Federal Criminal Defense Blog : Georgia Federal Criminal Defense Lawyer & Attorney : Gillen Withers & Lake Law Firm : White Collar Crime, RICO, Trial : Atlanta, Savannah, GA

According to Lyle Denniston at SCOTUSblog,  Ashby Jones at the Wall Street Journal Law Blog, and Professor Ellen S. Podgor of Stetson University College of Law and the White Collar Crime Prof Blog, the U.S. Supreme Court seemed more interested in the jury selection/fair trial issues in yesterday's oral arguments in the case of former Enron CEO Jeffrey Skilling, Skilling v. U.S., Case No. 08-1394 then it did in the constitutionality of 18 U.S.C. 1346, the federal honest services fraud statute. The transcript of the oral argument may be read here. After lengthy questioning regarding the jury selection at Skilling's trial by Justice Stephen G. Breyer and others, Chief Justice John G. Roberts, Jr., raised the question of honest services. Skilling's counsel, Sri Srinivasan, appeared to have adopted the strategy of arguing for a new trial based upon juror bias relating to the Enron scandal rather than a reversal of Skilling's convictions for honest services fraud. Srinivasan argued that the Department of Justice was interpreting the law broadly enough to reach virtually any falsehood told by an employee.

Deputy Solicitor General Michael R. Dreeben argued for the government. Dreeben argued ways in which the Court could interpret the honest services fraud statute in order to avoid holding it unconstitutionally vague. Justice Anthony Kennedy stated to Dreeben that it was Congress' job to rewrite the statute and Justice Antonin Scalia remarked on the excessive scope of the statute.

The Court's decision in the case is expected this spring or summer. The parties' arguments regarding honest services fraud largely mirrored the arguments in the two other challenges to 1346 which the Court had heard this term. Commentators have opined that 1346 may not survive without being sent to Congress for reshaping.

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Mark Shelnutt, a distinguished attorney and member of the Columbus, Georgia, community, was found not guilty by a jury in the United States District Court for the Middle District of Georgia, the Honorable Clay D. Land, United States District Judge, presiding, on 36 counts brought by the government, including conspiracy, aiding and abetting a conspiracy to distribute cocaine, concealment money laundering, false statements and attempted bribery. Mr. Shelnutt was represented in the trial by attorneys Thomas Withers and Craig Gillen and the firm of Gillen Withers & Lake LLC. The Government was represented by attorneys Charles Bourne, David Stewart and Joe Newman of the United States Attorneys Office for the Southern District of Georgia.

The 6 day trial saw testimony by convicted drug dealers, federal agents and attorneys, as well as numerous supporters of Mr. Shelnutt, including several ministers with the United Methodist Church, which included the late Reverend Joseph Roberson, head of the South Columbus United Methodist Church and Cabinet member of the South Georgia United Methodist Conference, who died in an auto collision near Statesboro, Georgia, on Saturday. This blog has been on a hiatus for the trial, and we would like to thank all those who supported Mr. Shelnutt throughout the trial, as well as to send our condolences to Reverend Roberson's family and congregation.

The allegations arose from Mr. Shelnutt's representation of Torrance Hill, a convicted drug trafficker. The central allegation was that Mr. Shelnutt laundered money which Hill paid him as legal fees.

Mr. Shelnutt was charged under the concealment money laundering provision, 18 U.S.C. s 1956(a)(1)(B). The companion federal money laundering statute, 18 U.S.C. s 1957, contains an express exemption for "transaction necessary to preserve a person’s right to representation as guaranteed by the sixth amendment to the Constitution…" 18 U.S.C. s 1957(f)(1). However, no such exemption for legal fees exists in s 1956. Two weeks before Mr. Shelnutt's trial began, the Eleventh Circuit Court of Appeals issued an opinion in United States v. Velez, No. 09-10199, 2009 WL 3416116 (11th Cir., October 26, 2009), in which it reaffirmed s 1957(f)(1)'s exemption of payment of fees for legal representation from transactions which can constitute money laundering.

The parties and the Court agreed that mere payment of attorney's fees, even from drug proceeds, was lawful. Mr. Withers and Mr. Gillen argued to the Court that if legal fees were lawful in an attorney's hands, the fees could not be "magically transformed" into unlawful fees no matter what the attorney might do with them afterwards. After considering these issues, Judge Land crafted an instruction to the jury on s 1956(a)(1)(b), which read as follows:

             I am first going to explain the law to you regarding the substantive offense of money laundering. I will then explain to you the separate charge of conspiracy to commit money laundering. I will then explain the other offenses alleged in the Indictment.

