One side painted the picture of a “greedy, selfish and dishonest” man who manipulated elderly board members to fund a lifestyle that included luxury automobiles and lap dances.

The other side described an innocent hero who brought hundreds of jobs to Wyoming County and never tried to hide any information from anyone.

U.S. District Judge David Faber listened and asked questions as attorneys presented closing arguments Friday in the government’s case against Bob Graham, who was indicted this year on multiple counts of mail fraud, filing false personal income tax returns, theft in receiving federal funds, engaging in illegal banking transactions, illegally buying out sick leave and various other illegal transactions.

Graham, 59, was the executive director of the Wyoming County Council on Aging and All Care, two nonprofit organizations that received funding from Medicaid.

His bench trial began Monday with testimony from a stripper who told the court Graham paid for her breast enhancement and spent thousands of dollars for VIP treatment at Southern XPosure. And although publicly exposing that information in open court may have been embarrassing for Graham, the acts were not criminal, defense attorney Mike Carey argued.

Carey reminded the court of testimony from a Medicaid representative who said there are no federal or state regulations that address how agencies spend their reimbursement money. Such money, he said, is left for the board of directors to spend how it wishes, and it wished to give Graham a Lincoln Navigator, cash for sick leave dating back to 1975 before he even worked there, giant bonuses and an annual salary of $185,000.

“If he obtains that money legally and if he spends it on strippers ... it is not proof of a crime,” Carey said. “And if he had given it to the world hunger organization, it wouldn’t be a defense.”

But prosecutors argued Graham obtained that money fraudulently. They presented a case that included testimony from memory-impaired board members in their 80s, in poor health, with little or no work experience outside the home, and no training, in an effort to show Graham manipulated and controlled their actions.

“They are arguing that the victims should have stopped him from committing the crime,” assistant U.S. Attorney Susan Arnold said.

Graham went so far as to cash in $12,000 of his sick leave at one time, then use the money, first, to pay off a personal credit card on which charges were made at a strip club and for breast enhancement surgery, and, later, to pay back to the council the price of a plasma television he purchased through the agency’s tax-exempt status for his personal use, Arnold said.

“ ... No one is saying that the board of directors is stupid. ... They’re just inadequately equipped to deal with the defendant’s greed, his manipulation and his deceit. ... He destroyed their trust, robbed them of their dignity and robbed them of their pride in the center,” Arnold said.

Not so, Carey said. All but one of the board members who testified spoke fondly of Graham, and none of them was deceived.

Carey also said the organizations’ bylaws deem that Graham is not a member of the board of directors or an officer. He is staff and therefore has no fiduciary duties.

He also said there was no evidence Graham recruited these board members. They ran for office and were elected by their peers.

But Faber interrupted and noted that the one businessman board member was not accommodated when he was unable to attend meetings because of a scheduling conflict.

“It seems like an executive director who wanted to have a proper board would have accommodated him,” Faber said.

Carey said the way the board members appeared in the courtroom was no guarantee of how they behaved three to five years ago when the alleged crimes were committed.

“Does that prove beyond a reasonable doubt that they didn’t remember at the time, that they didn’t approve it at the time?” Carey asked.

In fact, he added, there was proof Graham carefully presented things by offering the board detailed minutes.

But Arnold had already said the minutes were vague — for instance, stating that Graham wanted to cash in some of his sick leave but not providing the dollar amount or informing the board that doing so would place the council in the red for a year — and that testimony proved Graham struck things from the record, including one rare criticism from a board member who thought his wife’s salary was too high.

Carey noted Graham had left a paper trail, that board members signed the very checks the government has accused him of embezzling, that the board could read audit reports and that there was proof Graham even discussed with them the importance of reviewing minutes.

“This doesn’t show guilty intent. This doesn’t show a scheme to defraud,” Carey said. “This is a man who showed them what he wanted to do and then encouraged them to read and understand.”

“The defendant was smart enough to know that at least he had to dot his i’s and cross his t’s,” Arnold said.

Later, when assistant prosecutor Hunter Smith closed, Faber questioned the meaning of fraud.

“But you don’t have in this case any of the traditional badges of fraud. ... You have to assume the board was totally manipulated,” the judge said.

“His dealings with the board, your honor, contained fraud by what he left out. ... That is the badge of fraud here,” Smith said.

Even within the organizations’ SEP-IRA plan — from which Graham had accumulated $295,000 — there was fraud, Arnold pointed out. But Faber questioned that, too.

“I have a big problem with your theory that just because this plan didn’t qualify, it was part of a scheme to defraud,” he said.

“The defendant clearly had knowledge in 1984, 1985, that the Council on Aging (retirement) plan was a SEP plan,” Arnold said. Yet Graham demonstrated “willful blindness” when an auditor called to his attention that the plan may not qualify because not all eligible employees were participating in it and that they had to in order for the plan to qualify.

“If it’s not a valid SEP, they should not be on the 990s,” Smith explained. “If he knew he didn’t have a valid ... SEP, it was income, and he should have reported it.”

But Carey said Graham didn’t commit any crime in that regard, either.

“The problem isn’t ‘was this right or wrong?’ It’s did Mr. Graham know it was right or wrong,” Carey said. “ ... There’s no evidence that Mr. Graham knew and understood and essentially excluded anybody (from participating in the plan).”

Still, prosecutors pointed to evidence of insurance fraud, when Graham kept his ex-wife on his policy years after their divorce, and to evidence that he used his employees for personal reasons, such as purchasing and installing a 50-inch plasma television.

But is that really worthy of a federal felony conviction, Carey asked.

For clarification, Faber compared Graham’s personal use of employees on company time to a general having a private mow his grass. Carey said that was a correct analogy.

“We’re not talking about a significant amount of time,” Carey said.

It is still illegal, and representative of the typical actions of this “greedy, selfish and dishonest” man, the government contended.

“He betrayed the agency, the board and its employees, and he did it for his own enrichment,” Smith said.

Faber is expected to render his decision in early August. Graham, who was suspended from his job in February, faces a prison sentence of up to 112 years and a $5.2 million fine if convicted on all counts.

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