The government concluded its case yesterday at the fraud and conspiracy trial of Mary Treadwell, the former president of the defunct P.I. Properties Inc., after presenting testimony that she evaded more than $33,000 in federal income taxes between 1976 and 1978.
As soon as the prosecution rested, John W. Nields, Treadwell's court-appointed defense attorney, asked U.S. District Judge John Garrett Penn to acquit his client on all 22 charges against her, claiming that government prosecutors had failed in a variety of ways to prove their case through the testimony of the 35 witnesses they presented.
The judge dropped one mail fraud charge against Treadwell when Assistant U.S. Attorney Stephen R. Spivack conceded that there was no evidence presented during the 19-day-old trial to support the charge. But Penn said he would wait until Monday morning to rule on the remaining 21 charges against Treadwell of conspiracy, fraud, tax evasion and making false statements to federal officials.
Unless Penn acquits Treadwell of all the charges, the defense would then start to present its case to the jury of eight women and four men.
Treadwell, one-time head of the 1970s Youth Pride job training program, is accused of using a Pride affiliate, P.I. Properties, to defraud the federal government and the impoverished tenants at the Clifton Terrace apartment complex of thousands of dollars to enrich herself.
Four other persons connected with P.I. Properties, including Ronald S. Williams, one of Treadwell's three former husbands, and Joan M. Booth, Treadwell's sister, have already pleaded guilty to a variety of charges in the case.
None of the four was called by the government to testify against Treadwell and prosecutors rested their case after calling only about half of the witnesses they said they would call before the trial.
Robert E. Lee, P.I. Properties' general manager and a man repeatedly implicated by the testimony, was particularly conspicuous by his absence from the witness stand.
However, the government could still call Lee and other witnesses to rebut defense testimony, which is expected to take about a week to present.
The key accusations against Treadwell came during 12 hours of testimony by Zellene Laney, P.I. Properties' former bookkeeper.
She testified that Lee told her that Treadwell wanted the Clifton Terrace financial records altered so that monthly reports on the apartment complex submitted to the Department of Housing and Urban Development would never show a surplus. P.I. Properties would have had to send any surpluses to the federal agency.
Laney and other witnesses recounted numerous times when P.I. Properties' officials tapped the apartment complex's operating account or the security deposits of tenants for their own personal use to pay personal bills, such as a Treadwell vacation to Jamaica, or to provide collateral for loans and money to invest in various Treadwell-run ventures.
But the witnesses also often admitted under cross-examination that many of the financial transactions dealt directly with Lee or Booth, both of whom have pleaded guilty to conspiracy and other charges, and not Treadwell.
Moreover, Nields, in trying to convince Penn to dismiss the entire case, disparaged Laney's courtroom testimony because of discrepancies between it and the testimony she gave to the federal grand jury investigating the case.
But Assistant U.S. Attorney William D. Pease told the judge yesterday that "Mary Treadwell used Clifton Terrace as her own personal piggy bank." The prosecutor said that while Treadwell established P.I. Properties as a charitable venture to provide low-income housing at Clifton Terrace, "That's exactly what they didn't do."
In yesterday's testimony, Internal Revenue Service agent William Fox said Treadwell still owes $33,308 more in federal income taxes for 1976, 1977 and 1978 than she had withheld from her Youth Pride paychecks or was entitled to in tax credits. The government contends that she received thousands of dollars in income from various ventures for which she did not pay income taxes.
Jerome R. Silverman, a certified public accountant, testified that he prepared the three tax returns for Treadwell in 1980 at the request of one of Treadwell's former attorneys. The returns were prepared at a time, he said, when Treadwell was already under investigation in the current case.
Another IRS agent, James Locraft, said that Treadwell's tax returns claimed that she made more money in each of the years than he was able to prove she did through examination of her financial records.