By Ryan Yousefi
By Chuck Strouse
By Terrence McCoy
By Terrence McCoy
By Terrence McCoy
By Michael E. Miller
By Kyle Munzenrieder
By Michael E. Miller
The two insurance-fraud investigators had stopped by unannounced. It was just after 6:30 on the evening of January 12, 1995, and Steven Smith and Maureen Murphy had some questions for the petite woman with long, dark hair who answered the door wearing a T-shirt emblazoned with the words "U.S. Attorney's Office."
The shirt was no bootleg knockoff, no thrift store hand-me-down. It was the genuine article. The woman, the investigators knew, was Susanna Timor, the 36-year-old assistant to Kendall Coffey, U.S. attorney for the Southern District of Florida and the most powerful law enforcement officer in South Florida.
Timor agreed to talk with the pair for a few minutes and led them into the living room of her home, a spacious, two-story house in a quiet, upper-middle-class neighborhood of Miami Beach.
The investigation of Timor had begun with two anonymous handwritten letters the Florida Department of Insurance received in January 1993 and March 1994. The letters, seemingly written by the same person, alleged that Timor committed fraud by submitting inflated and altered receipts to State Farm for post-Hurricane Andrew repairs to a house she had owned in Coral Gables. The ensuing inquiry, launched last year, revealed that Timor had submitted a total of seven altered documents from five different companies and received $3847 to which she was not entitled, according to an affidavit filed by the Department of Insurance.
The dollar value of the alleged fraud was small by Hurricane Andrew standards and the case was "a routine ground ball," says Frank Doolittle, director of the Division of Insurance Fraud at the Department of Insurance. He figured the investigators would conduct the interview, wrap up the paperwork, and within several days forward the matter to the State Attorney's Office, which prosecutes such violations.
But when she was questioned at her house that day, Timor did something unexpected: She asserted her innocence.
Perhaps, she suggested, it was the contractors who were at fault. Maybe they fiddled with the receipts to avoid reporting the money she paid them. Toward the end of the interview, Timor sat up straight, glared at them, and defiantly declared, "I work for the U.S. Attorney's Office and I indict people for fraud, I don't do fraud."
Timor would eventually be arrested and charged with six felony counts: five counts of filing a false insurance claim and one count of grand theft.
But not for seven and a half months.
The protracted investigation prompted rampant speculation in South Florida's law-enforcement and legal communities. For months Timor and her supporters have accused state officials of mishandling the matter and victimizing her. The authorities, meanwhile, have maintained their secrecy, saying nothing.
Until now. Voluminous investigative files recently made public reveal how a straightforward phony-receipts case quickly ignited into something much more complex. After the January 12 interview with Timor, investigators delved further into her finances and discovered more alleged wrongdoing, involving not only Timor but her mother, Gaude Timor, and her boss, Kendall Coffey. The more they looked, the more suspicious they became.
Of interest to state officials was an array of financial transactions between Coffey and the Timors -- loans, gifts, and payments -- over a period of about fifteen months from 1991 to 1992, when Coffey was still in private practice and Timor was his paralegal. Investigators were particularly suspicious about several campaign-related payments Coffey made to Gaude (pronounced gow-day) Timor, who owns a printing shop, during his unsuccessful 1992 bid for the Florida Senate.
They also scrutinized a Coconut Grove Bank account Coffey opened in 1990 and later turned into a joint account with Timor. Though both had sworn in affidavits that Timor never used any money in that account for any purpose, among other transactions investigators found a $28,000 withdrawal, which Coffey later admitted he had loaned Timor to complete the purchase of a house -- thus raising the specter of perjury.
As investigators searched for a possible motive for the flow of money from Coffey to Timor and her mother, the personal relationship between Coffey and his assistant also came under scrutiny. Friends, neighbors, colleagues, even carpenters gave divergent answers when questioned about whether they believed the pair had ever been romantically involved. Though he was never asked about the purported affair, the U.S. attorney himself was summoned by state prosecutors to provide sworn testimony regarding his financial dealings with Susanna Timor and her mother. (Both Coffey and Susanna Timor refused to comment for this story.)
Eventually the clamor died down, and the matter was officially reduced to its original kernel: insurance-fraud charges against Susanna Timor. But not before it had been stoked into a political firestorm that blew as far as Tallahassee and Washington, D.C. And while investigators were probing various links between Timor and Coffey, the U.S. attorney retained legal counsel to protect his image against the onslaught. Numerous influential Florida Democrats also rallied to the support of the Clinton appointee. Because of the sensitivity of the case, few people will speak about it to the press even now. (To this day, both the Division of Insurance Fraud and the Dade State Attorney's Office categorically deny ever having officially opened an investigation involving Coffey.) Says a source familiar with the investigation: "There was enormous pressure to get [the State Attorney's Office and the Division of Insurance Fraud] off the case, and it damn near succeeded."
