Ex-Fairbanks mayor asks for a new trial

Attorney asks court to overturn Hayes' laundering conviction

Posted: Wednesday, October 29, 2008

FAIRBANKS - Jim Hayes, the former mayor of Fairbanks now serving five years in a federal prison, wants a new trial.

His attorney John Murtagh has asked the 9th U.S. Circuit Court of Appeals to overturn Hayes' money laundering conviction.

Hayes was convicted in February of helping siphon federal grant money from his wife Chris' mentoring center, LOVE Social Services, and hiding the thefts.

Murtagh says a judge should have rescheduled Hayes' trial, so his wife could have testified about her central role in stealing more than $400,000 from social service grants.

Murtagh unsuccessfully asked that Jim Hayes' trial be postponed until Chris Hayes - who had already pleaded guilty under a deal with prosecutors - was sentenced. Murtagh renewed his argument in an appeals court filing last week.

Had Chris Hayes been sentenced before her husband's trial, Murtagh writes, she would not incriminate herself by telling jurors of steering money away from the federally supported tutoring center toward a church and her own personal spending.

A federal judge in May sentenced Jim Hayes, 62, to 5 ½ years in prison and Chris Hayes, 57, to three years. Hayes and his wife are serving time in separate federal facilities in Texas.

The former Fairbanks first couple founded the tutoring center in 2000, when Jim Hayes was still in his third term as mayor.

Chris Hayes, who around that time fell into personal debt, served as the executive director and operated the center from the old home of the Lily of the Valley Church of God in Christ.

Meanwhile, church officials led construction of an impressive, 21,000-square-foot new home across the street - one built partly with money from the earmark-funded tutoring center.

Witnesses at Jim Hayes' trial told jurors the church project's price tag grew too fast for its budget to manage without help.

In her plea deals, Chris Hayes acknowledged a role in sending increasing amounts of money, intended for tutoring, toward the church and to cover her personal spending habits.

Murtagh wrote that the former mayor counted on his wife, known as the "church mother," to oversee the financial relationship between the two organizations, a relationship only partly allowed under the grant's rules.

The case against Jim Hayes revolved around a wave of payments traced to the tutoring center's earmark-funded bank accounts and made to contractors and businesses around Fairbanks.

"The individual conducting these transactions was always Murilda (Chris) Hayes," Murtagh wrote.

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