             Counts Five through Thirty-Five of the Indictment allege that Defendant engaged in money laundering. Title 18, United States Code, Section 1956(a)(1)(B), makes it a Federal crime or offense for anyone to knowingly engage in certain kinds of financial transactions commonly known as money laundering. The Government alleges that the Defendant committed this crime on thirty-one separate occasions. You must consider each separate alleged count and determine whether the Government proved beyond a reasonable doubt the essential elements for each separate count.

             The Defendant can be found guilty of the offense of money laundering only if all of the following facts are proved beyond a reasonable doubt:

First: That the Defendant knowingly conducted, or attempted to conduct, a “financial transaction;”

Second: That the Defendant knew that the funds or property involved in the financial transaction represented the proceeds of some form of unlawful activity;

Third:    That the funds or property involved in the financial transaction did in fact represent the proceeds of “specified unlawful activity” - - in this case the proceeds of the distribution of controlled substances, also known as illegal drugs; and

Fourth:            That the Defendant engaged in the financial transaction knowing that the transaction was designed in whole or in part to conceal or disguise the nature, location, source, ownership or the control of the proceeds of the distribution of a controlled substance.

             The term “conducts” means initiating, concluding, or participating in initiating or concluding a transaction. “Knowingly conducted” means that conduct was done voluntarily and intentionally and not because of accident or mistake.

             The term “transaction” means a purchase, sale, loan, pledge, gift, transfer, delivery or other disposition of funds or property; and, with respect to a financial institution, includes a deposit, withdrawal, transfer between accoiints, exchange of currency, loan, extension of credit, purchase or sale of any stock, bond, certificate of deposit, or other monetary instrument, or use of a safe deposit box.

             The term “financial transaction” means a transaction which in any way or degree affects interstate or foreign commerce involving one or more “monetary instruments” which includes coin or currency of any country, travelers or personal checks, bank checks or money orders, or investment securities or negotiable instruments in such form that title thereto passes upon delivery. The term “financial transaction” also means a transaction involving the use of a “financial institution” which is engaged in, or the activities of which affect, interstate or foreign commerce in anyway or degree. The term “financial institution” includes a bank.

             The term “interstate or foreign commerce” includes any commercial activity that involves transportation or communication between places in two or more states or between some place in the United States and some place outside the United States.

             The term “proceeds of some form of unlawful activity” means profits of some form of unlawful activity and not simply gross receipts.

             The term “knowing that the funds or property involved in the financial transaction represented the proceeds of some form of unlawful activity” means that the Defendant knew that such funds or property involved in the transaction represented proceeds from some form, though not necessarily which form, of activity that constitutes a felony offense under state or Federal or foreign law.

             The term “specified unlawful activity means distribution of a controlled substance. “Controlled substances” means illegal drugs.

             In this case, the Government alleges that the Defendant committed the crime of money laundering for each of the separate amounts listed in Counts Five through Thirty-Five of the Indictment by doing the following:

1)       Knowingly receiving the money as alleged from Torrance Hill;

2)       That the money Defendant received from Torrance Hill which he is accused of laundering actually came from illegal drug proceeds;

3)       That Defendant knew that the money he received from Torrance Hill came from illegal drug proceeds; and

4)       That the Defendant received the money and deposited it for the purpose of concealing or disguising the nature, location, source, ownership, or control of the proceeds from the distribution of illegal drugs.

In order for you to find the Defendant guilty as to these money laundering counts, you must find beyond a reasonable doubt the existence of all of these elements.

             I instruct you that it is not illegal for an attorney who represents a defendant accused of a crime to accept payment of his attorney fees in cash. It is also not illegal for an attorney to receive attorney’s fees from someone accused of a crime who pays those attorney’s fees from money that the person got from illegal activities. In other words, if you found here that Torrance Hill paid the Defendant attorney’s fees and that the source of those fees was Hill’s illegal drug activities, then the Defendant’s receipt of those attorney’s fees, without proof of concealment as described previously, is not money laundering or a federal crime.

