Kenneth W. Watford says he is here because of an injustice.
Sitting on the other side of the sloppily caulked double Plexiglas window, his wide face and short cropped hair flecked with gray leaning into a flat microphone and speaker affixed to the wall, he says he resides at the Baltimore City Correctional Center because of a series of bad acts by a judge who sent him to jail instead of releasing him on his own recognizance.
“My lawyer was completely blindsided,” Watford’s tenor voice says through the old-school phone receiver on my side of the divide. “You can see it on the transcript. He was saying he had no time to prepare.”
Of the underlying charges involving fraud, identity theft, a semi-automatic pistol, and several expensive cars, Watford says he is innocent. The whole thing—the arrest, the search of his house by federal agents, the criminal complaint in federal court—stems from a misunderstanding about his business dealings and, indeed, about the way business works.
So important are the fine points of business law to Watford’s defense, in fact, that he has petitioned the court to allow him to hire a corporate law expert. “The defendant is of the opinion that his defense of this case rests in the area of corporate law and undersigned counsel does not have sufficient expertise in this area of law to properly defend him,” reads a recent motion from Watford’s court-appointed criminal defense attorney, Marc Hall.
And the gun was his nephew’s, Watford says: “He signed an affidavit.” He can explain everything.
Always keen for a good wrongly accused story, I researched Watford’s explanations as far as I could. What I found surprised even the legal experts I consulted—but not necessarily for the reasons Watford might expect.
From what I could unearth, Watford’s business dealings include a tiny North Carolina grocery store, a brace of small electronic repair shops (one of which Watford apparently operated under the name Warford), a corporation that he alleges paid him six figures during a time when he was filing repeated bankruptcy petitions, and a technology-business-turned-interstate-transport company that, for a moment at least, may have had a piece of a $1.5 million Baltimore City contract.
Watford’s identity as a businessman and the status that confers on him is integral to his narrative. In America, business owners are revered as job creators while others are held in lower regard. And the U.S. confers awesome rights to businesses, beginning with limited liability and tax advantages and extending up to and including a form of constitutional personhood that practically eclipses that of flesh-and-blood humans. Businesses are immortal legal alter egos that, unlike mere people, can give unlimited funds to political campaigns. They can conceal one’s personal identity or magnify it; they can borrow money and discharge the debts in bankruptcy—and that’s all regardless of whether they turn any profit. The status and privilege a corporate charter confers is valuable and, like anything of value, is subject to theft and abuse.
The question of Watford’s guilt or innocence would seem to turn on the intersection of corporate personhood and personal identity—a fragile and malleable thing that, also, is increasingly vulnerable to hijack by digital thieves.
Whether Watford is the perpetrator of such thievery or a victim is the central question for his upcoming trial, currently scheduled for Dec. 2.
Watford first called me from the jail a half mile from City Paper’s downtown office on July 7. His story was convoluted to the point of incoherence, but breaks down like this:
Watford’s business partner (who he knew only as Tsedale Zewdie) is the reason he was caught with this stolen car to be used in his limousine service.
That man made a deal with Watford such that Watford would lend the name of one of his companies—Annie M’s Grocery—to Zewdie’s credit, and supply him with a commercial-vehicle insurance policy, in order to facilitate Zewdie’s business plan, which was to open his own bus or limousine company. “I put him on my company,” Watford said. “I made him a director.”
Watford said prosecutors won’t allow the record of this contract—the record that supposedly proves that Watford was only acting as a kind of co-signer on an automobile insurance policy for the person who really stole the identity of an innocent person—to be entered in his defense. (I tried to reach Zewdie, who the feds identify as a woman, at a listed number in Milwaukee, without success. Perhaps coincidentally, someone by that name collected nearly $11,000 on the payroll of the University of Maryland in 2008.)
Police raided Watford’s house without a proper warrant, Watford said. “And they sell us to this jail.”
Even while he was on the phone on that first call, I could see in the online file of state criminal court records that this was not Watford’s first rodeo.
Arrested at various times and charged with passing bad checks, theft, grand theft, and identity theft, including forgery and counterfeiting of private documents, Watford was convicted of grand theft and received a five-year sentence, with all but about six months suspended, in 2005. He received three years’ probation and was ordered to repay CitiFinancial $5,000.
