'She Didn't Ask, And I Didn't Tell,' Ex Says Of Fraud Scheme

Both federal prosecutors and defense counsel for a Georgia woman accused of using her small business to hide hundreds of thousands of dollars in illegally obtained pandemic loans agreed Tuesday that her ex-husband was not just a philanderer, but a fraudster to boot. But where their agreement ended — and the question for jurors weighing the guilt or innocence of defendant Carla Jackson — is just how much she knew about her former husband John Gaines' illegal activities. John Gaines, who is divorced from Jackson and was convicted last month of money laundering charges, took the witness stand to tell jurors during week two of a federal trial that he'd kept his wife in the dark about the scheme he was involved in with Darrell Thomas. Thomas, according to prosecutors, was the mastermind of a fraud ring encompassing more than 20 defendants who orchestrated the scheme to illegally obtain $11 million in Paycheck Protection Program loans. "I didn't tell her anything," John Gaines insisted Tuesday, later adding, "She didn't ask, and I didn't tell." John Gaines' criminal behavior, Jackson's attorney David Marshall said, was just the latest in a series of secrets he'd kept from his wife over the course of their nearly 20-year marriage. He'd had affairs behind her back and fathered two children out of wedlock, Marshall said. Why, he suggested, should the PPP scheme have been any different? By John Gaines' own admission, he had partnered with Thomas and his cousin, Andre Gaines, during the early months of the pandemic to prepare fraudulent PPP applications on behalf of businesses that effectively existed only on paper. Also allegedly involved in the scheme was Teldrin Foster, who is being tried alongside Jackson and is accused of working with Thomas to prepare his own bogus applications. After securing the loans, which were intended to help small businesses shuttered by the pandemic keep their workers on their payroll, John Gaines then moved the money into a business run by Jackson in an attempt to hide the fraud from the government. John Gaines said Jackson believed the money was for a purportedly above-board real estate development project they were undertaking together in Alabama. The project never came to fruition because, as John Gaines put it, "Everything went to shambles before we got a chance ... the FBI showed up, and things got ugly." But on cross-examination, Assistant U.S. Attorney Tal Chaiken first hammered John Gaines' credibility by casting doubt on Andre Gaines' role in the scheme. She noted Andre Gaines had suffered a stroke in 2018, and he was in his late 60s with cognitive disabilities by the time of both the fraud scheme and the joint real estate venture. Chaiken then pointed to email exchanges between John Gaines and a woman who, for years before the PPP scheme, had helped him prepare forged documents of all kinds: drivers' licenses, tax records, pay stubs, car titles, utility bills and more. "Is it fair to say you've used her to make so many fake documents over the years that you don't even remember what you've asked her for?" Chaiken asked as John Gaines continued to say he didn't remember the emails in question. Chaiken further scorned the notion that John Gaines and his disabled, retired cousin had "all of a sudden decided to do a construction project together" on a property that didn't appear to have been listed for sale. John Gaines, for his part, said his recollections of a visit to the property were hazy, thanks to having "had a couple drinks" before scoping out the parcel in 2020. Finally, Chaiken circled around the claim that Jackson was unaware of the scheme John Gaines was involved in, even as he was moving six-figure sums of cash into her business's bank accounts. As Chaiken pressed John Gaines on his assertion that his ex-wife never questioned the transactions in the midst of a global pandemic, he continued to maintain her ignorance. "She didn't know how we obtained that money," he said. Marshall, meanwhile, implied John Gaines' and Jackson's continued contact and work together after their divorce stemmed not just from business concerns, but more personal ones as well. At one point, Marshall asked John Gaines why he still stayed at his ex-wife's house on occasion even after their divorce. John Gaines, not making eye contact with Marshall or the jury, took a long pause before answering. "She still loved me," he said. The government is represented by Siji Moore of the U.S. Department of Justice's Criminal Division, and Nathan Parker Kitchens, Tal C. Chaiken, Radka T. Nations, Sekret T. Sneed and Samir Kaushal of the U.S. Attorney's Office for the Northern District of Georgia. Carla Jackson is represented by David D. Marshall. John Gaines is represented by Deana Timberlake-Wiley of the Law Offices of Deana Timberlake-Wiley. Teldrin Foster is represented by Saraliene Durrett of Saraliene Smith Durrett LLC and Leigh Ann Webster of Strickland Webster LLC. The case is USA v. Thomas et al., case number 1:20-cr-00296, in the U.S. District Court for the Northern District of Georgia.