A Bowling Green man who was convicted in a wire fraud scheme that defrauded 168 investors of more than $14 million received a pardon from outgoing President Donald Trump.
The list of 73 pardons and 70 commutations made public Wednesday included a pardon for Johnny D. Phillips Jr., who was convicted in 2016 of conspiracy to commit wire fraud and mail fraud.
A White House statement on the 143 people receiving executive clemency said Phillips’ pardon was supported by U.S. Sen. Rand Paul, R-Ky., as well as a former U.S. Attorney for the Middle District of Tennessee and numerous members of the community.
“Mr. Phillips is known as an upstanding citizen and is a valued member of his community,” the White House statement said. “He dedicates his time to his three young children and is an advocate for Type 1 diabetes research.”
Nashville attorney Ed Yarbrough, who represented Phillips at his trial, wrote on his behalf when Phillips sought a pardon.
“Johnny is a really fine young man who I think deserved a second chance,” Yarbrough said. “He’s really sorry for what happened and is extremely grateful he’s been given a second chance, and I certainly believe he’ll never again be guilty of any conduct inconsistent with good citizenship.”
Phillips was one of 12 people indicted on criminal charges stemming from involvement in New Century Coal, a company formed by Bowling Green native and former NASCAR driver Brian Rose.
New Century, based in Johnson City, Tenn., advertised that it developed Blue Gem coal, a highly-valued type of coal used in making silicon for computer electronics and found only in Kentucky and Tennessee.
Federal prosecutors said New Century Coal staff sold shares in nine partnerships and created documents falsely representing the existence of coal reserves, profitability and ownership of the mines.
No coal was ever developed and most of the investor funds went toward financing the extravagant lifestyles of many of the co-defendants, according to court records.
Rose ended up pleading guilty to criminal charges related to his role in leading the scheme and received a nine-year prison sentence.
His father, previously convicted fraudster David Rose, also pleaded guilty to crimes stemming from the conspiracy and was sentenced to 18 months in prison.
While the other 11 co-defendants pleaded guilty, Phillips took his case to trial in U.S. District Court in the Eastern District of Tennessee.
Phillips, now 40, was convicted of conspiring to commit wire fraud and mail fraud and found not guilty of money laundering and conspiring to launder money.
He was sentenced to 30 months in prison and completed his sentence in 2019.
Prosecutors argued that Phillips was involved in the scheme for its duration, pretending to be an experienced buyer of Blue Gem coal and participating in investor meetings in which co-defendants used fake names.
At trial, it emerged that Phillips was present at a meeting with potential investors in Missouri in which a number of co-defendants used false names, with at least one investor testifying that they would not have done business with New Century Coal if not for Phillips’ attendance at the meeting, court records show.
Phillips’ defense team said in court filings that his work as a land manager for New Century Coal was legitimate.
Court records said Phillips testified in his own defense at trial and claimed he had no idea the company was lying to investors and was not aware that New Century Coal had not secured the mining rights to a property he had introduced to Rose and later helped pitch to unwitting investors.
Yarbrough said he argued that Phillips had marginal involvement in the enterprise.
“We argued in the trial that he was not aware of the nature of the conspiracy, and the prosecutor was successful in telling the jury that he should have known and was basically indifferent to the violations of the law,” Yarbrough said.
Co-defendants at Phillips’ trial testified that he was not involved in the day-to-day solicitation of investors and had limited overall knowledge of the extent of the conspiracy, and Phillips’ lawyers argued that his knowledge of and participation in the conspiracy was minimal compared to his co-defendants.
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