In total, before the current charges, Watford was charged with document forgery and theft relating to the same in Maryland on no less than three occasions between 2005 and 2012.
I mentioned that to him. “All my criminal records previously I was found not guilty,” Watford protested. “What’s that mean when you are found not guilty?”
Watford also said the feds had placed a false charge on him, including in his criminal history a 1990 drug conviction of a man with a similar name who used “Kenneth Watford” as an alias. “Is my name Warren Willie Watford,” he asked. “Was I born in 1968?”
I told him I’d look a little harder. In examining the federal case I found he was convicted in Virginia in 1996 for fraudulent use of a credit card, and that, along with the Phoenix Arms .25 loaded with 15 bullets, the cops reportedly found credit reports and other documents in his house in Zewdie’s name and “the names of other possible victims.”
In our second phone conversation, on July 10, I told Watford the federal case against him looked tight. “If I had known you were a reporter working for the government I would never have called you,” he spat. “You’re a reporter that believes every black person is guilty!”
He says he’s 54 years old, a statement that matches the available public record. “I’ve seen a lot of things,” he said. “As a businessman.”
What business, I asked.
Annie M’s Grocery in Merry Hill, North Carolina, Watford said. Understanding Annie M’s is the key to understanding everything that happened.
The jail’s media-access policies being what they are, I had come to the CDF on July 17 posing as a friend. The sign just past the metal detector in the fully tiled waiting room says “Repent Thank Y u” and the guard says she’ll be by when the visit is over. Watford wanted to give me paperwork he says would prove his innocence, but he could not do that under the conditions of my visit. His lawyer declined to speak to me, beyond a cursory discussion of the charges, saying it would not be in Watford’s interest.
By the time of our first encounter one of Watford’s co-defendants had pleaded guilty. On March 27 Flinton Newton, age 34, was sentenced to 42 months in prison for his part in the scheme, and at the bottom of the press release said his prosecution was “part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.”
Established in 2009 by Executive Order 13519 “to investigate and prosecute significant financial crimes and other violations relating to the current financial crisis and economic recovery efforts,” the Financial Fraud Enforcement Task Force was widely thought to be aimed at the bankers, hedge fund crooks, and mortgage companies that collectively stole trillions of dollars from America.
Instead, it has fallen like a million-ton hammer mostly on run-of-the-million pyramid schemers, retail-mortgage fraudsters, and, apparently in this case, random knuckleheads with color copiers and an unrealistic fondness for Mercedes-Benz.
Indeed, the case against Watford, outlined in a superseding federal indictment and the affidavit by U.S. Secret Service Agent Jamie Hamel unsealed as part of the case, looks as comical as it does forbidding.
According to the feds, Watford is part of a group of identity thieves who used other peoples’ credit to purchase (or attempt to purchase) nine luxury cars in June and July of 2012. The ruse was discovered when a routine credit check flagged the identity of an Ohio resident identified as “E.K.” (the feds just use initials of the identity theft victims), and police—and agents of Homeland Security—moved in right after.
On July 19, 2012, Newton (posing as “E.K.”) and Juan Carlos Willis were arrested at Mercedes-Benz of Silver Spring. They had driven up in a brand-new Escalade and tried to buy two new Mercedes 550s costing about $80,000 and $100,000 each. Turns out they had just done the same thing at the Cadillac dealer, financing the Escalade’s full purchase price of $80,663.48 and driving their prize straight to the Mercedes dealership.
Willis said they were buying the cars for his company, Greenlight Entertainment. But for some reason, the insurance policy was in the name of Annie M’s Grocery in Landover, Maryland. The Mercedes dealer spotted a fraud alert on E.K.’s credit report and called him in Ohio. E.K., who according to the feds’ affidavit is a white man, confirmed that he had not purchased a Cadillac in Maryland. Asked later by law enforcement, he made it clear he did not know Willis or Newton, then posing as his African-American doppelganger.
Turned out Newton had been busted three months before in North Carolina using E.K.’s identity. He even had his cable TV in E.K.’s name, according to the feds.
