Every time I think Pat Graham has run out of options, the convicted swindler comes up with a few more.
Graham, who is a little over halfway through a 15-year sentence for fraud, has filed another motion, this time with the Missouri Southern District Court of Appeals in an attempt to have his sentence set aside.
This is the first time in more than four years that Graham has gone back to the courts in his neverending quest for freedom. His last appeal in U. S. District Court for the Western District of Missouri was rejected by Judge Nanette K. Laughrey in 2001, with prejudice, meaning he was not allowed to refile it.
That was the fourth time Graham had tried to have his sentence tossed out since he pleaded guilty to three counts of stealing and securities fraud in September 1997 in Barton County Circuit Court.
In the earlier court decisions, the judges indicated there was no reason to throw his sentence out because Graham was the one who had entered the guilty plea. In the June 21, 2001, decision, the judge rebutted each of the points Graham made in his appeal. Graham claimed that his conviction and 15-year prison sentence for securities fraud violations should have been tossed out because Barton County Prosecuting Attorney Steven Kaderly had represented him in legal matters prior to his arrest and that he (Kaderly) was "a material witness to the events that were the basis of the charges," and that he had not received adequate representation from his attorney, Ross Rhoades of Neosho.
Judge Laughrey noted that the Missouri Southern District Court of Appeals had disagreed with that contention. "The record shows that (Graham) was not threatened or coerced into entering his plea of guilty and that (he) was satisfied with plea counsel's representation. At both the plea and sentencing hearings, he failed to reveal that there was a conflict of interest involving Kaderly or that such an issue was raised with (Rhoades).
"The record indicates Graham pled guilty in order to obtain the benefit of the plea bargain and because he was, in fact, guilty of the crimes charged and he has failed to allege specific facts showing otherwise."
The judge also rejected Graham's claim that former Circuit Court Judge David Darnold was prejudiced against him and said he failed to show that he (Graham) is "probably actually innocent."
The U. S. District Court offered one last opportunity for Graham, a man who had been at the top of the world six years ago, at a time when he had already spent millions of dollars and planned to make millions more, bilking investors, including singer Pat Boone, the Herschend family of Silver Dollar City fame, and the Branson performers, the Presleys, and other Branson high-rollers, by convincing them to invest in an AIDS vaccine that did not exist.
The AIDS vaccine scheme was the latest in a lifetime of schemes for Graham. Pat Graham was born June 18, 1941, in Pleasanton, Iowa, the third of four sons born to Lawrence and Elizabeth Graham. He married Betty Woods July 3, 1959, in Pleasanton. They had two daughters, Marcia Martinson, 44, and Michelle Hoyt, 37. Graham graduated 21st in a class of 66 students at Leon High School, Leon, Iowa. His grades were average to superior, but he did receive a D in chemistry. He later attended Iowa State University from September 1964 until he dropped out n June 1970 with 155 hours of college credit. He had a grade point average of 1.79 (D+) on a scale of 4.0.
Robert Getty, chairman of the Department of Anatomy at Iowa State, gave him a job working with a colony of beagles in 1964, researching the clogging of coronary arteries. After Getty died, Graham left that job and worked for a time as a deputy sheriff.
Graham's difficulties with investors go back two decades. He had problems in previous dealings involving a veterinary medicine company and a Christian restaurant venture in Freeman, S. D., according to court records.
His one foray into the restaurant business ended in bankruptcy and caused eight lawsuits. On Oct. 26, 1977, Graham held a groundbreaking ceremony for The Cornerstone, a Christian-themed restaurant in Freeman. Plans for the restaurant included several private dining rooms, a picturesque fountain and a stage for live gospel music.
By the time the restaurant had its grand opening in September 1978, Graham had skipped town and his workers had not been paid. Orville Waltner, an electrician, estimated Graham owed local tradesmen more than $130,000, including $8,000 owed Waltner. Lawsuits were filed in South Dakota and in Missouri accusing Graham of stealing patents from Duane Pankratz, a Freeman veterinarian.
When Graham moved from South Dakota to Missouri in the late 1970s, documents filed in Barton County Circuit Court indicate, he and Pankratz entered into an agreement which would allow Graham to sell Pankratz' products in Missouri. Graham did not pay Pankratz the money he owed him. The doctor sued him and a U. S. District Court jury awarded Pankratz $25,000.
Graham managed to avoid the criminal side of the judicial system until 1984, when he pleaded guilty to wire fraud charges in U. S. District Court.
Charges were filed against Graham after he offered to pay three southeast Kansas businessmen, August Rua, Francis Usher and Ken DeLange $250,000 "one half of my finder's fee from a gold sale in South Africa," according to a promissory note on file at the Barton County recorder's office, in exchange for a loan of $25,000. Court records indicate Graham already owed the three businessmen $575,000. He sent letters to the men telling them the money he owed them was being held by the Internal Revenue Service until it completed an audit of his taxes.
When the businessmen realized Graham had no intention of paying them the money he owed them, they went to the FBI. A plea agreement was worked out in which Graham would serve no prison time in exchange for his cooperation in other federal investigations.
Graham was placed on probation for five years. He was required to repay the $25,000, but the $575,000 was lost forever.
