Staff Report –

Colorful Atlanta attorney Donald Watkins and his son have been charged by the U.S. Department of Justice with concocting a scheme that defrauded investors out of millions of dollars, according to an announcement just out from the U.S. attorneys office in Birmingham.

Donald Watkins: Facebook

Donald V. Watkins Sr., 70, of Atlanta, Georgia — perhaps best known for representing and successfully obtaining an acquittal of former HealthSouth CEO Richard Scrushy in a federal fraud case in Birmingham — along with his son Donald V. Watkins Jr., 46, of Birmingham, Alabama, were charged in a 10-count indictment filed in the Northern District of Alabama with seven counts of wire fraud, two counts of bank fraud and one count of conspiracy to commit wire fraud and bank fraud.

According to the indictment, from 2007 until at least 2014, the defendants induced investors to pay millions of dollars into a bank account controlled by Donald Watkins Sr. by telling the investors that their money would be used for specific purposes related to the international growth of two companies associated with the defendants. Instead of using the money for those purposes, the defendants redirected the funds for other uses, including the payment of personal tax obligations, personal loan payments, alimony and clothing, the indictment claims.

“Persons who defraud investors through material misrepresentations, omissions, and lies must be held accountable,” Lloyd Peeples, assistant U.S. attorney, said in announcing the charges. “As set forth in today’s indictment, the defendants mislead numerous individual investors and used their investments for unrelated purposes.”

For example, the indictment quotes one solicitation in which Donald Watkins Sr. represented that he needed an investor’s funds to pay for investment bankers and lawyers ahead of an anticipated business transaction, when, in fact, the funds allegedly went toward the payment of unrelated expenses. The indictment also alleges that, up until 2016, the defendants sent the investors stakeholder reports and other updates that purported to keep the investors apprised of developments related to the companies involved, but were instead intended to conceal what had really happened to the investors’ money.

The defendants are also charged with conspiring to obtain loans from Alamerica Bank through an allegedly fraudulent scheme involving the use of a third party to take out the loans on their behalf. Finally, the indictment charges the defendants for fraudulently obtaining money from Alamerica Bank by convincing one of their investor victims to apply for loans under his name, when — as they had planned — the defendants ultimately took and used those funds for their own purposes.

The FBI and IRS-CI investigated the case. Trial Attorney Kyle Hankey of the Criminal Division’s Fraud Section, First Assistant U.S. Attorney Lloyd Peeples and Special Assistant U.S. Attorney Beau Brown of the Northern District of Alabama are prosecuting the case. Former Assistant U.S. Attorney Xavier O. Carter also was instrumental in the investigation.

The charges in the indictment are merely allegations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

An attempt to reach Donald Watkins on Facebook for commented failed. He has become known on Facebook for writing a blog-style column on the social media platform and often getting his facts wrong and putting out fake news about legal issues facing the state of Alabama and the region.