Though Susanna Timor hasn't yet had her day in court, the reams of documents generated during the investigative proceedings have been laid open for public scrutiny. As a chronicle of the nuances of an inquiry, their contents are instructive. And as a repository for unanswered questions A particularly where the U.S. attorney is concerned A they are, to say the least, daunting.
At 9:00 a.m. on June 13, John Askins, the lieutenant of the Miami office of the Division of Insurance Fraud and a seventeen-year veteran of the department, sat down at his office computer and began typing. "Frank Doolittle called me yesterday afternoon extremely upset over the Susanna Timor investigation," commenced an interoffice e-mail from Askins to his investigators on the case, Murphy and Smith. "In order for you to understand the gravity of this situation, the following is what was said, to the best of my recollection:
"The Director first mentioned that his blood pressure was extremely high as he just had a 45-minute conversation with Department General Counsel Dan Sumner. Apparently, enormous political pressure is being applied to get us off this case. Director Doolittle stated, 'I may get fired over this, but I'll make sure you and the investigators get fired also.' He stated that this case is going to do us in, and we need to get completely away from it."
Perhaps only fittingly for a case where nothing is exactly as it seems, the veracity of this memo has been thrown into doubt. By Doolittle.
The division director says he learned about the e-mail only early this past month, when it was made available to New Times in response to a public records request. But he contests several of its assertions, and says he never uttered the words, "I may get fired over this, but I'll make sure you and the investigators get fired also." In fact, Doolittle adds, he never said anything threatening about Askins's or the investigators' jobs, or about his own livelihood being in jeopardy. "I don't know where he's coming from on that," Doolittle says of the quotation. (John Askins refused to comment on any aspect of the case and referred all inquiries to his superiors in Tallahassee.)
Regardless of the disputed contents of the memo, there was evidence of pressure, whether political or otherwise, from the other side of the investigation.
The complications had begun with the involvement of John Thornton, Jr., a Miami lawyer who says he was contacted by Timor the night Murphy and Smith visited. She knew him, Thornton explains, because he had done referral work for Coffey's law firm before the U.S. attorney's appointment by President Clinton in October 1993. Thornton also had more than a passing familiarity with the Dade State Attorney's Office, where he had worked as a prosecutor from 1977 to 1980. He was also a social acquaintance of both Chief Assistant State Attorney Trudy Novicki and Mary Cagle, the deputy chief for special prosecutions. Both women oversee cases involving public officials.
Within several days of Timor's interview, Thornton met with prosecutors at the State Attorney's Office and with investigators at the Division of Insurance Fraud to plead his client's case. His aim, says Thornton, was to prevent charges being filed against Timor. Under his counsel she submitted to four lie-detector tests and passed them all. (She also underwent handwriting analysis, the results of which were deemed inconclusive.) Thornton also pointed investigators to documents and witnesses he felt would further attest to his client's innocence. Among the people he proffered as character witnesses was U.S. Attorney Kendall Coffey. "In my experience, I'm not familiar with a defense attorney meeting and trying to provide leads to an investigative body prior to charges being filed," comments Doolittle. "But there's certainly nothing that says a defense attorney can't do this for his client."
The swirl of lawyers and politics intensified in part owing to Coffey himself. By late spring, when New Times was preparing a story about the Timor investigation, the apparently nervous U.S. attorney retained noted First Amendment lawyer Richard Ovelmen to run interference for him. A former general counsel for the Miami Herald, Ovelmen says he was commissioned "to provide libel counseling" for Coffey and to call the State Attorney's Office on the U.S. attorney's behalf. He adds that Coffey instructed him to ask specifically about how the office was planning to respond to New Times's inquiry about Coffey's involvement in the case.
Over the course of a few days, Ovelmen blitzed the State Attorney's Office and New Times with phone calls. "The fear was that New Times would publish something that was inaccurate," he explains.
In one bizarre exchange of calls, Ovelmen tried to persuade Assistant State Attorney Mary Cagle to declare publicly that Coffey was not a target of any investigation. Though it is the policy of the State Attorney's Office not to comment on open investigations, Ovelmen called New Times insisting that Cagle had told him she was willing to declare that Coffey was not under investigation. But when Cagle was reached the following day, she gave only the standard "no comment" response to New Times. (Though Cagle will not comment on the exchange of phone calls, it appears the miscommunication was a matter of semantics: While Cagle says there was no official investigation of Coffey at the time, the public records make it clear that the State Attorney's Office was amassing information about Coffey and suspected possible wrongdoing on his part.)
