More than four years after she withdrew $160,000 from an account funded with money designated for feeding jail inmates, former Sheriff Ana Franklin on Thursday was sentenced by a federal magistrate to probation on tax charges related to that transaction.
U.S. Magistrate Judge Herman Johnson Jr. sentenced Franklin to two years probation and 300 hours of community service after she pleaded guilty to willful failure to file an income tax return, a misdemeanor. He imposed no financial penalty and ruled no restitution was due. Johnson said that, based on her guilty plea and sentencing guidelines, she could have received up to six months in jail, three years of probation and a fine of up to $9,500.
“I appreciate the court and the process. It’s behind us now,” a subdued Franklin said after the hearing ended.
Most of Thursday’s sentencing hearing was behind closed doors as Assistant U.S. Attorney Robert Posey and Franklin’s lawyer, William Gray, debated amendments to a presentence investigation report that the court relied upon in issuing a sentence. That report is sealed and unavailable to the public. Posey, Gray and Franklin were each given an opportunity to address the magistrate in open court before he announced the sentence, but all declined.
Franklin's failure to file her 2015 tax return was directly tied to her confusion over how to treat the jail food money, Decatur accountant David Scott said in a letter to the court.
“When she first came to me in November 2017, she was truthful with me that she had failed to file her tax returns mainly because she really didn’t know how to treat the reporting of the jail food money,” Scott wrote. “According to what she believed and understood, no taxable event had occurred because she had not kept and retained the money for personal use.”
Scott’s letter was one of 19 submitted to the court by family, friends and former colleagues of Franklin seeking leniency in the sentencing.
Bank statements and checks filed by the U.S. Attorney’s Office show that on June 5, 2015, Franklin withdrew $160,000 from the Morgan County Sheriff's Office Food Account at Peoples Bank. Three days later, Priceville Partners LLC deposited her cashier’s check for $150,000.
After Thursday’s hearing, Posey said “we were considering other sorts of tax charges, but at the end of the day we thought the charges that we filed for willful failure to file a personal income tax return was the right thing to do.”
According to a brief filed this week by her lawyer, Franklin loaned the money to Priceville Partners “based upon a guarantee by a friend, Steven Ziaja, that the money would be repaid at 17% interest.”
Ziaja, of Falkville, last year pleaded guilty to 13 misdemeanors involving his use of an Alabama Law Enforcement Agency database to assist Priceville Partners in repossessing vehicles. He was an agent of ALEA at the time, but was terminated in 2017.
Franklin’s lawyer said in the brief that she never intended to keep the money.
“Ms. Franklin has always maintained that her intent was to replace the money, including any ‘profit’ earned, and continue using it for feeding inmates,” Gray wrote.
The loan to Priceville Partners went sour, as explained by bankruptcy trustee Stuart Maples, who wrote a letter to the court.
Priceville Partners “obtained outside investor loans from multiple people to capitalize the business. However, the business was a sham, and the principals lavished themselves with perks while the outside investor lenders to Priceville Partners were defrauded,” Maples wrote this month.
One of the owners, Greg Steenson, is awaiting trial in Morgan County on multiple felony counts related to the business.
Priceville Partners declared bankruptcy in March 2016, and Franklin’s filing of a claim for $150,000 brought public attention to her use of the inmate food money. Because a 2009 federal court order at that time prohibited the Morgan County sheriff from personally benefiting from jail food money, she was found in contempt of court in June 2017 and fined $1,000. She reimbursed the food account with financial assistance from Ziaja, according to court documents.
A decades-old statewide controversy over whether sheriffs could personally keep excess inmate food money was conclusively resolved this year with the passage of a constitutional amendment in Morgan County and statewide legislation, both of which ban the practice.
Morgan County District Attorney Scott Anderson in December sued Franklin for a return of money in a personal account that he alleged included $55,000 she had transferred from the official Morgan County Jail food account. The case settled in August, with Franklin retaining $10,000 and the remainder paid to the Morgan County Sheriff's Office.
Gray said after Thursday's hearing that he was pleased with the result, but he questioned the magistrate’s ruling that the jail food money used by Franklin was personal income.
“We did not think then and do not think now that the $160,000 was taxable,” Gray said.
In arguing for a lenient sentence, Gray wrote that Franklin’s stepfather died in March and she is the primary caregiver for her mother. Letters to the court from Franklin's daughters and her mother reiterated this point. According to Gray, Franklin used CPR to resuscitate her mother in June.
“If someone had not been there, she likely would have died. If she goes to jail Ms. Franklin will have to hire a sitter for her mother,” he wrote.
Franklin, 55, did not seek a third term as sheriff and in January was succeeded by Ron Puckett.
She now works for Texas-based NCIC Inmate Communications selling inmate communication equipment and information technology programs for jails and prisons.
Among the letters requesting leniency was one from Limestone County Sheriff Mike Blakely, who is himself under indictment on 13 theft and ethics counts. “I have never known Ana to be dishonest and I hope and pray your court will show mercy on her upcoming sentencing date,” he wrote.
Russell County Sheriff Heath Taylor wrote that Franklin “has always been a person of high morals and standards and never took shortcuts.”
Bobby Timmons, executive director of the Alabama Sheriffs Association, also weighed in.
“Everyone who walks this earth makes mistakes — bar none. An elected official lives in a fish bowl, with outsiders taking political shots at any and all actions performed. Sheriff Franklin, to my knowledge, never intentionally violated any law,” Timmons wrote.