Originally created 05/12/02

Two men convicted in school fraud



SAVANNAH - Former Chatham County school board member Billy Knight III and businessman Varnedoe Ladson Hancock - charged in a kickback scheme stemming from the 1999 sale of a $2.5-million annuity to the Savannah-Chatham County school board - have been convicted in a Chatham County court.

Mr. Knight was convicted of all 17 counts against him. Mr. Hancock was convicted of six of 12 counts against him.

The jury agreed with prosecutors that the men participated in a scheme to take a kickback from the sale of the annuity to take over the school system's local retirement plan.

Mr. Hancock, who received a $50,000 commission on the sale, gave $27,500 of it to Linda Ewaldsen, an employee of Mr. Knight's insurance company. She gave $22,500 of that money to Mr. Knight.

Ms. Ewaldsen was given governmental immunity in exchange for her testimony in the case. In closing arguments Wednesday, U.S. Attorney for the Southern District of Georgia Rick Thompson told the jury that a verdict of guilty could help put a stop to the "good ol' boy system" in Savannah.

The defense argued that neither Mr. Hancock nor Mr. Knight had any criminal intent in their handling of the contract or in their splitting the commission.

"He tried to save them money," said Mr. Knight's wife, Anne. "He never tried to cheat anyone."

Standing outside the courtroom Friday, surrounded by her family and friends, she continued to defend her husband of 43 years.

"Do you think this man would have jeopardized everything he loved for $22,000?" she asked. "They offered him all kinds of pleas. But he said, 'I can't take any of these pleas because I've done nothing wrong."'

Several of Mr. Knight's family members said their father, who says he is blind because of a brain aneurysm in September 2000, was not competent to stand trial, despite a judge's ruling that he was.

Although Mr. Hancock's family disappeared quickly from the Wright Square courthouse, members of Mr. Knight's family stayed to console one another.

Terry Jackson, Mr. Hancock's lawyer, said he plans to review the case and expects to file an appeal.

Both defendants were allowed to remain free on their previous bonds pending sentencing, which is expected in the next several weeks.

"I don't see how they can find him guilty," said Mr. Knight's youngest son, Chris. "I can see bad judgment, but money laundering? It blows my mind."