ROANOKE TIMES

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, October 11, 1995                   TAG: 9510110080
SECTION: VIRGINIA                    PAGE: C1   EDITION: METRO 
SOURCE: LAURENCE HAMMACK STAFF WRITER
DATELINE:                                 LENGTH: Medium


CRANWELL LAWSUIT REJECTED

A judge on Tuesday dismissed a convicted felon's lawsuit accusing Richard Cranwell of tax fraud, ruling that the 201 pages of sweeping and complex allegations were not presented to the Roanoke County delegate within the one-year period required by state law.

Although the suit was dismissed for technical reasons, Cranwell's lawyer said he would have prevailed on the merits of the case as well.

"It's the most scandalous, defamatory lawsuit I've seen in my 32 years of practice," Grayson P. Hanes, a Falls Church lawyer who represented Cranwell, said after Tuesday's hearing in Roanoke Circuit Court.

Frank Selbe, who pleaded guilty to tax evasion in 1991 and served time in a federal prison, had claimed in the $10 million lawsuit that he was wrongly convicted because of lies and distortions by his former business partners, including Cranwell.

But Selbe lost his chance to prove those allegations in court when Judge Barnard Jennings ruled that the lawsuit was not properly served on Cranwell, a lawyer who is majority leader of the House of Delegates.

Testimony showed that Selbe did not request service of the lawsuit when he filed it in October 1993, then waited a year - until the day the deadline expired - before having a process server attempt to deliver the papers to Cranwell at his Mountain View Road residence.

By that time, Cranwell was no longer living at the Mountain View home, having separated from his wife, witnesses testified, and having moved in temporarily with his legislative aide, James Echols, and his wife in Vinton.

Although the process server testified that he left the lawsuit with Cranwell's wife, who promised to pass it along to her estranged husband, Hanes argued that such an arrangement did not meet the legal requirements for substitute service.

"The case law in Virginia ... has to be strictly followed," he said.

Jennings, a Northern Virginia judge appointed to hear the case after Roanoke judges stepped aside, agreed that there was "no evidence that Cranwell ever received the motion for judgment." Jennings then dismissed the lawsuit.

Acting as his own attorney, Selbe had suggested that Cranwell attempted to keep his residence a secret, noting that he continued to list his Mountain View residence and phone number in telephone directories after he moved out.

"Certainly a delegate in the Virginia House of Delegates knows that the public is trying to get in touch with him," Selbe said.

Selbe also noted that Cranwell's final divorce papers - which listed Echols' address - were filed under seal in an Alexandria court. And he suggested that Cranwell may have voted in the wrong precinct while he was living with his aide.

Cranwell, who two years ago described Selbe's lawsuit as "pure, raw revenge" filed in an effort to hurt his re-election campaign, said Tuesday that the latest allegations were not worth a response.

"It appears to me that in October of every election year, Frank Selbe rears his head to make some charges against me," Cranwell said. "I just don't think that they are worthy of any reaction or comment anymore."

Selbe's conviction for tax evasion stemmed from his involvement in American Chemical Co., a janitorial supply company that he, Cranwell and three other partners bought in 1979.

Federal prosecutors contended that Selbe, who ran the day-to-day affairs of the company until he was fired in 1984, took more than $200,000 from American Chemical bank accounts without authorization and failed to report the income on his tax returns.

But in his lawsuit, Selbe detailed a conspiracy in which he claimed the American Chemical partners defrauded the Internal Revenue Service of $160,000 and, when confronted, fed the government evidence that made Selbe the scapegoat.

Hanes said the allegations were the product of Selbe sitting in prison and having "nothing else to do" except think of ways to justify his own wrongdoing. "He's looking for someone else to blame," Hanes said.



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