial,” Oreskovich said. “I think the government is putting pressure on any witness who is potentially exculpatory for Karl Thompson.”
Zehm, a mentally ill janitor, was confronted by Thompson and other police officers in a North Division Zip Trip on March 18, 2006. He was beaten with a baton, shocked with a Taser and hogtied for 17 minutes before he stopped breathing; he never regained consciousness and died two days later.
Durkin could not be reached for comment; he has repeatedly refused to comment about any aspect of the case.
But he wrote in the motion filed this week that “there is evidence to raise the presumption that (Thompson’s) unopposed divorce was a fraudulent transfer of assets made to protect (Thompson) from a judgment in the civil case … and made for the purpose of fabricating non-existent faux divorce financial obligations that would make defendant eligible for appointment of counsel at public expense.”
Thompson, who faces federal felony charges of using excessive force and lying to investigators, filed for divorce on Sept. 3, 2009, after a $2.9 million civil rights lawsuit had been filed on behalf of the estate of Otto Zehm by the public interest law firm Center for Justice.
As part of the divorce, Thompson gave his wife of 38 years, Diana, all interest in the couple’s log home on two acres in Hayden, which was listed for sale last year for $675,000.
The agreement also calls for the ex-wife to receive half of Thompson’s retirement plan through the city of Spokane and all of his money in a deferred compensation plan. The agreement also requires Thompson to pay for all community debts and give his ex-wife $1,500 a month in spousal support for life.
The house is no longer for sale and Thompson continues to live there rent-free with his ex-wife, Durkin said in the court filing.
He argued that under Idaho law Thompson’s transfer is fraudulent because it was made to an insider; it was made after Thompson had been sued; it included substantially all his assets and Thompson became “insolvent.”
Durkin wrote, “If Thompson puts his character at issue, then the jury is entitled to hear the facts of Thompson’s divorce and fraudulent transfer because they directly implicate his character for truthfulness.”
But Oreskovich, who has filed a motion seeking to exclude any mention of the divorce, denied his client engaged in a fraudulent transfer to his ex-wife.
“I’m not going to get into the circumstances of Karl Thompson’s divorce, but I will say there is no evidence whatsoever that supports Mr. Durkin’s unsubstantiated allegations,” Oreskovich said.
Kootenai County Prosecutor Barry McHugh reviewed Durkin’s allegations, which he said are part of civil law.
“Based on what I read in the (Durkin) briefing, I don’t see anything that rises to the level to request an investigation as a criminal matter,” McHugh said Friday.
The dispute over the admissibility of the divorce details is just one of many motions brought by both sides, which the judge must decide in a hearing on May 17.
Another hotly contested issue is Durkin’s request to be allowed to show the jury a three-dimensional, computer-animated re-creation of the Zip Trip store and the confrontation between Zehm and Thompson, which was captured by four surveillance cameras.
The animation was created in two stages, according to court records. In the first stage, the Special Projects Unit of the Federal Bureau of Investigation made detailed measurements of the convenience store and the locations of the four surveillance cameras. Based on those measurements, technicians created a virtual model of the store that was built to scale, Durkin said in court records.
For the second phase, Chris Villa of Vital Distractions inserted individual frames from the security videos and layered digital versions of Thompson, Zehm and Officer Steve Braun Jr. Villa then went frame by frame and created “for each of the four camera angles a version of the animation that superimposes the actual video footage over the animation,” Durkin wrote.
Oreskovich has sought to exclude the animation partly because it purports to show a three-dimensional image based on two-dimensional camera footage.
“I think the government has taken great liberties in terms of filling in the blanks of what’s not shown on the video,” Oreskovich said. “It’s … a re-creation that is not supported by evidence. It’s inflammatory and in my view designed to prejudice the jury and prevent Karl Thompson from getting a fair trial.”