Also in early May, State Attorney Katherine Fernandez Rundle personally received several phone calls about the Timor case from other prominent Miamians. Among the callers was Benedict Kuehne, an influential attorney and Democratic fundraiser. Kuehne (pronounced cue-knee) telephoned Rundle at her office on May 2 A one of at least three calls he made to her that month, according to phone records maintained by the State Attorney's Office. Rundle, however, says she can't recall what they spoke about. "There have been a number of conversations about a variety of different issues involving this case," she hedges. (Kuehne did not respond to repeated requests to comment for this story.)
Rundle also heard from Miami attorney and prominent Democratic fundraiser Sylvan "Sonny" Holtzman. Phone records at the State Attorney's Office indicate that Holtzman, who is widely considered one of Gov. Lawton Chiles's most powerful allies in South Florida, called Rundle on May 16 regarding the Timor case. Both Holtzman and Rundle remember speaking with one another. But again, when it comes to the details, the participants' memories are extremely hazy. Holtzman says he can't remember who asked him to call Rundle, why he called, or even whether he called about the Timor investigation. "I do remember calling to ask a question," he offers. "I don't recall what the question was about."
Rundle's recollection is a little less fuzzy, but not much. "I vaguely remember speaking to Sonny Holtzman and telling him that the office's comment was going to be a 'no comment,'" she ventures. Was he calling about New Times's inquiries, a la Richard Ovelmen? "I think [so]," Rundle says. "That's my best recollection."
Susanna Timor also tried to intercede in the publication of a story about her case. On May 16 she faxed a handwritten five-page letter to New Times, threatening possible legal action if the paper were to proceed with an article that used prematurely disclosed information from a criminal investigation. "As a result of what you are doing, you will be personally liable for defamation and liable for destroying my name, reputation, and most of my life," she wrote, citing specific federal and state case law.
New Times's story, titled "Coffey Grind," was published two days later and was the first public mention of the Timor investigation.
In the weeks after the article's publication, Timor's friends, as well as former and current colleagues, deluged the State Attorney's Office with sympathetic letters on her behalf. At least 23 letters were sent between May 23 and June 23; most referred to the newspaper story. Among the authors: four assistant U.S. attorneys, two former assistant U.S. attorneys, one soon-to-be assistant U.S. attorney, and a former assistant U.S. attorney who recently rejoined the office.
Many of the writers described Timor as a woman of integrity, dignity, and pride who had suffered a life of hardship. Even Coffey's wife, Joni Armstrong Coffey, composed an eloquent five-page letter describing her "long friendship" with, and respect for, Timor and her family.
Susanna Timor had immigrated to the U.S. with her mother and two sisters at the age of six, and married when she was seventeen. She had her first daughter the following year, but within a few years had divorced, remarried, and given birth to a second daughter, who was born with mental and physical handicaps.
"At this point, Susanna was 24 years old, working outside the home, taking care of a house, two children, a husband, and going to school to obtain a paralegal degree," one friend, Michelle Alvarez, wrote to Assistant State Attorney Mary Cagle. "Once again, her marriage would end up in divorce." Alvarez, now an assistant U.S. attorney, wrote the letter before joining Coffey's office. Her two-page letter ends with this appeal, typical of the correspondence: "Susanna lives a life full of struggle, constantly fighting for her disabled child's education and welfare. . . . I tell you this not because Susanna needs pity but because, as a friend I know that she can sometimes come across as not trusting, insensitive, and abrasive. I know that she is not; she is a product, a result, of the cards her life has dealt. . . . I ask you, humbly, to take this into consideration and not charge her."
Not all the correspondence shared this gentle tone. On June 3 Rundle discovered an anonymous letter among her mail at home. The typewritten note, which was signed "Your supporters," alleged that "a great injustice involving your department is about to take place." While it didn't mention Timor by name, the letter described a case involving the insurance-fraud prosecution of "a single mother of a handicapped child," continuing, "We sincerely believe that she is going to be charged only because she works for an important public figure and the prosecutor from your office feels that she can get some mileage out of this case."
They knew a dirty secret, the letter's authors declared, and alleged that Rundle and her husband had improperly secured a home mortgage: "At the time of your loan application, your husband had recently resigned his position with the Public Defender's Office and since he had not been at his new practice for more than a year, you were informed that his income could not be used for qualification purposes. Since your new salary was not sufficient to make you qualify, some creativity was required to make you secure that mortgage. . . .
"We will continue to guard these secrets as we have done now for a long time! [We] sincerely hope that you will see fit to evaluate her case in a fair and just manner and do not allow not others to involve you in a self-serving political game."
(Rundle forwarded the letter to the Florida Department of Law Enforcement [FDLE], which investigated the allegations against her and found no evidence of wrongdoing.)
It was amid this flurry of phone calls and correspondence that John Askins composed his controversial June 13 e-mail regarding the concerns of Frank Doolittle, his boss at the Division of Insurance Fraud.
