published Wednesday, April 17th, 2013

Defendant in federal fraud trial takes the stand

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    Federal prosecutor John MacCoon enters the courthouse Monday in Chattanooga for the first day of a fraud trial against Joshua Dobson and Paul Gott, III.
    Photo by Dan Henry.
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A lot of people have said a lot of things over the course of the federal fraud trial of Joshua Dobson about how he ran his end of a land development in Dade County, Ga.

On Tuesday, Dobson, 35, got to tell his side of what happened in the bankrupted land development that brought a 12-count indictment against him and Paul Gott III.

Prosecutors Perry Piper and John MacCoon allege that Dobson and Gott, through a local company called Southern Group, defrauded and manipulated the credit of land buyers from multiple states in selling plots at the 2,500-acre second-home development known as The Preserve near Rising Fawn, Ga.

The indictment and testimony throughout the five-day trial have claimed that Dobson told buyers they could get land for no money down and that his company would pay the monthly mortgage payments for up to three years. At the end of the period Southern Group would buy back the land and the buyers, who had only signed papers to enact the deals, would receive up to $20,000.

But that's not how it worked, Dobson testified.

His attorney, Chris Townley, walked him through letters he sent banks explaining the buyback option and how buyers were required to put up the 15 percent down payment out of their own money.

Dobson said very few deals even involved the buyback option.

From the beginning of the trial, Townley has pointed much of the blame at Jim Tobin, a Florida broker who worked as a go-between for buyers in that area and with a group called GM Mortgage.

Townley attacked prosecutors characterizing the work Southern Group was doing as a sort of scheme or a quiet deception.

"These bankers wanted to do business with us. We were proud of what we were doing and what we'd done," Dobson said. "We were telling people about it."

Townley had Dobson list the work done on the property -- roads, underground electric power, swimming pool, an equestrian center, clubhouse and walking trails.

Dobson said he modeled the site on what he'd seen near Gatlinburg but priced cheaper.

It was the down economy that brought the investment to its knees.

"And were you able to finish the development?" Townley asked.

"We were really close," Dobson said. "But we weren't able to finish."

The trial is scheduled to resume today in U.S. District Judge Curtis Collier's courtroom.

about Todd South...

Todd South covers courts, poverty, technology, military and veterans for the Times Free Press. He has worked at the paper since 2008 and previously covered crime and safety in Southeast Tennessee and North Georgia. Todd’s hometown is Dodge City, Kan. He served five years in the U.S. Marine Corps and deployed to Iraq before returning to school for his journalism degree from the University of Georgia. Todd previously worked at the Anniston (Ala.) Star. Contact ...

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