Case Document Page13 of Case Document Filed Page of Case Document Filed Page of Case Document Page14 of Case Document Filed Page of Case Document Filed Page of C2grdau4 Schoeman direct which we concluded the summations in the case yes Do you recall the subject matter of that note A I recall in general that there was a question regarding respondeat superior Again just to be clear what stage was the trial at A I be lieve that that was after all of the summations had bee,n concluded I think including the rebuttal summation Do you know a lawyer named Theresa Trzaskoma A I do How do you know her A I think I first met Ms Trzaskoma in approximately My babysitter and her babysitter became friends Being a first time parent I did a little diligence on the parents of my month old playmate and learned that it was Ms Trzaskoma and her husband We became family friends at that point Im loathe to ask this question but you Googled her A Actually I think I knew her husband who had been an associate with me at Paul Weiss and had clerked in the Eastern District at the same time that my wife had clerked So I think I knew them in advance Was Ms Trzaskoma also a lawyer during the course of the trial in this courtroom the David Parse trial A She was Who did she and her firm represent A She and her firm represented David Parse SOUTHERN DISTRICT REPORTERS P.C Case Document Page15 of Case Document Filed Page of Case Document Filed Page of C2grdau4 Schoeman direct Sometime after the reading of the note from Juror No did you speak to Ms Trzaskoma about Ms Conrad Juror No A Yes Would you tell the Court what was said between you and Ms Trzaskoma at that time A Yes I recall that we had a conversation I believe it was as we were walking across Foley Square towards Duane Street She told me that there was a person with the same name as I don recall whether she said Juror No or Ms Conrad but a person with the same name who was a disbarred lawyer but that it was not the same person as Juror No I began formulating a question to say how do you knc1 She anticipated that question and said ecause of the voir dire I began formulating the question of what question dur in the voir dire would have disclosed that She anticipated that question as I was speaking it and said something to the effect that her educational background did not include law school I said then it not the same person And i she said right By that time we had fi nished crossing the street Any further discussion about Ju ror No A Not with Ms Trzaskoma during that time period Any further discussion with anyone at the Brune firm regarding Ju ror No during that time period A No SOUTHERN DISTRICT REPORTERS P,C Case Document Page16 of Case Document Filed Page of Case Document Filed Page of C2grdau4 Schoe man direct Did you take any action based on that conversation A No We know that it was after the juro note Do you recall when it was A I cant say exactly when it was I believe it was during the deliberations eit er that Friday or sometime the following wee1c MR SHECHTMAN No further questions THE COURT Cross-examination MR OKUL A Briefly your Honor CROSS-EXAMINATION BY MR OKULA Good afternoon Mr Schoeman How are you A Good thank you Good afternoon Or DeRosa sends his regards A I send mine right back You sa i you had this conversation with Ms Trzaskoma after the note was received in court is that correct A Yes Was it the same day or the following day A I dont believe it was either the same day or the following day I believe it was sometime a couple of days or several days later You talked about the follow-up questions that you asked to try to get to the bottom of the information is that correct SOUTHERN DISTRICT REPORTERS P.C Case Document Page17 of Case Document Filed Page of Case Document Filed Page of C2grdau4 Schoeman cross A Yes Thats what any good lawyer or investigator does when somebody tells them a broad fact you ask what supports that correct A Its the question I asked Do you disagree with my proposition that a good investigator or lawyer when somebody gives them a broad proposition asks the follow up question what is that based on A I dont disagree with it Did you ask Ms Trzaskoma what had led her to conclude or what led to her belief that there was a possible conn ction between Juror No and the suspended attorney A I think she told me that there was someone with the same nam.e as Juror No I don recall whether we actually used the persons name Then as I described I asked questions about why she had determined it was not the same person and the answer was based on the voir dire responses Is it correct that you didnt ask any other follow-up questions that led to her initial belief that there was a connection between Juror No and the suspended attorney A I think all she told me was that they had the same name and I inferred that that was the basis of her considering it possible that they were the same person Did she tell you that they had the same middle initials SOUTHERN DISTRICT REPORTERS P.C Case Document Page18 of Case Document Filed Page of Case Document Filed Page of C2grdau4 Schoeman cross A No Did she tell you that she had viewed a Westlaw report that had certain information on it that was connected to Juror No Catherine Conrad A No Did she tell you that she had communicated with somebody int,ernally in her firm where she had exclaimed Jesus I think Juror No is the suspended attorney A No If you had that information from Theresa Trzaskoma would you have done further investigation yourself A I dont know How many years did you spend as an Assistant U.S Attorney Mr Schoeman A A total of about seven or eight I would stipulate to the fact because Ive heard it