Doolittle recalls having spoken with Askins about ensuring that his investigators confined their probe to insurance-fraud matters. "I think I said something to the effect, 'You've been in this business long enough A as have I A to know that working outside your jurisdiction could ruin people's careers both up and down the line,'" Doolittle says. But he says he never received any political pressure to drop the case or spoke about the matter with anyone who wasn't directly involved in the investigation.
State Insurance Commissioner Bill Nelson says he hasn't seen the controversial e-mail but recalls having two conversations about the Timor investigation with people outside the investigative agencies directly involved. Both conversations were with fourth-term State Rep. Steven Geller, a Hallandale Democrat who is a member of the legislative oversight committee for the Department of Insurance. Nelson says Geller called him earlier this year (he doesn't remember the date) to raise a concern. "The question was, Were our agents operating outside of their scope as Department of Insurance agents?" Nelson remembers. He says he consulted with a subordinate in the Division of Insurance Fraud who told him the investigators were, indeed, staying within their jurisdiction.
Geller called back two days later with more specific information: "He indicated that somebody had told him that our investigators were asking about campaign contributions, indicating that they were going outside their lines of authority," Nelson recounts. "I told him I'd check that out and get right back to him." The director says he was again satisfied by the explanation from his subordinates.
Geller explains that he was moved to call Nelson after he and his brother Joseph Geller, who is chairman of the Dade Democratic Party, discussed the May 18 New Times article. "It appeared that the Department of Insurance investigators were investigating things that had nothing to do with insurance. Sometimes you have people in any department who act beyond their authority," the legislator says. "I thought this was something the commissioner should be aware of." (Geller admits he and his brother have been friends of Coffey since childhood. But, he adds, he never had a discussion with the U.S. attorney about the Timor investigation.)
By the second week of June, the temperature within the investigative circle of the Timor case was torrid. On June 14 Katherine Fernandez Rundle wrote to Gov. Lawton Chiles. She had a problem. During the course of the Timor investigation, the Dade State Attorney stated, "Various additional allegations have arisen concerning her [Timor] and another member of the United States Attorney's Office.
"My office has worked closely with the United States Attorney's Office in the past and continues to do so . . . ," Rundle wrote. "[T]hese spin-off allegations in particular create a conflict and the necessity for an executive assignment [to another state attorney]." Rundle didn't name the subject of the new allegations and still refuses to identify Coffey as the staffer mentioned in the letter. "I'll let you draw that conclusion," she demurs curtly.
A day later Chiles reassigned the case to Jerry Hill, state attorney for the Tenth Judicial Circuit of Florida, which covers the Central Florida counties of Polk, Highlands, and Hardee. (Like Chiles, Rundle, and Coffey, Hill is a Democrat.) With the assistance of an FDLE investigator, Hill picked up the insurance-fraud investigation of Timor. In addition to several tangential allegations they would look into and soon dismiss, Hill and his prosecutors also opened an investigation into whether Timor and Coffey had committed perjury back in 1993.
During the next two months, the team interviewed at least fifteen witnesses, including Timor, Coffey, and a few people in Columbia, South Carolina, where Timor had lived briefly in the fall of 1993. The insurance-fraud investigators from Miami, Steven Smith and Maureen Murphy, also remained on the case.
On August 24, a judge signed a warrant for Susanna Timor's arrest on the insurance-fraud charges. Four days later the paralegal surrendered in court alongside her two new defense attorneys, Stephen Bronis and former federal judge Thomas Scott. Timor pleaded not guilty and was suspended from her job without pay. Simultaneously, Hill closed his investigation of Coffey.
Frank Doolittle, director of the Division of Insurance Fraud, blames John Thornton, Jr., for initially prolonging the insurance-fraud case against Susanna Timor. "It's been represented to me by my office [in Miami] that right away Thornton goes in and wants to proffer testimony to Mary Cagle," Doolittle explains. "There would have been virtually no delay in charging Timor had not Thornton entered into those activities. And frankly, if there had been no delay, I don't think there would have been a Kendall Coffey issue at all."
By offering Coffey and others as character witnesses, Thornton did open new avenues of inquiry. At the very least, prosecutors would have wanted to investigate the relationship between Timor and the person most likely to provide the strongest testimony in her support: the U.S. attorney. Moreover, the best counterattack to a powerful witness is to impeach him. (Assistant State Attorney Mary Cagle refuses to comment on the nature of Thornton's involvement in the case or on the evolution of the Timor investigation. Officials from the office of Polk County State Attorney Jerry Hill also refuse to comment on the specifics of the Timor investigation because it is a pending criminal matter.)
