Years before he was implicated in a drug-arrest setup of his brother, former Knight Oil Tools CEO Mark Knight played a leading role in the criminal prosecution of his mother’s interior decorator on charges of forgery.

The decorator, Judy Lyons, eventually prevailed against charges initially made in 2006 that she illegally signed Knight Oil Tools matriarch Ann Knight’s name on more than $600,000 in fraudulent invoices.

In 2009, a state district judge declared Lyons not guilty of all 43 counts of forgery, issuing a directive verdict that ended the trial and acquitted Lyons.

In 2009, after her acquittal, Lyons filed a lawsuit against Mark Knight, his sister Kelly Knight Sobiesk, Ann Knight and Knight Oil Tools, the company that Mark Knight used to run. Lyons claimed that she had been maliciously prosecuted, and that the Knights’ accusations against her led to criminal charges and a trial that defamed her and ruined her reputation.

Lyons settled with the Knights for an undisclosed amount of money in March 2014. Allen Breaud, one of Lyons’ attorneys in the civil suit, said Lyons’ settlement was for a substantial amount of money. He would not reveal how much Lyons received.

“She went through a lot at the hands of Mark Knight,” Breaud said. “It’s not an easy task to take on the Knight family in Lafayette.”

In an interview following Mark Knight’s April 14 arrest, Lyons said she would not gloat.

“What is happening to the Knight family and that person (Mark Knight) now has nothing to do with me. He’s done this to himself. I pray for the whole family,” Lyons said. “I survived strictly by the grace of God. I’m just trying to get my life back together now.”

Mark Knight now stands accused of felony racketeering for allegedly orchestrating his younger brother Bryan’s June 4, 2014, drug arrest. He surrendered to police April 14.

Also implicated were a state trooper and a Lafayette Parish sheriff’s deputy, who police say, signed on to help further the scheme in exchange for $100,000 in cash and gifts. Like Knight, Trooper Corey Jackson and Deputy Jason Kinch were each booked on one count of racketeering then released after posting bail of $100,000.

A former employee at Knight Oil Tools — Russell Manuel, described by an investigator as Mark Knight’s “henchman” — was booked on counts of drug possession extortion and intimidating a witness.

Police allege Knight orchestrated a scheme with the other suspects to frame his brother in a drug bust. The only motive that police have so far given for the alleged setup was that there were interfamily negotiations ongoing over finances and the future of Knight Oil Tools.

In December, Knight relinquished the title of president and chief executive officer at Knight Oil Tools. On April 17, he resigned his position as chairman of the board. The company has said Knight’s only remaining relationship with Knight Oil Tools is as a stockholder.

Allegations

The family of Knight Oil Tools founder Eddy Knight, who died in 2002, is well known in Lafayette and Houston, where they socialize in tony, high-end circles.

Judy Lyons, according to court documents and interviews, was a sought-after decorator who specialized in faux paintings — a decorative paint finish that gives the appearance of wood, marble, brick or other materials.

From 2000 to 2005, Lyons oversaw extensive home decorating for Ann Knight and Kelly Knight Sobiesk at their homes in New Orleans, Lafayette and Houston, and also at the company headquarters in Lafayette.

According to court records, Lyons charged almost $1.5 million for the work, which included what Lyons paid subcontractors and the cost of buying materials and furniture. Lyons claimed that during the years, Ann Knight would instruct her to submit the invoices to Knight Oil Tools.

“In order to keep Mark Knight from knowing that personal work for Mrs. Knight and Mrs. Sobiesk was being paid for by Knight Oil Tools, Mrs. Knight instructed Ms. Lyons to alter invoices so that they looked like business expenses,” according to a narrative of the case written by 3rd Circuit Court of Appeal Judge Elizabeth Pickett, who in a panel of three judges reviewed the case in 2011.

Lyons in court papers admitted to signing the checks. But she said she was instructed to do so.

“After a while, a growing practice of Mrs. Ann Knight was for her to instruct Ms. Lyons to sign her (Ann Knight’s) name to the checks since she (Knight) was so often out of town, too busy or simply did not want to be bothered with such details,” Lyons’ attorneys wrote.

Then, in 2005, Mark Knight discovered the payments to Lyons, wrote Pickett, the appellate judge.

“He initiated a criminal complaint with the Lafayette Police Department alleging that Ms. Lyons had forged signatures on 35 checks issued by Knight Oil Tools,” Pickett wrote.

The criminal complaint, and the later felony charges, alleged that Lyons received over $640,000 via fraudulently signed checks.

“The reason Ms. Lyons got in the predicament she got into was she was working at the direction of Ann Knight, the mother,” said Breaud, Lyons’ attorney.

“We claimed (in the lawsuit filed in 2009) that what happened was that when Mark Knight found out that his mother was spending the corporate money on things like decorating her home and her daughter’s home, he got upset and Judy (Lyons) got in the middle of him and his mother,” Breaud said. “He (Mark) just went and made a complaint and had her arrested.”

Lyons was humiliated on the September 2005 day she was arrested, Breaud said, handcuffed by police at the home of a wealthy client in Lafayette.

Lyons was charged with multiple counts of forgery. Her former clients, Ann Knight and Kelly Knight Sobiesk, signed on as witnesses for the prosecution.

But the trial never progressed to the point where guilt and innocence was weighed. Judge Herman Clause, who in the bench trial was judge and jury, declared Lyons not guilty after Ann Knight could not identify which checks she signed and which checks Lyons signed.

The 3rd Circuit Court’s Pickett also noted in court filings that Clause, the trial court judge, found there was no intent to defraud, something that is required for a criminal conviction of forgery.

In September 2011, after her acquittal on the criminal charges, Lyons filed a lawsuit against Mark Knight, Ann Knight, Kelly Knight Sobiesk and Knight Oil Tools. In March 2014, Lyons settled for an undisclosed sum, according to court records.

Lyons claimed in her civil suit that she was maliciously prosecuted because of the actions of Mark Knight, who, Lyons and her attorneys intimated, was powerful enough to pick up a phone in Lafayette and get her criminally charged.

In a phone interview last week, Ronald Dauterive, the assistant district attorney who prosecuted the case, disputed that Lyons’ arrest and prosecution was a result of malicious prosecution.

Dauterive said last week that Lyons confessed to detectives that she forged the checks. Dauterive also said Lyons admitted to having a gambling problem.

Even though the judge acquitted Lyons, “In my opinion it doesn’t change the fact that she confessed,” Dauterive said. “… She confessed that she had taken the money.”

Starting over

Breaud, the attorney for Lyons, said last week the difference in the ways Lyons and Knight were treated was illustrative. In 2005, right after hurricanes Katrina and Rita, Lyons was hauled off to jail and had trouble getting needed medication; Knight was allowed a few days to get things together before he met with police officials, with his criminal defense attorney — former U.S. Attorney Mike Skinner — in tow.

“Unlike Mark Knight, she wasn’t given three days to show up,” Breaud said, referring to Lyons. “They (police) show up and handcuffed her.”

He noted the arrest came right after Hurricane Katrina, and she couldn’t get out of jail.

A message left with Knight Oil Tools recently seeking comment from the family was not returned.

Lyons said the ordeal revealed who believed in her — “They’re still my friends,” she said — and who didn’t.

Her fear is for people to listen to her story and conclude it’s “sour grapes.”

“I will tell my whole story. It’s not time, but it will be soon,” she said.

At age 66, Lyons just recently returned to work, beginning again the faux painting projects for which she had become known by her clients.

“I have to start to do something creative again. And I look forward to it. … I’m fine. I’m fine because of me.”