that you were a terrific investigator correct A Ill stipulate with you Are you telling us really that you wouldn have looked into that further yourself if you had seen these further con nections tying Juror No to the suspended attorney A Forgive me I thought your question was if I had heard that she had written an email that had that exclamation I dont know what I would have done I guess I can ly tell you what I did do which was ask about the voir dire SOUTHERN DISTRICT REPORTERS P.C Case Document Page19 of Case Document Filed Page of Case Document Filed Page of C2grdau4 Schoeman cross Would you have liked to receive that information in order to make a better assessment of yo own about whether Juror No was the suspended attorney After all more information is better isnt it A It did not occur to me at the time to ask for more information I didn ask you whether it occurred to you at the time Would you have wanted more information Would that have helped your analysis A I don know whether it would have helped my analysis I concluded from the fact that she was telling me that the voir dire answer had said that this person had not gone to law school that this was not an issue Do you really mean what you just said that you dont think more information would have helped your analysis Schoeman A I telling you I don know whether more information would have he ped my ana ysis I telling you that I reached a conclusion based on that information Would you agree with me that if you have two people one named Catherine Conrad another named Catherine Conrad and you were given information about their middle initials that they share the same middle initial that it made it statistically more likely that was the same person A Yes MR OKULA Judge I have nothing further Thank you SOUTHERN DISTR I CT REPORTERS P.C Case Document Page20 of Case Document Filed Page of Case Document Filed Page of C2g i:-dau4 Schoeman cross THE COURT Mr Shechtman REDIRECT EXAMINATION BY MR SHECHTMAN Mr Schoeman just to be clear on May 13th or sometime thereafter Ms Trzaskoma told you that she had rejected the conclusion that Juror No was a suspended attorney is that correct A Yes MR SHECHTMAN Very good MR OKULA Nothing else your Honor THE COURT Mr Schoeman did you get any understanding from Ms Trzaskoma as to why it was that she was sharing this information or her deliberative process with you THE WITNESS I didn have an understanding We having spent many months of trial togethe often shared information It was consistent with ou pattern of sharing information during the course of the trial But I have described I think the entirety of the conversation THE COURT Anything further MR OKULA No thi ng Thank you your Honor THE COURT Youre excused You may step down Witness excused MR SHECHTMAN Mr Parse cal ls Barry Berke of the same law firm BARRY BERKE SOUTHERN DISTRICT REPORTERS P.C Case Document Page21 of Case Document Filed Page of Case Document Filed Page of C2g-rdau4 Berke direct called as a witness by defendant Parse having been duly sworn testified as follows THE COURT State your full name and spell lt slowly for the court reporter THE WITNESS Barry Berke B-E-R K-E THE COURT Mr Shechtman you may inquire DIRECT EXAM I NATION BY MR SHECHTMAN Berke how are you employed A I am a partner at Kramer Levin Naftalis Frankel How long have you been a partner at that firm A I have been a partner at that firm since I believe Prior to that were you involved in the law A I sorry Since I was a partner there Prior to that I was an associate at Kramer Levin Prior to that A Prior to that I began my career as a clerk in this courthouse for a judge here I was then at the Federal Defenders office in the Southern District of New York until when I joined Kramer Levin I had a brief period when was a visiting associate professor at NYU teaching courses there right in between Were you a lawyer in this courtroom during the trial of David Parse and other defendants A I certainly was SOUTHERN DISTRICT REPORTERS P.C Case Document Page22 of Case Document Filed Page of Case Document Filed Page of C2grdau Berke direct Whom did you and your firm represent A We represented Craig Brubaker Let me direct your attention to May 11th of Pid the Court that a ternoon re a a note from Juror No Catherine Conrad A I recall that Do you recall the subject matter of that note A I recall generally that there was a note om Juror asking whether the jud was going to instruct I believe on respondeat superior I think there were some other things but I recall that to be the overall gist of the note as I recall it Do you know a lawyer named Susan Brune A do How do you know her A I ve known Brune for a long time I can tell you the background but I certainly know her as cou sel for David Parse in this action Sometime after the judge reading of that note from Juror No did you spea to Ms Brune about Ms Conrad A I did Il tell you what I recall I recall that after we hea the note that day I believe it was the following day although I can ay that with a hundred percent certainty it could have been the day after that I recall being in the witness room in the back which we used and had SOUTHERN DISTRICT REPORTERS P.C Case Document Page23 of Case Document Filed Page of Case Document Filed Page of C2grdau4 Berke direct copy machines and other things and often spent time back there I remember talking to Ms Brune about the note I recall her saying that they had identified a person with the same name who had been a disbarred lawyer I recall saying to her well that cant be because she certainly isn a lawyer I said I assume she was asked what her educational background was I remember Ms Brune said she did she