The Oregonian


Jeffrey Grayson Shows Defiance, Sorrow In E-Mail


Capital Consultants' ex-boss writes, "There is . .. information concerning other people that has yet to be told"





By Jeff Manning and James Long of The Oregonian staff

Friday, March 23, 2001



The day after his son Barclay Grayson agreed to testify against him in a criminal case, Jeffrey Grayson fired off an e-mail message to 109 friends in which he said, "There is a substantial amount of information concerning other people that has yet to be told."


In his e-mail, a copy of which was obtained by The Oregonian from a recipient, the elder Grayson, former chairman of Capital Consultants, struck a defiant tone.


"I already know that the Receiver is interested in information concerning existing defendants as well as those that have not been named," he said in the e-mail, referring to the court-appointed liquidator who is trying to recover losses for clients of Capital Consultants.


He also indicated he was weighing his options regarding any possible criminal charges. "Although my odds increase if I go to trial vs. accepting a plea which I cannot accept, my physical strength and health are major considerations."


He added that he would decide in coming weeks what to do after evaluating "the impacts on family members not involved in this fiasco."


Wilson C. Muhlheim, a lawyer who represents Jeffrey Grayson, confirmed that the rambling e-mail is authentic. He told The Oregonian that Grayson informed him ahead of time that he was going to send it. "But I wish he hadn't said so much," Muhlheim said.


Jeffrey Grayson wrote in his message that he anticipated "that the U.S. Att'y (sic) will attempt to come after me full bore."


But, he added, "I'm not as concerned about my welfare as I am about (Barclay Grayson, Capital Consultants' former president) and his family."


Lawyers for more than a dozen trust funds that are suing the Graysons and Capital Consultants disputed Jeffrey Grayson's e-mailed contention that he has "always been willing to cooperate and to assist our former clients in recovering any lost money."


"To this point, I have seen zero evidence that he's willing to help us find our money," said Stephen English, a Portland lawyer representing union trusts. The Oregonian provided him a copy of the e-mail.


The correspondence appeared to catch some of Jeffrey Grayson's friends and even his criminal defense lawyer by surprise. Norm Sepenuk, located while vacationing in Florida, asked that the message be read to him, then said, "What I'm going to have to do is say no comment."


Scott Thomason, a prominent Portland auto dealer and a Grayson friend who received the e-mail, said, "What the purpose of this message was I really couldn't say. I haven't talked to (Grayson) in some time. He's got a big mess on his hands."


Roger Krage, general counsel for Crown Pacific Partners, also received the message. "Obviously, he's a stressed person. Obviously, he's hurting," Krage said.


Jeffrey Grayson, 58, suffers from multiple sclerosis and uses a wheelchair. Muhlheim, the attorney who represents him in several civil lawsuits, described his client as a "functional quadriplegic."


Grayson said in his e-mail that he will continue to keep people informed. "Although I have lost the use of my legs and left arm and am weakened horribly in my right side I am still able to communicate with my voice," he wrote. "As long as I have the strength to speak . . . I will."


Grayson labeled the e-mail as "regarding my son, Barclay Grayson," although most of the message dealt with his own situation.


The elder Grayson said he had "neither spoken to nor seen" his son since Sept. 25, 2000, four days after the U.S. Securities and Exchange Commission and the U.S. Department of Labor filed fraud suits against them and their company. The lawsuits accused the Graysons and Capital Consultants of running a "Ponzi-like scheme" to conceal the loss of more than $200 million of client money, mostly union pension funds.


The Graysons surrendered their company to a court-appointed liquidator and are among the targets of a federal criminal investigation. Muhlheim said the Graysons haven't talked recently because "I advised Jeff back in September not to talk to Barclay so that father and son could avoid the appearance of conspiracy."


In his e-mail, Jeffrey Grayson lamented his separation from Barclay Grayson. "I missed our traditional get-togethers on Thanksgiving, Christmas and his birthday," he wrote. "I also missed the celebration of his children's birthdays. Today I learned that he had accepted a plea bargain with the U.S. Att'y to admit to one count of wire fraud plus serving 18 months in a federal prison.


"He was told that if he continued to cooperate with the U.S. Att'y, his sentence would be reduced. As of today, he is now down to 15 months of incarceration."


The younger Grayson actually pleaded guilty to mail fraud and agreed to testify against his father and others in exchange for a prosecutor's recommendation of an 18-month sentence.


Lance Caldwell, an assistant U.S. attorney who handled Barclay Grayson's plea bargain, declined to comment on Grayson's claim of having "substantial information" about others but said the door was always open at the U.S. attorney's office.


Grayson's e-mail also claimed that the SEC had settled its civil lawsuit against him, Barclay Grayson and their former firm and that "we have neither admitted nor denied any wrongdoing."


But, again, federal officials disputed Grayson's understanding.


"Our litigation continues," said Kelly Bowers, an SEC attorney in Los Angeles. "There is no settlement at this time."


Jeff Manning can be reached at (503) 294-7606 or by e-mail at



James Long can be reached at (503) 221-4351 or by e-mail at


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