Prosecutor Won’t Call On Moriarty in Banker’s Trial

A federal prosecutor said Wednesday that he is not going to call confessed political money launderer W. Patrick Moriarty, the central figure in an investigation into public corruption, to testify against former Bank of Irvine Vice President Nelson Hallidy, who is charged with failing to comply with federal bank reporting rules in a scheme allegedly involving Moriarty.

Moriarty, who has pleaded guilty to seven counts of fraud in a plea bargain with prosecutors, was the key witness against Hallidy in the banker’s first trial last month.

That trial ended in the banker’s acquittal on a charge that he conspired with Moriarty in a money-laundering scheme.

However, jurors deadlocked on nine other charges that Hallidy had failed to comply with the federal reporting rules, and the government is trying him a second time on those allegations.

Chief Assistant U.S. Atty. Richard E. Drooyan, the prosecutor at both trials, told U.S. District Judge Edward Rafeedie that he does not intend to call Moriarty. “I’m 99.9% sure we’re not going to call him,” he said.

Drooyan offered no explanation to the judge and declined to provide one to a reporter.

But Byron McMillan, Hallidy’s attorney, speculated that it was because Moriarty is “not believable.”

McMillan said Moriarty’s lack of credibility was a major reason for Hallidy’s acquittal in July.

“He is a patent liar, a corrupter,” McMillan said. “He’s not believable. If Moriarty testified (in this trial), I can assure you the jury would know he’s a liar.”

Drooyan declined to say whether the government had decided not to use Moriarty in any other cases that might grow out of the political corruption probe.

The FBI and the Orange County district attorney’s office have conducted an extensive probe of Moriarty’s dealings with a number of prominent California politicians, banking officials and other businessmen.

To date, eight people, including Moriarty, have either been convicted or have pleaded guilty to criminal charges stemming from the probe.

Agreed to Testify

Moriarty pleaded guilty in March and agreed to be a government witness against politicians who allegedly received bribes from him.

His credibility may have been damaged, however, during cross-examination by Hallidy’s lawyer during the first trial.

Under tough questioning, Moriarty, for example, admitted spending “several thousand dollars” for prostitutes to entertain state political figures, but said he could not remember the names of any of the politicians who were supplied with the prostitutes. He also testified that he laundered money as donations to political candidates, but again said he had trouble remembering who received the funds.

Hallidy, 61, was indicted last May by a federal grand jury on charges that he helped Moriarty, a wealthy Anaheim fireworks company owner, launder $317,000 in bank transactions to avoid Internal Revenue Service reporting requirements.

At Hallidy’s first trial, Moriarty testified that Hallidy had advised him on how to avoid IRS reporting regulations.

At the second trial, in Moriarty’s absence, Drooyan is attempting to prove his case by calling a series of bank employees and a former employee of Moriarty.

Employee’s Testimony

Anthony Martello, who worked for Moriarty between 1971 and 1983, testified that he cashed a number of large checks for his boss during 1981 and 1982.

“I asked Mr. Moriarty why he was breaking down the checks and he said, ‘So they wouldn’t be reported,’ ” Martello testified.

The IRS requires banks to report cash transactions of $10,000 or more and cash transactions exceeding $100,000 in any one-year period. These transactions include checks being cashed.

Drooyan said he will call one more witness--a government investigator--in the three-day trial, which may go to the jury today.