Details, Details

The prosecution's evidence seems convincing--but will the jury grasp it?

Government prosecutors face a dilemma as the Symington criminal trial moves into its fourth week.

Prosecutors know they must present overwhelming evidence of wrongdoing to win a conviction; they realize that no jury is likely to slam a sitting governor for making a couple of mistakes.

But, at the same time, prosecutors must take care that the sheer volume and complexity of the evidence of Fife Symington's deceit don't overwhelm the 12 jurors and four alternates hearing the case. An overwhelmed jury is a confused jury.

Complicating matters for the government is the fact that this is not a liquor-store holdup. There is no smoking gun or surveillance videotape. What there are are pages upon pages of deadly dull numbers. The prosecution must provide the jury with a fundamental understanding of real estate finance before it can expect jurors to detect the sleight of hand Symington allegedly employed.

Predictably, it is a goal of the defense to disrupt the government's Real Estate/Bank Fraud 101 course. So far, however, the defense has succeeded in refuting only a handful of the government's facts.

When it knows the prosecution has solid evidence, the defense simply adopts a nonchalant "Okay, so what?" posture--a question Symington hopes jurors are asking as well.

Prosecutors already have established that Symington submitted financial statements claiming widely varied net worths. Now, the government is painstakingly attempting to prove that many of the values Symington placed on those financial statements were false--and that Symington knew they were false.

One of the most important representations Symington repeatedly made on financial statements from 1986 to 1989 was that he had $1 million in equity in the Scottsdale Centre office development. The equity amounted to about 10 percent of Symington's purported net worth during this period.

The prosecution last week spent more than four hours and presented more than 40 exhibits dissecting the Scottsdale Centre investment. This phase of the prosecution was presented to the jury by assistant U.S. attorney George Cardona. The Yale-trained physicist turned prosecutor deftly used a brilliant witness to walk--some would say crawl--through Symington's troubled investment in the Scottsdale Centre.

The testimony of government witness Timothy Boyce provided a clear picture that the Scottsdale Centre was a loser from the start. Boyce's concise explanations of complicated real estate transactions showed that Symington knew he had zero equity in the Scottsdale Centre between 1986 and 1989.

Nevertheless, Symington continued to report on financial statements--submitted to more than a half-dozen lenders during this time period--that his personal stake in the property was worth $1 million.

The question is whether the jury grasped the nuances of a tedious exercise in belaboring the obvious. The prosecution can take some comfort in the knowledge that if anyone can explain the intricacies of real estate limited partnerships, it is Boyce.

Wearing wire-frame glasses and with his hair parted in the middle, the boyish-looking Boyce is the consummate yuppie. A 1975 graduate of Georgetown University, Boyce later attended graduate school at the University of Pennsylvania, where he received simultaneous law and business degrees in 1979.

Boyce started a law practice in Connecticut specializing in tax and estate planning. A few years later, when he and three associates started a real estate syndication company, he got involved with a Phoenix developer named J. Fife Symington III.

In 1985, Boyce and other partners joined Symington to create Scottsdale Centre Limited Partnership. Each partner was required to contribute $500. The partnership purchased the Scottsdale Centre from Southwest Savings & Loan, which had lent Symington--a member of the Southwest Savings board--$20 million to build the office complex.

The Scottsdale Centre Limited Partnership sold $100,000 shares in the property to wealthy investors looking for a tax shelter. The partnership also borrowed more than $24 million from several lending institutions.

Cardona parlayed Boyce's relationship with Symington into a lengthy examination of the Scottsdale Centre project. Cardona was the needle and Boyce was the thread. By the end of the afternoon, Symington had been hemmed in.

Boyce testified that the partnership agreement called for Symington to be the last person to be paid if any profits were generated from the project. Since the project always lost money, it was clear it would be years before Symington would see a dime from his Scottsdale Centre investment.

To make matters worse for Symington, he was obligated to provide operating loans up to $500,000 if the project lost money. Boyce testified that Symington forwarded at least $100,000 to fund operating deficits.

Boyce's testimony also dashed the defense team's hope of claiming that Symington was in the dark about the project's problems. Not only was Symington pouring more money into a losing project, Boyce testified that Symington received numerous reports from lenders and investors that showed the Scottsdale Centre was bleeding red ink every year.

In fact, Boyce testified that Symington was intimately involved in 1989 negotiations with a lender to modify repayment terms because the partnership was out of money.

By April 1989, the Scottsdale Centre was for sale. Boyce testified that Symington received an appraisal that month stating its value had plummeted to $21.5 million, which was several million dollars less than the balance owed on the loan.

Even though the project was clearly in the red and Symington had a recent $21.5 million appraisal in hand, he reported the value of the property on his December 31, 1989, financial statement at $35 million, with his equity share remaining at $1 million.

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