The scheme that finally put Pat Graham in prison began in the early 1990s when Graham started selling shares in Conquest Labs, Inc., a company he said had developed an AIDS vaccine. According to court records, he sold more than $5.3 million worth of stock in the company. He convinced potential investors with a deeply personal selling style, using his "Christian" background and oozing with sincerity. His sales pitch is captured in a transcript of a sales meeting in Branson, which is on file in Barton County Circuit Court.
At that meeting, he told potential investors he had turned down attempts by Elizabeth Taylor, Michael Jackson, Magic Johnson, and Arsenio Hall to buy shares in Conquest Labs. "We have turned down money from all sorts of people," Graham said. Graham indicated he wanted only Christian people to invest in his company. "My name is Graham," he said, introducing himself, "like the old brown crackers. I'd be less than honest if I didn't tell you that everything that I hope to have, I owe to the good Lord. Period. There's nothing else that I can add to that."
Graham talked about the history of Conquest Labs and said he had been teaching his grandchildren about the Bible, that the Christian life was the most important thing of all. "If you don't feel like you're serving number one, you better. I hope nobody noticed how polished my knees are. I've been on my knees a lot lately." He said his wife and his daughter had both had cancer scares. The AIDS vaccine was brought to him by a university professor in 1991, he said.
The professor, who was in his 80s, said he had come to Graham to ask him to take over the vaccine. "He said, 'Every time I've gone with a big company to do something, I've been done wrong.' " Graham said he agreed to help the professor. "I don't want anybody to sit here and get the idea that Pat Graham is a genius or something like that. I'm an old south Iowa cow milker."
The old south Iowa cow milker then told his Bible belt audience how he had prayed about the product, since many of those who suffered from AIDS had lifestyles that were contrary to what he believed in.
"At one time in my life," he said, "I didn't love those people enough and I don't condone one iota of anything they do, but I know God loves them and I know that He put me in charge of this product."
An added benefit of his vaccine, Graham said, is that it wouldn't work on a homosexual unless he changed his lifestyle. "It doesn't matter if it's a horse or a human, if they are too far gone, you got to let them go. If they continued in their sinful ways, it didn't work at all." Graham said the vaccine would only work on homosexuals if they quit being homosexual. "God isn't going to let homosexuals continue their sinful lifestyle without punishment," he said.
The spiel worked. Many of the investors in Conquest Labs came from that meeting...which was held in a Branson church.
Before Conquest Labs came under the scrutiny of state officials, Graham had convinced more than 500 people to invest a total of $5.3 million. Graham told the investors he was not in it for the money...when he was drawing a salary of $120,000 a year under his wife's name; his residence and those of his two daughters were bought with funds paid by Conquest investors, one of his daughters and his sons-in-law were receiving handsome salaries, their vehicles were paid for by investor funds and other living expenses were being covered by investments.
Tonya Ehrsam, a former Conquest employee, told state investigators that while she worked there, between Sept. 21, 1993, and Oct. 27, 1994, the firm only had $250 in income, a rebate, other than income received from investors. The company's marketing plan indicated Conquest was also working on vaccines for cancer and Alzheimer's Disease.
The beginning of the end for Pat Graham's biggest scam came on Oct. 3, 1994, when Frederick Holloway, a securities investigator for the Missouri Secretary of State's office, received a call from David Hoyt, Graham's son-in-law. Hoyt told Holloway much of the investors' money was being used by Graham for himself and his family. "Mr. Hoyt stated that investor funds had been deposited in a number of banks under fictitious names which were controlled by Mr. Graham."
On May 23, 1995, the Missouri Highway Patrol, working with the secretary of state's office and the attorney general's office, indicted Graham on 10 counts of securities fraud and 10 counts of stealing. Graham finally agreed in 1997 to plead guilty to three counts of securities fraud and was sentenced to 15 years in prison. He could have been placed on probation if he had been able to repay his investors. He was given 120 days to pay back the money.
The sentencing judge, David Darnold, had no doubt the investors would never see their money. "If someone wants to step up here and pay the $5.5 million," Darnold said, "I would be delighted." Darnold and the lawyers representing the Missouri attorney general's office were not amused by two ideas to raise the money that were brought up at the sentencing hearing. One would have had Graham working for one of his former investors to market serums made out of elks' blood. The other was a deal through which, Graham, an unpublished novelist ( a talent no one had known about up until that time) would sell one of his books to a Hollywood producer, who was interested in making it into a movie.
"I would like to not have to go to jail," Graham said. "I have a goal of paying back every one of my investors 100 percent. I would like to be with my family, my grandchildren and my church family and not be gone."
The elks' blood serums did not impress Judge Darnold, who was not impressed with Graham's scientific expertise, noting that Graham had taken chemistry in college six times before getting a D grade. It was not all bad for Graham on the educational front, the judge noted. "I see you had a B in volleyball," he said, adding, "This is not a scientist."
The investors did not receive a cent and Graham began making his motions, all of which have been rejected by Judge Darnold and in the appellate system. Graham's latest effort has been filed against Darnold's successor, Judge James Bickel. As Graham was sentenced by Judge Darnold in 1997, his youngest daughter and his son-in-law watched intently. David hood's phone call had begun the process that put his father-in-law behind bars for 15 years. "I felt we had a responsibility to those investors," he said. "Those people were being cheated."
Graham's daughter, Michel, agreed with her husband's action, though the pain in her face as her father was sentenced was undeniable. "People think we took that money," she said, holding on to her husband's arm, "but we didn't come out of this with a cent. I want people to know that."