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Thursday, September 18, 2008

Moonshine trial finds pair guilty

Jody Smith and Margaret Smith were convicted of dozens of counts tied to running a still.

The biggest moonshine trial to hit Roanoke's federal court since the days of Operation Lightning Strike ended Wednesday with dozens of guilty verdicts against a pair of defendants.

A jury took just five hours to convict Jody Alton Smith, 61, of Franklin County and Margaret Rigney Smith, a Pittsylvania County woman who was 46 when she was indicted last fall, of numerous counts tied to running an illegal distillery, money laundering, perjury and more.

The speed of the jury's verdicts rankled Jody Smith's daughter, Denise Hall, and other relatives and friends who waited out six days of testimony and argument.

"Five hours on 31 indictments? Give me a break," Hall said after the jury announced its decision. "It took an hour and a half to read the indictments."

The Smiths, friends who share a last name after a years-ago, overseas marriage ceremony not recognized in the United States, had no comment after the verdicts.

The jury returns today to decide if Margaret Smith will forfeit about 8 acres in Halifax County where the distillery operated, and if Jody Smith and other defendants will forfeit hundreds of thousands of dollars of property, vehicles and money.

Also convicted of moonshine-related charges, in plea agreements filed days before the jury trial began, were Danny Walter Davis, John David Fralin, Terry Lynn Smith (a cousin of Jody Smith) and Jarman Johnson.

The four defendants who pleaded guilty admitted running a still on Margaret Smith's Halifax County property. Left for the jury to decide was whether Jody and Margaret Smith also took part in producing moonshine.

Assistant U.S. Attorney Sharon Burnham described Jody Smith as a leader of the still crew, and said Margaret Smith helped confuse the operation's paper trail by putting the property's deed and electrical service in her name.

Margaret Smith was also accused of pretending to rent the property to someone named J.B. Jones, who investigators could not locate but who was described as looking like the Uncle Jesse character from "The Dukes of Hazzard" with white hair and beard, a ball cap and bib overalls.

Margaret Smith's attorney, Phillip Lingafelt of Roanoke, said Smith had been too busy dealing with her mother's final illness and with her own ill health to collect more information about Jones or his use of her property.

Jones' existence was seemingly verified by a worker at a Richmond business that sold thousands of pounds of sugar to someone matching the Uncle Jesse description, but Burnham said a signed lease that Margaret Smith produced during grand jury testimony earlier in the case was fake.

The case against Jody Smith revolved around building permits and other paperwork attached to the Halifax property that bore his phone number or the address of his dealership in Redwood where he sold used cars and donkeys.

Burnham said that after investigators got a tip, they placed a surveillance camera near the Halifax property's gate.

Footage played in the courtroom showed Jody Smith coming and going -- but not entering the building that contained a still that Burnham said produced at least 16,000 gallons of liquor and earned its operators at least $225,000 during about 18 months of operation in 2005 and 2006.

A customer in Philadelphia bought 10 truckloads of moonshine, Burnham said.

Johnson testified that Jody Smith directed the still operation, but Smith's attorney, Gil Davis of Fairfax, suggested Johnson was just trying to escape punishment for his own actions.

Johnson had prior convictions and pleaded guilty to being a felon in possession of a firearm, as well as running the still.

Davis, an attorney who gained a national profile representing Paula Jones in her sexual harassment lawsuit against President Bill Clinton, called the case against Jody Smith circumstantial. He said a hunt club used the Halifax property and that Jody Smith could have been there for club business, or to help Margaret Smith by making repairs to another structure there.

Agent J.D. Underwood of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives testified that authorities' surveillance ended when someone discovered and removed the camera.

A subsequent search of the property found only a disabled still.

A decade ago, Jody Smith escaped charges when authorities could not prove he had a hand in operating a huge steam still found on property he owned.

The late Bill Davis, a Rocky Mount attorney famed for taking moonshine cases, said then that the unwritten rule was that still runners could be charged only if they were caught in the act.

Then came Operation Lightning Strike, a federal crackdown that began in 1999 and eventually convicted 29 people and seized about $2.1 million in assets.

Davis, who had represented a number of the figures associated with Lightning Strike, groused that the rule had been broken.

On Wednesday, after the jury convicted Jody Smith on 29 charges and Margaret Smith on 12 -- without the direct evidence Davis said was needed -- Burnham said the old equation was at best a local phenomenon.

"From a federal point of view, there's never been that unwritten rule," she said.

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