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A federal grand jury has indicted the chief executive officer of a bankrupt Alpharetta mortgage company on charges that he obstructed justice and committed perjury in a sexual harassment case brought by one of his former employees. James L. Pefanis, CEO of AME Financial Corp., was indicted in December following an investigation that began after a federal judge determined that before the harassment case went to trial in October 2009, Pefanis had presented as evidence a fabricated affidavit with the forged signature of one of Pefanis’s former employees and had later lied about the document while testifying in a pretrial hearing. U.S. District Senior Judge J. Owen Forrester’s findings led him to hand down what he called “the ultimate sanction” for litigation misconduct against Pefanis and his mortgage company—issuing a default verdict in favor of Pefanis’s former employee, Evangelina “Hope” Forsberg. In ordering the default, the judge wrote, “The use of a forged document in defense of a lawsuit prejudices both the opposing party and the judicial system itself.” Forsberg, who had worked for Pefanis as a junior underwriter and sales executive at AME, accused him of sexual misconduct that was intended to humiliate and demean her and forced her to quit her job. Forsberg also claimed that Pefanis had retaliated against her after she filed suit by threatening one of her business associates and her new employer and then attempting to have her fired from her new job. A jury awarded Forsberg $9.2 million in damages in 2009, which Forrester later reduced to $5.75 million. Pefanis has pleaded not guilty to the charges. His attorney, Leonard Louis Franco, could not be reached for comment. Pefanis’s arrest and detention prior to his release on bond is the latest in a series of actions against the former mortgage broker and his partner, Atlanta attorney Ron D. Eckland, that have resulted in multiple suits against the two men and their mortgage firms and led Forrester to jail both Eckland and Pefanis on civil contempt charges. Forrester has jailed Eckland—whose firm, the Atlanta Real Estate Law Group—handled the bulk of AME’s closings, twice for contempt and charged him with multiple fines stemming from what the judge once described as “matters of honesty that concern the court.” The attorney has spent a total of six months in jail. Forrester released Eckland for the second time on last Nov. 12. The judge also jailed Pefanis for contempt last March, and he remained in custody until Forrester ordered his release on Dec. 3—just six days before the grand jury indicted him. Following his indictment, Pefanis was taken into custody a second time. He was released Dec. 14 on a $50,000 surety bond over the objections of federal prosecutors who had argued he should remain in custody because there was “a serious risk” he might flee or obstruct justice. The contempt orders stem from a hunt by Forsberg’s attorneys for an estimated $8 million in assets allegedly held by the defendants that could be used satisfy the $5.75 million judgment against Pefanis and AME. The affidavit that Pefanis is charged with falsifying in the Forsberg case was supposedly signed by one of Pefanis’s former employees, David Popke. The defense had identified the affidavit as key to Pefanis’s case because it contradicted Forsberg’s claim that Pefanis crudely had groped her in front of witnesses, including Popke, at work as she struggled to break free. The affidavit, which Forrester subsequently determined was a forgery, stated that Popke did not recall the incident that Forsberg had described. But shortly before Forsberg’s case went to trial, her attorneys, Benjamin A. Stone and Thomas J. Munger of Atlanta’s Munger & Stone, located Popke in Texas and secured from him a new affidavit supporting Forsberg’s version of events. The new affidavit asserted that Pefanis had approached him and demanded that he sign a statement stating that the incident Forsberg had described had never happened. Popke’s new declaration stated that he had refused to sign the statement and did not know who did. At a pretrial hearing, Stone presented testimony from a former Army document and handwriting expert that the signature on the Popke affidavit was not Popke’s. At that hearing, Pefanis testified that he had typed the statement based on information Popke gave him and then presented it to Popke, who signed it. The indictment states that Pefanis “well knew when he testified” that his testimony was false. During that hearing, a deeply suspicious Forrester had warned Pefanis that if Pefanis, his associates or his lawyers had been “less than truthful,” he would call in the U.S. attorney. “We are certainly not surprised by the indictment,” Stone said Tuesday. “From our perspective, Judge Forrester was obviously extremely troubled by Mr. Pefanis’s conduct during this litigation. The U.S. attorney was as well. We are certainly closely following it.” Allegations of perjury and obstruction are not the only charges that have surfaced during the ongoing litigation. Forrester raised the spectre of possible bank fraud during a series of hearings last year. The judge raised the issue after Forsberg’s attorneys, who also represent another former Pefanis employee in another sexual harassment suit against the mortgage broker, accused Pefanis of transferring millions of dollars in personal and business assets to Eckland to hide them from the plaintiffs. Attorneys defending Pefanis and Eckland responded by claiming that financial statements used to obtain multimillion-dollar bank loans for their mortgage companies were riddled with misstatements that artificially inflated the value of their assets. Those claims echoed statements by Pefanis himself, in a pleading responding to the plaintiffs’ demands for financial documentation that he filed pro se (at least four firms have worked on the case and then withdrawn). The plaintiffs, Pefanis claimed, have asserted “that the information contained in those documents must be 100 percent accurate, and from that plaintiff concludes that Pefanis must have assets like or similar in amount to those reflected on the various documents which contain financial information. Many of the entries of those documents were either mistakes, were projections, or were simple errors in the completion of the records.” Those assertions prompted Forrester to raise the possibility that Pefanis and Eckland may have engaged in bank fraud, which their attorneys have denied. “You can bet I will refer this to the U.S. attorney,” Forrester said during a hearing last year. Forrester jailed Pefanis for contempt when he failed to turn over financial documents needed to trace assets that he and Eckland had listed as owning on financial statements that accompanied loan applicationsor that they claimed were held by three mortgage companies with which they are affiliated. Forrester jailed Eckland after the attorney refused to comply with a court order to surrender personal financial information and financial documents associated with his law practice and one of the duo’s mortgage companies. The judge released Eckland a month later after concluding, “I’m not sure it’s fair to hold someone in prison” if the only way to win his freedom was to admit to a federal crime. But Forrester jailed Eckland a second time after Forsberg’s attorneys claimed the attorney intentionally had hidden as much as $800,000 for Pefanis. Forrester ordered Eckland to turn the money over to the court registry or, as an alternative, post equity held in real property. But, according to court records, Eckland posted insufficient cash and equity in properties that he either had overvalued, were in foreclosure or it was not clear that he owned. Forrester released him in November after Eckland spent five months in jail and only after he tendered five additional properties that met the equity requirements.

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