              Just as it is not a federal crime for a Defendant to receive an attorney’s fee from illegal drug activities, it is not a federal crime to conceal a legitimate attorney’s fee, even if the fee comes from illegal proceeds. To be money laundering, the concealment must be concealment of illegal proceeds other than those that are paid for legitimate attorney’s fees.

The Shelnutt prosecution raised serious issues and concerns for criminal defense attorneys who represent clients charged with drug offenses, or in other contexts, where there is a high likelihood that any legal fees paid to counsel may be derived from unlawful activity. The defense argued that the prosecution of Mr. Shelnutt for money laundering could set a frightening precedent whereby the government could choose to prosecute any criminal defense attorney or money laundering for accepting payment for legal fees which was also proceeds of unlawful activity. The Court acknowledged these concerns and addressed them in the instruction it crafted for the jury. Fortunately, there have to date been very few prosecutions of attorneys under s 1956 for receiving attorney's fees, however the Shelnutt prosecution and the Court's instruction illustrate the need for either an amendment to s 1956 to contain an exemption for payment of legal fees similar to s 1957, or for the courts to make clear, as the Court's instruction did in this case, that (1) it is not illegal for an attorney to receive attorney's fees from money a person got from illegal activity and (2) it is not illegal to conceal monies received as legitimate attorney's fees.

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As reported by the New Orleans Times-Picayune, Judge T.S. Ellis, III, of the U.S. District Court for the Eastern District of Virginia read instructions to the jury yesterday which lasted over 2 & 1/2 hours, and the jury retired for its deliberations in the case against former U.S. Representative William Jefferson. The jury deliberated for about four hours and will re-convene to continue deliberations this morning.

The jury weighing the evidence in the six week long trial of Jefferson on 16 criminal counts, including racketeering, honest services fraud and violations of the Foreign Corrupt Practices Act, consists of two white males, six white females, two black males and two black females. Jefferson's case is the first time the Foreign Corrupt Practices Act has been applied to a public official. The Court sent three alternate jurors home yesterday, instructing them to remain "pristine" with regard to their exposure to information regarding the case.Jefferson's lead attorney, Robert Trout, told reporters that Jefferson intends to be present at Court each morning when the jury arrives.

Closing arguments were heard earlier in the week, with numerous media outlets and journalists from Louisiana in attendance.

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Sir Robert Allen Stanford is scheduled to be arraigned today on conspiracy, mail and wire fraud, money laundering and obstruction charges in Houston in the U.S. District Court for the Southern District of Texas. Stanford is represented by attorneys Dick DeGuerin and Sean Ryan Buckley, of the Houston firm of DeGuerin and Dickson.

According to the docket for the case, the Government obtained its 21-count indictment, which can be viewed here, last Thursday and promptly moved to seal (i.e. prevent public access to) it, and then unsealed it on Friday shortly before Stanford’s arrest.

The Court will likely revisit the issue of whether Stanford is entitled to release before trial. On Friday, the Court ordered co-defendants Mark Kuhrt and Gilberto Lopez released on a $100,000 unsecured bond. However, given Stanford’s considerable wealth and ties abroad, any amount of bond imposed in his case will undoubtedly be far higher, if Stanford is granted pre-trial release at all, that is. The U.S. District Court for the Eastern District of Virginia determined that Stanford posed a high risk of flight, and denied bond.

The case will be tried before U.S. District Judge David Hitter, a brief description of whom can be found here.

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The writers of Federal Criminal Defense Blog have been busy writing on other matter and apologize for the brief hiatus. Much has happened in the sphere of white collar crime even during our short absence, most notably developments in the two largest Ponzi schemes in U.S. history, and we have some catching up to do.

We’ll start with the second largest—an indictment indictment against billionaire Texas financier Sir Robert Allen Stanford, 59, was unsealed in the U.S. District Court for the Eastern District of Virginia on Friday according to the Associated Press  and the BBC. The 50-page indictment alleges that Stanford and six other defendants with allegedly perpetrated a $7 billion Ponzi-style fraud. It charges Stanford and the other defendants with 21 counts, including 7 counts of wire fraud, 10 counts of mail fraud, conspiracy to obstruct an investigation for the Securities and Exchange Commission, obstruction of an investigation by the SEC and conspiracy to commit money laundering. Defendants Laura Pendergest-Holt, Gilberto Lopez and Mark Kuhrt are executives of Stanford Financial Group. Defendant Leroy King, a former bank regulator for the Caribbean island nation of Antigua and Barbuda, allegedly accepted more than $100,000 in bribes from the other defendants in order to allow the alleged scheme to continue.