The police soon found more bad paper and pending sales and the kind of mess that always seems to complicate criminal investigations like this. The manager of another dealership told them his salesman was friendly with the alleged thieves, having met them at a nightclub. Two Mercedes and a Jaguar bought by the same crew in early June using the identity of an R.B. got returned the day after they were driven off the lot, and the sale reversed, after the manager told his salesman that if the cars didn’t come back he could “lose his job.”
Confined to Montgomery County lockup, Willis told the cops that Newton and Watford supplied the fake names and identifications of people with good credit.
He told members of law enforcement that he had also bought another BMW—a 2011 model 750 costing $79,452.77—under Watford’s direction, using the identity of a Wisconsin resident identified as T.Z.
On July 25, 2012 the cops raided Willis’ father’s home in Landover, where Willis was residing in the basement. They found documents related to the car purchases there, as well as “three Questionnaire for National Security Position Standard Forms (SF 86) in other people’s names.”
Willis then told the cops that he was present for the BMW purchase along with Watford and a guy named Ronnell “Nelly” Jones (who has not been charged). And he told them there were two more Escalades “on hold” at Capitol Cadillac in the name of T.Z. awaiting the $7,000 down payment required by the loans’ terms.
Police found Watford the next day at the wheel of the purloined BMW at the Bowie Public Library on Annapolis Road. “When taken into custody, WATFORD stated that the car was not his; however, stated the items inside were,” the feds’ affidavit says. On the seat was a black notebook full of various documents, including a Social Security card and drivers license with Watford’s picture on it in the name of Abdul Abrams.
According to the affidavit, “WATFORD claimed that Abrams was a ‘good friend’ who was the registered agent for his company, Annie M’s Grocery, LLC. Agents then confronted WATFORD with the social security card and driver’s license bearing Abdul Abrams’ name but WATFORD’s picture. Watford’s response was merely ‘OK.’”
Watford’s association with Annie M’s Grocery is curious at best. According to records on file at the North Carolina Secretary of State, Annie M’s was incorporated on October 15, 2009, as Ram Food and Gas LLC, by Legalzoom.com Inc. of Los Angeles, California, one of many on-line companies that for a small fee will file incorporation papers for anyone who wishes to conceal their identity. Ram Food’s principle office was established on North Curtis Street in Ahoskie, North Carolina, in Hertford County.
On Sept. 16, 2011, Ram Food and Gas’ name was changed to Annie M’s Groceries by Abdul Abrams, a member of the LLC. On Nov. 9, 2011 the address was changed to 137 Hwy 45 North, Merry Hill, NC in Bertie County. Abdul Abrams then became the registered agent as well.
I looked for an Abdul Abrams in North Carolina, but found them only in New York and Bowie, Maryland, the latter one certainly aka Kenneth W. Watford.
In December of 2011 the North Carolina Secretary of State warned that Annie M’s corporate charter would be administratively dissolved if it did not file the requisite annual reports. In early 2012, Annie M’s was dissolved.
Then on June 26, 2012—just as three African-American men were making the rounds of Capitol area luxury car dealerships and passing themselves off as two men and a woman from out of state, Annie M’s Groceries in Merry Hill North Carolina was revived. Three years of overdue annual reports appeared, and they included a new member of the LLC: Joining Abdul Abrams was Tsedale Zewdie, of 137 Hwy 45 N. in Merry Hill, N.C.
The email of the company’s principle office: email@example.com.
This was one month to the day before Watford would be arrested in the BMW.
A search for Annie M’s business address pulls up a Google Street View that depicts an empty stretch of road, forested on both sides. The nearest intersection has nothing resembling a store, and the nearest country store – on Taylor Store Road—appears abandoned.
As this story went to press I found, in a bankruptcy filing, the promissory note Watford signed to buy that store and another parcel from Harry Delbert Taylor in 2009. The total cost was to be $34,000. In 2013 Taylor told the court that Watford had never made even one of the $480.55 monthly payments.
In short, I could find no evidence indicating that Annie M’s is anything more than a corporate shell meant to create the on-line or paper illusion of an actual business. I could be wrong, of course. But it turns out that companies get founded (and even hijacked) all the time by people wanting fast, bogus credit.
