031137 Juror Says Sturgis Meat Trial Vote Was Close

Rapid City Journal (Iowa) - A juror in the Philip Cyre trial involving Sturgis Meat Service said Friday that most of the 12-member jury favored convicting Cyre of theft and securities charges.

The jury deadlocked late Nov. 7 after deliberating for more than eight hours on three sets of charges against Cyre, 51, of Watertown. A conviction requires a unanimous vote by the jury.

Juror Gary Sherman of Black Hawk said nine of the 12 jurors favored convicting Cyre of selling unregistered securities in the failed value-added beef venture that ultimately bankrupted Sturgis Meat Service and left dozens of ranchers owed about $1.3 million.

The jury didn't even deliberate two securities fraud charges because they couldn't first agree on the unregistered securities charges, Sherman said.

But 11 of the 12 jurors voted to convict Cyre of theft by deception in obtaining a $300,000 loan from Lantry rancher Dean Schrempp in 2001, Sherman said.

One juror in particular held out for acquittal, even on the theft by deception charge, Sherman said.

"That was the one that stuck in my craw," Sherman said in a phone interview. He said he was convinced Cyre was guilty of that charge by testimony that Cyre promised Schrempp a mortgage to a cheese plant bought by Sturgis Meat Service. Cyre, however, was only part of the group managing Sturgis Meat Service and not an owner.

"That guy knew he absolutely had no business offering that mortgage to the cheese plant," Sherman said. "That was an outright lie, and he had to know that."

Schrempp, who had worked with Cyre on legislative issues, has not recovered his $300,000.

Sherman said the jurors who wanted to convict Cyre were willing to do some horse-trading. "We were willing to say that we'd find him not guilty on the securities fraud if they would convict on at least one of the other charges."

Sherman said he holds no animosity for the one juror who fought hardest for acquittal. "I admire her for sticking to her guns. I can't fault anyone who had doubt and couldn't convict," he said.

Sherman said his public comments on the jury's deliberations were prompted by statements earlier this week from Cyre's defense attorney, Clint Sargent of Sioux Falls. Sargent said most jurors he spoke to after the hung jury was declared said they didn't believe Cyre committed securities fraud, and said that some of them also didn't believe he sold unregistered securities illegally.

But Sherman agreed that a major sticking point for the jurors reluctant to convict Cyre on securities charges was that a state Revenue Department official wrote Cyre in spring 2001 that the contracts he was selling to ranchers were service contracts subject to sales tax. Service contracts are not securities. But in January 2002, after the venture failed, the state Securities Division declared that the contracts should have been registered as securities.

Still, the majority of the jurors believed Cyre sought the sales tax ruling to avoid registering the contracts as securities, which would have required more disclosure about his background and the feasibility of the plan, Sherman said. "I got the feeling he was trying to cover his butt."

Sherman said he, too, was confused about the securities charges until the final day of the trial. After closing arguments by chief deputy attorney general Mark Barnett, Sherman said, he was ready to convict on those charges.

But Sherman said he was ready to convict Cyre on the theft-by-deception charge after hearing testimony from Schrempp and Robert Jewett of Spearfish, another principal in the venture.

"All the ranchers and everybody else were very forthright," Sherman said. "Honesty just exuded from those folks. Mr. Cyre never took the stand, so I couldn't look in his eyes.

"I'm not mad at anybody," Sherman said about his first jury duty. "I just feel awful that we couldn't give those ranchers what I consider justice. I feel awful for them. They really got took at a time they could least afford it."

Assistant attorney general Todd Love said Thursday that the state would ask a grand jury to return a new indictment against Cyre. He said the state might seek different charges. Love said prosecutors will definitely seek a new trial, but he didn't know when it would be scheduled.

Jewett, 53, of Spearfish, and Ronald Gapp, 46, of Piedmont, who is part of the family that owned Sturgis Meat Service, pleaded guilty in September to selling unregistered securities. Other charges were dropped against them in exchange for their testimony against Cyre.

The old Sturgis kill plant is now being operated by a new company owned by Gapp's wife, Jackie Gapp. Sturgis Meat Service filed for bankruptcy in January 2002.

And some of the ranchers, in an attempt to recover their losses, have filed a civil suit against Gapp, Cyre and Jewett; Gapp's parents, John and Dorothy Gapp; and First Western Bank.

"There aren't any winners in this thing," Sherman said. "It was just a bad deal all around."

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