The indictment alleges that the defendants sold certificates of deposit issued by Stanford International Bank, based in Antigua, to investors, promising large returns. The defendants allegedly made false claims to investors regarding the growth of Stanford Financial Group’s assets.

The scheme had approximately 30,000 investors. Stanford is alleged to have diverted more than $1.6 billion in investment funds in personal loans to himself. More than $1 billion in investment money is allegedly unaccounted for. Stanford is also charged in the indictment with allegedly conspiring to obstruct an SEC proceeding. Stanford Financial Group’s finance chief, James M. Davis, is cooperating with investigators. Davis has been charged with fraud and obstruction in a separate indictment.

Stanford was the owner of a newspaper, two restaurants, and a development company in Antigua, and was a cricket enthusiast and owner of the Stanford cricket grounds in Antigua. In 2008, Stanford staged a $20 million, winner-takes-all, match between a West Indian XI and England at the grounds. In 2006, Stanford became the first American to be knighted by Antigua and Barbuda.

Stanford is represented by attorney Dick DeGuerin, who has issued a statement to the press that Stanford is innocent of the charges. Stanford has made repeated statements as to his innocence and has alleged that no money was lost.

Stanford surrendered to the FBI on Thursday and had his initial appearance on Friday. U.S. Magistrate Judge Hannah Lauck determined that Stanford posed a flight risk and ordered him to remain in custody pending a future detention hearing in Houston. Several governments have frozen his assets. Stanford faces as much as 250 years in prison if convicted.

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By way of background, the Government originally charged Syed Haris Ahmed in a sealed indictment filed on March 23, 2006. The Government obtained a Superseding Indictment on July 19, 2006. It has charged Ahmed and his co-defendant, Ehsanul Islam Sadequee, with one count of conspiracy to provide material support to terrorists, in violation of Title 18 United States Code Sections 956 and 2332b; one count of providing and attempting to provide material support to terrorists, in violation of Title 18, Sections 956, 2332b and 2339A; one count of conspiracy to provide material support to a Designated Foreign Terrorist Organization, in violation of Title 18, Section 2339B; and one count of attempting to provide material support to a Designated Foreign Terrorist Organization, in violation of Title 18, Section 2339B.

The Government’s Superseding Indictment contains the following facts and allegations:

Ahmed was born in Pakistan in 1984 and became a naturalized U.S. citizen. Sadequee, who is allegedly nicknamed “Shifa,” was born in Virginia in 1986, and is of Bangladeshi descent.

In or around late 2004, Ahmed and Sadequee and another person engaged in alleged paramilitary training, including with paintball guns, in Northwest Georgia.

On or about February 26, 2005, Ahmed and Sadequee traveled to Toronto, Canada, by bus. While in Toronto, Ahmed and Sadequee allegedly met in person with “supporters of violent jihad” and “discussed strategic locations in the United States that were suitable for terrorist attack, including military bases and oil storage facilities and refineries.” Ahmed, Sadequee and the others allegedly also “explored how they might disrupt the world-wide Global Positioning System (GPS)” and “a plan for members of the group to travel to Pakistan to seek and receive paramilitary training that they would then use to engage in violent jihad.”

After returning to Atlanta, in or about March or April 2005, Ahmed and Sadequee further discussed these plans, and also the possibility of attacking Dobbins Air Reserve Base in Marietta, Georgia.

At or around this time, Sadequee was allegedly in communication with Younis Tsouli, an unindicted co-conspirator in the United Kingdom.

On or about April 10 and 11, 2005, Ahmed and Sadequee traveled to Washington, D.C., in Ahmed’s pickup truck. On April 11, Ahmed and Sadequee allegedly “made short digital video recordings… of symbolic and infrastructure targets of potential terrorist attacks in the Washington, D.C., area, including the United States Capitol; the headquarters building of the World Bank…; the Masonic Temple in Alexandria, Virginia; and a group of large fuel storage tanks near I-95 in northern Virginia.”

On returning to Atlanta, Ahmed allegedly gave the video clips to Sadequee so that he could send the clips to supporters of violent jihad abroad. Sadequee allegedly sent the video clips to Tsouli in the United Kingdom and Tsouli stored the clips on his computer along with other materials relating to violent jihad.

