Jury finds contractor guilty of five counts in tornado fraud case

Jason McKnight's wife, Resa McKnight testified on behalf of her husband Friday.
Jason McKnight's wife, Resa McKnight testified on behalf of her husband Friday.

LUFKIN, TX (KTRE) - By Holley Nees - email

LUFKIN, TX (KTRE) –An Angelina County jury has found a Wells building contractor guilty on five counts of fraud and not guilty on four others following about six hours of deliberation.

District Judge Paul White will sentence Jason McKnight at a later date. McKnight faces a minimum of five years in prison and a maximum sentence of life in prison.

During testimony, McKnight's wife said her husband's company never received any building permits to work on tornado-ravaged homes on the day he's accused of falsifying documents.

Jason McKnight was accused of pulling 10 building permits in December 2009, right after an E-F3 tornado ripped through a Lufkin neighborhood.

McKnight was on trial for 10 counts of fraud for scamming the city and tornado victims, according to prosecutors.

The state had withdrawn one of the counts prior to deliberations.

McKnight's trial continued Friday, nearly a year after the twister touched down. McKnight is said to have illegally secured building permits on behalf of tornado victims without their permission from the City of Lufkin.

Although the state had rested their case, the defense called their first witness, Resa McKnight, to testify on her husband's behalf.

In opening arguments, McKnight's attorney, Al Charanza told the jury the couple was married shortly before the tornado, but they've known each other for more than 20 years.  He said Resa McKnight handles the business side of the company.

"This is our opportunity to kind of give you the other side of the story," Charanza told jurors.

The defense said they may call additional witnesses depending on how testimony unfolds.

"You'll be given the other side of the story," Charanza reiterated.

McKnight explained Wells Siding and Metal Roofing was owned by her husband's mother and father. Her husband now runs the company, calling it Wells Siding and Roofing.

She said her husband had applied for at least 5 or 6 building permits from the City of Lufkin before the alleged December incident when they were dating.

"We were on our way from Beaumont with the kids and the wind had gotten really bad," she said remembering how she discovered a storm ripped through Lufkin leaving behind a path of destruction.

"We had a crew in Lufkin, a small crew," she said explaining salesmen were also on those crews.

She said salesmen get commission and could sell several jobs including, roofing, siding, room additions, porches, and patios.

"The permit office didn't want to give us a permit," said McKnight's wife.

"We went to go get the tarps, the permits for the tarps, because our signs had gotten pulled," she said.

The witness testified they did not receive, sign, or pay for any permits on the morning in question. She said they stayed in the parking lot waiting because their crews couldn't do anything without the dry-in permits for the tarping.

"It shut us down," she said.

Resa said Allred told them they didn't need a permit for tarping.

When she was asked about their company signs in people's yards she said, "We need our sign in that yard because we need that job."

His wife explained they were out thousands of dollars because they had not taken any money from anyone.

"You don't get [the permits] until you pay for them," she said.

His wife said compared to the competition, they were able to obtain 90 percent of the work in the Lufkin disaster area.

Prosecuting attorney Art Bauereiss asked Resa about calling the Angelina County District Attorney's office upset with her husband. She said she didn't recall the phone call.

Bauereiss asked her about their attorney giving them advice.

"I've never been told to put false information anywhere," she said.

"During the tornado episode, Wells Siding and Roofing signs went up before permits were issued," said Bauereiss.

"Absolutely," Resa responded, saying that's how it always happens.

Bauereiss stated that's against the rules, but she disagreed.

McKnight talked in a loud whisper to his lawyer while Bauereiss continued questioning his wife.

The prosecution asked her if she knew the City does not issue permits for tarping.  She replied she hadn't heard that.

City of Lufkin Building Inspector Dale Allred was called back to the stand Friday morning. Allred testified earlier in the trial McKnight acted "very agitated" when he requested 10 building permits in December 2009.

Allred explained the importance of permits having the correct company name on them. There was a lot of discussion about the name change of the company Wells Siding and Metal Roofing, which his parents owned, to Wells Siding and Roofing.

Allred said he didn't recall the defendant asking for dry-in permits.

He also said he didn't see any paperwork that matched on the defendant.

Allred told Charanza he just changed the bond number and the bond name to reflect Jason McKnight.

At 11:03 a.m. the defense rested their case.

Both attorneys rested and closed around 11:30 a.m. Friday. The state also moved to dismiss count four on the indictment.

District Judge Paul White reminded the jury of the charges against McKnight of tampering with a government record.

He instructed the jury to decide if McKnight made false entries on City of Lufkin building or roofing permits regarding the value of improvements to be made under contracts with customers with the intent to defraud or harm the City of Lufkin.

The court is to decide his punishment

In closing arguments, Bauereiss told the jurors the defendant claims he never paid for the permits and they were never actually issued, but the state said the real issue is McKnight made a false entry with the intent to harm or defraud the City of Lufkin.

"You call it what you want, but they're there to try to get business…to try to beat everybody to the punch," said Bauereiss.

The state told jurors there are discrepancies between the contract price and the valuation listed on the permits. Bauereiss said not one of the amounts match up.

"This whole thing stinks from top to bottom...he is taking advantage from the word go of these people's misery," he said. "Please find him guilty of these crimes, he is guilty."

The defense approached the jury apologizing for his client's loud talking during the trial. He said McKnight didn't have his glasses during trial and he has poor handwriting. Charanza explained he has to have the ability to communicate with his client.

Charanza told the jury this trial is "Jason McKnight fighting city hall."

He focused on the fact that no payment was ever made and a permit was never issued.

"They did not prove what is in the law as they charged him," Charanza emphasized.

He told the jury they may disagree with the way McKnight does business or the way he became confrontational with people at city hall, but he told jurors that's not what McKnight is charged with.

Charanza made reference to the building code he said Lufkin Inspection Services is supposed to follow which stipulates, a permit is not valid and should not be released until fees have been paid.

The defense said it's not criminal just because the competition was mad McKnight had the majority of the business.

Charanza said Ryan Deaton, McKnight's former attorney, should be in the chair next to McKnight as an accessory for giving McKnight false information, if the state's claims were true.

"Can you fight city hall?  Maybe, maybe not," Charanza said. "As he's charged, no crime, in any count was committed."

Bauereiss, in his response, said if McKnight's attorney really believed Deaton had misinformed McKnight, why didn't the defense call him as a witness and question him.

"The fact that this stopped before he got in [the victims'] pocketbooks is not a defense," Bauereiss concluded.

The jury began deliberating at 12:30 p.m.

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