Stearns’ criminal trial underway Monday in Austin federal court

The criminal trial of Brian Russell Stearns of Austin began Monday morning in the Western District of Texas Court in Austin, a proceeding that has the interest of many Brady citizens. The 30-year-old Stearns goes to trial on 82 counts of money laundering, securities fraud, mail fraud, wire fraud and other offenses. Among the charges are ones that involve more than 250 Brady and McCulloch County residents who were bilked out of more than $4.5 million in 1999. Stearns was arrested by federal authorities in mid-September 1999 and has been in jail since that time. Federal investigators say that Stearns operated a high-stakes Ponzi scheme, taking $50 million from corporations and individuals and investing only a fraction of it. The defendant told a Brady Standard-Herald reporter in October 1999 that he took “loans” from Brady folks and steadfastly denied that their monies were considered “investments.” He has denied all charges and according to his attorney, Stephen Orr of Austin, he is “looking forward to this trial because he wants to prove he is innocent.” The trial Monday began with jury selection. Judge Richard Nowlin told the prospective jurors that he expected the trial to last between two and three weeks. He also said that in order to get a conviction, the jury must reach a unanimous decision. Stearns allegedly squandered millions of dollars on high-priced toys and personal investments, according to a story by Andrea Ball in Monday’s edition of the Austin American-Statesman. These items included a mansion on Lake Austin, a Lear jet, a helicopter, jewels, a Lamborghini, a Mer-cedes and a Land Cruiser. Some people still believe that Stearns is innocent and hope the trial will clear him of any wrongdoing. “I am a firm believer in the American way,” Shirley Doyal of Lohn, Stearns’ grandmother-in-law, was quoted as saying in the Austin newspaper. “Until he is convicted of something, he’s family, and I support him.” Stearns’ 1999 indictment was not his first brush with the law, according to Mrs. Ball’s article. Born in Korea in 1970 and later adopted by a Maryland couple, Stearns ran into trouble in 1994 while serving as a private in the Maryland National Guard. He was convicted of swindling $20,000 from fellow soldiers in a bogus investment scheme. Stearns admitted spending the money on personal items, according to court documents and was sentenced to five years of probation. One year later, Stearns participated in a failed plan to start a heliport business in Maryland, according to Don Schimonelli, a former business partner. Stearns then moved to Houston, where he tried unsuccessfully to enter the airplane industry. Along the way, Stearns learned the world of high finance’notes, bonds and securities. He admitted that he had a mentor who taught him how to do a lot of things, according to Orr. But prosecutors say he used that knowledge to scam clients, fraudulently telling them their money had been invested and was insured by bonds worth billions of dollars. Stearns attracted investors with fast talk, aliases and false Social Security numbers, prosecutors said. He also allegedly wielded a bogus r’sum’ in which he claimed an extensive, highly decorated Armed Services record with elite military training and security clearances from the CIA, National Security Agency, Italian Secret Service and Federal Reserve. A Canadian company invested more than $8 million, according to the indictment. A Nevada business gave $10 million in gems. A Panamanian corporation put in $20 million. Instead of investing money, prosecutors say, Stearns used money and property from new investors to repay prior clients. In letters last year to the Austin American-Statesman, Stearns denied the allegations without detailing how he made his money or what he did with investors’ money. “All I can tell you is my case has nothing to do with being a Ponzi or a con artist,” he wrote. Stearns’ entry into Brady society was Raegan Martin, a University of Texas student and former Miss Heart of Texas from a well-respected Brady family. She was 17 when she met Stearns on Sixth Street in Austin. She had graduated from Brady High School in three years and had just entered college. In June 1998, before 200 guests, the young couple married. After the family allegedly made money, word got out that Brady citizens could make the same. What Brady denizens did not know was that Stearns was under investigation by the FBI. A Georgia man had accused Stearns of selling $3.3 million in bogus securities, and in September 1999, just when Bradyites were due to collect on their investments, the FBI arrested him at his Lake Austin mansion, seized his property and froze his assets. Prosecutors accused Stearns of defrauding investors by lying about his training, his actions and his ability to guarantee returns. But Stearns’ lawyer said he did not intentionally defraud anyone. “These are just business deals that didn’t get handled properly by other people,” Orr said. “That’s his contention.” The arrest stunned Brady. “The records of how many people invested are not complete,” said Nan Hazel, a lawyer on the case. “We know 340-some-odd names. These are people who gave checks to the family.” Stearns maintains he had every intention of repaying Brady investors. “His contention is that if he hadn’t been arrested, they would have gotten their money,” Orr said.

Leave a Comment