Between March and July 2005, Sadequee allegedly provided Ahmed with the contact information for Abu Umar, an unindicted co-conspirator, and told Ahmed that Abu Umar could assist Ahmed with obtaining paramilitary training in Pakistan. On or about July 17, 2005, Ahmed traveled from Atlanta to Pakistan for the alleged purpose of studying in a madrassa and then obtaining paramilitary training to engage in violent jihad in Kashmir or other locations, including the U.S. Ahmed is alleged to have intended to join Lashkar-e-Tayyiba (“Army of the Righteous”). Ahmed was allegedly unsuccessful in his attempts to enter a madrassa or to obtain paramilitary training, and returned to Atlanta.

On or about August 18, 2005, Sadequee traveled from Atlanta to Bangladesh to allegedly get married and to pursue violent jihad. Sadequee was stopped as he traveled through John F. Kennedy Airport in New York and was discovered to allegedly have two compact discs concealed in the lining of his suitcase which contained a Fairfax County, Virginia, Visitor’s Center map of the Washington area, including the sites of four potential terrorist targets which Sadequee and Ahmed had videotaped in April 2005. Sadequee was interviewed by federal agents and allegedly falsely stated that he had traveled to Toronto alone.

On or about August 19, 2005, Ahmed returned to Atlanta from Pakistan and was interviewed by federal agents at Hartsfield International Airport in Atlanta. Ahmed allegedly made false and misleading statements about his travel to Canada and Pakistan, allegedly stating that he had made the trips to visit friends and family and to attend a religious school.

In the Fall of 2005, Ahmed allegedly researched shaped explosive charges and methods to defeat surveillance by government authorities. He also allegedly cautioned an individual to avoid discussing certain topics over the telephone.

On or about November 27, 2005, Ahmed allegedly told a supporter of violent jihad of his intent to go abroad again to train for, and engage in, violent jihad, and told the individual to read the indictment against Jose Padilla. At or around this time, Ahmed allegedly reviewed a periodical for gun enthusiasts.

In early 2006, Ahmed allegedly engaged in efforts to detect and evade suspected government surveillance. In March of 2006, agents from the FBI Joint Terrorism Task Force engaged in a series of interviews with Ahmed, in which Ahmed allegedly attempted to conceal the true nature of his, Sadequee’s and their alleged co-conspirators’ discussions, activities and plans. After the interviews began, Ahmed communicated with Sadequee in Bangladesh and warned him about the FBI’s interest in their activities.

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The trial of Syed Haris Ahmed is Georgia’s most significant terrorism case and we will collect for readers daily information on the trial and additional information. Today’s information on the Ahmed/Sadequee Trial comes from the Atlanta Journal-Constitution, WSBTV and CNN.

Ahmed is 24, an Atlanta area native and a former student at Georgia Tech. Ahmed waived his right to jury trial, and his case is being tried before District Court Judge William S. Duffey in the U.S. District Court for the Northern District of Georgia without a jury. Jack Martin, of Martin Brothers, P.C., is representing Ahmed. Assistant U.S. Attorney Robert McBurney is representing the United States. Ahmed’s co-defendant, Ehsanul Islam Sadequee, will be tried in August. Stephanie Kearns of the Federal Defender Program is representing Sadequee.

On Monday, Mr. Martin gave his opening statements to the Court, describing Ahmed as a confused, frustrated and immature young man who “fell prey” to websites espousing extremist views. Mr. Martin characterized the alleged plans for terrorist acts as “passing random thoughts, momentary ideas, childish fantasies, unformed, inchoate notions.” Mr. Martin argued that Ahmed had the ability to commit the alleged acts but said “No.” He stated that Ahmed’s idea of paramilitary training was shooting paintball guns with a friend in the North Georgia woods.

Mr. McBurney argued that Ahmed “one step removed from the bomb throwers” and intended to wage violent jihad. Mr. McBurney argued that Ahmed was a would-be terrorist who went to Pakistan to join the Taliban. He said that the videos made by Ahmed while allegedly “casing” locations in Washington, D.C., including the Capitol and the Pentagon, were intended to prove to terrorists overseas that Ahmed had access to Washington’s “backyard” and could get in close to targets. McBurney said the government’s case is about supporting terrorism and not actually “pulling the trigger or dropping the bomb.”