The association between Susanna Timor, who is now 37 years old, and the 42-year-old Kendall Coffey began more than a decade ago, when he hired her to work for him at the law firm Greenberg Traurig. When Coffey and fellow Greenberg Traurig partner Robert Burlington decided to launch their own firm in 1988, they brought along Timor. Both men interceded on her behalf during her protracted divorce and child-custody battles. (Burlington handled most of the legal work, but Coffey made numerous appearances in court and filed pleadings, at no charge.)
Coffey has since helped Timor deal with other legal matters. In February 1993, for instance, he filed suit on her behalf against Synergy, a company that supplies natural gas for home use. He also wrote a letter of complaint to Catalina Pools, the firm that built a swimming pool and deck for Timor. Later he paid a personal visit to Richard Jones, the owner of Catalina Pools, to discuss a settlement of the dispute.
"Oftentimes the cost of retaining legal assistance is prohibitive for the staff in a law office, so the lawyers try to help out," Coffey told New Times earlier this year. "I would venture to say the practice is so far from unusual as to be routine."
After he assumed the post of U.S. attorney in October 1993, Coffey hired Timor to handle his appointment scheduling and to help out with event planning. In her $46,985-per-year post, she also worked as a paralegal on civil cases, including a few that involved health-care fraud.
Coffey and Timor have both maintained during the past year that they are very close friends. "We consider Kendall like family," Gaude Timor, Susanna's mother, told investigators at one point.
But the public record makes it obvious that investigators and prosecutors were interested in finding out whether the U.S. attorney and his assistant were ever romantically involved; various people were questioned about the nature of the pair's friendship. Jim Dorn, a carpenter who did some work for Timor, told an FDLE investigator about the first time he encountered Coffey at her house. "I was talking with Susanna and ready to build the cabinet, putting it in the kitchen," Dorn said. "And he walked in the house, took off his jacket, and I thought it was her husband." Dorn told the investigator he remembered seeing Coffey at Timor's "once or twice."
The FDLE investigator probed further: "During the couple of times that you did see him there, was it pretty much in the same manner or just kind of very casual and, yet, as you described it, almost 'at home'?"
"Yeah," Dorn replied.
The same investigator asked Timor's ex-husband Ricardo Ferreira whether he suspected his ex-wife had "an affair" with Coffey. "I suspected it," he replied. "Yes." Ferreira admitted he had no "actual evidence" but said he had learned from Timor's neighbors that after the couple's separation, Coffey visited Timor's house regularly. "[The neighbors] . . . told me, 'We thought this man, Mr. Coffey, was the little girl's father because he would come by here, like, almost every night. Take her out for walks. Take her out in the car.'" (According to several sources, Timor had a running feud with those neighbors.)
Polk County Assistant State Attorney Cass Castillo quizzed Robert Burlington, Timor's friend and Coffey's former law partner, about the relationship between the U.S. attorney and his aide. "Are you aware of any type of relationship of a romantic nature between Susanna Timor and Kendall Coffey?" Castillo asked.
"No," Burlington replied.
"Have you suspected that perhaps one existed?" the prosecutor persisted.
"Yes, I have," the attorney responded. Burlington, though, added that after discussing the matter with his wife, they concluded that Coffey and Timor did not have a romantic relationship.
Several other witnesses interviewed in the course of the investigations -- including Gaude Timor and Nancy Calderone, a friend of Timor who was once a secretary for Coffey A said they didn't suspect Timor and Coffey had ever had a romantic relationship. Timor's former live-in housekeeper, Idalia Mendez, described Coffey and Timor's relationship as "work-related," and, in answer to a prosecutor's question, said Coffey never spent the night at Timor's house.
"We felt it appropriate that we investigate the entire relationship between Coffey and the Timor family," Polk County Assistant State Attorney Chip Thullbery asserts. "Had we concluded that there was misdoing [by Coffey] A which we did not A it would've been important to establish some reason for the misdoing." In other words, as they investigated the financial transactions between Coffey and the Timors, investigators were considering the possibility that the flow of money had something to do with a romantic relationship. The nature of that relationship became irrelevant when the Polk County team decided Coffey had done no wrong.
The public record does not make clear when suspicions of misdeeds involving Coffey first arose, although they developed during the spring, while the insurance-fraud investigators and state prosecutors in Dade were pursuing Timor.
By early June the Dade officials had begun inspecting records relating to Coffey and Timor's joint account at Coconut Grove Bank. The account's existence had become a matter of public record in 1993, during Timor's divorce proceedings, when Ricardo Ferreira petitioned the court to issue a subpoena for the bank records, claiming that someone had anonymously sent him a copy of a bank statement showing both names, Timor's home address, and a $60,000 balance. The soon-to-be ex-husband wanted to determine whether the account should be tallied along with Timor's other assets.
