U.S. Attorney: Holmes & Dukes named as possible witnesses in Bolton federal trial

U.S. Attorney: Holmes & Dukes named as possible witnesses in Bolton federal trial
A pair of local attorneys in the Hub City could appear as witnesses in a federal trial involving Forrest County Sheriff’s Department Chief Deputy Charles Bolton and his wife Linda Bolton. Source: WDAM

HATTIESBURG, MS (WDAM) - A pair of local attorneys in the Hub City could appear as witnesses in a federal trial involving Forrest County Sheriff's Department Chief Deputy Charles Bolton and his wife Linda Bolton, and federal prosecutors are arguing that those attorneys be removed as counsel.

Attorneys Paul H. Holmes ("Holmes") and James K. Dukes, Sr. ("Dukes") are representing Linda Bolton from her 10-count federal indictment related to tax evasion.

Charles and Linda Bolton were indicted in March 2016 on a 10-count federal indictment for charges linked to tax evasion and filing false tax returns.

Just shy of four months later, the government has filed a motion Friday afternoon to disqualify Linda Bolton's legal counsel.

"Now into court comes the United States of America, appearing herin through the undersigned Assistant United States Attorney's who move this Honorable Court to disqualify Paul H. Holmes ("Holmes") and James K. Dukes, Sr. ("Dukes) as counsel of record for defendant Linda Bolton."

Holmes has represented Linda from the date of her arraignment on March 25, 2016, three days after being indicted. Dukes enrolled as co-counsel for Linda on June 22, 2016.

In June, Assistant U.S. Attorney Fred Harper appeared before the grand jury on a related matter, and soon after Harper and members of the Internal Revenue Service case agents traveled to Hattiesburg and stayed a week to review case-related documents and further investigate the case in preparation for trial.

According to court documents, Harper and case agents met with several witnesses and began a page-by-page review of all of the evidence that has been collected in the case.

"During that review, AUSA Harper observed several checks written by Holmes and Dukes to the Schedule C businesses owned by the Boltons, "Halls" or "Sports 22 Restaurant."

An examination of Linda Bolton's notes, which she provided the Boltons' tax preparer on a monthly basis along with the bank records of both businesses, revealed the Boltons claimed that various amounts, including the amounts on the checks written by Holmes and Dukes, were recorded as loans rather than income to the business.

The government is arguing the payments as "loans" is unsupported, as there are no loan documents or agreements in the government's evidence, nor did either defendant provide reciprocal discovery suggesting these payments from Dukes and Holmes were in fact loans.

Additionally, there is not a single check or receipt indicating a repayment on any loan, at any time, to any part.

"The government's investigation revealed that Holmes and Dukes wrote checks as payments for goods and services obtained from the Bolton's business. They were not loans, as the Boltons have claimed."

The government stated in the filings that it intends to call numerous witnesses to identify the invoices from the Bolton's businesses, checks those witnesses or their entitles wrote in payment of those invoices and documents provided to the Bolton's CPA tax preparer, which claimed those same payments for goods and services were loans and not sales, thereby avoiding tax liability for same.

"The government cannot simply exclude these checks because the months involved have other checks from other people or their entities that are in some cases mixed with a check written by Holmes and/or Dukes. To exclude the checks would leave a gaping (and inexplicable) hole in the Government's evidence."

The government added that the continued representation by Holmes and Dukes of Linda Bolton violates the long established rule that an attorney shall not act as an advocate in a matter in which may be called as a witness.

"The United States hereby respectfully moves this court to disqualify and remove Holmes and Dukes as counsel of record for Linda Bolton due to the inherent conflict of interest."

An example listed is if Holmes and Dukes continue to represent Linda Bolton, the government will be forced to call her lawyers to explain purpose of the checks or seek a stipulation regarding the purpose of the checks. If the attorneys testify or stipulate the checks were for goods and services, this evidence is adverse to the Bolton's defense and supports the Government's theory that the Bolton's disguised business income as loans in order to minimize their tax liability.

"Should the checks be admitted in to evidence without the testimony of Holmes and Dukes, their conduct would be at issue, along with the Boltons' conduct. The question of the purpose of the checks would be left unanswered."

The government disclosed all of the evidence, including the checks written by Holmes and Dukes, to the defendants long ago according to court filings.

"As soon as the government became aware of the conflict, it notified the defendants of its position that Homes and Dukes are necessary witnesses and have a conflict."

Holmes and Dukes disagreed and declined to voluntarily withdraw as legal counsel in the case.

No ruling has been issued on the government's request at this time.

The next set date in federal court is Aug. 22, 2016, where the defendants are to appear before District Judge Keith Starrett for the start of the trial.

Paul H. Holmes ("Bud Holmes") has been in practice for over 40 years, and was the 12th District Circuit Court District Attorney for Forrest-Perry Counties in the 1980s. Holmes is a practicing attorney at the Holmes Law Firm.

James K. Dukes, Sr. ("Jim Dukes") has been a licensed attorney for 57 years, and is an attorney at the law office of Dukes, Dukes & Wood.