was asked she said that she had a BA degree Ms Brune told me what it was in I dont recall as I sit here But it was some humanities I recall saying well definitely it cant be the same person She said that what I think as well That was really the end of it I would say the conversation probably did not last more than two three minutes at most Then I recall we left the room and that was it She said thats what I think as well A That what I recall MR SHECHTMAN No further questions THE COURT Cross-examination CROSS-EXAMINATION BY MR OKULA Good afternoon Mr Berke A Good afternoon Mr Okula I get to check one of the things off my bucket list A I just hope you didn prepare too much for it Would you agree with me Mr Berke that if an attorney SOUTHERN DISTRICT REPORTERS P.C Case Document Page24 of Case Document Filed Page of Case Document Filed Page of C2grdau Berke cross forms a be ief that a juror has engaged in misconduct that attorney is obligated to bring the misconduct to the attention of the Co rt A You re asking me an ethical question a legal opinion I will tell you this Can you not answer that yes or no Mr Berke A Well I like Im asking you a question and Ill repeat it again Maybe you cant answer it yes or no tell me if that the case If an attorney forms a belief that a juror has engaged in misconduct do you believe that the attorney has an obligation to bring it to the attention of the court A I can answer that yes or no I can answer it but I just can answer it yes or no Real You can answer that estion yes or no hat your testimony A That not how I wou answer that question Tell us how you would answer that question A I will tell you that I have never confronted that issue at trial in any trial I have done that whenever I have an issue that I think raises an ethical issue I always do the same thing I always look to the ethics rules I always look to the ethics commentary I very familiar with the ethical rules I familiar ith my obligations to my client to the court my SOUTHERN DISTRICT REPORTERS P.C Case Document Page25 of Case Document Filed Page of Case Document Filed Page of C2grdau4 Berke cross ot obligations I never will act on a piece of information that I think invokes my duties as an advocate for my client as well as an officer of the court without first looking at the rules I will read the rules As we all know at times you will read the rules they will be absolutely clear what my obligations are Sometimes they will be less clear and we will research it Thats what I do I never act on information until I do that and I ve never don that on that issue That what I can tell you I dont think you answered my question though Can you answer the question that I asked If you form a belief as an att rney in a courtroom that a juror has engaged in misconduct do you have to bring that to the attention of the court A What I can tell you is if I had confronted that issue Is this another one that you cant answer yes or no A Im going to answer your question Would you do that A I will What I will tell you is my reaction to that information if I confronted it would be that I believe I have an obligation to tell the court Before I did anything though I would do exactly what I said I would look at the rule look at the law and make sure I was complying with all my obligations Did Susan Brune explain to you why she felt it important to brD1g the information to your attention that her firm had SOUTHERN DISTRICT REPORTERS P.C Case Document Page26 of Case Document Filed Page of Case Document Filed Page of C2grdau4 Berke cross learned about the juror or believed or the connection between the juror A No I think I have told you the substance of what I recall of that conversation She didn explain in any fashion why she thought it was important to tell you at that period of time A No Did she tell you anything else that her firm had learned that gave rise to the belief by one of their attorneys that there was a connection between Juror No and the suspended New York attorney A No Did she tell you any of the underlying facts A No The only other thing that I recall is that when talking about the note we both noted that we believed that Juror had said she had been a plaintiff in a personal injury case which might explain the respondeat superior I cant say for certain it was in that identical conversation I believe it was probably was but I do remember talking about that as well Let me ask you this If you had learned from somebody at the Brune firm that they had a written report showing somebody named Catherine Conrad had a personal injury or had a ivate lawsuit would that be a piece of information that you would want to have had at the time in order to do your own analysis A Just to be clear what I referring to I believe the SOUTHERN DISTRICT REPORTERS P.C V3 Qt KI y?ʍ X?P km6 T8 i??GŹ?y??x??z?Kǔ Ms6 9zc e??P K?j z??鰍k;?y NTm ʦ?w?g?R bL Ҩ?P?x?wn _X a e??O Ln M?j pv Yha?N A S?Ƌ??Z qFi ZP k8 1J 0?sـ xȶ?A i?Ӕ Ǣ?Ӵ?cc bldz i _Q QEN?A??l V?Ș s0 rĻ z?HŅ?x TO hG u?j 2J?O tE/?m E4 I xU??H N??B콽?H Q3wn?ض 6YU?f2iIY V?i u?C 8w 竀??tpU?C J?Y?h??ç ߈M r?Ҁz?b N6Ia íq i qM?Q EC?k J0 r?wЅ I G?n HdǔkMY Ui mӀ r?km Ab e?OT Օʳ4?R Qp e"X?.?G?嵩u?d Up J?ػ Y?V OS UF Ӿ??v?y zJ Ճ??ߋ(q ɀ?M?F 2?bA 0Wy m??om W??O?N _IŴ f8M ZҎm??i zr VԳz ZN Zmc?P k4N aY m?CKa fWWC Y?Ţp L??m tJˇTMz p?v?jBu?Xu ht?T??A zw nC ẠnH u0 n?Í D_ 8?Qf l??ZUE K?C ʑo tI??Gj?z?I e?L Pd Ѥ陒A K??W y?? KW5 l2ȥ?i??妜ua?d?j??ԅA I jI 8R 9p d?4ó?A Vt;Iχ?N CYc Pfi?e.R?q?7W5 6P qQ qv R??d;?lq Լ/?Vn z?U?H t?s?h q?f A W?h 9N 3B dr??L??k rGu Q7 a 1h?o BZr f?J-?wcQN GJm x"?-OݞIrQ fA?b?(j5 QҨ nYA??X 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ys;z zr cz n?rc _B?e z??r?rsŖ?z g??BΝi ux ą?G a id cFҸ Iښ_ހ?OQ B??K?nƩޜ Fx LH vO?zN PX a _GP ό0 OR Gv Q?