Anyone in the country can incorporate a business, pretty much in any state, for no more than a few hundred dollars. In Maryland it costs just $100 to form a Limited Liability Company, or LLC.
America, home of the free, is the ultimate pro-business utopia. Despite what you might hear from the Heritage Foundation or the U.S. Chamber of Commerce about “burdensome regulations,” the United States is one of the most lightly regulated places in the world in which to do business. And that light touch begins with this: In America—at least in most states—the Secretary of State does not even check your identity when you reinstate a company that has been forfeited for nonpayment of taxes or fees.
“We don’t do any background checks to make sure you’re the original person,” says Eric, the man I spoke to at the North Carolina Secretary of State’s office.
This practice invites thieves to monitor the state for forfeited businesses, mail in the $25 or $200 reinstatement fee, and then get credit in the business’s name, according to the FBI and other law-enforcement agencies, who have for a decade or so been urging state corporations agencies to tighten their regulations.
But it isn’t that simple. In many states, the Secretary of State cannot by law demand proof of identity or attempt to enforce any anti-fraud provisions that may be in other laws.
“It’s not what our mission is,” Eric continues. “We’d have to go to the attorney general’s office, that’s where our legal eagles are.”
This fact at first astonishes Robert Strupp, executive director of the Baltimore Neighborhood Inc. Strupp, a lawyer, has for years worked on legislation to tighten up the disclosure of people who control LLCs. Growing from his work on real estate-based fraud, Strupp helped develop bills that he says would allow city code enforcement and state tax authorities to track down slumlords and other bad actors who use their corporate anonymity to pollute Baltimore with vacant buildings or steal workers’ wages.
The idea that any random schmoe could revive a forfeited business at first sounds ludicrous to Strupp. “You would have to have some tie to the entity and have the authority to reinstate it,” Strupp says, before considering it and then admitting that, given what he’s seen he’s really not surprised to hear that criminals can take over companies with no questions asked.
He says North Carolina Eric’s position “was exactly the position of SDAT [State Department of Assessments and Taxation] a few years ago when I was dealing with these LLCs—they’re not an enforcement agency. They’re simply an administrative agency.”
A couple years ago Strupp handed the LLC-reform baton to Robin Jacobs of the Community Law Center. The latest version of the bill, HB 268, received an unfavorable report in committee and went nowhere, as it is not favored either by SDAT bureaucrats or the state’s leading business associations, who fret that putting one’s actual name, address, and contact information on their LLC would unduly burden the state’s overtaxed entrepreneurs. She is at first unsure what to make of the news that criminals can easily steal small businesses. “I’m sure that’s illegal too. I’m sure that would be fraud,” she says, warming up to the idea that, next session, she will perhaps be able to recruit a few small-business owners who fear the threat of a corporate hijacking more than additional meddlesome government paperwork.
The problem is not unique to Maryland and North Carolina.
“What I can tell you as a matter, on record, there have been states where this has been a trend, where criminals have tried to capitalized on what we call dormant businesses to change records and use them for criminal purposes,” says Kay Stimson, the communications director for the National Association of Secretaries and Special Projects of State, which met for its annual conference in Baltimore a few weeks ago.
Reform at the state level has been slow and uneven. Colorado instituted an e-mail alert system to its online corporate filing system a few years ago informing users when someone attempted to change their information, and corporate identity theft plunged there, she says. North Carolina is studying best practices, she adds.
Corporate identity theft is but one piece of a larger corporate crime puzzle that has vexed authorities for years. At the high end you have strictly legal abuses, such as “corporate inversions,” wherein a huge U.S.-based multinational sells itself to a tiny foreign company to skip out on U.S. taxes. You have banks laundering money from international drug cartels and kleptocratic dictators, usually paying a fine, years after the fact, with shareholders’ money. And you have fraud-intent people collecting corporate identities and so-called “shell companies” in order to hide assets, manipulate stocks, steal investors’ money, and shield themselves from the consequences of those actions. So-called “shelf companies”—corporations that are formed and put on a shelf so that they are years old (and thus appear more legitimate) when their owners first put them in service—are such a trend that there are corporations that specialize in forming corporations to later sell to those wanting to look better-established than they actually are. These are the kinds of activities one might expect a presidentially chartered anti-fraud task force to be working against.
