Young Trial: Prosecutors Expose Fascinating Details of Money Laundering Scheme of Sullivan's Riches

SAN ANGELO, TX -- Prosecutors with the Texas Attorney General’s office turned to the money laundering paper trail during testimony in John Young’s forgery, theft and money laundering trial Thursday.  

The state called one of its own to testify about the paper trail that allegedly connects a payment from John Young to Ray Zapata using funds from the Sullivan estate.  According to testimony in the Zapata trial, the payment allegedly was for forging John Sullivan’s will.  

Stephen Thompson is a financial analyst with the Attorney General’s office and has been present in the courtroom since the trial began on October 16.  

Thompson reviewed thousands of financial documents from dozens of bank accounts belonging to Ray Zapata, John Young, Sweetwater attorney Chris Hartman and Dallas attorney Juan Marquez.  He also reviewed all the phone records for Zapata, Young and Hartman from June 4 and 5, 2014, the day John Sullivan died.  

Thompson developed a flowchart and prosecuting attorneys used copies of checks and bank statements detailing how the money left the Sullivan estate and wound up in Ray Zapata’s hands.  

Jonathan White led the jury through the timeline by following the money.  First, John Young transferred a personal E-Trade account worth about $1 million to a Stern Agee account belonging to the Sullivan estate Young received from the allegedly forged, handwritten will of Sullivan's.  

On August 4, 2014 Young deposited $235,000 from the Stern Agee account into his own banking account.  Prosecutors showed the jury copies of the deposit and the bank statement showing Young didn’t have enough money in his account to cover a check written to Chris Hartman for $167,500 written just days later.  

Prosecutors contended the $167,500 was a huge overpayment to Hartman for legal work representing Young in the probate hearing for the Sullivan estate.  

The next step, according to prosecution testimony, is a check written by Chris Hartman to Dallas attorney Juan Marquez.  Marquez deposited that check for $65,312.50 into a Interest On Lawyers Trust Account or ILOTA account.  ILOTA accounts are state-regulated accounts like escrow accounts for attorneys to hold funds from their clients for various reasons.  

Marquez is a longtime friend of Ray Zapata.  According to testimony, they met in law school and have had many interactions over the intervening decades.  We’ll get back to Juan Marquez later.  

At about the same time, Marquez and Ray Zapata went to the bank to deposit the check from Chris Hartman.  Marquez then changed the address for the ILOTA account from his office to a Post Office box in Christoval belonging to Ray and Julie Zapata.  He also gave Zapata a stamp of his signature, effectively giving Zapata free reign to write checks on that ILOTA account.  

In the fall of 2014 and early 2015, Ray and Julie Zapata wrote checks from Marquez’s account to themselves to a total of $60,079.12, according to copies of checks and bank statements from that account presented by the prosecution.  

One check was for $31,679.12 from Zapata’s account to First Financial Bank of San Angelo.  That check was to pay off the El Paisano restaurant property on S. Chadbourne St. according to documents presented by the prosecution.  

That chain of events effectively paid money from the Sullivan estate through John Young to Ray Zapata through Chris Hartman and Juan Marquez.  Money laundering.  

In short, Young paid Hartman, Hartman Paid Marquez and Marquez paid Zapata, and the money came from the Sullivan estate according to prosecutors.  

But that’s not how the day started in the largest courtroom in the Tom Green County courthouse.  

Testimony was delayed from the 9 a.m. start time until 9:33 a.m.  The state called Juan Marquez to the stand.  Marquez has quite a resume including earning a law degree from Michigan, working at Ray Zapata’s restaurant in San Angelo, Mejor Que Nada, and working in Dallas as a real property and bankruptcy attorney.  

Marquez testified that he and Ray Zapata were friends. In fact, Zapata traveled to Dallas in 2014 to help Marquez move during a bitter and complicated divorce.  

Marquez testified that Zapata was in Dallas to help him move his belongings in a bitter divorce while Zapata asked for his help.  Marquez agreed to help Zapata, telling jurors he was going through a very difficult time.  Evidence showed he asked Zapata to sign an escrow agreement in exchange for access to his ILOTA account.  Zapata agreed according to testimony  but never signed the escrow agreement.  

Marquez was cordial during questioning from prosecuting attorneys, but became very combative when questioned by defense attorney Frank Sellers.  It was so contentious that during questioning Sellers said, “Lawyers lose their licenses every month in Texas for monkeying around with IOLTA accounts, don’t they?”

Marquez evaded answering most of Seller’s questions.  

Prosecutors then turned to the phone records of Zapata, Young, and Hartman.  Thompson and the prosecution team provided jurors with a timeline of the phone calls between Ray Zapata and John Young, and between Young and Chris Hartman during the hours following Sullivan’s death.  

Essentially, there were 30 phone calls between the three in the hours after John Sullivan’s death.  There were 15 phone calls between Zapata and Young, eight between Young and Hartman and seven between Zapata and Hartman.  

Late Thursday, Judge Brock Jones told attorneys they would have to change courtrooms by Monday because the district courts needed courtroom A on Tuesday.  

Testimony resumes Friday morning in the Tom Green County courthouse.