Judge sentences Stearns to 30 years

The final chapter in the intriguing saga of Brian Russell Stearns and his influence on some 300 McCulloch County citizens came to a close in a federal courtroom in Austin last Thursday, July 12. Judge James R. Nowlin sentenced the “mystery” man, who married a former Miss Heart of Texas in 1998, to 30 years in a federal prison. Stearns had been convicted of 80 counts of fraud and money laundering in Judge Nowlin’s court in Austin back on Feb. 8. Following the announcement of sentencing, Judge Nowlin asked Stearns if he had anything to say in his behalf. Stearns responded, “Your honor, I just am frustrated. Through the trial my point did not come out.” A bit later, prior to Judge Nowlin’s closing comments, Stearns asked for a continuance for his sentencing. He claimed that he was working on something else that is the “truth.” He said a third party “will be able to show, and I think actually prove, that what I have been saying and the rambling that you heard me talk about is actually the truth.” At that point, Judge Nowlin interrupted and said, “Mr. Stearns, the court has already denied that, obviously, since we are here. And I want you to know, as kindly as I can put it, that you might have been successful in conning a lot of other folks in various ways, but you are not going to con me.” Earlier in the sentencing hearing, Judge Nowlin announced that the findings from mental examinations from federal doctors in Springfield, Mo., declared that Stearns was competent to be sentenced. The evaluation was conducted from March 8 through April 25. “The bottom line is that the Springfield people found that Mr. Stearns is competent to proceed to sentencing, mentally competent, that he suffers from no significant mental defect that would put him within any defensive position within the law for mental incompetency.” Stearns’ defense attorney Stephen Orr argued that he felt that his client was mentally lacking because he failed to follow his advice and accept a “perfectly decent plea bargain by the government” when it was offered. According to an Austin American-Statesman report, Stearns was offered a proposed plea agreement to spend seven years in prison shortly after his arrest in September 1999. Judge Nowlin said he had seen a defendant deny a plea bargain on several occasions during his many years on the bench. “The fact that one can convince himself or herself after awhile of the validity of the lie, is one of the more interesting psychological human factors I have observed here,” he said. “In Mr. Stearns’ case these millions of dollars, you buy your airplanes and your big houses and your cars and your off-road vehicles and all that, I think it’s possible that you can begin to believe that maybe the lies that you have been telling might become truth to you. “I think Mr. Stearns may well have done this so often and been successful, that even though he knows the fraud, untruth and deceit of his schemes, so many people accepted it that he began to believe some of it himself. “All these kinds of talents that Mr. Stearns had and has is always to me a great waste of human capacity to see someone like that use those talents for deceitful and illegal purposes where they could have been used, if directed properly, into constructive legal purposes. And perhaps he could have built buildings instead of paper houses,” Judge Nowlin said. The judge praised Orr. “I think you have done fine. . .you were appointed in this case. It was a long trial. It’s been a complicated trial and there’s a lot of paper involved. “Defending an individual who has a paper trail as extensive as this defendant was quite a large task. But in the court’s opinion, regardless of what the defendant’s opinion or the government’s opinion is, you did an excellent job with what you had and did it well,” Judge Nowlin said. During the proceedings, Judge Nowlin, in discussing the presentence investigation report, stated that Phillip Wylie, a lawyer with the Dallas law firm of Locke Liddell and Sapp, assisted Stearns in his scheme. The judge said that three attorneys could have been indicted in the case and could have been criminally involved in Stearns’ scheme. “The government doesn’t prosecute lawyers very often,” Judge Nowlin observed. “Lawyers and politicians are kind of exempt sometimes.” “I have a difficult time accepting that individuals like Mr. Vosselman and even Mr. Wylie and certainly Mr. Caron could not on the basis of their experience, background and education know what was going on,” Judge Nowlin observed. H After Stearns married the former Raegan Martin in 1998, Stearns became well known in the Brady/McCulloch County area because of his lavish lifestyle. He became even better known in the summer of 1999 when several members of Mrs. Stearns’ family began contacting the local people about “making loans to Stearns” with promises of making triple their money within a period of some 60 days. Although the scheme was “too good to be true,” many took the bait and on Sept. 19, 1999, their dreams of cashing in on the big money came crashing down when FBI and IRS agents, armed with a federal search warrant, raided the Stearns’ mansion on Lake Austin. Stearns, 29, was jailed and charged with running an elaborate Ponzi scheme that scammed $50 million from people around the world, but especially affected Heart of Texas people for more than $4.7 million. Within weeks after Stearns’ arrest, former Bradyite and prominent Austin attorney, Jim George, returned home and promised that he would file a civil case against Stearns and his Dallas law firm, Locke Liddell and Sapp, and specifically attorney Phillip Wiley. Federal investigators eventually built a massive case against Stearns. It all culminated when the trial began about a year and a half later in Austin on Jan. 22, 2001. The trial lasted more than two weeks with Stearns being convicted on 80 counts. Following the conviction, George said he expected Stearns to be sentenced to a minimum of 20 years and a maximum of 30-35 years. At the time, George said, “There is no indication of big money in offshore or Swiss banks. We may be able to round up between $4 and $5 million.” In the meantime, George has taken Wiley’s deposition and has had numerous discussions with the liability insurance company for Locke Liddell and Sapp. Nan Hazel is handling the case for George. She told the Standard-Herald on Monday that the judge’s sentence would help negotiations with the insurance company. “It was a very good find for us. We considered Judge Nowlin’s decision a reasonable sentence,” she said. George hopes to have a settlement or a decision from the insurance company in the near future.

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