On the low end of the spectrum are people who watch state business regulators for lists of forfeited companies, which they then reinstate and take over, perhaps using another fictitious name to do so.
In all these cases, the company’s legitimate business is an afterthought at best. The purpose is not to sell goods or services as a profit, but instead to borrow and channel money to the person who controls the corporation, and allow him or her to take on the social status of a “business owner.” That person may still be able to converse in a detailed way about the company and its (legitimate) work. But if he can’t, you have to wonder.
In our meeting in the jail, Watford explains that he had come to Maryland from Virginia after growing up in North Carolina. He joined the Army in 1979, served four years active and four in the reserve. He says he worked as a truck driver hauling chickens and then worked in Newport News before starting his first business, a wholesale supply for convenience and grocery stores.
Married then separated, Watford says he moved to Maryland in the late 1980s to be with a friend who had served (or was then serving) in the Air Force. He started a TV repair shop in Capitol Heights called Kenny’s Electronics. “Eventually I had three locations,” Watford says. “I once repaired a VCR for Al Gore.”
The fall of VCRs and then the advent of flat-screen TVs killed that business, Watford says. So in 2006, he says, he started Futranet, his limousine business. “I had a contract with the City of Baltimore to drive people around,” he says.
Futranet Coaches of America is federally registered as an interstate motor carrier and appears, with two other coach companies, on the City of Baltimore’s bid holder list, circa 2008. A file on the website Baltileaks indicates that the city granted a $1.5 million transportation contract to the three companies that year and that the contract was up for a one-year extension for the 2010-2011 fiscal year totaling $750,000.
But the company’s history is nearly as murky as Annie M’s. Founded in 2005 by Chanda A. Fields of Fort Washington, Maryland, Futranet (not to be confused with Futuranet, an actually operating west-coast bus company) was originally a Virginia technology company and then forfeited in late 2008.
It was requalified in early 2009 by Watford, who first wrote the name of his lawyer, Michael Lieberman, as the resident agent, but then crossed it out. He left Lieberman’s home address as Futranet’s business address. (Lieberman did not return my phone message.)
The requalification was voided for nonpayment, so Watford re-filed the same paperwork—complete with the crossed-out name.
Fields, meanwhile, sued Watford for nonpayment of a $30,000 debt, winning a judgment that, with costs and interest, summed to about $35,000.
Despite what looks like a lucrative city contract, Futranet was also being sued for debts. The landlord sued for nonpayment of rent—and lost. The staffing company that supplied a worker sued in 2007, eventually winning $35,000. “They placed someone to prepare Futranet’s business proposals,” Todd Forster, a lawyer for Technology Management & Staffing Inc., says.
He’s still trying to collect, and says he was surprised to see notification that the company was filing to become an interstate common carrier more recently under the name Kabuki Luxury Cars. “My recollection is that it was a limousine service,” Forster says, “because there was banter between me and my client about paying off the judgment with free limo service.”
There were several other debts listed, for which we could find no explanation. Prince George’s County sued and won around $2,200. Allbritton Communications, parent company of News Channel 8 sued and won $22,000. Ford Motor Credit, operating as Cab East LLC, filed suit in July of 2008, eventually winning a judgment against the company of $19,761.60. In December of 2008 Quarles Petroleum of Fredericksburg, Virginia sued for payment of $10,442.64, eventually winning a judgment, though the case was later dismissed when the collector could find no one to serve.
By that time it was 2011, and the resident agent of Futranet had been changed to Ashley Wade of Upper Marlboro. I was not able to contact her either. Futranet was forfeited and ceased to exist as a company in November of 2011.
On June 18, 2012, Watford attempted to file a bankruptcy petition on Futranet’s behalf. He wrote in the filing that the company had less than $50,000 in assets and owed less than $50,000 in debts.
The bankruptcy was thrown out of court a few months later because Watford did not file the necessary paperwork—including a detailed list of its creditors. This would seem to be a habit of his.