عU Ia TT b?J?f oY?I?Ֆ4 I?w a K?Ϟ ᛷN?o?2 s?r zI?l N?m_?h pX,?Ҭ 7_ Jc0?ܙ Hڠ?_ Z?"H?c 7S Ĉj MMK Ul h??GW W?S?L A HҌ ccUq?Q e?r O?d B?F??c 2V?ϗ F?V?d?Qv i Cو Aݓ 6t?ŁJ t۶ X?t P??R?Rg?q Cs ls z?t;jĹ2 oD XT d?e?d?G?UR?t m?nR?AT o6 Yi 7L UY XC?jL?C 0D Iɸp ZV e?L?8ŀ tR y?d?W Ʃ0 S?o?z Lk 9H CkD u?ٽC a KU p?R A?S h??WN ƋC?Hw AK?æg h?bv a 5Z RS?N?FL?O??e Vh _S?B i Y?c2?L f??E?wYU Ov xD?d glg Ƅ??c C4x YJ A Z?i n9 3?vz Ӷj??m A tS??ߌ cW?E?-6x 6i?Hs??A0?Y??yey va㾅?D:?Hq VI UA óm cX v?nwO P5?C7ϳVN T?L?l Nc ăT Ҁ2 6?V?Sy Wk??Dw Ȇ?y 5c ôv??-L ݞr Ė?to ڳw Sq qp i ˀet?M ںx c??G ᒚ8 ӻZ?y?G7 Yq R??M n?s H?a??ڈ?z h9 p?DR JΙgQ p?Ϡ у??m U.Y R4K bE ʤ??n op d?B?Y?n pkN?F??2 H6 kГ?g v?ƁϨ?I i 8r h??ôI tHp ʩ?f ca8 N??V?ތ L?s rԤ f??鞑t Dn Yc T?C L?F t?Gu E??ߛñ dO aނ g?p HE?E 4si ve S?Z i?Q y?ǯ iM HP Lʙ fv aF ߒ?N q??o?R 9L VM 을ïT8y Q?l?l Q?nJ HG c?i u?cνEv a 9ũ N?TO k?l PF A?0z ɺP U!?e dhm H??g L?p??C I A?vn?eY?j A?l tz F?ɜX)?筓 ƱqÍd9i P??p Q?j D?)ÝXC?3 oez?97 I O?s A??pc??M JئbR?ń0?1 3n?B ͺ??M T?!J V?ӧ?p?ɬ u??VI?A uu I E獞 b??HFĺb C??lk?p G?4?yU K?/y o??q ڗou?i ΰ?K?p??S Z?6?tNj?Ѻ J??r Ғ?0xҿ U?zG 1Nq neŝb ml?Ӻ mArν FZ O?F Wb8 _?I?qp T1?Dt j?OvSe j?(?Gڔu?l q_ cR er s?M6 C?t?NjF?Q5 OZ9m g?H Case Document Page27 of Case Document Filed Page of Case Document Filed Page of C2grdau4 Berke cross juror herself had said in response to a question about other litigation that she had been involved in a personal i njury case Thats what I referring to Right My question to you is would that information as background if Susan Brune came to you and told you that we not only found a Catherine Conrad who was a suspended lawyer but we also found a Catherine Conrad who was involved in a personal injury lawsuit is that something that you would have wanted to know at the time A Im not sure understand We knew that Catherine Conrad had said that she was involved in a personal injury suit We knew that from her answers in the voir dire If yo saw a piece of paper that connected Catherine Conrad who was Juror No and Catherine Conrad who was a personal injury lawyer and a suspended attorney who had the same address as the person involved in the lawsuit would that have been of in erest to you A You know I really am not omfortable speculating What I can tell you is I told you what I knew I did not believe that the person who had been a disbarred lawyer could have been or was this Juror No based on what I knew That really all I can tell you So your answer to my direct question is that you can answer the question A Well I would object if I was sitting over there but Im SOUTH RN DISTRICT REPORTERS P.C Case Document Page28 of Case Document Filed Page of Case Document Filed Page of C2grdau4 Berke cross not Youre asking me to speculate Im just not comfortable speculating think that on your bucket list to move up there right A No not at all Im just not comfortable speculating Isnt more informatio better than less when you are trying to imake an assessment of possible juror misconduct and a connection in names between a person who may be acting as an imp,oster and a juror on trial MR SHECHTMAN Judge Im going to object on Mr Berkes behalf THE COURT Overruled A I wasnt making that assessment I didnt ask you if you were making that assessment Is mor information better when you are trying to find out whether somebody who shares the same name as a suspended at torney is the juror Yes or no A I going to tell you Mr Okula it sounds like youre arguing with me It depends on what that information is All I c,an tell you is what I know from my personal experience From what I heard it did not occur to me for a moment that there was any issue with Juror land the suspended lawyer at the time Thats all I can tell you I can speculate or answer your argument I really can What is the type of investigation youd do if you found a SOUTHERN DISTRICT REPORTERS Case Document Page29 of Case Document Filed Page of Case Document Filed Page of C2grdau4 Berke cross suspended attorney named Catherine Con rad the same name as Juror No A I was never in a pos i tion where I needed to or had to make decisions about the investigation I don understand that Im here as an expert itness I can tell you as a matter of fact what I knew what I was to ld the conversations I had but I really can go beyond that Mr Okula You re not going to answer my question Youve hired private investigators many times as a lawyer right A I have Are you unwilling to answer the question that I just asked about what steps you ould take if you learned that Catherine Conrad a suspended attorney was in existence and you knew you had Catherine Conrad sitting in seat number Are you not going to answer that question A What you are ignoring is its such a far-fetched idea that any citizen would come in here and lie to be a juror I have never experienced it as a practicing lawyer It never occurred to me it happened in this trial and it not something I have ever thought about it When Ive used investigators it because Im defending someone in a criminal case or civil case and I want to look at facts Youre asking me to speculate and give opinions about an experience Ive never had MR OKULA Judge I have no further questions for Mr Berke SOUTHERN DISTRICT REPORTERS e.c Case Document Page30 of Case Document Filed Page of Case Document Filed Page of C2grdau4 Berke redirect MR SHECHTMAN I do THE COURT Mr Shechtman REDIRECT EXAMINATION BY MR SHECHTMAN You were told by Ms Brune that there was a suspended lawyer with the name Catherine Conrad which was the same as Juror No A That is correct And you didn do any further investigation A I did not Thats because you agreed with her that based on the voir