Lexington businessman found guilty of lying about alleged illegal campaign donations
A federal jury has convicted a Lexington real estate executive on 11 charges relating to obstructing a federal investigation into alleged illegal contributions to Lexington council members in the May 2018 election.
After five days of testimony, the jury began deliberations early Monday evening and returned the verdict after more than two hours deliberation, according to federal officials.
Timothy Wayne Wellman could face decades in prison if given the maximum sentence on all 11 counts. Wellman will be sentenced July 1.
Kent Wicker, Wellman’s attorney, said Wellman will appeal the decision.
“We respect the jury’s verdict, although we are disappointed in it,” Wicker said. “We will appeal.”
Federal prosecutors alleged Wellman circumvented state campaign finance limits that prohibit individuals from donating more than $2,000 to a candidate by giving money to more than a dozen straw contributors and then reimbursing them.
Wellman, 66, was charged with multiple counts of lying to federal investigators and convincing others to lie about campaign contributions. Wellman told his co-workers at CRM Companies to lie to FBI agents and a federal grand jury, and created false documents to cover up where money for those campaign contributions came from, federal prosecutors alleged.
U.S. Attorney for the Eastern District Robert M. Duncan Jr. said Wellman’s “disgraceful conduct cannot be tolerated.”
“People simply cannot obstruct federal law enforcement or grand jury investigations, because such conduct undermines the foundation of our system,” said Duncan in a written statement. “Through his actions, the defendant brazenly attempted to obstruct federal investigations into criminal conduct, by counseling others to lie and create false documents, concealing the truth from federal law enforcement and a federal grand jury.”
Some of those employees were truthful in their testimony during the five-day trial, Assistant U.S. Attorney Ken Taylor said during closing arguments Monday. Others tried to walk back previous statements they made to a federal grand jury in April and stuck with the explanation that checks they received from Wellman were not repayment for their campaign contributions.
The donations were made to former Lexington-Fayette Urban County Councilman Kevin Stinnett, who was running for mayor in 2018, and Vice Mayor Steve Kay. No allegations of wrongdoing have been made against Stinnett or Kay.
Jeff Collins, a CRM employee, originally told FBI agents that he had received checks from Wellman, but they were for work he did to lease property Wellman owned in Elizabethtown. Taylor said Collins then later called the FBI and changed his story, admitting that the money was repayment for his campaign contributions.
In court, Collins stuck to his original story and claimed the money from Wellman was for help leasing the property.
Collins refused to meet with prosecutors prior to the trial, Taylor said, but he did meet with Wellman’s lawyers.
Other employees who testified during the trial admitted they had lied to the FBI about where the money for the contributions came from, Taylor said.
“They had every reason to lie to protect Wellman but they did not,” Taylor said.
Wicker, Wellman’s lawyer, painted a different picture for jurors Monday during closing arguments. He said Wellman often loans money to people without asking to be repaid and contends a disgruntled business competitor hired a law firm to investigate him and spread unfounded rumors.
Wicker said employees who testified that they made contributions at Wellman’s direction were harassed and intimidated by FBI agents to change their statements. Those agents intimidated witnesses until they told them what the FBI wanted to hear, Wicker said.
Wicker said it was Collins and others who were telling the truth.
CRM Companies, where Wellman was an executive, was one of four bidders on a new city government center for Lexington. CRM Companies’ proposal — to renovate and expand the Lexington Herald-Leader building on Midland Avenue — was picked as the winning bid, but the council ultimately voted not to move forward on a new city government center in September 2018.
Wicker told the jury during opening arguments that Cowgill Properties hired a law firm to investigate CRM Companies after Cowgill lost the bid for the city government project. It was investigators with the McBrayer law firm who turned information over to the FBI about the alleged straw contributors, Wicker said last week.
Representatives from Cowgill and McBrayer did not return calls seeking comment.
In addition to the federal case against him, Wellman also has been indicted on 16 state charges for allegedly using straw contributors to circumvent campaign finance laws. That case is ongoing.
This story was originally published February 25, 2020 at 10:52 AM.
