Jun 16, 2014 17:50 DA’s gold business included partnership with convict DA’s gold business included partnership with convict Walter Reed Man was still on probation when gold-buying deal struck by SARA PAGONES and KATIE MOORE| email@example.com firstname.lastname@example.org June 16, 2014 Comments In summer 2010, gold was about a year away from its dizzying $1,900-an-ounce peak, but the precious metal’s rising price was enough to convince Eric Cazaubon, who was rebuilding his life after a felony drug conviction, to stop selling used cars and buy and sell gold instead. He was not alone in seeing a financial opportunity. That same year, St. Tammany Parish District Attorney Walter Reed went into the gold-buying business with Yancie “Bubba” Moseley III. Moseley began approaching other buyers, and one of the places he went was St. Tammany Wholesale Gold, the business that Cazaubon — a man on active probation in Reed’s jurisdiction — had just opened at the site of his former car lot on Gause Boulevard West. They struck a deal under which Moseley and Reed, through their brand-new business, would provide Cazaubon cash to buy gold in exchange for a hefty chunk of Cazaubon’s profits. But the agreement was short-lived, and within weeks after they severed ties, Cazaubon’s home and business were raided by probation agents and other law enforcement officers. Soon, an assistant to Reed was arguing before a judge that the shop owner’s probation should be revoked. Cazaubon’s occupational license for St. Tammany Wholesale Gold was issued on Aug. 20, 2010. Moseley, who approached him a week later, incorporated MR Precious Metals soon after he signed off on the deal with Cazaubon — on Sept. 8, 2010, according to state filings. Reed was included as a partner in the filings for the following year, but his 2010 financial disclosure form makes clear that he was a partner from the company’s inception. The form doesn’t say how much income the side business generates for Reed, who is the highest-paid district attorney in Louisiana with an annual salary of nearly $190,000. The DA lists additional income in the six figures from his private law practice and the gold business. Reed, whose outside financial dealings have come under heavy scrutiny in recent weeks, did not respond to requests for an interview or answer questions that were submitted to his office concerning MR Precious Metals and his office’s policies on employees doing business with people who have criminal records. But Rafael Goyeneche, president of the Metropolitan Crime Commission, said the district attorney should have avoided doing business with Cazaubon. “As a general rule, in any law enforcement agency, and that includes prosecutors’ offices, you don’t want your employees associating with people with a criminal history,” Goyeneche said. “And this is a guy on active probation.” Such a relationship puts the law enforcement official in an “untenable” position, with ample chance for conflicts of interest to arise, he said. Handwritten deal For his part, Cazaubon said he didn’t feel comfortable with the deal that was offered, which he characterized as a partnership. Its terms were outlined in a handwritten note: “I Eric Cazaubon hereby accept 10,000 dollars from Yancie Moseley for 30 percent of the profits of St. Tammany Wholesale Gold on the 27th day of Aug. 2010.” Both men’s signatures are on the single-page agreement. Reed’s name doesn’t appear on the document, but Cazaubon said Moseley made it clear that the district attorney was his partner and had put up half the $10,000 stake. And it was Reed’s name that Cazaubon said was invoked by Moseley when he hesitated. “Bubba said that, ‘You don’t know who you’re messing with. This is the DA of this parish. He’s my partner; we’re in business together.’ ... It wouldn’t be wise for me not to accept this offer,” Cazaubon said in an interview with The New Orleans Advocate this month. He said Moseley suggested that he could lose his occupational sales and use permits and second-hand buyer’s license if he declined the offer. Cazaubon claims Moseley also offered an incentive: Reed, he said, could help make minor legal problems go away. “Nothing major, he said: ‘Now you go kill somebody, we can’t help you,’ ” Cazaubon recalled. Moseley offers a far different account of his dealings with St. Tammany Wholesale Gold. He acknowledges doing business with Cazaubon. But he says problems arose because Cazaubon was selling stolen goods and wasn’t holding items for 30 days before selling them, as required by the law. Moseley said he has 150 accounts across the Gulf Coast from whom he buys gold. “It’s up to them to hold it” for the required 30 days, he said. He said he picks up gold from some shops every few days because the waiting periods elapse at different points, depending on when the item was purchased. Arrested after raid Moseley