Nidiffer found not guilty of theft charge

By Kathy Helms-Hughes
STAR STAFF
khughes@starhq.com

   It took a seven-woman, five-man jury less than 40 minutes Tuesday to find Elizabethton businessman Carl Ray Nidiffer not guilty of theft over $10,000. The trial, which was expected to take most of the week, took less than two days.
   Nidiffer, thrilled with the outcome, hugged friends and family members.
   "Based on what I have seen," he said, following the verdict, "the birthplace of this whole mess is right across the street at Tom Cowan's office. As long as he can keep Mr. (Neil) Friedman, a misguided individual, in legal entanglements, the cash flow is flowing.
   "The judicial system worked," Nidiffer said. "I have the greatest respect for our judicial system. I am elated that this mess is finally over."
   According to the previous day's testimony before Knoxville Criminal Court Judge Richard Baumgartner, Sossner Steel Stamps owner Neil Friedman was involved in an automobile accident in 1995 which resulted in him being charged with third-offense DUI. Friedman panicked at the thought of having to spend 120 days in jail -- the statutory minimum for third offense -- and asked the vice president of his company, Karen Smith, who he knew to have a relationship with Nidiffer, to talk to him on his behalf.
   Smith said Friedman knew that Nidiffer and then-District Attorney General David Crockett were good friends, and it was hoped that Nidiffer could get Crockett to give him a reduced sentence. During this time, the suggestion was made that it might be beneficial for Friedman to make a contribution to the Crockett for Congress campaign.
   Friedman, following alleged conversations with Nidiffer, then sent his wife, Lori, to deliver a check to Nidiffer in the amount of $20,000. The check was made out to 'Cash' and intended for Crockett's campaign fund, according to testimony.
   The state kicked off Tuesday's questioning by calling Nidiffer's wife, Kim, to the stand. Mrs. Nidiffer told the court that she had worked at her husband's company, Precipitator Services Group Inc., about 12 years and had served as the company controller for about the last eight years, handling all financial transactions.
   Under questioning by Deputy Attorney General Dennis J. Garvey, district attorney pro tem, Mrs. Nidiffer told the court that Lori Friedman came to see her husband at PSG where they were getting their boat ready for the lake and that later in the day while they were on the water, her husband gave her what she thought was a check.
   "I took it and put it in my purse. The last time I looked at it was about a week later when I deposited it to the Raymond James account," she said. Mrs. Nidiffer mailed the check and a deposit slip to their Raymond James Associates account in Tampa, Fla. She did not endorse the back of the check and failed to write "for deposit only," according to testimony.
   The state showed her three checks written on the Raymond James account: one for $5,000 to Class Act Cycle on June 28, 1996; one for $7,800 to 'Cash,' on July 16, 1996; and another written the same day, also to 'Cash,' in the amount of $7,200. Garvey said the checks added up to $20,000 and questioned what the money was used for.
   Mrs. Nidiffer said the check to Class Act possibly went to purchase a jet ski to be used by friends, family and customers during lake outings. The remaining checks, she said, probably went for payroll advances. She said it is customary for PSG employees who are on the road to take a draw from their pay for weekly living expenses, while their actual payroll checks, minus the draw, are picked up by family members.
   "The men are distributed cash by their foreman for payroll advances," she said under cross-examination by Defense Attorney Stacy Street. She said PSG has approximately six bank accounts which are used by the company.
   "Who directed you to deposit the check from Neil Friedman?" Street asked.
   "Nobody did," she said.
   "Did he (Carl Ray Nidiffer) tell you where to deposit the check?"
   "No, I just deposited it," she said.
   "You could have taken the check and walked down to the bank and cashed it -- no paper trail whatsoever," Street said.
   "Yes," she agreed.
   "But you deposited it to the account?"
   "Yes, as I do all checks I receive," she said.
   She testified that Neil Friedman later came to PSG and that while he was there her husband came into her office and requested $20,000, which she gathered into a manilla envelope and gave to him. She said she later saw Friedman leave the office with the envelope in his hands. Garvey asked whether she remembered testifying in May 2000 that she handed her husband wrapped stacks of money and some loose bills, and that she said she didn't put the money in a container. Mrs. Nidiffer said she did not put the bills in a container, but in a manilla envelope.
   "Why didn't you remember that in May 2000? Was it because you wanted to say to the jury that you saw Neil Friedman walking out with an envelope in his hand?" Garvey asked.
   "No, sir," she said emphatically.
   Sue Chinouth, treasurer of Crockett's campaign, testified next that as treasurer she kept detailed records of contributions in her ledger. Under questioning by Mark Green, paralegal for the state Attorney General's Office, Chinouth told the court there were no contributions to Crockett's campaign for $20,000. "I would have remembered that."
   She said Nidiffer had made a donation on behalf of himself and his wife in the amount of $1,000 each. She produced two Steno pads from the campaign records.
   "That's what you referred to as your ledger?" Judge Baumgartner asked.
