R. J. Reynolds tobacco heir Smith Bagley and four others today asked U.S. District Judge Robert Merhige Jr. to dismiss the illegal stock manipulation charges against them.
Bagley, president of the Washington Group Inc., and his codefendants said the government, after presenting testimony from 45 witnesses and offering over 700 exhibits, had failed to prove the 11 criminal charges and that the jury should not even have to decide the case.
The nine--man defense team made the pleas after assistant U.S. attorney Patricia Lemley completed the government's case.
Merhige, who has been highly critical of the government's case throughout the two-week trial, said he will make a decision on the dismissal motion this weekend. He sent the jury home with instructions to return Monday morning.
Through Merhige postponed his decision, he told defense lawyer William Osteen he is having trouble with all of the counts but certainly with the conspiracy count in deciding whether to let the jury decide the case.
Bagley is charged with illegally manipulating the stock of Washington Gorup, conspiracy, misapplying bank funds, wire and mail fraud.
From the outset of the government case two weeks ago, Merhige has been critical of the conspiracy evidence. But Wednesday he criticized the government's entire case saying he was shocked and embarrased it had been brought to court.
The government claims the defendant created an artificial demand for Washington Gorup stock in order to increase the price of that stock. The government says that Bagley and Washington Group bank president Jim Gilley did this by borrowing or guaranteeing large bank loans at Northwestern Bank of Winston-Salem, N.C. for employes and friends to finance stock purchases sometimes against their will: taking 50 percent of the assets of the company's profit sharing plans for stock purchases; and creating an employe stock purchase plan.
To try to prove all of this the goverernment's case consisted of records of stock and loan transactions and of employe benefits plans. The case also consisted largely of witnesses telling of pressure to buy or sell stock and of the use of employe benefit plans to buy stock.