Court, Kay settle plea deal

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Six-year sentence diverted for five years, restitution must be made to ex-husband

By Becky Barnes

A day and half into what was expected to be a five-day trial, Kay Brown made a surprise change of plea and accepted a new deal from the Commonwealth.

The deal, in essence, would wipe Brown’s criminal slate clean after five years as long as she adheres to a long list of conditions.

After a seven-man, seven-woman jury was seated Tuesday morning and opening statements from the defense and prosecution, attorneys met privately to hash out the components of a plea agreement.

Brown entered a guilty plea pursuant to North Carolina vs. Alford, which means that the defendant (Kay Brown) maintains her innocence but acknowledges that with the evidence and testimony, she would likely be found guilty.

“It was in the best interest not only of Mrs. Brown, but also the people of Harrison County,” said defense attorney Mike Curtis following the Alford plea and subsequent diversion of a six-year sentence.

“Anytime you can get a diversion, you have to recommend it to your client,” Curtis said. “You never know what a jury is going to do.”

Curtis added that the Alford plea gives the client a sense of dignity.

“You’re pleading guilty but you’re not admitting guilt,” he said.

Laws’ opening remarks

Assistant Commonwealth Attorney Michael Laws opened for the prosecution. He painted a picture of repeated transgressions the defendant made against her husband James A. Brown in a time line that started with the death of Brown’s first wife, Martha.

“Jim and Martha were a modern day success story,” Laws told jurors. “They turned the sweat of the brow into a small fortune.”

The couple agreed to set up a trust that would benefit a number of individuals, Laws said.

Then in 2008, Jim married Brenda Kay Booth.

At that time, Jim’s assets were $114,377,330.53. Kay’s were $236,600. That, Laws said, is why an antinuptial agreement was signed.

It detailed that what’s mine is mine and what’s yours is yours, he said.

Ten months into the marriage, on Dec. 23, 2008, Jim Brown suffered a debilitating stroke.

“A stroke is an awful thing,” Laws said, adding that because of the affects of the stroke, Jim Brown would not be able to testify during the trial.

In April 2009, Kay Brown pursued a power of attorney to handle Jim’s business and personal affairs.

One of the stipulations of the power of attorney was that Kay Brown was prohibited from giving away any of his estate.

“She thought she had his assets to do with as she saw fit,” Laws said, continuing the time line.

In June 2009, a new will was prepared by John Kirk, Kay’s cousin, which left everything in Jim Brown’s estate to her and her adult children.

There were numerous other breaches that Laws detailed, from the purchase of a house in her name only to certificate of deposit transfers that added her name to accounts, some of which she later cashed in.

Then in November 2009, Kay Brown had in excess of 20 deeds drawn up that transferred $6.27 million of real estate to herself. Only one of the deeds was successfully transferred and that was the Farmers Bank of Paris, which she sold for $840,000.

It was then that attorneys Richard Wehrle and Tom Rawlings met with Jim Brown, along with Dr. Frank McKemie, to discuss some of the events that had occurred since his stroke.

Laws said Jim Brown denied having signed any power of attorney or new will.

Kay Brown had also attempted to sell Grand Haven Nursing Home.

That was when the court system became involved and District Judge William Probus issued a status quo order that prohibited Kay Brown from doing anything with Jim’s properties other than what would be considered “reasonable.”

Laws said she transferred $60,000 to Marshall Mining Co., which is partially owned by her brother, Carl Kirk. A few days later she transferred another $100,000 to the same company.

In May 2010, local attorney Ed Culbertson was appointed limited temporary guardian and the power of attorney that Kay held was extinguished by Judge Probus.

However, according to Laws, excessive spending continued. She purchased a Jaguar and forged Jim Brown’s name on the title without any notification to Culbertson, to whom she was to report.

In March she went on a cruise, also without notifying Culbertson, and purchased $35,000 in jewelry. That was followed by the purchase of a Mercedes.

Then in May 2011, Kay told Culbertson that she was taking Jim to Paintsville.

“She doesn’t return him,” Laws said, noting that she changed his voter registration to Johnson County and brought in new doctors, again without notifying Culbertson.

In June 2011, Judge Probus ordered that Jim Brown be brought back to Cynthiana to Grand Haven Nursing Home and that Kay  Brown have no contact with him or his businesses.

Laws continued the time line detailing that in direct violation of Probus’ order, Kay Brown cashed in a $524,966.37 CD and put the proceeds into an account bearing only her name.

While Laws detailed infraction after infraction, Kay Brown sat beside her attorney Mike Curtis shaking her head.

In September 2011, Jim Brown received a $96,000 supplemental check from State Farm which she cashed and then changed the beneficiary to herself and her daughter.

Wehrle was appointed conservator and Jim’s brother, Paul, was appointed guardian.

Still there were more defiant actions by Kay Brown,

There was a withdrawal of over $700,000 that was deposited in her brother’s account; Social Security checks and a $40,000 tax return that Kay endorsed.

Kay filed for divorce in Johnson County but later asked that it be dismissed. However, Jim pursued the divorce, which was finalized in May. 

