The case against Donald Watkins Sr. and his son would’ve been one of the biggest sports stories of the year had it not been happening in Birmingham.
The trial of Donald Watkins Sr. and Donald Watkins Jr. — both indicted on 10 counts of wire fraud in 2018 and convicted in March 2019 by a jury in federal court in Birmingham — was some astonishingly good late-capitalist swindle drama.
In summary: Between 2009 and 2014, a prominent attorney and his son were accused of bilking investors out of more than $10 million in investments in a biofuels company. These investors included professional athletes like NFL great Takeo Spikes, former NFL players like Gibril Wilson, and NBA legend, TNT commentator, and future governor of Alabama Charles Barkley. All of them testified or were deposed in the case, appearing along with witnesses like former Secretary of State Condoleeza Rice and civil rights activist Martin Luther King III.
At one point it kinda involved trying to buy the St. Louis Rams? And a man cross-examining himself on the stand? There is a lot here, is what I’m saying, and most of the country missed it. If this trial had happened in New York or Los Angeles, there would have been no other sports stories happening that week. But it happened in Birmingham.
Here are the highlights — i.e., the parts they will make a podcast or streaming true-crime story out of later this year.
Watkins Sr. defrauded athletes, including one of the NBA’s most voluble commentators, out of millions in a scheme involving a biofuels/energy company.
Investors like Barkley and Spikes believed they were buying shares in an up-and-coming energy company called Masada Resource Group. Masada was worth potential “billions,” according to Watkins Sr.
According to the SEC’s filing in the case, Masada became a funding vehicle for Watkins Sr.’s personal finances. He used investors’ money to pay off his own financial liabilities, including money he owed to his ex-wife, outstanding debts from a prior investment in a local bank, his girlfriend’s home expenses, a payment on a Cessna airplane, and delinquent taxes.
Barkley estimated he lost around $6 million on Masada. Spikes testified in court that he lost a million to the scam. He also had a chance to address Watkins Sr. from the stand personally, and did not waste it.
Spikes says Watkins had the opportunity to do something good, and not a lot of people who look like him get to do that.— Madison Underwood (@MadisonU) February 20, 2019
Spikes: "You're going to get what you deserve, but be very grateful that I'm not the one administering it."
Spikes steps off the witness stand.
Please notice Spikes found a way to tell a man “be thankful you are not catching this entire FDA prime-grade ass-kicking personally” in a court of law and still not get found in contempt of court. Between this and having a neck so thick it has its own section in his Wikipedia, put him in the Hall of Fame immediately.
While this was all going on, the central figure in the case tried to buy the Rams.
In 2009, while getting money out of athlete investors for a company he ultimately didn’t even own a share of, Watkins Sr. decided to multitask a little. He was one of the named suitors in the bidding for the majority stake in the St. Louis Rams.
Like his previous ownership bids for the Minnesota Twins, Montreal Expos, Tampa Bay Devil Rays, and California Angels, Watkins Sr.’s campaign to buy the Rams failed. (His credit score at the time: 699, one point shy of “good.”) That share was eventually sold to current Rams owner Stan Kroenke, but not before Watkins Sr. got to be listed in the media as a potential buyer.
He did get something else out of the pursuit of the Rams. He tried to convince a member of the Rams’ former ownership, the Rosenbloom family, to invest in his energy company in 2010. Watkins Sr. went as far as to say in internal emails afterward that a partnership with the Rosenblooms was all but a done deal — the opposite of what a member of the family said in sworn testimony in the case in February 2019.
The defendants sold shares in an energy company they never actually owned.
Watkins Sr. was a successful attorney when he offered to buy half the shares in Masada Resource Group from co-founder Terry Johnson in 2007. Watkins Sr. and Johnson agreed in principle on Watkins Sr. buying $3.2 million in shares from Johnson, making Watkins Sr. the owner of 50 percent of the company.
As CEO of a promising biofuels company, Watkins Sr. immediately began soliciting investors for funding. He did not mention he’d missed the deadline to actually buy his own shares.
Instead of pushing Watkins Sr. to pay, Masada co-founder Johnson simply changed the deadline six times, including in the last amendment to their agreement, in 2017. In court in 2019, Johnson stated that because he never received payment for the shares, Watkins Sr. never even really owned the shares of the company he was selling.