FBI Special Agent Mark Richards testified for the government. During Agent Richard’s testimony, the government showed some of the videos. In one video of the World Bank Building, Ahmed bobbed up and down so much that Mr. Martin asked Special Agent Richards “If a terrorist was attacking on a pogo stick, this might be useful, right?” However, another video shows Ahmed and Sadequee driving past the Pentagon with Sadequee stating “This is where our brothers attacked.”

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National Century Financial Enterprises Case (NCFE), a healthcare financing company, collapsed in 2002, resulting in a loss of $2.9 billion to investors, including the world’s largest bond fund manager, Pacific Investment Management Co., Pimco and Credit Suisse Group. The failure also hastened the bankruptcies of some 275 hospitals and healthcare providers. A dozen NCFE executives and employees were indicted in the Southern District of Ohio in 2003 on charges of conspiracy, mail and wire fraud, securities fraud and money laundering, including NCFE’s former Executive Vice President, Mr. James K. Happ. NCFE, which purchased accounts receivables from healthcare providers at a discount, was alleged to have advanced $2.2 billion to six companies in which its Chief Executive, Lance K. Poulsen, owned stakes, and to have charged NCFE’s clients for the advances. NCFE’s fraud is considered the largest by a private company in U.S. history, and case has received nationwide media attention.

Several of the NCFE defendants pled guilty, and the remaining defendants were convicted in three trials on all counts. In particular, Poulsen was convicted in July for obstruction, and in October, on a total of 17 counts. Poulsen has already been sentenced to 10 years imprisonment on four of the counts, and faces a sentence of 30 years to life in prison on the remaining counts. NCFE co-founder Rebecca Parrett was convicted of 9 counts in March, but disappeared in March when she was given leave by the Court to return to Arizona to tend to her personal affairs.

Mr. Happ, who was charged with counts of conspiracy, money laundering conspiracy and three counts of wire fraud, was to be the seventh NCFE executive tried and the fourth and final NCFE trial. The case was presided over by the Honorable Algenon Marbley, United States District Judge. Mr. Happ was represented in the proceedings by the Columbus, Ohio, law firm of Kravitz, Brown & Dortch, LLC, and by the Atlanta, Georgia, law firm of Gillen Withers & Lake, LLC. Eminent attorney Max Kravitz, founding member and managing partner of Kravitz, Brown & Dortch and professor of law since 1976 at Capital University Law School, represented Mr. Happ until Mr. Kravitz’s untimely passing in August 2007. Representing Mr. Happ at trial were founding member and managing partner of Kravitz, Brown & Dortch, attorney Janet Kravitz, and attorney Craig A. Gillen, founding member and managing partner of Gillen Withers & Lake, serving as lead counsel. Mr. Zach Kravitz, Mr. and Mrs. Kravitz’s son, who is a recent graduate of the University of Florida School of Law, also served as counsel.

During the three-week trial, the defense argued that Mr. Happ was not involved in any wrongdoing and never lied to NCFE’s investors. The prosecution attempted to allegedly connect Mr. Happ to the fraud through witness testimony, including from NCFE Executive Vice-President Sherry Gibson and Frank Magliochetti, Jr., Chief Executive Officer of Med Diversified. The defense impeached the witnesses’ statements against Mr. Happ, and argued that while Mr. Happ advanced monies to healthcare companies, he did so merely as part of NCFE’s legitimate business, that the advances to companies had been occurring for eight years prior to Mr. Happ’s joining NCFE in 2000, and that Mr. Happ was not involved in the creation of any false investor reports or financial documents.

At the close of the trial, the prosecution urged the Court to instruct the jury on intent and “deliberate ignorance” or “willful blindness,” the concept that a defendant may still be found guilty of a crime where the defendant deliberately closes his or her eyes to criminal conduct. The defense responded that the jury could not be instructed on both intent and deliberate ignorance/willful blindness, citing an unpublished decision by the Sixth Circuit Court of Appeals, United States v. Ramos, 38 F.3d 1217 (6th Cir.1994) (unpublished per curiam), in which the Court held that “[t]he deliberate ignorance instruction should not be used where the evidence points to ‘either actual knowledge or no knowledge at all of the facts in question.’” Id. at *4 (quoting Sanchez-Robles, 927 F.2d at 1074; quoting United States v. Perez-Padilla, 846 F.2d 1182, 1183 (9th Cir. 1976)). The Judge found that a deliberate ignorance/willful blindness instruction could not be given where the government attempts to prove a defendant’s intent through direct evidence, pursuant to Ramos, and denied the prosecution’s proposed instruction. The jury subsequently found Mr. Happ not guilty on all counts. Jurors who were questioned following the verdict informed the media that they felt that the government did not prove its case. Mr. Happ is the only NCFE defendant to be acquitted. The acquittal has been widely reported in the national media.