Kay was appealing the action.

Rounding out his comments, Laws asked the jury to see through Kay’s “disingenuous tears.”

Laws said that Kay Brown took advantage of her husband and knowingly exploited him for a substantial amount of money that he and Martha had worked hard to obtain.

Curtis’ opening remarks

Curtis faced the jurors and described the case as one of “intrigue, deceit and manipulation.”

He said that Jim and Kay had been long time acquaintances, that they went to high school together. After Martha’s death, Jim returned to Paintsville and became reacquainted with Kay and ultimately married her in February 2008.

In was on their wedding day, Curtis said, that the prenuptial agreement “was thrust upon” Kay, which she signed.

“They had a relationship that was beautiful,” Curtis said, noting that there would be several witnesses that would testify to the kind of relationship the couple had.

On Dec. 23, 2008, Jim suffered a stroke, Curtis said, adding that Kay was at his bedside.

She was there on Christmas Eve and Christmas Day, he said, adding that there were no friends or family who visited him during that time.

He said Jim’s businesses, Goldberg’s, Lee’s, Ponderosa and Brown, Redd and Williams, began to fail.

“And, there were problems at Farmer’s National Bank,” Curtis said.

Accountant Gene Hargis was brought in to assist Kay with getting the businesses back on strong ground.

Curtis said there would be testimony about tax return checks for $800,000 and $300,000, which he said Kay used to rebuild the businesses.

She purchased two new ambulances, remodeled Lee’s, resurfaced the parking lot and had shrubs and trees planted.

“Cindy Bryant, a long-time friend of Jim’s worked at the Deposit Bank in Carlisle, knows that Jim Brown wanted this woman’s name on the CDs,” Curtis stressed.

He went on to describe the couple’s life in Paintsville with Kay’s daughter and her family.

“Jim was getting better,” Curtis said. “Until attorneys manipulated the court.”

Curtis said Kim Underwood, an EMT, would testify that when she went to Paintsville to bring Jim back to  Cynthiana as the judge ordered, Jim objected saying that he wanted to stay with his wife and grandchildren.

Guilty plea

Following the opening statements, Judge Jay Delaney recessed court for lunch.

As jurors returned to the jury box, Delaney advised that there was an unavoidable delay and recessed for another hour.

At 2:40 p.m., Delaney brought the jurors back in session and advised that there were still issues that would prohibit court from continuing and excused the 14 jurors until Wednesday morning.

While attorneys were behind closed doors negotiating the next plea deal, Kay Brown sat at the defense table thumbing through tablets and files.

Curtis returned to the courtroom on two occasions to usher Kay away to discuss the agreement.

At 4:30 p.m., all attorneys and the judge returned to the courtroom.

Commonwealth Attorney Doug Miller said a deal had been reached and that the victim and his family and fiduciaries were in agreement.

Kay Brown entered Alford pleas to an amended charge of financial exploitation of an adult, reducing the charge from a Class C felony offense to a Class D felony for which a five-year sentence was recommended; to first degree perjury with a  one-year sentence to run consecutively; and second degree criminal possession of a forged instrument for a motor vehicle title with a five-year concurrent sentence.

It was agreed that the six-year sentence would be diverted for five years and at the end of the fifth year, if Kay had met all of the stipulations, the criminal charges would be dismissed.

Diversion agreement

The terms of the diversion:

•The period of diversion is five years. Kay Brown would not be released from diversion until full restitution is made.

The amount of restitution will be determined at a hearing on Jan. 13, 2014, in Harrison Circuit Court.

•The diversion is to be supervised with Kay paying $25 per month to Probation and Parole.

•Probation and Parole will conduct home visits and she is to have no access to firearms.

•She will remain drug- and alcohol-free for the duration of the diversion and will submit to random testing.

•She will pay court costs of $155 and restitution to be determined. Within 30 days she will be party to joint motions seeking dismissal with prejudice of all pending appeals involving her and James A. Brown, his estate or  entities in the United States 6th Circuit Court of Appeals and the Kentucky Court of Appeals.

•She is to cooperate with counsel for Jim Brown in the prosecution of causes of action, claims against Sandra Spurgeon of Spurgeon & Tinker, Erik Bolog and his law firm, Eugene Hargis and Hargis and Associates, Whiteford, Taylor & Preston, Greenberg & Traurig firm, John Kirk and the Kirk law firm, Mike Hogan, J.D. Johnson, Brad Teeters, David Barber and his law firm and Greg Stumbo and his law firm.

She will also waive her attorney-client privilege with exception to her defense attorney Mike Curtis as well as her accountant-client privilege.

•She is to have no contact with Jim Brown or his family or employees. She is to stay away from his residence, businesses or where he may be receiving care.

•She must also provide a sworn financial statement as to assets and liabilities.

•She will cooperate with counsel for Jim Brown in filing and pursuit of an insurance claim with or against any carrier who may be obligated to compensate him for lost or stolen property.

In the event any terms of the diversion are not met, the court may schedule a hearing to revoke the agreement and she would be subject to the recommended sentence.