In response to the subpoena, Coffey, who was then still in private practice, filed a motion to prevent Ferreira's access to the records, arguing that the funds in the account never belonged to Timor and asserting that they were used for purposes unrelated to her. It was at this point that both Timor and Coffey filed separate sworn affidavits stating that Timor had no financial interest in the account. In his affidavit, Coffey explained that he added Timor to the account so that, as a trusted and dedicated employee, she would be able "to handle various transactions." Both affidavits stated that Timor made virtually all the deposits but never made any withdrawals or transfers.
"Needless to say," Coffey's sworn statement reads, "none of the money in that account was hers for any purpose. . . . It is essentially a matter of public record that virtually every dollar of my savings, which included in their entirety the funds from the subject account, were expended in an effort to pursue a career in public service."
Timor echoed this claim in her affidavit: "None of the money in that account was ever mine, nor did I receive any interest from those funds."
But bank records subpoenaed this year by Dade investigators told a different story, and raised the possibility that Coffey and Timor had perjured themselves. In October 1991, Coffey withdrew $27,981.70 from the account and converted it to a cashier's check, which Timor used to close the sale of a $160,000 house in Coral Gables. The records also indicate that within weeks of the withdrawal, Timor made two deposits to the Coconut Grove Bank account, totaling $21,008.96. (These were proceeds from the sale of her previous residence.)
And even though Timor and Coffey swore she never withdrew money from the account, the records show that Timor made a $6005 withdrawal, which she converted to a cashier's check made payable to her mother, Gaude Timor.
On the morning of August 16, in a conference room at the Dade State Attorney's Office, Coffey was questioned under oath about the transactions. In attendance were Hill and three members of his investigative team. Coffey was represented by Miami attorney Benedict Kuehne (who three months previously had called State Attorney Katherine Fernandez Rundle to lobby about the Timor case) and Fort Lauderdale attorney Edward Kay. Also present was the U.S. attorney's wife Joni.
During the questioning, Coffey seemed to contradict the assertions he had made in the affidavit back in 1993. He explained to Polk County Assistant State Attorney Cass Castillo that he opened the account in anticipation of a possible political campaign, then withdrew the $28,000 as a "loan" to Timor, anticipating that Timor would repay the loan after selling her other house. While the paralegal did return $21,000 to the account, Coffey admitted that she hadn't fully paid him back.
As for the $6005 withdrawal, Coffey said, he was "virtually certain" he had accompanied Timor to the bank when she executed the transaction, which, rather than being a withdrawal to further his campaign, was a loan to Gaude Timor. (Coffey said Gaude Timor had asked for the money to help pay for construction expenses for a house she was building, and that she repaid the loan.) "I was the principal and I told the bank how to fill out the cashier's check and clearly it was my loan to Gaude, it was my loan. I was doing the transaction," Coffey told Castillo.
To which the prosecutor responded, "It appears somewhat inconsistent for the purpose of putting Susanna on the account to begin with for you to accompany her to the bank to lend her mother the money when she was authorized to withdraw without you being present."
Coffey attempted a further clarification: "I don't think she wanted to go down by herself and be responsible in her mind for lending the mother money."
Even Robert Burlington was questioned about the joint account during his interview with Polk prosecutors. "Do you think it is a 'mistress account'?" Cass Castillo asked Burlington.
"No. Not a mistress account," Burlington responded.
(Oddly, Coffey was never questioned about why the joint account had Timor's home address on it; he told New Times this past May that her home served as an informal headquarters during the initial phases of his Senate campaign. Nancy Calderone, Timor's friend and Coffey's secretary at the time of the campaign, told fraud investigators the campaign never operated out of Timor's home.)
Other financial transactions between Coffey and the Timors also came under investigative scrutiny. Most involved the attorney's personal bank account (as opposed to any business or campaign accounts), including:
* A check for $2000 to Susanna Timor dated August 5, 1991, which Coffey characterized as a "loan" when prosecutors asked him about it. Bank records indicate that the check boosted Timor's personal bank account to a level necessary for her to secure a home loan. (She signed a contract to buy a house about a month later.)
* A check for $4000 to Susanna Timor also dated August 5, 1991, which Coffey, under oath, said was compensation for work Timor contributed to a book he had written about mortgage foreclosure.
* A $5000 check to Susanna Timor dated July 28, 1992. Coffey's explanation to Polk County prosecutors: "Might have simply been a loan." While Coffey couldn't remember whether Timor had repaid the loan, he thought it might have been for a pool she had built in her back yard.
* A $3000 check written to Susanna Timor on October 20, 1992 A Timor's birthday. Coffey told prosecutors the money was a birthday gift.
* A check made out to Gaude Timor for $2000 on November 2, 1992. "I assume some kind of loan for something," Coffey explained to Castillo in his sworn statement. "It may A I made a previous loan to Gaude and she may have had A again, I am speculating A she may have some kind of brief cash shortage and I wrote a check." Coffey added that he didn't think Gaude Timor repaid him. (In an earlier interview, Gaude Timor told prosecutors the money was not a loan and may have been a down payment for some printing work.)