dire this couldnt be the same person A Exactly MR SHECHTMAN No further questions THE COURT Anything further MR OKULA No your Honor Thank you THE COURT Mr Berke youre excused Yo may step down THE WITNESS Thank you Judge Witness excused THE COURT Youre still talking as fast as ever THE WITNESS I made a promise I wanted to eep THE COURT Mr Shechtman does the defendant Parse have any additional witnesses to ca MR SHECHTMAN No your Honor SOUTHERN DISTRICT REPORTERS P.C Case Document Page31 of Case Document Filed Page of Case Document Filed Page of C2grdau4 THE COURT Does the defendant Parse rest MR SHECHTMAN We do your Honor THE COURT Does any defendant have any additional evidence to offer to the Court on this hearing MS McCARTHY Not from Mr Eield your Honor MR ROTERT We do not your Honor MR SKLA.RSKY No your Honor THE COURT Does the government have anything further MR OKULA Thank you your Honor We do not THE COURT The government rests MR OKULA We do indeed your Honor THE COURT I would like to get some post-hearing bri,efing from the parties It seems to me that the simplest ay to do it would be to have the parties submit simultaneous briefs and then I give you a very short responsive brief if you felt it was necessary to respond to something that the other sid1e said We fix a schedule in a moment Obviously in the briefs I want the parties to provide the Court with what they believe the strongest results are of this evidentiary hearing Second in the post-hearing briefs I like the question of whether the attorneys for Brune Richard involved in this matter would have satisfied their ethical obligations if they failed to disclose the contents of the July letter and their complete investigation into Juror No SOUTHERN DISTRICT REPORTERS P.C Case Document Page32 of Case Document Filed Page of Case Document Filed Page of C2g rdau4 Finally in the past I asked the parties to brief what they believed might occur depending upon various rulings by the Court It seems to me that one scenario was left out You are not to conclude from this request that this is the Courts thinking but I want to receive briefing on the following que,stion If this Court were to grant the defendants motion for a new trial and also conclude that the defendant Parse had waived what would be the shake out of that in terms of Parses ability to take that issue to the Court of Appeals at the same time that the government would be taking the underlying issue on motion for a new trial to the Court of Appeals as is the government righ under a specific statute I have pre.liminarily looked at the matter but I appreciate your wisdom on the uestion Are there any other issues that counsel want to raise Mr Shechtman MR SHECHTMAN Can I try to sharpen that last question THE COURT Go ahead certainly MR SHECHTMA I take it the notion would be could Mr Parse take that appeal interlocutorily before sentencing THE COURT Bingo MR SHECHTMAN The af er one is easy So it really an interlocutory SOUTRERN DISTRICT REPORTERS P.C Case Document Page33 of Case Document Filed Page of Case Document Filed Page of C2grdau4 THE COURT Right In the end whateve happens with re pect to these matters befo the Court I think that it is in everyone interest that they travel together wherever they going Are there any other matters at counse want to raise at this time before we fix a schedule for the submission of these briefs MR OKULA No your Honor I was just going to sug gest most respectfully that perhaps if counsel for the gov,errunent and defendants could confer momentarily about a proposed schedule then we could propose one to the Court THE COURT Thats fine with me MR GAIR Judge Mr Okula is on vacation next week so I like to suggest one week MR SHECHTMAN Judge if we might be heard THE COURT Go ahead MR SHECHTMAN want very much to accommodate Mr Okulas vacation seriously He has suggested three weeks I start a trial on Tuesday a month long trial I fully appreciate that I have to write this brief on weekends and I will but an extra week would be very helpful If we could get a m:rnth that would be grand THE COURT Fine You ve got it Do you want to file your briefs on March your initial briefs or do you want Mar-ch SOUTHERN DISTRICT REPORTERS P.C Case Document Page34 of Case Document Filed Page of Case Document Filed Page of C2grdau4 MR SHECHTMAN Id be happy if we could have March 19th so we cant get that extra weekend THE COURT Ill give you until the 23rd if you want MR OKULA Thats fine It separates it from St Patricks Day more Judge THE COURT All right March for the initial briefs Why dont you provide your responses by April 5th MR OKULA Thats fine Judge THE COURT Will that work MR SHECHTMAN Yes THE COURT I ll take the matter then on submission Is there anything else that counsel want to raise MR OKULA Not other than our thanks Judge THE COURT My thanks to all of you for conducting the hear ing in the customary professiona and efficient manne Certainly there are some aspects of it that have been memorable and that an understatement Have a good afternoon Adjourned SOUTHERN DISTRICT REPORTERS P.C Case Document Page35 of Case Document Filed Page of Case Document Filed Page of INDEX OF EXAMINATION Examination of SUSAN BRUNE Direct By Ms Davis Cross By Mr Shechtman Redirect By Mr Davis Recross By Mr Schectman Redirect By Ms Davis LAU RA EDELSTEIN Direct By Mr Okula Cross By Mr Schectman Redirect By Mr Okula PAUL SCHOEMAN Direct By Mr Shechtman Cross By Mr Okula Redirect By Mr She chtman BARRY BERKE Direct By Mr Shechtman Cross By Mr Okula Redirect By Mr Shechtrnan Page SOUTHERN DISTRICT REPORTERS P.C Case Document Page36 of Case Document Filed Page of Case Document Filed Page of l4 