Conour bond revoked, denied funds to file bankruptcy

William Conour, a former leading personal-injury attorney, was led from federal court in handcuffs Thursday after a judge said Conour had misled the court and dissipated assets in violation of bond conditions ahead of his trial on a wire fraud charge.

Conour was escorted from the courtroom of Chief Judge Richard Young of the Southern District of Indiana after Young granted the government’s motion to revoke bond for burning through tens of thousands of dollars without court approval.

“I just don’t believe Mr. Conour is taking seriously the court order here,” Young said. “I have real concerns that if there are other assets out there that Mr. Conour may dissipate those assets as well.”

As Conour was led from the courtroom, some of his family members wept and some of his alleged victims embraced in restrained celebration. Authorities said Conour will be held in a federal detention unit of the Marion County Jail ahead of his trial scheduled for Sept. 9.

Conour is accused of defrauding 25 or more clients of at least $4.5 million. He faces a possible sentence of up to 20 years in prison and a fine of as much as $250,000.

Young’s decision to revoke bond came after an unusual hearing in which now-retired federal prosecutor Richard Cox was called to testify about agreements that Conour represented had been made with Cox. Conour said an informal arrangement existed with Cox allowing him to use proceeds from art sales and other assets to pay living expenses.

But Cox testified that the government viewed any assets as those that could be used for restitution, and it was up to Conour, not the government, to ensure conditions of bond were met.

Cox said he had been put in the uncomfortable position of prosecuting Conour while also controlling purse strings from the court fund after Conour began to represent himself late last year. The court registry was established for potential victim restitution and for Conour’s legal defense and expenses.

Conour public defender Michael Donahoe grilled the former prosecutor about the proceeds of art sales the government was aware of and for which Conour received the proceeds.

“On no occasion did you ever discuss with (Conour) how that money should be divided,” Donahoe said. “That’s correct,” Cox said.

Donahoe argued in a filing Thursday responding to the government’s revocation bid that prosecutors were stretching honest disagreements over prior arrangements into allegations of perjury.

“Mr. Conour has done nothing that even approaches the commission of a new crime while on pretrial release. Considering the loose, informal spirit of cooperation and trust that characterized the prior pattern of defining and paying for living expenses, the government has not shown, by clear and convincing evidence, that a specific condition has been knowingly violated.”

“It would have been easy for Mr. Cox to say this money needs to go in the court registry,” Donahoe told Young, referring to art sales made while Conour represented himself late last year. But Young said there was no burden on the government to ensure Conour complied with conditions of his bond.

“The point is, he wasn’t supposed to dissipate assets,” assistant U.S. attorney Jason Bohm told Young. “There is clear and convincing evidence he violated terms of his bond.”

Young also referenced Conour’s divorce, initiated by his ex-wife, Jennifer Conour, days after Conour was charged in April 2012. The two signed an uncontested settlement in December.

Young said he said he had serious doubt about whether a judge in Kosciusko County would have signed the dissolution order if he had knowledge of Conour’s wire fraud case, and noted the federal court was never informed of the divorce.

“It’s clear to me what was going on,” Young said, calling the proceeding “a way to transfer a significant amount of assets.”

Meanwhile, Conour also was denied a motion filed this week asking the court to release the remaining $21,000 from the court registry so that he could declare Chapter 11 bankruptcy. The firm of Tucker Hester Baker & Krebs LLC filed the request Tuesday. Under the proposal, Conour would have used money from the fund to hire bankruptcy lawyers to pursue claims “against other parties holding money which are attorney’s fees due him on cases in which he provided legal services,” according to the filing.

Young appeared mystified by the request. “He wants me to take the little money left in the registry here … and give it to attorneys for attorney’s fees?”

Donahoe said using the money to hire bankruptcy counsel would allow Conour to collect fees he claims he’s owed by other attorneys who took his personal injury cases after he was arrested, and would be a good deal for alleged victims.

“I don’t know that the alleged victims would think that’s a good thing to do,” Young said.

Donahoe claimed Conour was owed a share of at least $2 million in settlement fees to which attorneys “admit” Conour was entitled. When Young pressed, Donahoe said, “I’ve been told that by Mr. Conour,” and that no such admission existed in writing.

“I’m not going to grant this motion to remove what’s left in the victims’ fund, no,” Young said. He said he would consider appointing a special master to handle claims if Conour is convicted.