While Hill's team quizzed Coffey about the financial transactions, they ignored another realm of inquiry that had attracted the attention of insurance-fraud investigators and State Attorney's Office officials back in Miami: Coffey's expenditures during his 1992 State Senate bid.
Campaign records and printing invoices indicate that from July to December 1992 Coffey paid more than $31,000 to Gaude Printing, the company owned by Timor's mother, in return for an assortment of products that included signs, flyers, stationery, and bumper stickers. Gaude Timor told prosecutors she contracted out "the big jobs and the things done by silk-screen" to a printer named Mario Rodriguez. She paid him $6300, a fraction of Coffey's total printing expenditures. Coffey's campaign also paid five other printers a total of at least $11,000, to bring the total of the campaign printing costs to more than $42,000. (By comparison, Coffey's opponent, Republican Alberto Gutman, spent more than $60,000 for printing.)
While investigators never questioned Coffey about these issues, the U.S. attorney told New Times this past May, "[Gaude Timor] did an awful lot of work for us. It's all documented and I'd be happy to make all campaign records open for any appropriate inquiry." Explaining Polk County prosecutors' reasoning for not quizzing Coffey about the campaign monies, Assistant State Attorney Chip Thullbery says, "The governor's office did not engage us to go on a fishing expedition. There have been no complaints made about specific wrongdoing in that campaign. In the absence of someone coming forward, we didn't feel it was appropriate to go fishing."
But the investigative records indicate that the Dade team expected their Polk counterparts to scrutinize the flow of campaign money to the Timors, among other matters. A June 28 memo sent by the insurance fraud investigators to Hill's team detailed "seven separate, but related inquiries stemming from Susanna Timor's hurricane claim investigation." One of those inquiries: Coffey's Senate campaign.
Thullbery won't comment about why his team didn't pursue that line of inquiry.
During the summer and early fall, another investigative body was giving the Coffey-Timor relationship a hard look: the Public Integrity Section at U.S. Department of Justice in Washington, D.C.
Even though neither state campaign violations nor state court perjury charges would fall under federal jurisdiction, the Justice Department reviewed the investigative files. According to a source familiar with the case, the federal officials were most interested in the fact that Timor owed Coffey money when he hired her to work at the U.S. Attorney's Office. At the very least, that arrangement presented an appearance of a conflict of interest: Coffey was providing Timor employment so she could earn money to pay him back.
This past month, Public Integrity Section chief Lee Radek informed Dade Assistant State Attorney Mary Cagle that he'd closed his investigation. "Based on a thorough evaluation of the available materials," he wrote, "we have concluded that there is no basis for a federal criminal investigation into these allegations." Department of Justice officials refuse to comment on their inquiry.
After many months of investigation involving thousands of pages of documentation -- and untold hours of backroom politicking -- a $3847 case of insurance fraud that had been fomented into a multipronged investigation resulted in a handful of simple charges and an enormous mound of paper.
"This is not the crime of the century," remarks one person familiar with the various investigations and frustrated with their outcome. "But there are still just a lot of questions here."
The way the fraud investigators figure it, Susanna Timor was deft with her pen and her Liquid Paper, albeit not quite deft enough. The arrest warrant accuses the paralegal of submitting seven fraudulent receipts and estimates to State Farm, seeking reimbursement for damages Hurricane Andrew caused to her former residence at 836 Alberca St., Coral Gables. Among the charges, Timor is accused of:
* Altering a work order from Swings n' Things for replacement of a playhouse and receiving reimbursement of about $362. The owner of the company told investigators he never replaced a playhouse for Timor. She initially denied submitting a fake receipt but later admitted in a sworn statement that she had whited-out an old work order from January 1991.
* Submitting a proposal from one awning company and an invoice from a second for the replacement of a carport awning she claimed had been lost in the storm. She received about $1200 in reimbursement. An employee of the second awning company told investigators the invoice was for $400 less than the amount Timor submitted to State Farm. Further investigation revealed that the house had no awnings at the time of the hurricane; therefore, Timor should not have been entitled to anything, prosecutors allege.
* Receiving a $350 reimbursement after submitting a fraudulent landscaping invoice for tree removal. A federal handwriting inspector confirmed the invoice was an altered copy of the original found in Gaude Timor's State Farm insurance file, and a landscaping company official told investigators the company never did any work at that address.
* Submitting three forged invoices from a house-painting company, for which she received a total of $1935.
Timor's attorneys won't comment on how they plan to defend their client against the charges, but they don't hesitate to take issue with the way the investigation was conducted. Stephen Bronis, who left the case this past month when he moved to another law firm, asserts that the prosecution of Timor was driven by the fact that she was an assistant to the U.S. attorney.
