Defense attacks bribery theory Witness says alleged laundered money actually repaid loans

November 17, 1995|By Scott Higham | Scott Higham,SUN STAFF

Defense lawyers for Baltimore housing contractor Larry Jennings Sr. tried to undercut a critical piece of the bribery charges against their client yesterday, introducing evidence to contradict part of the prosecution's theory in the case.

Prosecutors have told jurors that money used to fund payoffs Mr. Jennings allegedly made to a city Housing Authority manager was laundered through a pair of unsuspecting contractors.

After listening to the testimony of the prosecution's star witness this week -- a housing manager who took bribes from a series of contractors -- defense attorneys produced a star witness of their own.

Charles Armwood Jr., who runs a West Baltimore liquor store and check-cashing business, testified that he constantly lent money to Mr. Jennings.

Mr. Armwood said the contractor then would repay him with checks written by his company, Elias Contracting.

Mr. Armwood said he cashed several checks from Mr. Jennings and kept the money.

Prosecutors say the checks were made out to subcontractors, but diverted to help fund bribes Mr. Jennings allegedly made to housing manager Charles Morris.

"Mr. Jennings said when he got the money, he would pay me back," Mr. Armwood told jurors in U.S. District Court in Baltimore. "That's exactly what he did."

The testimony came on the fourth day of the bribery trial. Mr. Jennings is charged with paying a series of bribes to Morris -- who is cooperating with a federal investigation of the Housing Authority -- and then trying to cover them up in an alleged scheme that violated federal tax laws.

The prosecution's theory of the scheme is a little complicated:

To cover the bribes, prosecutors say, Mr. Jennings wrote checks to a pair of his subcontractors -- Moe Construction and BHS Inc. -- but the checks never went to the companies. Instead, Mr. Jennings converted the checks into cash for his own use and funneled some of the money to Morris, prosecutors allege.

In court Wednesday, the owners of both companies reviewed a series of Elias Contracting checks made out to their firms.

Both men testified that they never saw the checks, never saw the money, and someone else had endorsed them.

Yesterday, defense attorneys offered an explanation through Mr. Armwood -- a witness with a potential conflict because he is dating Mr. Jennings' daughter, who is an officer of Elias Contracting.

Defense attorney Thomas L. Crowe tried to sort out the confusion for the jurors.

Mr. Armwood is known as "Moe" in the West Baltimore neighborhood where he runs his liquor store. Mr. Armwood testified that he has three corporate accounts -- all starting with the name "Moe." When people repay money they owe him, or write checks to his store, the checks are made out to "Moe's Corporation."

Mr. Crowe showed Mr. Armwood checks from Elias made out to Moe Construction that have been labeled as prosecution exhibits -- evidence introduced to show how the alleged bribes were purportedly covered up.

"Who signed this check?" Mr. Crowe asked, showing him a check for $1,415.

"I signed this check."

"Did you have a company called Moe's Construction?" Mr. Crowe asked.

"No, sir," Mr. Armwood said.

"Why did you sign Moe's Construction?"

"Because he [Mr. Jennings] wrote Moe's Construction," Mr. Armwood said. "I didn't give it no mind. I was happy to have my money back."

Mr. Armwood repeated the explanation for three other checks made out to Moe's Construction that he cashed, saying he believed them to be loan repayments from Mr. Jennings.

Mr. Armwood also testified that he had an explanation for a $15,000 check made out to BHS Inc. by Elias Contracting -- money the owner of BHS testified he never received and prosecutors say helped fund the bribes.

Mr. Armwood said the man who ran BHS -- Saafir Abdul Raab -- owed him money.

"Did you ever cash checks for Mr. Raab," Mr. Crowe asked.

"Yes," Mr. Armwood said.

The defense lawyer asked him why he cashed the Elias check for $15,000 to Mr. Raab.

"To my knowledge," Mr. Armwood said, "I know he [Mr. Raab] gave me the check."

Prosecutors will cross-examine Mr. Armwood today.

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