flatly denied ever saying the district attorney would help buyers avoid criminal charges. Instead, he said, it was Cazaubon who “called and called and called,” seeking help after he was arrested following an October raid on his gold shop and house. “I told him we had nothing to do with that (getting him out of trouble),” Moseley said. The question of who was to hold the gold also is a point of contention between Moseley and Cazaubon. Part of the pitch, according to Cazaubon, was that Moseley would come by every few days to pick up gold and would pay cash on the spot — an arrangement for which he demanded another percentage of the profits. “He elaborated that ‘I can come every two or three days to pick up the merchandise. ... If you spend the whole $10,000 today, tomorrow I’ll bring you $10,000 more and take what you’ve got,’ ” Cazaubon recounted. Moseley gave him a lot of advice, he said, from what type of signage to use to what kind of equipment to buy. “I was just getting started, so I wasn’t really sure how all that worked. ... As a business associate, I thought that they would be holding it for 30 days or do whatever they had to do with it,” he said. Moseley said Cazaubon bore that responsibility and shouldn’t have sold him anything that he hadn’t held the requisite amount of time. The relationship between the two businesses ended acrimoniously when they disagreed over how much MR Precious Metals should pay Cazaubon for a diamond ring. The ring was worth about $15,000, Cazaubon said, and Moseley advised him to pay the seller as much as $3,500 for it. Cazaubon got a better deal, paying only $2,500, but he said Reed wanted the ring as a piece of jewelry — and he only wanted to reimburse Cazaubon what he paid. Cazaubon thought he should make a nice profit on the deal, but in the end, Reed was only willing to offer him $200 above the purchase price. Cazaubon wouldn’t back down, and they parted ways. The shop owner paid back the $10,000 Reed and Moseley had fronted him, with a final check made out to Moseley on Sept. 29, 2010 — about a month after they signed the initial agreement. Troubles just starting But it turned out Cazaubon’s troubles were just beginning. A multiagency raid was conducted on St. Tammany Wholesale Gold and his Slidell home the following month, and he was arrested on several misdemeanor counts related to gold-sale regulations, as well as for possession of marijuana. Judge Peter Garcia, of 22nd Judicial District Court, revoked his probation on Dec. 1, 2010, ruling that he had violated the terms of his supervised release on a 2009 drug conviction, which required him to refrain from owning or possessing dangerous weapons. During the raid, officers had found a stun gun at the gold shop. He was initially ordered to serve eight years in prison plus another six months for violating the terms of another probation for buying and selling fish without a license. He took classes to secure an earlier release and got out Nov. 4, 2013. At the time of the revocation hearing, Cazaubon had not been tried or convicted on any of the charges stemming from the raid, and Goyeneche said it’s unusual for prosecutors to seek to revoke a probation based simply on an arrest. “The normal way I’ve seen probation revocations is with convictions,” he said. “Here, you didn’t even have lab reports showing the contraband was ... a controlled substance.” After Cazaubon’s initial sentence was imposed, a lab report confirmed that a pill bottle containing the remnants of marijuana joints found at his house during the October 2010 raid contained one-tenth of a gram of marijuana. Cazaubon said the joints were not his and were not tested for DNA. But he pleaded guilty to possession of marijuana, a misdemeanor, on April 27, 2011, saying he did so as a condition to serving out his time in work-release rather than in prison. He received 90 days, to be served concurrently with the sentence imposed by Garcia. He was not tried on the alleged gold sale infractions. Cazaubon’s original conviction stemmed from a Jan. 5, 2009, arrest for distribution of a Schedule II controlled dangerous substance, hydrocodone. While Reed has frequently recused his office from prosecuting cases where he has a relationship with one of the parties involved, he did not do so in Cazaubon’s case, nor did he do so in a 2012 DWI case involving Moseley, who also was Reed’s tenant in a house he owned in Abita Lakes Estates. Goyeneche said the Cazaubon case highlights why it can be problematic for a district attorney to pursue a range of private business opportunities. “The bottom line is he says he’s the full-time DA,” Goyeneche said. “If he was the full-time DA, he wouldn’t put himself in these types of business ventures that could potentially compromise his integrity and the integrity of the office he heads.” Follow Sara Pagones on Twitter, @spagonesadvocat.