Wednesday, October 28, 2020

Bowling Green real estate attorney fined $100,000 in money laundering case

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Bowling Green real estate attorney Harris Pepper Jr. was fined $100,000 Thursday and placed on probation for five years in a federal criminal case involving money laundering.

Pepper, 53, had pleaded guilty to a count of conspiracy to launder money, admitting to taking part in a scheme with Douglas Booth in which Booth invested hundreds of thousands of dollars he made from operating illegal gambling websites.

Pepper facilitated Booth’s investments into several real estate ventures in Bowling Green, failing to record or document Booth’s involvement and thereby concealing his ownership stake in a number of properties, according to records filed in U.S. District Court.

Federal authorities accused Pepper of taking part in the conspiracy from 2008 to 2016 and, in a court filing, named four instances in which Booth provided a total of $665,000 to Pepper to invest.

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Appearing Thursday for sentencing, Pepper told U.S. District Judge Justin Walker he was “very sorry.”

Pepper’s attorney, Marc Murphy, successfully argued that Pepper should avoid incarceration because of his role in taking care of his two adult children, who have autism and require around-the-clock care.

Pepper’s daughter, who is non-verbal, had been living at The Stewart Home and School in Frankfort, a campus for people with intellectual disabilities, but the COVID-19 pandemic forced the school to close, with no date set for its reopening.

Before the sentencing hearing, Murphy submitted a video to Walker that documented life in the Pepper household and the responsibilities he, his wife and his parents have to assume when caring for Pepper’s children.

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Murphy argued that Pepper’s role in this dynamic makes him irreplaceable and probation is a more appropriate punishment.

“What he does for his children is something quite literally no one else could do,” Murphy said.

Pepper shared details in court about the daily routine with his daughter, which entails taking her on an hours-long car ride early each morning that follows the exact same route.

Murphy said Pepper has been trained to physically restrain his daughter without hurting her when she becomes aggressive to the point of being a danger to herself or others.

In the afternoons, Pepper said he works at his real estate company and spends time with his son while his wife cares for their daughter.

Mike Simpson, a family friend, testified that Pepper is the only person who is able to calm his son when he has emotional outbursts.

Pepper said he has been saving money with an eye toward ensuring his children receive care after his death.

“Any financial decision I’ve made has been based on putting myself in a position financially to provide for my two children,” Pepper said. “Any extra money, that’s what I’m building it up for.”

Pepper said previous instances of hiring nannies and people from in-home care companies were not as effective in providing the best care for his children.

Pepper’s father, Henry Pepper, testified that he and his wife help care for their grandchildren when they can, but doing so has become more difficult with age.

“Harris Pepper’s parents can really no longer effectively be a part of this equation,” Murphy said.

Walker asked Pepper how things went wrong for him, and Pepper said he drank until he stopped several years ago, and that was replaced with a gambling problem.

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Murphy said in a court filing that Pepper’s gambling trips put him in contact with Booth and at one point his gambling losses amounted to $250,000.

Federal prosecutors said Booth provided $200,000 in cash and relief from gambling debts to Pepper at some point during the conspiracy.

“I know I made some bad decisions that cost me dearly … decisions I might not have made if I hadn’t been gambling,” Pepper said.

Assistant U.S. Attorney Bryan Calhoun asked for imprisonment for Pepper. The plea agreement recommended a prison sentence of up to a year and a day.

Calhoun argued Thursday that prison time for Pepper would promote respect for the law.

“This is someone who at least since 2008 had been involved in gambling and laundering money for a gambler … taking bags of cash, literally, from someone he knew as a gambler and investing in properties,” Calhoun said. “This man is an attorney … he made a conscious decision to ignore the law … if he’s not punished, he’s gotten away with it to a certain extent.”

Walker questioned Calhoun about how Pepper’s household would operate if Pepper were jailed for six months, and Calhoun said he was not sure before adding he believed Pepper has the means to find help for his children.

In pronouncing his sentence, Walker said that, while the crime was serious, Pepper provided enough evidence to show that he was needed at home to care for his children and that no alternative plan of care would be adequate.

“Harris Pepper and his wife have a relationship with their children that is the definition of extraordinary,” Walker said in court. “If any parents are irreplaceable, this is the situation.”

Booth, who has pleaded guilty to five counts of failing to file federal income tax returns, four counts of money laundering and one count each of transmission of wagering information and conspiring to launder money, is set to be sentenced July 8.

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