Exhibit No Exhibit GOVERNME EXHIBITS DEFE DANT EXHIBITS Received PMD and PMD Received SOUTHER DISTRICT REPORTERS Mstim Page A.D.3d N.Y.S.2d N.Y Slip Op Cite as A.D.3d N.Y.S.2d Supreme Court Appellate-706 Division First Department New York Matter-541 Catherine CONRAD a suspended attorney Departmental Disciplinary Committee for the First Judicial Department Petitioner Catherine Conrad Respondent Dec Background Departmental Disciplinary Committee instituted disciplinary proceedings against-526 attorney The Su-preme Court Appellate Division N.Y.S.2d suspended attorney from practice of law for failure to respond to requests made by Committee pursuant to its investigations of complaints made against her Committee subsequently moved for order suspending attorney on ground that she suffered-637 from disability by reason of physical or mental infirmity or illness Attorney cross-moved for order converting her current suspension to med-ical suspension nunc pro tunc and order vacating-1133 suspension and reinstating her to practice law Holdings The Supreme Court Appellate Division held-360 that attorneys immediate reinstatement was not warranted and attorney was required to prove her fitness-824 to be reinstated Suspension ordered West Headnotes Jll Attorney and Client Attorney and Client The Office-638 of Attorney Discipline Reinstatement Most Cited Cases Immediate reinstatement-692 of suspended attorney to practice of law was not warranted alcohol dependence ren-dered attorney unfit to practice law and attorney acknowledged during her deposition that her failure to cooperate and her underlying conduct was related to alcohol dependency N.Y.Ct.Rules fl IL Attorney and Client Attorney and Client The Office-638 of Attorney Discipline Reinstatement Most Cited Cases Attorney who was suspended from practice of law due to alcohol dependence was required to prove her fit-ness to be reinstated and that burden-1030 could not be satisfied by attorneys own self-assessment-651 rather evaluation by Thomson Reuters No Claim to Orig US Gov Works PMD Case Document Page37 of Case Document Filed Page of Case Document Filed Page of lestliML A.D.Jd N.Y.S.2d Slip Op Cite as A.D.3d N.Y.S.2d Supreme Coun Appellate Division First Depanment New York In the Matter of Catherine CONRAD a suspended attorney Departmental Disciplinary Co mmittee for the First Judicial Department Petitioner Catherine Conrad Respondent Dec Page Background Departmenta Disciplinary Committee instituted disciplinary proceedings against attorney The Su preme Cour1 Appe ll ate Division A.D.3d N.Y.S.2d suspended attorney from practice of law for failure to n::spond to requests made by Committee pursuant to its investigations of complaints made against he Committee Subsequently moved for order suspending attorney on ground that she suffered from disability by eason of physical mental infirmity or Jllness Attorney cross-moved for orde converting her current suspension to med ical suspension nunc pro tune and order vacating suspension and reinstating he to practice of aw dings The Supreme Court Appellate Division held that ill attorney immediate reinstatement was not warranted and ill attorney was required to prove her fitness to be rei stated Suspen:sion ordered West Headnotes ill Attorney a Client 4S Attorney and Client The Office of Attorney ill Discip ine ik6 Reiostatement Most Cited Cases Immed i iate reinstatement of suspended attorney to practice of law was not warranted alcohol dependence ren dered attomiey unfit lo practice law and attorney acknowledged du ing her deposition that her failure to cooperate and he underly i ng conduct was re ated alcohol dependency N.Y.C t.Ru es ill Attorney and li 4S 6J Attorney and Client The Office of Attorney 1l!Q Discipline ik6 I Reinstatement Most Cited Cases Attome,y who was suspended from practice of law due to her a cohol dependence was required to prove her fit ness to be r,einstated and that burden could not be satisfied by attorneys own se f-assessment rather eva uation by I Thomson Reuters No Claim to Orig US Gov Works PMD Page A.D.3d N.Y.S.2d N.Y Slip Op Cite as A.D.3d N.Y.S.2d mental health provider attesting to attorneys current fitness to re-commence practice of law was necessary N.Y.Ct.Rules Alan Friedberg Chief Counsel Departmental Disciplinary Committee New York Kevin E.F OSullivan of counsel for petitioner Victor Serby for respondent DAVID SAXE Justice Presiding DAVID FRIEDMAN JOHN SWEENY JR EUGENE NARDELLI JAMES McGUIRE Justices PER CURIAM Respondent Catherine Conrad was admitted-540 the practice of law in the State of New York by the Se-cond Judicial Department on January and at all times-486 relevant to this proceeding maintained an office for the practice of law within-694 the First Judicial Department In a previous order dated December this Court suspended respondent from-500 the practice of law for fail-ure to respond to requests made by the Departmental Disciplinary Committee pursuant to its investigation of two complaints made against her NYCRR After receiving a response respondent six months later seeking an opportunity to respond to-6 the complaints the Committee conducted an investigation Based upon re-spondents admitted problem with-722 alcohol dependency which she acknowledged was connected to her failure to cooperate and the underlying conduct the Committee obtained a psychiatric evaluation of respondent in November and-9 a subsequent re-evaluation in May The psychiatrist determined that respondents prognosis is good did not go as far as to assert that she is now fit to re-commence the practice law The Departmental Disciplinary Committee now moves for an order suspending-1172 respondent