CHICAGO -- In the early 1980s, horseman Frank Jayne Jr. spent his money on cocaine instead of investing in business ventures at his Morton Grove stables, where he collaborated with two of his employees to torch a barn for insurance money, one of the employees testified Thursday during Jayne's arson retrial.
Donna Rose, who ran the business operations at Northwestern Stables in 1984 when prosecutors said the arson occurred, told jurors that in the months before the fire she thought Jayne started losing interest in the stables -- which in turn led to the decline of the business -- when his cocaine use became more regular.
Read:Rose, who admitted to jurors she started taking cocaine in the late 1970s and at times used the drug with Jayne, added that money Jayne usually spent to keep up the stables was going toward drug purchases.
"The business was ... somewhere near close to failure," Rose told jurors in Skokie Judge Garritt E. Howard's courtroom. "He began using cocaine more and more, several times a week."
Prosecutors have said Rose stood lookout while another employee ran inside the Western Barn at the stables, 9501 Austin Av. in Morton Grove, dumped gasoline-filled containers over the concrete floor and set the barn ablaze in the early morning hours of Sept. 10, 1984.
Rose, who took over the business operations at the stables in the late 1970s, said that in the months leading up to the blaze she had trouble paying bills and employees, and the business lost customers.
She described a meeting she had with Jayne and Michael Hunter, who admitted in testimony earlier this week to setting the fire, where the three discussed the plans for torching the barn.
According to prosecutors, Jayne orchestrated the plan to collect roughly $88,000 in insurance money.
In opening statements Tuesday, prosecutors for the first time pinpointed Jayne's cocaine habit -- evidence the judge did not allow in the first trial -- as a reason he needed money and had the barn set ablaze.
Jayne, 69, who was sentenced in 1998 to 2 years in federal prison for selling cocaine at Northwestern Stables, was free on $500,000 bond. The judge has refused to allow any testimony about Jayne's conviction.
In June, a deadlocked jury that had deliberated for nearly 16 hours forced Howard to declare a mistrial on the arson charge.
Rose said Thursday that while Hunter set the blaze, "I was to be watching and to be sure that nobody else was watching."
At first she became upset with Jayne, but felt obligated to carry out the plan, she said. "I thought it was crazy, and the other barn (a main barn nearby where horses were kept) was going to burn, and all the horses would die," Rose said. But "I had to do what I was told."
When the fire was set, she watched Hunter run from the barn, which she said quickly burst into flames.
"It was a huge fireball of flames," Rose said. "It puffed pretty quick. It was scary."
Immediately, she called Jayne at his home and woke up the few workers who had been living at the stables, she said. When Jayne arrived at the scene, he approached Rose, who had been leading dozens of horses from the main barn into a safe area on the grounds, she said.
"I was screaming mad because I thought all the horses were going to get hurt," Rose said.
Jayne told her to "shut up," and to not discuss the fire with anyone and leave the area.
Jayne's former wife, Kathy Rheume, along with other witnesses who have taken the stand for the prosecution in both trials, said Wednesday that she first started to notice business at the 5 acre equestrian ranch tumble in the early 1980s.
Like Rose, Rheume alluded to Jayne's continual cocaine use as being a possible reason for his waning interest in the stables.
Rheume said Hunter had volunteered to set the fire.
"Michael said, 'Yes, boss, I've done things before,'" Rheume recalled in her testimony.
On cross-examination she admitted telling a federal agent that Hunter said, "Let me do it. I can do it. I know how to do it."
Jayne later told her that Hunter had "asked for help" in setting the blaze, she said.
Prosecutors have said Jayne had arranged to have the bulldozer on the scene even before the fire started so he could clear evidence of the arson as soon as possible.
Prosecutors said Jayne collected more than $68,000 in insurance for the barn, and $20,000 for the pickup truck and the trailer.
Prosecutors have also said Jayne reported a loss of more than $100,000 the year of the fire and told an insurance agent he made between $100,000 and $150,000 in 1984.
Hunter agreed to tell authorities what he knew about the 1984 blaze after his 1996 release from federal prison, where he served time for mail fraud.
Rose, also convicted on federal mail fraud charges, agreed to cooperate with investigators in 1994 in exchange for not being sent to prison.
Jayne was a nephew of the late horseman Silas Jayne, who served 7 years in prison for a 1970s conviction of conspiring to murder his brother George Jayne, a horse-breeding rival.
In October 2002, Du Page County authorities announced that Jayne and a former business partner, Charles Sundstrom, of Wonder Lake, had been indicted in a June 17, 1980, fire that destroyed Jayne's frame home in Bartlett. Jayne received $85,900 in insurance from the fire, according to news reports.
Prosecutors rested their case Thursday afternoon, shortly after jurors heard testimony from Angelo Zito, a former investigator for the State Fire Marshal's office, who testified that Jayne told him at the scene that the barn was not insured.
Defense attorney Robert Will called his first witness, Judy Lefferdink, whose daughter, Amy, rode a pony housed at the stables.
The day before the fire, she described a horse show she and her daughter attended with Hunter and other employees from the stables. She said after the show she noticed Hunter drinking at a restaurant bar and refused to let her daughter ride home with him because she felt he was drunk.
The judge recessed trial for the day at 4:40 p.m., when Lefferdink's testimony concluded.
Trial was scheduled to resume at 9 a.m. Friday, when Will said he expected Jayne to take the stand. Outside of the jury's presence, attorneys told the judge they expected to be ready to present their closing arguments Monday.
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