DALLAS CRIMINAL LAWYERS.: FEDERAL, STATE & APPEALS - BRODEN & MICKELSEN LLP

Evidence Against EX-IRS Agent Dismissed

Illegal Traffic Stop and Arrest yield $1 million in stock certificates, $25,000 in cash

By Bill Lodge, Staff Writer of The Dallas Morning News, Published March 3, 1999

Take a copy of The Old Farmer’s Almanac. Mix it with a broken automobile taillight, a dispute over the official time of sunset and a contest over probable cause. Bake for eight months.

Voila! You have an overdone bankruptcy-fraud case – sweet as Jack Daniel’s pie to defendants and bad as bitters to prosecutors.

U.S. District Judge Joe Kendall of Dallas has thrown out all of the evidence seized in the case of a Little Rock, Ark., couple arrested after a traffic stop in June.

Texas state troopers found about $1 million in Wal-Mart stock certificates and more than $25,000 in cash after they stopped a car with a broken taillight near Mount Pleasant in Titus County.

The car was occupied by Virginia D. Hatch, now 55. She had several forms of identification in different names.

Ms. Hatch, a former Internal Revenue Service agent, had been released from $48,000 in debts in her 1992 bankruptcy case in Dallas.

After that East Texas traffic stop, Assistant U.S. Attorney Linda C. Groves obtained a warrant in September for a search of Little Rock property owned by Ms. Hatch and her husband, Billy F. Hatch, 58.

That search led to a Dallas grand jury indictment that accused the Hatches of hiding about $350,000 in Wal-Mart stock and other assets from Ms. Hatch’s bankruptcy trustee. The Hatches were jailed without bond in September.

But Ms. Hatch’s attorneys, F.R. “Mick” Mickelsen Jr. and Clint Broden , and Mr. Hatch’s attorney, Robert J. Reagan, argued that all evidence should be suppressed because state troopers had no probable cause to stop, search or detain Ms. Hatch.

In a hearing last week, Cpl. Wayne Hellen of the Texas Department of Public Safety testified that Ms. Hatch’s broken light was probable cause for the traffic stop.

Cpl. Hellen also said a drug dog called to the scene seemed to “alert” on Ms. Hatch’s car, giving him authority to order her to unlock the trunk for a search. No drugs were found, but Ms. Hatch was detained after the discovery of her multiple aliases, cash and stock certificates.

Defense attorneys argued that the drug dog, shown on videotape by a trooper’s car-mounted camera, made no obvious movement toward Ms. Hatch’s vehicle. Ms. Groves countered that Cpl. Hellen was adamant that the dog pointed to the trunk.

But Mr. Broden said the traffic stop, which occurred at 8:35 p.m., was only 10 minutes after the day’s official sunset, according to The Old Farmer’s Almanac. State law does not require use of vehicle lights until 30 minutes after sunset, Mr. Broden argued.

Ms. Groves countered that state law permits troopers to stop unlighted vehicles when conditions warrant the use of headlights and taillights. In addition, she noted that other cars captured on videotape were using their lights as the dusk began to fade to darkness.

Judge Kendall ordered all the evidence suppressed and ordered Mr. Hatch released from custody Friday. Ms. Hatch, however, remained in custody because of a contempt charge she faces in a civil case in Arkansas.

Ms. Hatch’s Wal-Mart stock was not released, however.

U.S. Bankruptcy Judge Harold C. Abramson ordered those assets turned over to bankruptcy trustee Diane Reed, who has reopened Ms. Hatch’s bankruptcy case.

Ms. Hatch “may be able to fight that,” Mr. Mickelsen said Monday. “I don’t think she’ll be detained long.”

Ms. Groves said federal officials have not decided whether to appeal Judge Kendall’s suppression of evidence in the criminal case.

“The fat lady hasn’t sung yet, but she’s real close to the microphone,” Mr. Mickelsen said. “Virginia Hatch never felt she had done anything wrong. The last time I looked at the penal code, it was not a crime to keep $25,000 in your trunk.”

Mr. Hatch could not be reached Monday.

“I stand by my original statement,” said Mr. Reagan, Mr. Hatch’s attorney. “He didn’t do what he was accused of doing.

“If those DPS troopers had been at Bunker Hill, they would have been wearing red coats. This drug dog didn’t alert. It was an illegal stop. It was an illegal search. It was an illegal arrest.”