Attorney Donald Watkins Sr. fought to keep disgraced HealthSouth chief executive officer Richard Scrushy out of prison in 2005 — but more than a decade later, he’d find himself behind bars.
Watkins Sr., who is featured in Netflix's new docuseries "Trial By Media," was convicted in 2019 of defrauding former sports players, including Charles Barkley, of millions of dollars in a years-long scheme he ran alongside his son, Donald Watkins, Jr.
The once-distinguished Alabama attorney was sentenced to five years in prison at the age of 70 and reported to the Talladega Federal Correction Institution in August, according to WIAT.
A Winning Defense
Before his conviction, Watkins Sr. was a well-known figure in the Alabama legal scene, and one of his most prominent cases was working for the defense of Richard Scrushy.
The sensationalized case portrayed by prosecutors as one of excessive wealth and greed was revisited in Netflix’s “Trial by Media,” which includes new interviews from Watkins and fellow defense attorney Jim Parkman, along with United States attorney Alice H. Martin and Scrushy himself.
Scrushy had been accused of directing employees at the HealthSouth Corp. to alter the books to make it appear the company was more profitable than it really was under mounting pressure to perform in the stock market.
Five of the company’s chief financial officers had agreed to testify against Scrushy to tell jurors how Scrushy had encouraged them to cook the books.
“No doubt in my mind that Richard Scrushy was guilty of the financial fraud occurring at HealthSouth,” Martin, who prosecuted the case, recalled in the series. “We had five CFOs that could tell you what Richard Scrushy had said to them, and they said from the very beginning, when it was on the Nasdaq, that HealthSouth had never reported true numbers.”
Before the case proceeded to trial, Watkins Sr. embraced the philosophy that public opinion was equally as important as the evidence in a case and encouraged Scrushy to talk with the media whenever possible.
“Richard Scrushy was the most hated man in Birmingham. He was the devil. Your jury pool is coming from regular folks out here who are exposed to all this mainstream media so we need to hit back in the same news cycle, put our story out there all of the time,” he said in the series of the strategy.
In court, prosecutors focused on the rising wealth they said Scrushy enjoyed as the company’s inflated earnings reports helped falsely drive up stock prices.
However, Watkins Sr. and Parkman mounted a defense that painted Scrushy as a man of humble beginnings who had earned the success he enjoyed.
“Inside the courtroom, decisions by jurors are based on the human connection. So during the trial, you make love to everybody. You get to know everybody,” Watkins Sr. said.
They attacked the credibility of the CFOs, portraying them as liars, and told jurors that Scrushy was not aware of the actions of his CFOs.
One of the particularly defining moments of the trial was when Watkins Sr. wrapped himself in an American flag during the closing arguments and recounted how as a child his mother would give him a peppermint when they went out in public so that if the water fountain designated for black people wasn’t working, he was able to keep his mouth moist until they found one that was.
He told the jury it had been a group of people much like themselves who had decided at one point that black children didn’t have to go thirsty, and another group that decided black people could sit at lunch counters and go to college, and now it was this jury’s turn to uphold the constitution and opt for truth.
“What I’ve found that has worked consistently throughout my legal career is an appeal to patriotism,” he said in the series.
Parkman called it “one of the greatest stories” that he had ever heard in a closing argument.
The strategy worked, and Scrushy was found not guilty of all the charges against him.
“I was happy that we won because I was going to establish a certain standard for an African American lawyer on a mainstream, high-profile case that will never be broken in American juris-prudence and I think I did that with Scrushy’s case,” Watkins Sr. said in the docuseries.
The day after the trial ended, Watkins Sr. moved to Miami, Florida.
From Lawyer to Defendant
But he would find himself at the center of a legal battle in 2019.
Watkins Sr. and his son, Donald Watkins Jr., were each charged with seven counts of wire fraud, two counts of bank fraud, and one count of conspiracy to commit wire fraud and bank fraud in a multi-million case that spanned almost a decade, according to AL. com.
Prosecutors accused the pair of stealing more than $10 million from investors and an FDIC-insured bank by telling investors their money would be used for the Masada Resource Group, a company where Watkins Sr. served as chief executive officer, according to a news release from The United State’s Attorney’s Office Northern District of Alabama.
Watkins Sr. described as the company to investors as “a ‘pre-revenue’ company that supposedly had technology that could convert garbage into ethanol,” according to the statement.
But instead of using the money to grow the businesses, prosecutors said Watkins Sr. used the money for his own personal needs, including using the money to pay hundreds of thousands in back taxes, personal loan payments, alimony, and a private jet. The money was also used to buy clothing for Watkins Jr. and his wife.
Watkins Sr.’s list of investors included some famous names, such as former NBA star and television analyst Charles Barkley who testified during the federal trial that he had lost more than $6 million through the scheme, The Birmingham Times reports.
Former NFL players Taeko Spikes and Bryan Thomas along with former NBA star Damon Stoudamire also lost money in the scheme.
Thomas and his wife, Danielle, testified during the trial that they had been “greatly affected” by their multi-million loss and that it had even put strain on the couple’s marriage.
“I was manipulated by a master con artist,” Bryan Thomas said in a letter read during sentencing, according to AL.com. “I work hard to provide for my family…[He] didn’t see any of us as human beings. We were all dollar signs to bankroll him.”
Stoudamire’s wife, Natasha Taylor-Stoudamire, said during the sentencings that Watkins Sr. had once been considered a trusted friend to the family.
“You are someone who has fallen so far from grace,” she said, according to the news outlet. “You need to sit somewhere, separately, and think about how it’s wrong. I don’t even know what else to say… You should be ashamed. Your son should be ashamed.”
Former United States Secretary of State Condoleezza Rice, who is a native of Birmingham, also took the stand during the trial to testify that Watkins Sr. had wrongly used her name to promote the business, even though she had declined to get involved.
Prosecutors also accused Watkins Sr. of defrauding Alamerica Bank, a company in which he had a controlling interest in through stock.
Watkins Sr. had a long-time mentor and prominent figure in the Birmingham community act as a “straw borrower” and take out more than $900,000 in loans from the bank. The money was then immediately given to Watkins Sr. to use for his own “personal benefit,” including paying “hundreds of thousand of dollars in litigation expenses” connected with another one of his businesses, according to the state attorney’s office.
Headed To Prison
Watkins Sr. defended himself in the trial, but this time the jurors would not decide in his favor.
He was convicted of seven counts of wire fraud, two counts of bank fraud, and one count of conspiracy and sentenced to five years in prison in connection with the scheme.
Watkins Jr. was convicted of one count of wire fraud and one count of conspiracy. He was sentenced to 27 months in prison.
Both men were also ordered to pay restitution in the case. U.S. District Judge Karen O. Bowdre ordered Watkins Sr. to pay just over $14 million in restitution. Watkins Jr. was ordered to pay $13.85 million jointly with his father, according to the state attorney’s office.
Watkins Sr. continues to maintain his innocence, according to the docuseries.
“Jurors try to do the right thing, more often than not. However, my 46-years of active participation in the American judicial system has shown me (and the world) that well-meaning jurors often convict innocent defendants,” Watkins Sr. wrote in a post on his website just before the sentencing.
Watkins reported to the Talladega Federal Correction Institution to serve out his sentence in August.
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