from the practice of law on the ground that she suffers from a disability reason of physical or mental infirmity or illness NY-CRR In her cross motion respondent seeks to convert current suspension to a medical suspension nunc pro tunc but further seeks an order vacating the suspension and reinstating her to the practice of law due to her year-long sobriety The Committees motion and the first branch of respondents cross motion are granted to the extent that the prior finding of non-cooperation is vacated and an order of suspension based upon the attorneys medical dis-ability is granted nunc pro tunc see Matter of Kaplan A.D.3d N.Y.S.2d Matter of Fusco A.D.3d N.Y.S.2d However that branch of respondents cross motion seeking immediate reinstatement is denied at this time The cross motion itself concedes existence-401 alcohol dependence rendering her unfit to practice law additionally she acknowledged during her deposition that her failure to cooperate and her underlying conduct was related to alcohol dependency To support her cross motion respondent implies that the examining psychiatrist failed to satisfy an obligation establish-1054 that continues to be unfit to resume her practice However to be enti-tled to reinstatement since-416 the initial infirmity has been conceded it is respondent who must prove her fitness to be reinstated see NYCRR and that burden is not satisfied here by her own self-assessment see Matter of Stewart A.D.3d N.Y.S.2d The branch of respondents cross motion seeking reinstatement the practice of law therefore must be denied at this time without prejudice to a further application supported-1124 by an evaluation by a mental health provider attesting current fitness to re-commence the practice of law see Matter ofSupino A.D.3d N.Y.S.2d Accordingly the Committees motion and respondents cross motion-1142 should be granted the extent that the pri-or orders finding of non-cooperation is vacated and respondent is suspended from-625 the practice of law for an indefi Thomson Reuters No Claim to Orig US Gov Works Case Document Page38 of Case Document Filed Page of Case Document Filed Page of A.D.3d Y.S.2d Slip Op Cite as A.D.3d N.Y.S.2d Page2 menta health provider attesting to attorney current fitness to re-commence practice of law was necessary Y.Ct.Rul1es A an Friedberg Chief Counse Departmental Disciplinary Committee New York Kevin E.F OSulivan of counsel for petitioner Victor for respondent DA YID SAXE Justice Presiding DAVID FRTEDMAN JOHN SWEENY JR EUGENE NARDELLI JAMES McGUIRE Justices PERCURJAM Respondent Catherine Conrad was admitted to the practice of aw in the State ofNew Yo by the Se cond Judicial Department on January and at all times relevant to this proceeding has maintained an office for the pracliice oflawwithin the FirstJudicial Department In a pre:vious order dated December this Court suspended respondent from the practice of law for fail ure to respond to requests made by the Departmental Disciplinary Committee pursuant to its investigation of two complai nt imade against her NYCRR i After re ceiving a response by re spondent six months later seeking an opportunity to respond to the comp a in ts the Committee conducted an investigation Based upo,n re spondents admitted problem wit alcohol dependency which she acknow edged was connected to her failu1re to cooperate aind the underlying conduct the Committee obtained a psychiatric eva lu ation of respondent in November and a subsequent re-evaluation in May The psychiatrist detennined that respondents ognosis is good but did not go as far as to assert that she is now fi to re-commence the practice of law The Departmental Disciplinary Committee now moves fo an order suspending respondent from the practice of law on the ground that she suffers from a disability by reason of physical or mental infirmity or illness NY CRR Io her cross motion respondent seeks to convert the current suspension to a medical suspe,nsion nunc pro tu;nc but furthe seeks an order vacating the suspension and reinstating her to the practice of law due to her year ong sob ri ety Co,mmittees motion and the first branch of respondents cross motion are granted to the extent thut the prior finding of non-cooperation is vacated and an der of suspensio based upon the attorneys medical dis ability i granted nunc pro tune see Matter fKaplan A.D 3d S.2d Matter Fi1s A.D.3d S:J N.Y.S.2d llJa1 However that branch of respondents cross motion seeki imm ediate reinstatement is denied at this time The c1ross motion i tse concedes the existence of the alcoho dependence endering her unfit to practice aw additionally she acknow edged during her deposition that her failure to coope ate and her underlying conduct was related to a cohol dependency To support her cross motion respondent imp lie that the exam i ning psychiatrist failed to satisfy ao obligation to establish ha she continues to be unfit to resume her practice However to be enti tled to einstatement si ce the initial infinnity has been conceded it is espondent must prove her fitness to be reinstated see NYCRR and that burden is not satisfied here by her own self-assessment see Maller Stewart A.D.3d N.Y.S.2d The branch of responde ts cross motion seeking reinstatement to the actice of law therefore must be denied at this time without prejudice to a further applicat i on support1!d by an evalua ic,n by a mental health provider attesti to her current fitness to re-commence the practice of law see Matter of upin A D.3d 2d According the Committees motion and respondents oss motion shou ld be gran ted to the exten that th,e pri or orders fonding of no cooperation is vacated and respondent is suspended