As Futranet foundered as a business, Watford says he bought Annie M’s, just because he’s always wanted a small general store. Asked to describe what the store looks like, he says it was painted white and was full of stock.
And Abdul Abrams?
“That is a name I used. It may seem hard to believe but I considered the Muslim faith at one time,” Watford explains through the double panes, adding that he asked his lawyer if it was OK to do this—to buy a store under an assumed name—and was told it was fine.
“People change their names all the time,” Watford says.
Abrams does appear to be a Watford alter ego. In 2003 a North Carolina woman named Mollie Gilliam Colerain gave a house to Abrams, who then gave it to Watford, who had drawn up the papers. Watford then took out a $52,000 mortgage on the property, records show, and soon thereafter the house was foreclosed.
In Maryland, Abdul Abrams was sued twice in 2005 for debts totaling $3,600, online court records show, but the cases were dismissed because Abrams could not be properly served.
Abdul Abrams is also listed as the chief financial officer of Futranet.
Watford calls me on Aug. 7, and I ask him how he acquired Futranet.
“I’m not going to talk about Futranet,” he says.
After establishing that he paid Fields $50,000 for what was then an I.T. company, which Watford converted to a bus company, I ask about the company’s rolling stock.
“I purchased them,” Watford says. “I bought them and I leased them.”
He cannot say how much he spent, however. Not even within a range of several hundred thousand dollars.
“I don’t know,” Watford says. “I’m not going to answer no more of your questions. None of what you’re saying is relevant. I just want you to write about this corrupt federal government.”
I asked about the bus company’s finances because the Watfords had been in bankruptcy shortly before Futranet was chartered. I was curious about how a man with a long history of foreclosures, bankruptcies, and criminal fraud charges—and no apparent experience in the charter-bus business—might have capitalized his new bus company.
In 2002, facing a foreclosure action on their Bowie home, Watford filed for protection under Chapter 13 of the bankruptcy code. It had been about four years since Watford had declared bankruptcy, federal records indicate.
But that file was soon thrown out for insufficiency. He filed again in 2004, but the case was again dismissed because Watford declined to provide the basic information a bankruptcy court requires. Listings of things like income and debt and assets. He repeated the process twice more in 2005.
During these filings, mention is made of Kenny’s Electronics, a company that existed, according to state tax records, from 2001 to 2003, when a bad check for its personal property filing fee resulted in its forfeiture. There is also Beller, Inc., which Watford listed as a source of income in the early 2000s.
Founded in 1957, Beller saw little activity on SDAT until 1996 when the resident agent was changed (from who to who is not available online). The business forfeited shortly thereafter but was revived in 1999. The RA is listed as Kenneth Warford.
Sony World Parts Center won a $5,100 judgment against Warford in 2003.
In a “Statement of Financial Affairs,” filed in 2005 as part of that bankruptcy case, under the heading “Income from employment or operation of business,” Watford wrote that he had received $130,000 from Sehmi Inc.
If you Google it, you quickly turn up Sehmi Motors, a high-end import car repair and restoration shop in Los Angeles operated by Daljit Singh Sehmi.
But he has nothing to do with the Maryland company, he tells me by phone, even though the Maryland company’s resident agent had the same name as his.
That Daljit Sehmi resigned from the company with a hand-written note to the secretary of state in 2008, after a decade in business. The number associated with its address on the 9400 block of Lottsford Road, just outside the DC beltway in Upper Marlboro, is not in service. A message left at Daljit Sehmi’s listed home phone number was not returned.
I asked Watford about Sehmi. “That was one of my stores that I purchased,” he told me. “One of my electronics stores.”
He said he paid $2,000 or $2,500 for the store.
He declined to confirm that he made $130,000 from it in one year. “I’m a businessman,” Watford said. “If you bring me the documentation and explain it to my face, then I can explain.”
He then accused me of “trying to dig up something that doesn’t matter.”
Whatever Sehmi did or did not pay Watford in 2004, the bankruptcy cases do not disclose the Watfords’ actual income or assets with any degree of credibility.
