Arpaio Claims Judge Was A Victim In Alleged Bank Fraud Scheme

By Jude Joffe-Block
Published: Friday, October 2, 2015 - 9:51pm
Updated: Friday, October 9, 2015 - 4:59pm

Maricopa County Sheriff Joe Arpaio answered a series of persistent questions about his dealings with a confidential informant while on the witness stand Friday in his contempt of court hearing.

The sheriff and four others are facing contempt of court for violating U.S. District Court Judge Murray Snow’s orders in a racial profiling case.

While plaintiffs’ lawyers presented some evidence suggesting the informant, Dennis Montgomery, was investigating Snow, Arpaio insisted he hadn’t encouraged Montgomery to investigate the judge. 

Instead, Arpaio insisted the informant was investigating bank fraud and the judge was one of 150,000 alleged victims in Maricopa County. Arpaio said he and his wife also appeared on the list of victims.

The informant, Dennis Montgomery, was first mentioned as part of this case back in April, during the first round of contempt hearings against the sheriff.

Snow asked Arpaio directly from the bench about a June 2014 Phoenix New Times article that alleged the sheriff had hired Montgomery to prove Snow was engaged in an alleged anti-Arpaio conspiracy with the U.S. Department of Justice and the plaintiffs’ law firm, and get the judge disqualified from the case.

Arpaio told Snow in April that Montgomery wasn’t investigating Snow, but rather allegations of federal agencies hacking into bank accounts belonging to Maricopa County residents and wiretaps against the sheriff, his chief deputy and their lawyers.

Montgomery calls himself a CIA and National Security Agency whistleblower. According to court testimony Montgomery claimed he had obtained records while working as a federal intelligence contractor that he could use to prove these alleged crimes by the federal government.

A number of high-profile media accounts have accused Montgomery of defrauding the U.S. government with bogus counter-terrorism software, though Montgomery has denied those allegations.

After the April hearing Snow ordered the sheriff’s office to turn over documents relating to Montgomery’s investigation. Those documents include timelines and flowcharts seeming to allege conversations and collusion between Snow, the DOJ and the law firm of Covington & Burling, which represents the plaintiffs.

On Friday plaintiffs’ lawyer Stanley Young questioned Arpaio repeatedly about Montgomery and presented some evidence to try and show Arpaio knew Montgomery was looking into Snow and was personally interested in that probe.

Both Arpaio and his Chief Deputy Jerry Sheridan testified in this round of hearings they didn’t ask Montgomery to make those documents. Sheridan testified earlier in the hearing that he told the detective and sergeant working with Montgomery not to pursue any investigations against Snow.

Young, who is employed by Covington & Burling, showed Arpaio had received a fax from Montgomery in November 2013 with an early version of a timeline showing events in the Department of Justice’s racial profiling case and the racial profiling case in Snow’s court, as well as information about alleged wiretaps against the sheriff.

On the back of the fax Arpaio used a typewriter to make some typo-riddled notes and added handwritten notes about possible connections between Snow and the law firm of Covington & Burling.

Those notes mentioned that former Arizona Senator Jon Kyl worked for the law firm Covington & Burling. There is also a mention that Snow’s wife worked there as well, which is not true. The notes read [sic]: “Snow confirmed by US senate (Kyle on judiciary committee) on june 26 2008 Obama takes office on Jan 2009. Judge born 1959, Boulder City, NV...”

On the stand Arpaio said he was only noting the irony of the Kyl connection since Kyl had suggested the sheriff join the federal government's 287(g) program to enforce federal immigration laws, and that was one factor that led the sheriff’s office to being sued in a racial profiling case in Snow’s court.

On the top of the note Arpaio wrote by hand [sic]: ”Judge Snow has sister-in-law works for Covington.”

When asked about the reference to Snow’s sister-in-law, he downplayed any connection to the alleged conspiracy involving that law firm.  

“I think it was important to make a note since I believe the judge...was also a victim,” Arpaio said.

That handwritten note also noted [sic]: “Wilcox husband in 150,000.”

That referred to former Maricopa County Supervisor Mary Rose Wilcox’s husband, Earl. Arpaio said it was a reference to him being among the 150,000 victims of bank fraud.

That note “totally floored,” Earl Wilcox who was seated in the courtroom and saw his own name on the document when it was displayed on a monitor in the gallery. He and his wife attend most of the hearings in this case.

The Wilcoxes are vocal opponents of the sheriff. The sheriff’s office tried to criminally indict Mary Rose Wilcox, and she won a civil suit against the county for the baseless charges.

Earl Wilcox said he didn’t believe he was an alleged victim in the bank fraud scheme and thinks instead it shows, “they are still going after us.”

Plaintiffs’ lawyers pointed out Arpaio never tried to interview Snow about the alleged bank fraud, even though he supposedly believed Snow to be a victim. Arpaio countered that there were many other victims, and there were complications with contacting a federal judge, particularly because he was presiding over this case.

According to records presented in court, in November 2014 two outside experts with experience working with the NSA evaluated Montgomery’s hard drives for the sheriff’s office and concluded Montgomery was a “complete and total fraud.”

Young brought this up to Arpaio.

“At least by November 2014 you knew Montgomery was a fraud?” Young asked.

“That was putting it lightly,” Arpaio said, noting they had been working Montgomery for a year at that point. “So we decided to stop paying him.”

Young went on to present email records showing members of Arpaio’s team were still in touch with Montgomery for months after that, into 2015.

“Would a law enforcement officer have to be incredibly stupid to continue working with someone known to be a complete total fraud?” Young asked.

Arpaio's attorney John Masterson objected to the question, which Snow sustained. After court, Masterson accused Young of insulting the sheriff.

Young reminded Arpaio that Snow had asked him in April whether Montgomery had investigated Snow, and Arpaio never brought up the timelines or other documents Montgomery had made that included Snow.

“I never thought of that timeline when he asked me the question,” Arpaio said.

“Do you regret not telling him those things in April?” Young asked.

“In retrospect maybe I should have brought it up but it never came to my mind at the time,” Arpaio answered.

The contempt proceedings resume on Thursday and Arpaio is expected to continue testifying.

EDITOR'S NOTE: This article has been modified to reflect the correct spelling of John Masterson's name.

Updated 10/9/2015 at 4:55 p.m.