Nelson's Wife and Attorney Won't Pay Up - KCBD NewsChannel 11 Lubbock

12/29/05

Nelson's Wife and Attorney Won't Pay Up

The deadline to pay nearly $5 million is now over-due. But it appears, a hearing will decide what happens next.

Jody Nelson is accused of embezzling $78 million from a Snyder based oil drilling company. The $5 million is part of the alleged scheme. The courts gave Nelson's wife and attorney until Thursday to hand over the money that the SEC says was given to them illegally. But getting the $500,000 back from Jeff Kearney, Nelson's attorney, and the $4.2 million back from his wife's stock brokerage account, is going to be difficult. Both filed court documents, without handing over the money.

The documents show Nelson's attorney's response to the judges order to give back the money. Jeff Kearney claims the order should be denied on two grounds. The first, Kearney says the money paid to him was not in connection to the invoicing scheme. The second says Nelson has had "extraordinary cooperation" with the courts.

The SEC argues that all Nelson's assets were supposed to be turned over, and that includes attorney fees and investments. But Kearney says that Nelson has a right to pay for his attorney. In the agreement made between Nelson and his attorneys it shows their first meeting was November 14th, two days before the court ordered a freeze on Nelson's assets.

On November 13th, Nelson reportedly went to Morgan Stanley and transferred over $4 million to a stock brokerage account in his wife's name. The judge ordered Nelson's wife pay $4.2 million by nine o'clock in the morning on December 29th. But at the end of the day, Mrs. Nelson said she too thought she should be able to keep the money. Documents filed Thursday say the Morgan Stanley account is community property and it is against Texas law to take the property since Mrs. Nelson has filed for divorce.

On Thursday, the judge decided both the attorneys and Mrs. Nelson have enough evidence to hold a hearing so they can try and prove they should be able to keep the money given to them from Nelson. The first hearing is the 17th of January. Meanwhile, Nelson is expected to appear in court next week for the first time on his criminal charges.

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