Not exactly, counters Division of Insurance Fraud chief Frank Doolittle. After receiving the second anonymous letter about Timor, investigators followed their normal procedure for pursuing such a tip: They searched a national database in which insurance companies file their claims. When their inquiry failed to turn up any record of Timor's claim A State Farm had apparently neglected to enter that information A they put the letter into a dormant file. It may have remained there forever if the office hadn't received another piece of mail. This one was from the U.S. Attorney's Office, announcing a meeting of a health-care fraud task force. The letter instructed fraud investigators to send information about new cases to Susanna Timor. "That's what made someone make the association," Doolittle explains.
Bronis also argues that for such a small hurricane-related fraud case, Timor probably should have been offered pretrial intervention. "It's certainly customary and certainly within the State Attorney's Office's own procedural guidelines," he insists.
Assistant State Attorney Mary Cagle says those guidelines are just that: guidelines. Each case is evaluated on its own merits, she asserts, adding, "We generally don't offer P.T.I. to public officials or public employees." No public officials who were charged with hurricane-related insurance fraud ever received pretrial intervention, she notes. (Timor's advocates point out that she was a private citizen, not a public employee, at the time she allegedly committed the insurance fraud.)
Defense attorneys also believe that fraud investigators may have strayed outside their statutory jurisdiction, which restricts them to insurance-related matters. Gaude Timor told New Times this past May that the State Attorney's Office had asked her about Coffey's campaign expenses, and she was annoyed. "I thought they wanted to know about hurricane repairs," she recalled at the time. "Then they start to ask about my work for Kendall and I thought, What does this have to do with Susanna?" (The now-public investigative files contain no indication that prosecutors asked Gaude Timor about the campaign. Cagle won't say whether she ever broached the subject.)
By May, documents indicate, John Askins's investigators were snooping around Coffey's campaign expenditures while still ostensibly conducting an investigation into Timor's hurricane claims. The following month they asked witnesses about Coffey's campaign and about the controversial affidavits. John Thornton, Jr., who was representing Timor during those months, argued vociferously that Askins and his fraud investigators were out of hand. He sent a three-page letter to Kathie Emrich, assistant division director of the Division of Insurance Fraud, accusing Askins and crew of "unfair and damaging conduct to [Timor]. . . . There are at least three witnesses whose questioning by the Division's agents went far beyond the scope set forth in the statutes governing your division and applicable case law," he wrote.
This charge has been no small worry for insurance officials in Tallahassee. "My concern was that investigations in criminal prosecutions have been nullified by defendants who prove that our investigators have gone beyond their jurisdiction. I was concerned that there would be some kind of tainting of this investigation," says Dan Sumner, general counsel for the Department of Insurance. But Sumner says Askins has placated him. "John explained that it all related to insurance fraud because he was looking at the flow of funds [involving Timor]," Sumner explains. "He ran me through a logical explanation of this analysis."
Adds Doolittle: "I wanted to make sure that everything we were doing was at the direction of the prosecutor. And based upon my conversations with [Dade Assistant State Attorney] Cagle and Askins, and on a review of the file, I'd have to say we were."
Susanna Timor is scheduled to stand trial on February 5 in Miami. Kendall Coffey is scheduled to testify in her defense. Since her indictment and suspension from the U.S. Attorney's Office, Timor has found work as a paralegal at a Miami law firm. She has put her Miami Beach house on the market to help pay her attorneys' fees and plans to move in with her mother, reports a friend, Alden Burlington, the wife of Robert Burlington and a lawyer who has volunteered to help prepare Timor's defense.
Timor is also getting financial assistance from elsewhere: After her arrest, an e-mail circulated throughout the U.S. Attorney's Office inviting employees to contribute to a Susanna Timor Defense Fund. The source of the e-mail is unclear. Robert Burlington says he and his wife are handling a defense fund, too. He says he sent letters to about 40 people, a list compiled by Timor herself, and has raised about $3000. None of the money, as far as he can remember, came from an employee of the U.S. Attorney's Office. Burlington says another Timor friend has launched yet another defense fund.
Polk Assistant State Attorney Cass Castillo says that if Timor is convicted on any or all of the charges, he will recommend to the judge that she serve a sentence of up to one year in a county jail.
Originally Timor's case was assigned to Circuit Court Judge Alex Ferrer. But the defense asked that Ferrer recuse himself because he was once an investigator for the Miami office of the state Division of Insurance Fraud and was also the judge who signed Timor's arrest warrant. The case has been reassigned to Judge Alan Gold.
Gold was a partner at Greenberg Traurig when Coffey and Burlington worked there. But despite this relationship between the judge and the defendant's extremely influential witness, prosecutors seem confident that blind justice will prevail; they haven't asked for Gold's recusal.