A federal judge has pushed back the start date by at least a month in the trial of United Development Funding CEO Hollis Greenlaw and three other executives of a Grapevine-based real estate investment company due to the case’s immense scale, scope and complexity.
According to court filings, the case against the Dallas-Fort Worth-area firm involves “hundreds of residential developments across North Texas and Austin,” millions of pages of documents and real estate investment funds involving billions of dollars.
The trial, originally scheduled to begin Dec. 6, is now set to start Jan. 3 in Fort Worth, according to an order U.S. District Judge Reed O’Connor signed Nov. 12.
However, the new date could be further extended if federal prosecutors and attorneys for the defense get their wishes.
Defense lawyers and attorneys for the government put their calendars together. They requested that the trial be pushed to April because of the complexity of the case and other trials already on court dockets and lawyers’ and witnesses’ additional pre-existing commitments, according to court documents.
All pretrial motions in the case are due Dec. 13, according to O’Connor’s order.
In its unopposed motion to continue the trial, the defense argued that case law allows trials to be postponed if a case is so “unusual and complex” that it is unreasonable to expect adequate preparation for pretrial proceedings or for the trial itself within the currently set timeframe.
“The parties agree that the case is sufficiently unusual and complex and should be so designated,” according to the motion.
The defense argues in the motion that lawyers for the executives charged had not, as of Nov. 10, effectively received from the government information about the evidence and witnesses they’ll present at trial.
The defense expects to receive “multiple terabytes” — equivalent to millions of pages — of discovery in the case. The amount is anticipated to be roughly enough to fill 1,300 filing cabinets, the motion to delay the trial states.
“The discovery provided to defense counsel, once fully made, will be massive, according to the government,” the defense motion says. “The volume of this discovery and related delay in its production necessitates a trial continuance to ensure that defense counsel has adequate time to review this discovery and effectively prepare for trial.”
The case involves complicated lending and property development transactions by UDF and many business partners across Texas that occurred more than seven years ago. Moreover, the defense pleading says that the government has already designated 11 potential expert witnesses in connection with the planned presentation of its case, with more likely to come.
“The indictment identifies multiple fund offerings by UDF, involving billions of dollars, a host of investors, multiple financial institutions; complex securities filings made by some of those funds with the Securities and Exchange Commission; and hundreds of residential developments across Northern Texas and Austin,” the motion states.
UDF CEO Hollis Greenlaw and three other top executives are charged in an alleged plot to cheat investors and banks using funds that provided loans to residential housing developers.
Federal prosecutors in the Northern District of Texas claim in an indictment made public last month that the four UDF executives conspired to improperly use investor money, defraud banks and hide the true financial condition and performance of UDF funds from shareholders, the investing public, external auditors and the U.S. Securities and Exchange Commission.
The allegations date back nearly a decade and involve dollar figures high enough to rank it among the nation’s largest financial fraud cases.
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