   "That's what he called them," she said, referring to the state's attorney. "I referred to them as 'my little Bibles,' because we had to keep such close records," she said.
   Crockett was called next by the state and was cautioned by the judge to restrict his comments due to concerns by the state that he might offer some information of a "self-serving" nature. The state also objected to Crockett bringing along notes from the campaign period, saying they had not viewed them first.
   Defense Attorney Bill Byrd said that if the state had wanted to ask him about the notes, "they could have asked him this morning. This building is full of TBI agents."
   Crockett said he didn't know what the state was going to ask and that he might need to refer to them to refresh his memory. They were not allowed.
   Under questioning by Garvey, Crockett said he went to Chinouth's house to look over the campaign records after learning that he had been accused of taking a bribe through Nidiffer.
   "Did Mr. Nidiffer make a contribution to your campaign?" Garvey asked.
   "I was unaware of a contribution until later when he said he and his wife made cash contributions of $2,000," Crockett said.
   "I'll ask you again and maybe we can get a short but sweet answer," Garvey said. "Other than $2,000 cash, he did not give you any other contribution?
   "Not that I'm aware of," Crockett replied. He said he also was not aware of any contributions from the Friedmans.
   Neil Friedman was called as the state's final witness. Friedman said that following his accident in March 1995, "I was terrified that I might go to jail for a substantial period of time and might lose my business. When the president is not there for an extended period of time, customers get nervous," he said.
   He admitted to constantly asking Karen Smith whether Nidiffer had talked to Crockett about fixing his DUI and said he had reason to believe that Nidiffer would do so.
   Friedman said Nidiffer called Sossner Steel one day to talk to Smith and he answered the phone. He said Nidiffer asked how he was doing and he told him, "Not too well because I'm facing three to four months in jail. He said that wasn't a problem, that if I made a small campaign contribution to David Crockett that it would be taken care of."
   Friedman said Nidiffer came to his home in May 1996 and they started talking in the living room, then went outside to the back deck to continue their conversation because his wife, Lori, was home. "She's a very introverted person, a very honest person. It's not something she would want to get involved in," he said.
   Friedman said the amount was decided that day and that Nidiffer wanted cash, but that he "wanted some kind of paper trail."
   Friedman testified he gave his wife two checks the day she went to see Nidiffer: one made to 'Cash' and one made to either Carl Ray Nidiffer or PSG. He didn't remember which and also said he didn't know what happened to the second check but thought that either he or his wife tore it up.
   "In 1995-96, you would have done anything to get out of the DUI, wouldn't you?" Garvey asked.
   "Yes, I would," he replied.
   Friedman said Nidiffer later told him that Crockett said thank you for the campaign donation and that he would thank him personally when he saw him, but that he never did.
   Under cross-examination, Attorney Street asked, "You didn't think Mr. Crockett would make that good a congressman to give him $20,000 did you?"
   "No," Friedman said.
   "You wrote the check to bribe him to fix a DUI?"
   "Correct," Friedman said.
   "There was no note on the check for Crockett for Congress? Bribe? Fix my DUI?" Street asked.
   "Correct," Friedman replied.
   "You voluntarily gave that money to him?" Street asked.
   "I absolutely, voluntarily gave him the money," Friedman said.
   Street said Friedman never reported the theft to Carter County Sheriff's Department, Elizabethton Police Department, or TBI. "You had your attorney (Thomas Cowan) contact Mr. Partee (Senior Counsel Albert L. Partee III of the Attorney General's Office) and work out an immunity agreement. You said you had something to tell them but that you wanted immunity first," Street said.
   The state objected when Street produced a copy of the immunity agreement to show Friedman.
   "You sent it to me," Street told the state's attorneys.
   After conference with the judge, Friedman was allowed to examine the papers.
   "What was your understanding of the document?" Street asked.
   "That I would not be charged with a bribe if I gave my statement," Friedman said. According to Street, the document also said the state would not oppose a reduced sentence for DUI.
   Street said Friedman had struck deals with the state before, once working for the drug task force which resulted in two people being convicted of drug charges. Friedman agreed.
   "Did you also tell (TBI) Agent (Rick) Mowell that you used crack cocaine?" Street asked.
   The state objected, however, Street was allowed to continue. "On April 3, 2000, you told Agent Mowell that you were on crack cocaine?" Street asked.
   "I don't remember," Friedman said.
   "Did you use cocaine from 1996 to 2000?" Street asked.
   "Yes," he said.
   Street also told the court that Friedman put on expert witnesses at his DUI trial who testified that he suffered from amnesia following his auto accident. "Do you remember telling her that you lost seven to eight cell phones and that your mind wanders?" Street asked.
   "I don't remember what I said to a psychologist six to eight years ago," Friedman said.
   "But you remember in great detail giving Mr. Nidiffer a check?" Street countered.
   "Sir, when you give somebody $20,000 and a job's not done, you remember," Friedman said.
   "You want the jury to believe you're a victim?" Street asked.
   "I'm a victim," he said.