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One issue that arose quickly after the lawsuit was filed involved the postdated checks signed over to Manning and Associates by zero-down clients. Mike Manning told Judge Redfield Baum on June 1 he'd turn over the checks--estimated at hundreds of thousands of dollars--to authorities. Manning reneged on his promise to the judge, stonewalling the many attempts by the plaintiffs' attorneys to collect the checks. The stalemate led to an emergency June 15 hearing before Judge Baum, who wanted to know why Manning hadn't turned over the checks.
What transpired at the hearing was maddening and, at times, farcical.
Appearing for the plaintiffs was attorney Donald Gaffney of Snell & Wilmer. That firm's clients are mostly big wheels--Arizona Public Service Company, Del Webb, CIGNA and Bank of America. But Gaffney and his colleague Lisa Coulter are litigating this little-guy case with great fervor, and they're doing it pro bono--for free.
Attorney Hugh Hull, formerly a key zero-down player at Manning and Associates, was present to represent his former employer. (Hull and Kevin Lewis, another ex-Manning attorney, had just started their own firm in the same office building that once housed Manning and Associates.) Also attending was an attorney for the U.S. Trustee's Office.
Gaffney started with a bang. Mike Manning not only hadn't turned over the postdated checks, Gaffney told Judge Baum, but an unidentified man had been trying to pass them at a bank.
"We have someone who is disobeying the basic fundamentals of being an attorney," Gaffney said of Manning.
Manning's actions shouldn't have been surprising, given his pathetic record as a barrister: A two-year suspension from the practice of law that ended in August 1993 noted Manning's "inexcusable pattern of neglect and abuse" to his clients. In June, the State Bar recommended Manning again be suspended, for more violations that predated zero-down.
Hugh Hull, the onetime Manning colleague, hemmed and hawed about the checks, but finally told Baum that Manning would "turn [the checks] over within the next 24 hours. . . . I think the checks are just kind of assembled in boxes at the moment."
The judge is an affable sort for whom compromise is the norm. He agreed to give Manning one more day to deliver the postdated checks.
But Gaffney wasn't so congenial.
He stressed to Baum that Manning firm guru Wayne Majors and its manager/bookkeeper Jennifer Metzger had disappeared.
"I need someone here to state to me that they know that these people don't have . . . [the checks]," Gaffney said. "Because otherwise, I am being set up here."
Baum agreed to ask Manning a few questions.
"I want to know where the checks are," Baum told Manning.
Manning paused for several seconds.
"As of this moment, the checks that I have are sitting in my office," Manning finally said, in a nasal monotone.
"That's not the question. So you've got checks at your office, right?"
The usually calm Baum was getting testy.
"Answer my question," he snapped. "Have you turned any checks over to anyone else?"
Manning paused again, even longer this time.
"There were checks," he said, "that as part of an agreement to bring in cash, were [turned over] to a third party, yes."
"Who did they go to?"
"They went to a Mr. Jimenez," Manning said.
The man's first name possibly was James, he continued, but he couldn't be certain. Manning did recollect that he'd sold Jimenez the postdated checks in mid-May, in return for a promise of $300,000 in cash over an 18-month period.
"He sends me a monthly payment," Manning explained, adding he had a copy of the Mexican resident's previously undisclosed promissory note back at the office.
"Is Mr. Jimenez Mr. Majors?" Don Gaffney asked Manning, referring to the law firm's founder, Wayne Majors.
This was not a far-fetched proposition. Majors had lived in Mexico in the 1980s while trying to evade criminal prosecution on unrelated mail-fraud and promotion-of-prostitution charges. And Manning owed what brief financial successes he had found to the zero-down mastermind.
"No," Manning told Gaffney.
The following day, June 16, the Manning/Hull team turned over about 100 checks--just a handful, considering the firm's vast client base.
They also produced the promissory note allegedly signed with a flourish May 13 by the mysterious Mr. Jimenez.
The business address for Jimenez Financial was said to be the #2 Latino Americana Tower Building in Mexico City. His telephone number also was listed on the note.
But the one-page note made no mention of the sum of postdated checks Manning allegedly sold to Jimenez.
"Got any inventory documentation on those checks, Mr. Manning?" Judge Baum asked Manning at the June 16 hearing.
"Not today," Manning said.
The noose around the Manning crowd seemed to be tightening. But that didn't stop a man on June 22 from passing postdated checks made out to the firm. Surveillance cameras at a Bank of America branch office near 20th Street and Camelback in Phoenix photographed the transaction.
Bank of America is a client of the Snell & Wilmer law firm, a fact that had bearing on events that followed. The firm had asked bank officials in early June to keep an eye out for someone trying to pass postdated checks made out to Manning and Associates or the Bankruptcy Center.