Gillen Withers & Lake LLC are white collar and corporate criminal defense attorneys with an outstanding reputation and track record, handling cases throughout Georgia and the nation. Call our Atlanta, Georgia, office at (404) 842-9700 or our Savannah, Georgia, office at (912) 447-8400.

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   Jeffrey Brooks was a student at Southern University in New Orleans. Allen Snyder was a Louisiana man on trial in a Louisiana court for the first degree murder of his wife, Mary. And Mr. Brooks was a member of Synder’s jury panel.

   The prosecution and defense winnowed the 85 prospective jurors of the panel down to 36 through challenges for cause. Five of the remaining 36 prospective jurors were African-Americans, including Mr. Brooks. The prosecutor proceeded to eliminate the remaining African-American jurors through the use of peremptory strikes. In the case of Mr. Brooks, the prosecutor offered the alleged race-neutral reasons that Mr. Brooks allegedly looked “very nervous” during questioning, and that he was a student teacher and therefore allegedly might be more inclined to render a guilty verdict on a lesser charge so that he could return to his teaching duties.

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The case of the Wecht jury deliberations gets curiouser and curiouser. Remember now, since deliberations began on March 18, 2008, the jury has deliberated on only 8 of the intervening 22 days, and they have had two consecutive four day weekends. The irony here is that the defense has blasted the district court for months now, alleging judicial bias, but if there is a way to interrupt the continuity of jury deliberations, it is to have them deliberate only 5 hours and a half hours  a day and only 3 days a week. The result, 22 days after deliberations began, the jury has deliberated a total of approximately 44 hours. Not surprisingly, out of this jumbled deliberation arises jury confusion, over what appears to have been a weak case to begin with (see earlier post here).  

The latest saga began when a male juror took ill on Tuesday (see here). Judge Schwab then dismissed the juror, apparently without any inquiry of the juror’s physician, and without taking any testimony from the juror. A rare move indeed. The defense filed a motion to vacate that order (see brief here). I would argue that the defense has an absolute right to have the issue of the juror’s physical ability to continue deliberations vetted in open court, on the record. Not surprisingly, defense counsel objected vehemently, and now we know why – this juror was a male prison chaplain.

In an earlier post, I posed the question, whether the stuff of this case had the makings for a federal criminal prosecution. Not to prejudge before the case is done, but the jury’s apparent deadlock suggests the obvious answer.

To complicate things and to move the case further down Alice’s rabbit hole, the jury today announced that “they are deadlocked”. The court then individually questioned each juror about whether they were, in fact, deadlocked, and then, each juror having answered in the affirmative, the court sent them back to continue deliberations!! Not surprisingly, the defense was apoplectic. And, to round this bizarre course of events out – no deliberations tomorrow – the jury returns to continue deliberations on Monday.

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The Eleventh Circuit Court of Appeals has issued a ruling which confirms one more element which the government must prove, and which the jury must be instructed on, in order to convict a defendant of fraud. In United States v. Brown, 79 F.3d 1550, 1557 (11th Cir. 1996), the Eleventh Circuit held (or re-confirmed) that, in order to prove the crime of mail fraud, in violation of 18 U.S.C. § 1341, “the government must show the defendant intended to create a scheme ‘reasonably calculated to deceive persons of ordinary prudence and comprehension.”’ (Quoting Pelletier v. Zweifel, 921 F.2d 1465, 1498-99 (11th Cir.1991)). Last week, in United States v. Svete, NO. 05-13809, 2008 WL 788407, *7 (11th Cir. March 26, 2008), the holding of Brown was finally applied to Eleventh Circuit Pattern Jury Instruction (Criminal Cases) 50.1, which, as the Court noted, “does not include the reasonable person standard as articulated in Brown…” id.

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