Judge: Investigator ‘misled’ grand jury

PALMER — That a judge tossed a grand jury indictment of a longtime Mat-Su teacher and hockey coach doesn’t necessarily mean the end of the legal process for James D. Smith.

Although Superior Court Judge Vanessa White threw out the five-felony indictments against Smith Oct. 8, the state is trying to decide where to go from here, said Lisa Kelley, who’s litigating the case for the state Office of Special Prosecutions.

“The state has a few options,” she said. “The state can do nothing and leave it as is, the state can go back and re-indict in a way that is true to the judge’s order, or the state could charge lesser crimes, if they fit.”

In the indictment handed down in February, the state alleged Smith defrauded the Alaska Avalanche Junior A hockey program’s booster club — the Spirit Booster Club — of more than $48,000. During his tenure with the Avalanche from 2005 to 2009, Smith served in multiple front-office roles, including head coach. The indictment included a pair of forgery charges alleging he forged the signature of the booster club’s president on the club’s state gaming license and dozens of checks. The cumulative amounts of those checks led to felony charges of theft, scheme to defraud and fraudulent use of an access device.

In her order granting Smith’s motion to dismiss the grand jury indictment, Judge White agrees with defense attorney Josh Fannon’s argument that the grand jury’s decision was made without crucial evidence that Smith worked for a nonprofit agency, not a for-profit business. Legally, that makes a world of difference, the judge wrote.

“The state acknowledges that the Alaska Avalanche hockey team, operated by Smith, was a nonprofit organization,” White wrote. “The use of the gaming permit funds to support the nonprofit hockey team was lawful and the state concedes that counts 3, 4 and 5 should be dismissed.”

While the state in its opposition to the motion to dismiss the indictment didn’t contest throwing out the theft and fraud charges, Kelley argued the forgery charges should not be dismissed, based on the testimony of the booster club president, who told the grand jury she didn’t sign the gaming license or dozens of checks for the club’s expenses.

“The testimony presented at the grand jury was that the forged checks resulted in the improper use of gaming funds, resulting in the theft-related charges,” Kelley says in her opposition. “The sole piece of evidence that Mr. Smith alleges was withheld from the grand jury was that the Alaska Avalanche hockey team was not a for-profit enterprise.”

Although it’s one piece of evidence, it’s a pretty big one, Judge White says in her ruling. That’s because that information could influence the grand jury’s interpretation of Smith’s motives.

“The court must evaluate whether the improper evidence prejudiced the jury’s deliberations off this intent element,” she wrote.

White ruled that because the grand jury didn’t have information that the club was a nonprofit and how being nonprofit legally influences what Smith could and could not do with booster club funds, the forgery charges should also be tossed.

“A review of the grand jury proceeding convinces the court that the state’s improper evidence was a decisive factor in the grand jury’s decisions to indict on both forgery counts,” White’s ruling says.

White also agrees with another of the defense arguments in its motion to dismiss that a state investigator testifying about the investigation and evidence did not disclose the nonprofit status of the Avalanche.

Kristian Heikkila, an investigator with the state Department of Revenue, “misled the jury to believe that Avalanche hockey was a for-profit organization,” White says in her ruling. “He then relied on 58 out of 83 checks admitted into evidence to support the claim that Smith was illegally using the gaming permit to fund a for-profit organization. The jury was led to believe that Smith had written checks worth more than $25,000 for his personal expenses. Potentially exculpatory evidence tending to support Smith’s claim that he was reimbursing himself the hockey team’s expenses he paid for was not offered to the grand jury.”

Had the state relied solely on the testimony of the booster club president and not the investigator, the indictment may have been upheld, White wrote.

“The court finds that if (the club president) were the only witness to testify before the grand jury in this case, and if the state did not present improper evidence of the hockey team’s status as a for-profit organization, there would have been sufficient evidence to establish that Smith intended to defraud any person or entity.”

Whether the state decides to try and indict Smith again “is still under consideration,” Kelley said. When asked if the decision were to move forward again, would the state ask for the same charges, Kelley deferred to her written opposition to Smith’s motion to dismiss.

In that motion, she focuses primarily on the forgery charges.

“Whatever Mr. Smith’s motive may have been, the grand jury was presented with sufficient evidence to determine that Mr. Smith forged (the) signature on the gaming application, as well as the checks,” Kelley wrote.

After learning of Judge White’s order to throw out the indictment, Fannon said he and Smith were pleased with the result, but also want to continue to have open communication with prosecutors to hopefully put the case to bed.

“We want to meet with them to make sure Jamie can move on with his life and not have to worry about this anymore,” Fannon said. Smith wants to “start working to repair his name in the community he grew up in.”

Contact Greg Johnson at 352-2269 or greg.johnson@frontiersman.com.