Ed Garland, Garland Samuel & Loeb, Atlanta. (Photo: John Disney/ ALM)

Witness testimony moved fast on the first day of the defense's case in Atlanta lawyer Nathan Hardwick IV's embezzlement trial in U.S. District Court for the Northern District of Georgia.

Lead defense counsel Ed Garland of Garland Samuel & Loeb presented a string of witnesses Wednesday to persuade jurors that much of Hardwick's heavy spending was aimed at developing and entertaining clients. He also told Judge Eleanor Ross that the defense team might be done by Friday—and has not decided whether Hardwick will testify.

The government accuses Hardwick of stealing $26 million from the escrow accounts of his now-defunct residential real estate firm, Morris Hardwick Schneider, and has charged him with 24 counts of conspiracy to commit wire fraud, wire fraud and making false statements to financial institutions. If convicted, he faces up to 34 years in prison.

Nathan Hardwick.

Federal prosecutors indicted MHS's former controller Asha Maurya as a co-conspirator for allegedly wiring funds from IOLTA accounts at Hardwick's direction to pay his personal bills to casinos, charter jet companies and creditors, including $12.4 million to his personal holding company, Divot Holdings.

Maurya, who has admitted to taking almost $900,000 from MHS, pleaded guilty to a single count of conspiracy to commit wire fraud last year and is cooperating with the government.

Hardwick's defense team has maintained since the escrow shortfalls became public in August 2014 that Maurya, not Hardwick, was the only culprit.

However federal prosecutors rested their case Tuesday evening after the seventh day of document-intensive testimony without calling Maurya. Garland told the judge Tuesday that he wanted to call her as a hostile witness, but Maurya's lawyer, Page Pate of Pate & Johnson, said she'd refuse to testify under the Fifth Amendment.

Also behind the scenes, the prosecutors and defense lawyers are at loggerheads over whether the defense can call a forensic accountant that it's hired, J.P. Gingras, as an expert witness to critique the prosecutors' accounting math—particularly on how much Hardwick received in profit distributions during the charged conspiracy period of 2011 through August 2014, when the shortfalls came to light.

The government has presented the jury documentation showing that Hardwick took $20.6 million from the firm from 2011 to 2013, even though the firm's net income was only a bit above $10 million for the period.

Ross has allowed Gingras to sit in the courtroom and observe the case since voir dire began on Sept. 17. The judge said she'd make a ruling Thursday on using him as an expert.

The defense team also said it has witnesses to testify that Maurya took money from other companies where she has worked.

Parade of Witnesses

Garland's team presented seven witnesses to the jury Wednesday, including Hardwick's former equity partner, Gerard “Rod” Wittstadt. He and his brother Mark Wittstadt each owned 22.2 percent of MHS, while Hardwick owned 55.5 percent.

The defense introduced the idea that Hardwick spent a lot of money entertaining clients and potential clients for business development, which included trips to expensive golf tournaments. A law firm consultant, John Remsen, testified that building personal relationships with clients and potential clients by inviting them to “unique events” is key to winning business, and hosting them at golf events is a common practice.

MHS's sister company, LandCastle Title, took clients to the AT&T Pebble Beach Pro-Am in California and the Hootie & the Blowfish Monday After the Masters Celebrity Pro-Am, according to firm brochures that Garland showed the jury.

A residential homebuilder who said he'd been Hardwick's client at MHS for $800 million to $900 million worth of house closings over about 15 years, told the jury that Hardwick also entertained him, including golf outings at Hawk's Ridge Golf Club north of Atlanta.

The builder said he frequently spotted Hardwick having meals with clients at the St. Regis Hotel in Buckhead, where both owned condos.

But on cross-examination, Assistant U.S. Attorney Lynsey Barron told Remsen that the passengers on the jets Hardwick chartered for the golf trips were family members and old college friends, as were the golf companions shown with Hardwick in photos from the tournaments—not clients. “Often friends become clients and clients become friends,” he replied.

Rod Wittstadt testified that Hardwick had discussed taking LandCastle Title public or selling the title business's back-office operation to private investors. Garland said the law firm had been valued at $70 million.

But the value of a firm “missing roughly $30 million from its escrow accounts” is “nothing,” Wittstadt told Barron on cross-examination.

Wittstadt and his brother had instructed Hardwick not to bill the firm for his private jet travel, but it would reimburse him the price of a first-class plane ticket, he told Barron. “Mr. Hardwick told us he did not like flying on commercial airlines,” Wittstadt said, because he felt “claustrophobic and did not like being with the public.”

This story has been updated to correct the spelling of Assistant U.S. Attorney Lynsey Barron's last name.

READ MORE: 

Alleged Co-Conspirator a No-Show as Hardwick Prosecution Rests

Hardwick Spent Law Firm's Millions on Jets, Gambling, GIrlfriends, Jurors Hear

Ex-Partner Tells Jurors That Hardwick Kept Him in the Dark

Hardwick's Ex-Partner Recounts Big Debts, Expenses in Embezzlement Trial

'A Thief and a Liar': Jurors Hear Accusations, Accounting as Hardwick Trial Begins