Masada Resource Group has not built a power plant to date — including the one it was slated to build in Sierra Leone in partnership with Gibril Wilson, the former NFL player. Wilson went on to try and build the power plant with other partners, while Watkins Sr. attributed the failure to, among other factors, an outbreak of the ebola virus.
Watkins Sr. went big-big on name-dropping in order to woo investors.
To get investors on board, Watkins Sr. mentioned the former owners of the Rams. He went much, much further than that, though. Watkins Sr. also told them that Condoleeza Rice was joining the company’s board and would be working with them. Rice did not join the board, and testified she never seriously considered working with the company in any capacity.
Watkins Sr. also emailed investors to tell them Martin Luther King III would be lobbying President Barack Obama at Camp David on behalf of the company. King testified that this was not promised and would not happen.
The company — worth alleged billions to potential investors — did not even have a bank account.
We're now getting into Masada financial records and how Watkins used credit cards with the company. Masada once had a bank account, Watkins says, but early on he closed it. (That's right, a company supposedly worth $1.5-$2b didn't have a bank account.)— Kyle Whitmire (@WarOnDumb) March 6, 2019
Watkins Sr. represented himself. He cross-examined Watkins Sr., aka himself, in court.
It was not as awkward as it could have been.
Prior to getting involved in a bioenergy scam of pro athletes because he was overextended financially, Watkins Sr. was an accomplished trial attorney. His experience includes taking on big civil rights cases in Alabama, defending former Birmingham mayor Richard Arrington, Jr. against corruption and bribery charges, and representing Auburn defensive back Eric Ramsey in the case that helped force the resignation of Auburn football coach Pat Dye in 1992*.
*Of course there’s an SEC football scandal tie-in here. It’s required in all big legal cases in Alabama.
Watkins Sr. also successfully defended former HealthSouth CEO Richard Scrushy against 85 felony counts for fraud and violations of the Sarbanes-Oxley Act concerning his oversight of the company. Watkins. Sr’s website sums up his success in that case:
No white-collar criminal defendant before or since the Scrushy case has defeated 85 felony charges in an individual case.
That seems like a lot of felonies! Watkins Sr.’s website is also a repository for glowing summaries of the Masada Resource Group’s business, hot takes on everything from the conditions at the Greater Birmingham Humane Society to the unfair and dishonest reporting at AL.com, and his very positive review of the animated film Spirit: Stallion of the Cimarron.
Anyway, yes, he represented himself.
Watkins Sr. took care to note that he was going to avoid leading the witness. Himself. The witness, who was himself.
He performed well for someone representing himself, though he was warned to avoid tampering with the jury after riding the elevator with jurors several times during the trial.
One other issue with Watkins Sr.’s performance as Watkins Sr.’s attorney: the outcome of the trial.
Watkins Sr. was convicted on all 10 counts against him.
On March 8, after a day of deliberation, the jury found Watkins Sr. guilty, convicting him on seven counts of wire fraud, two counts of bank fraud, and one count of “conspiracy to commit wire fraud and bank fraud relating to a conspiracy.” His son, who also represented himself, was found guilty on two charges and acquitted of the remaining charges against him.
Watkins Sr. issued a thank you on his website to his supporters following his conviction. He also did way more than hint that the Masada case is persecution for his support of civil rights cases and other causes unpopular with those in power.
In my case, the cost of my advocacy for transparency and accountability in government and respect for humanity has been character assassination and may include imprisonment. My visit in 2012 to the small prison cell on Robbins Island in South Africa where Nelson Mandela spent 27 years of his life in isolation has prepared me psychologically for this moment.
Watkins Sr.’s sentencing will take place July 16. The investors in the case won’t recover any of their investments with Watkins, because they’re long gone. This includes Charles Barkley, by far the biggest investor among the athletes, who ended up losing more than $6 million.
Barkley hasn’t commented on the verdict yet. In his 2017 deposition in the case, Barkley initially goes to great lengths not to badmouth someone who took millions from him. He says Watkins is a friend, and someone he trusted. Barkley states that he just wants to get this over with and go on with his life, and that the whole thing is a waste of his time.
Yet after repeated reminders of the SEC’s findings in the case — like the emails between Donald Watkins, Sr. and Jr. saying they needed more “Barkley money” to pay their bills — even Barkley ends up at the same place as everyone else who gave Watkins, Sr. money.
“So you do consider him a friend?” asked Watkins’ attorney
”That’s a loaded question right now,” Barkley replied.