Wells Fargo, the huge mortgage company later pilloried (and successfully sued) for targeting African-Americans for predatory loans, filed a motion calling Watford’s attempt to keep the case alive “just another delay tactic in his long history of fraudulent conveyances and abusive filings in the bankruptcy court.”
The judge agreed, dismissing the couple’s fourth bankruptcy case in three years.
Watford was not finished. He filed two more bankruptcies in 2008, one in 2011 (which was discharged normally), another in 2012 (“dismissed for abuse”) and two more in 2013.
Watford filed the 2013 case to delay a foreclosure action on the two Bertie County parcels he says contain Annie M’s Grocery. He made not a single payment on that deal, according to a filing by Harry Delbert Taylor, the man who took the (unbuilt) parcels back.
On Aug. 5 I receive a letter from Watford. Running five pages in longhand, Watford again urges a “contact visit” that would allow an exchange of paper. I’ve been playing phone tag with the CDF’s public-relations man, Melvin Easely, for more than a week now, with no indication I’ll be allowed in the building with a notebook any time soon.
“If you listen to the Savage Nation show on AM-680 . . . Michael Savage broke the story about the corruption that’s going on in the federal prison detention centers,” Watford writes. “How the feds are throwing people into jail to fill beds.”
He says the place is dangerous, overcrowded, and expensive, as the detainees pay for everything out of pocket. He says it’s a former maximum-security prison, and that housing pretrial detainees inside is a violation of the constitution’s prohibition of cruel and unusual punishment. All of this could be true. By now I’m not willing to take Watford’s word for it, though.
At our meeting, Watford told me he was sent to CDF after a hearing in Greenbelt in which he tried to get his pretrial conditions loosened. He had been free after his arrest, but under a curfew. He said he got the curfew lifted but was required not to leave the state and to report any out-of-town trips. He wanted the provision lifted too, but at the hearing where he thought he was going to argue for that, he was jailed, supposedly because he moved without reporting to his monitor, and allegedly because he traveled to North Carolina and used a stolen credit card there.
Watford said he and his wife had to move to a motel for financial reasons, and that he did report this move. He was supposed to wear a monitoring device, he says, but the pre-trial monitor told him the ankle bracelet would not work in that motel, for some reason. He missed a hearing but his lawyer told him the hearing had been postponed anyway, he says.
Watford says he did not go to North Carolina and did not use anyone else’s credit card, for what that’s worth.
He has been here since November of 2013, caught in what he regards as a corrupt system geared to grind him down.
“All I want is for the public to know the injustices around the country concerning black folk,” he said.
Watford seems to believe that business ownership opens for him a world of legal loopholes so vast and intricate that, effectively, it exempts him from criminal law. In a handwritten motion sent to Judge Charles B. Day on Jan. 15, he asked that all criminal charges be dropped because the agent who swore out the complaint against him has “limited training in financial crimes, and no training or education in Commercial or Corporate law.” He went on to say that his “involvement of the commercial transaction was exactly what the law allow [sic], which is to act on behalf of the corporation. If a member misrepresent [sic] him or herself or participate in illegal activities without my knowledge I am not responsible.”
Watford’s theory appears comical, but it is grounded in an unsettling fact: Very large corporations use corporate law to steal every single day, with no criminal penalty.
On August 5 a federal district court judge in Manhattan approved a $285 million settlement that CitiGoup worked out with the Securities and Exchange Commission. Arising from the fraudulent sale of $1 billion worth of real estate bonds—basically bad debt like Watford’s promissory note for his grocery store—the settlement outraged Judge Jed Rakoff, who called it “pocket change” for the giant bank.
The bank—with the S.E.C.—appealed and won, forcing Rakoff to approve the tiny settlement in which crooks and cops effectively colluded.
But, of course, the CitiGroup matter is in civil, not criminal court. No one went to jail.
Because that’s how business works.
In our Aug. 7 phone conversation I ask Watford to explain, again, why he bought a tiny general store in North Carolina. What was the business strategy?
“Let me say something to you,” Watford replies. “You’re asking all these weird questions. I could own businesses around the world if I want to . . . I could own business in Europe. I could own businesses in Africa.
“My strategy then, and now,” Watford says, “is to own as many businesses as possible: Ownership is my strategy.”