Evidence points to destruction of HomeGold papers

Tony Park leaves the Anderson Federal Courthouse. Staff/Tanya Ackerman e-mail this story to a friend

Judge G. Ross Anderson's comments followed a daylong hearing in which a telecommunications contractor testified he removed HomeGold records from a Greenville storage facility at the request of a former HomeGold official and dumped them into trash bins off Woodruff Road.

The judge warned that any destruction of records didn't have to be done "in bad faith" to violate the court order he issued in November to preserve documents in the case.

"It's a serious matter," Anderson said. "A lot of money and a lot of people are involved in this."

Former HomeGold chief executive officer Ronnie Sheppard and former Greenville branch manager Tony Park, in testimony on Tuesday, denied any involvement in the destruction of records or equipment.

Anderson gave attorneys nine days to file additional written pleadings and make closing arguments. Arguments in the case will resume April 15.

The case involves a bankruptcy trustee's lawsuit against Emmco, a mortgage lending company formed by Sheppard following his resignation as HomeGold's president and CEO.

Trustee Ralph C. McCullough has accused Emmco of breach of contract in connection with the purchase of HomeGold assets and has asked for $120 million in damages and penalties. Tuesday's hearing was called so HomeGold officials, including Sheppard, could answer questions about the documents.

Jim Griffin, a Columbia attorney representing Sheppard and Emmco, said neither Sheppard nor company officials destroyed HomeGold documents. All records were maintained in compliance with Anderson's order that prohibited Emmco from destroying HomeGold documents and relocating any equipment, Griffin said.

Investigators, including SLED agents, last month seized computers and documents from a Roper Mountain storage facility as part of the state probe into the financial collapse of HomeGold and Carolina Investors.

Tim Greaves, an independent contractor who installs telephone and computer equipment, testified he, his son and his son's high school friend removed 16 truckloads of financial documents and dumped them in the trash bins after Park asked him to clear out the storage facility and get rid of the documents inside.

Some of the paperwork included loan documents with names, addresses and Social Security numbers, a 2000 financial statement, a report to the board of directors and correspondence from HomeGold's attorney, according to testimony.

Pickens-based Carolina Investors went out of business last year and sought bankruptcy protection. More than 8,000 people lost their savings when Carolina Investors suddenly closed its doors.

Greaves testified once he realized what he was throwing away he kept one box of documents and later gave it to investigators.

Park denied telling Greaves to destroy the documents, saying he only wanted them removed from the storage unit because he was behind on rent and the owners were going to auction what was inside.

Park said he "didn't care what he (Greaves) did" with the documents as long as they were removed from the storage unit.

During contentious testimony, Sheppard said he didn't know Park had the documents or that they had been destroyed.

"I think we presented our case very well," said Bob Pierce, a Carolina Investors depositor and advisor to McCullough.

"I'm confident that the court will rule in our favor," Pierce said. "And that will be just one step in a number of steps that are under way now that we will be pursuing in an effort to return all the monies that we can to the investors."

He added he was disappointed there was no ruling Tuesday.

Scott Grady, a HomeGold vice president, testified Tuesday he identified the computers as the Columbia-based company's property based on company markings and stickers.

SLED agents seized HomeGold documents last month after obtaining permission to search the storage facility from the person who leased it, said Trey Walker, a spokesman for Attorney General Henry McMaster.

HomeGold was a specialty finance company whose primary line of business was originating, selling and servicing subprime first- and second-lien residential mortgages. Its business was funded through loans from Carolina Investors, which sold notes and subordinated debentures to its depositors, according to SEC documents.

McMaster is overseeing the state grand jury investigation into the companies' financial collapse.

Sheppard became president and CEO of HomeGold in May 2000 after the merger of his private HomeSense with HomeGold Financial. The merged companies kept HomeGold's name and its status as a publicly traded company.

According to documents filed with the SEC, he resigned his HomeGold positions prior to the end of 2002 and formed Emmco LLC as of Dec. 31.