Banker Freed After 2nd Jury Deadlocks on U.S. Charges

The federal government is dropping criminal charges against an Orange County banker who was accused of participating in a money-laundering scheme with public corruption figure W. Patrick Moriarty, a prosecutor said Tuesday.

The decision came after two trials in which juries were unable to reach verdicts. The juries split identically, 8 to 4, for acquittal.

On Monday, the second jury told U.S. District Judge Edward Rafeedie that it was deadlocked on whether Nelson Hallidy, a former Bank of Irvine vice president, failed to comply with federal bank reporting rules. Rafeedie declared a mistrial.

Last month, another federal jury acquitted the 61-year-old Hallidy on one count of conspiring with Moriarty to launder 37 checks totaling $317,600 through the bank. But the same jury deadlocked on charges that he failed to report a number of individual transactions exceeding $10,000, as required by law. Hallidy was retried on those charges.

No Third Trial

In asserting that he would not pursue a third trial, the prosecutor, Chief Assistant U.S. Atty. Richard E. Drooyan, said he thought it would serve no useful purpose to put Hallidy through another trial.

“We (brought) a case we believed was a valid (one),” Drooyan said. “We took our shot and the jury was unable to reach a verdict. I am satisfied with the way these cases were tried. . . . Frankly, I just don’t think it’s fair to the defendant to put him through it again.”

Through both trials, Hallidy’s attorney, Byron McMillan, charged that Moriarty was “a patent liar, a corrupter” who could not be believed.

Moriarty had helped start the Bank of Irvine, which was closed by state banking officials in 1983.

Moriarty, an Orange County businessman and fireworks manufacturer, allegedly funneled laundered money to political figures to secure passage of a state law prohibiting cities from outlawing so-called safe and sane fireworks. He pleaded guilty in March to seven counts of fraud in a plea bargain and agreed to testify against politicians he purportedly bribed.

In the first trial, Moriarty testified for the government and accused Hallidy of advising him --Moriarty--on how to avoid Internal Revenue Service reporting regulations.

However, Drooyan did not call Moriarty as a witness at the second trial. McMillan, a former Orange County Superior Court judge, theorized Tuesday that the prosecution “probably felt that Moriarty did them in” in the first trial and wanted the second one to be “without his influence.”

Prosecutor Drooyan has steadfastly refused to comment on why he did not put Moriarty on the stand in the second trial. Nor would Drooyan say on Tuesday what--if anything--this strategy meant for any possible future corruption trials based on information given to the government by Moriarty.

Hallidy, reached by telephone at his Orange County home, said he would attempt to “put my life back together. I hope to get a job again,” but probably not in the banking industry, he said.

“The indictment pretty well destroyed my life despite the outcome,” said Hallidy.