No bond reduction for Danny Wise
By Linda Bentley | July 29, 2009
‘I bring that up because it shows the moral fiber of the man’
PHOENIX – Danny Wise, the former Scottsdale CPA who is accused of operating a $70 million Ponzi scheme, is currently incarcerated at the Lower Buckeye Jail in lieu of $500,000 cash bond on numerous other pending theft charges in Maricopa County Superior Court.
Wise, whose CPA license was revoked last year, allegedly stole money entrusted to him for the purpose of paying clients’ federal and state income taxes.
Initially arrested on April 15, when the Scottsdale Police Department served search warrants on Wise’s Desert Mountain home, Scottsdale office and storage unit, Wise was released while the investigation continued.
However, in May, right before the Memorial Day weekend, Wise was indicted and rearrested.
With his cash-only bond set at $500,000, Wise, who pled not guilty during his June 2 arraignment, has remained in custody.
Although Wise is being represented by a public defender, he hired Attorney Joseph Allen, with Malkin & Associates PLLC, to represent him for his motion to modify release conditions by lowering his bond.
Sean Gillespie, a long-time friend and client of Wise’s, and from whom Wise stole over $500,000 provided for the payment of taxes to the IRS and State of Arizona, was also present during oral arguments. Gillespie filed an objection to Wise’s motion and a request to be heard.
Wise apparently objected to the camera in the courtroom through his public defender, who was unable to appear except telephonically. However, since both Allen and Maryann McKessy, attorney for the prosecution, had already expressed no objections, Maricopa County Superior Court Commissioner Barbara Spencer granted Channel 12’s request for camera coverage.
Allen, admitted to the bar in October 2008, argued the $500,000 was a clerical error and claimed the grand jury proceeding only asked for $250,000.
McKessy explained that Wise is accused of over $600,000 in tax fraud but there was an ongoing investigation of his involvement in a $67 million Ponzi scheme.
“I bring that up,” said McKessy, “because it shows the moral fiber of the man. The bond is less than .5 percent of all that,” and pointed out there were victims of his Ponzi scheme present in the courtroom.
McKessy said even more victims were coming to the surface and the Arizona Corporation Commission (ACC) had already ordered Wise to pay $66.9 million in restitution to those victims.
Gillespie, the only victim present in the case at hand, was granted his request to speak to the court.
Gillespie said he was directly involved with the revocation of Wise’s accounting license and asked the court to deny Wise’s motion to modify bail.
Having considered Wise a friend and accountant for 12 years, Gillespie said Wise has done irreparable damage to his family and scores of others.
He said Wise’s direct theft, as evidenced by his conduct, showed his behavior was criminal in its intent and not just a matter of “accounting malpractice,” as represented by his attorney.
Gillespie said, “The statement by Mr. Wise’s attorney in the motion to modify, that ‘his accusers were all happy customers until they became dissatisfied’ should read, ‘were satisfied until he was caught.’”
Gillespie said after he confronted Wise about the IRS not having received payment, Wise forged canceled checks payable to the IRS to make it appear as though the IRS had erred.
“His unrepentant actions have left my family on the brink of bankruptcy,” said Gillespie, “and we are still selling our assets to keep afloat, pay legal and accounting fees due to Dan Wise. Worse, he left my family at the mercy of the IRS … accruing up to $900,000 in penalties on top of the money he stole, which could have left my family being homeless. Dan Wise’s malicious actions have cost my family over $1 million …”
Wise wiped out Gillespie’s and his wife’s entire retirement they had struggled to save over 25 years.
Although he likened Wise to Bernie Madoff, Gillespie said his own situation was actually worse, as Wise did not abscond with money he had invested, but rather directly stole funds dedicated for payment of federal and state taxes.
In conclusion, Gillespie said he believed Wise to be “a harmful person, a true sociopath and a serious flight risk.”
Gillespie said he has heard from third parties that Wise has spoken of fleeing to Israel and former Wise associates tell of funds missing in Panama.
In conclusion Gillespie stated, “Danny Wise has no reason whatsoever to come back voluntarily. I plead with you to please, please keep his bail at the current level.”
Allen attempted to diminish McKessy’s and Gillespie’s comments and said, “As much as his actions have been called malicious and compared to Bernie Madoff, that’s not the case.”
However, Spencer, noting the ACC had ordered Wise to pay $66.9 million in restitution, denied Wise’s motion to reduce bond and affirmed the comprehensive pretrial conference scheduled for Aug. 21 and trial date of Sept. 29.
Midway through the proceeding, Wise’s wife Cindy and the couple’s 13-year-old son entered the courtroom, where they saw Wise sitting in his black and white striped jail garb and pink handcuffs, chained and shackled to several other inmates.
Wise, with a smirk on his face, didn’t appear to acknowledge his wife and son’s arrival and, when it was over, his son left in tears.
After oral arguments failed to result in a reduction in bond for his client, Wise’s Attorney Joseph Allen did not appear too receptive to being interviewed by Fox 10 News Reporter Alex Savidge.
Photos by Linda Bentley