Moriarty Portrayed as a ‘Corrupter’ in Ex-Associate’s Trial

W. Patrick Moriarty, the central figure in a continuing investigation of public corruption, was portrayed Friday as a “corrupter of people” who has now turned against his former business and political associates to avoid a lengthy prison sentence.

The description of Moriarty, who has confessed to federal charges of fraud, illegal political contributions and banking kickbacks, came in the closing statements of attorneys just before the start of jury deliberations in the case of Nelson Hallidy, a former Orange County banker.

Hallidy, 61, is charged with helping Moriarty launder more than $317,000 in cash through the Bank of Irvine while he was a bank vice president before the Orange County bank was shut down by state banking officials last year.

Used His Wealth

Both a government prosecutor and Hallidy’s defense lawyer described Moriarty, the key witness against Hallidy in his four-day trial, as a man who used his wealth to corrupt politicians and businessmen.

“Mr. Moriarty in plain, simple words is a corrupter,” conceded Maurice L. Evans, an Orange County prosecutor serving as a special assistant U.S. attorney in the Hallidy case. “He corrupts people. He doesn’t put a gun to their heads, but he corrupts them with money.”

Nonetheless, Evans continued, Moriarty could not have succeeded without the help of others. He said Hallidy was one of many accomplices who helped Moriarty avoid prosecution for years.

“He was willing to assist the corrupter,” Evans said of Hallidy. “He was not willing to stand up and say: ‘I’m not going to violate the law.’ ”

Byron McMillan, Hallidy’s attorney, asked the jury to remember that Moriarty has agreed to be a cooperative government witness in its ongoing investigation since pleading guilty four months ago to seven fraud charges carrying a maximum possible prison term of 35 years.

5 Associates Sentenced

“He’s going to do whatever he can to work off his beef with the government,” McMillan said. “He’s got a contract with them. It’s like signing up with the Dodgers. He’s got a cut clause, too, if they don’t like his performance.”

McMillan, referring to four City of Commerce officials and a Las Vegas gambler originally indicted with Moriarty in connection with a City of Commerce poker club case, noted that all five of Moriarty’s former associates had been prosecuted and sentenced.

“He’s gone through the City of Commerce like a reaper,” McMillan said, adding:

“If I were a politician in California right now, I’d be very nervous. If I were a banker in California, I’d be very nervous.”

As the defense lawyer continued his effort to focus the jury’s deliberations on Moriarty, he cited admissions by Moriarty in testimony Wednesday that he had paid for prostitutes who were hired to entertain political figures, saying Moriarty had “copped to pandering.”

McMillan also questioned whether Moriarty will actually pay the government $3.4 million in cash from the proceeds of the sale of his shares in the California Commerce Club, as he has promised.

“They don’t have it. I have doubts if they’ll ever get it. Old Pat’s got it spread out in a bunch of partnerships,” McMillan said, referring to testimony by Moriarty that he had invested the $3.4 million in a number of business interests, but planned to pay the government in cash at the time he is sentenced.

Moriarty is now scheduled to be sentenced by U.S. District Judge William J. Rea on Aug. 26, although that date could be delayed by the continuing investigation. As part of a plea agreement, the government has promised to inform the judge of the extent of Moriarty’s cooperation at the time of sentencing.

IRS Requirement

During the trial before U.S. District Judge Edward Rafeedie, Hallidy conceded that he had authorized Bank of Irvine employees to cash Moriarty’s checks without complying with government requirements that any transactions of $10,000 or more be reported to the Internal Revenue Service.

Taking the stand in his own defense, the former banking official said he had assumed Moriarty was exempt from the IRS reporting requirements because he was both a founding director of the Bank of Irvine as well as a major customer.

While McMillan urged the jury to weigh Hallidy’s credibility against that of Moriarty, who testified that Hallidy had advised him on how to avoid IRS reporting requirements by writing checks for under $10,000, both Evans and Chief Assistant U.S. Atty. Richard E. Drooyan ridiculed the defense claim that Hallidy had unknowingly violated federal banking laws.

‘Closed His Eyes’

“The reason Mr. Hallidy was doing this was (because of) who Mr. Moriarty was. He wanted to be the president of that bank, and he tried to do what he could to assist Mr. Moriarty. He closed his eyes to $317,000,” Drooyan said.

“Mr. Hallidy claims he thought it was proper not to report Moriarty’s transactions because he was a familiar customer,” Drooyan added. “Do you think he really believed that as long as somebody wasn’t a stranger, the law did not apply?”

The government’s case focused on 37 checks cashed by Moriarty and associates totaling $317,600, which were not reported to the IRS. Hallidy had personally approved 28 of the checks, the government charged.