from the practice of law for an i 1deft Thomson Re ut No Claim to Orig US Gov Wo ks Page A.D.3d N.Y.S.2d N.Y Slip Op Cite as A.D.3d N.Y.S.2d nite period until further order-541 of this Court nunc pro tunc to December and the branch of respondents cross motion seeking reinstatement-442 the practice of should be denied without prejudice to a further motion for the same relief supported-1124 by an experts evaluation attesting to her present fitness-967 to practice law Respondent-2441 suspended from-500 the practice of law in State-290 of New York for an indefinite period until further order-416 of this Court effective nunc pro tunc to December Cross-817 motion denied without prejudice to a fur-ther motion as indicated much the Opinion Per Curiam and order-416 of this Court entered on December incorporating a finding of non-cooperation vacated-1212 as indicated All concur N.Y.A.D In re Conrad A.D.3d N.Y.S.2d N.Y Slip Op END OF DOCUMENT Thomson Reuters No Claim to Orig US Gov Works Case Document Page39 of Case Document Filed Page of Case Document Filed Page of A.D.3d 2d Slip Op Cite as SOI A.D.3d N.Y.S.2d P;age3 nite period until further order of this Court nunc pro tune to December and the branch of respondent cross motion seeking reinstatement to the practice of law should be denied without prejudice to a further motio,n for the same rel ief supported by an perts evaluation attesting to her present fitness to practice law Respondent uspended rrom the practice of law in the State New York for an indefinite period until further rder ofthi i Court effective nunc pro tune to December Cross motion denied without prejudice to a fur ther motion as ind i cated So much of the Opinion Per uriam and rder of this Court entered on December incorporating a finding of non cooperation vacated as indicated All concur A.D I Dept In re Conrad A.D 3d 2d N.Y Slip Op END OF DOCUMENT Thomson Reuters No Claim to Orig US Gov Works Case Document Filed Page of Case Document Page40 of Case Document Filed Page of Case Document Filed Page of IN THE UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK UNITED STATES OF AMERICA Plaintiff vs PAUL DAUGERDAS et al Defendants Case No S3 Cr WHP The Honorable William Pauley I DECLARATION OF STEPHEN GILLERS I Stephen Gillers under penalty of perjury declare as follows Qualifications My name is Stephen Gillers I am a law professor at New York University School of Law where I have taught the rules and law governing lawyers and judges legal ethics regularly since I am author of a leading casebook in the field Regulation of Lawyers Problems of Law and Ethics th ed I have spoken hundreds of times on the subject of legal ethics at state and local bar associations nationwide and at American Bar Association meetings at state and federal judicial conferences and at law firms and corporate law offices in the United States and abroad For more than a decade I have been and remain active in the legal ethics work of the ABAs Center for Professional Responsibility spending hundreds of hours yearly on this work Most recently I have been a member of the ABAs Ethics Commission a three and a half year project to review the rules of ethics governing lawyers in light of globalization and advance in technology I have written widely in the area including for law journals and the law and popular press Legal ethics is the primary focus of my academic research My resume is annexed as Exhibit A Question Addressed And Summary Of Conclusion I have been asked to address the question the Court posed on February namely whether the attorneys for Brune Richard involved in this matter would have satisfied their ethical obligations if they failed to disclose the contents of the July letter and their complete investigation into Juror No The question does not specify a time frame for any possible failure to disclose I have been asked therefore to address any disclosure duty in March May and July I have not been asked to address and I am not addressing the Case Document Filed Page of Case Document Page41 of Case Document Filed Page of Case Document Filed Page of separate question of whether the motion for a new trial based on the conduct of juror Conrad is meritorious That is not a question oflegal ethics In summary my opinion is that i the Brune Richard lawyers had no ethical obligation to disclose the results of their March research in March or the results of their March and May research in May ii the Brune Richard lawyers had no ethical obligation to disclose the existence or the results of their March and May research in their July motion for a new trial or during the July conference call with the Court and i nothing the Brune Richard lawyers said or did in the July memorandum or the July conference call violated their ethical obligations Factual Assumptions I have read the following documents Catherine Conrads letter to the Government dated May Defendants Brief in Support of a New Trial dated July Transcript of Telephone Conference with Court dated July Letter from Susan Brune dated July Letter from Susan Brune dated July Affidavit of Susan Brune with Exhibits including Catherine Conrads jury questionnaire and voir dire responses dated September Governments Waiver Brief dated October Defendant Parses Waiver Brief dated October and Transcript of Hearing dated February and My opinion is based on the cited documents and I assume as true the facts that emerge from the sworn testimony at the hearing held February and I note that the testimony at that hearing was subject to robust adverse direct examination by Government attorneys General Observations And Legal Standards The New York Rules of Professional Conduct hereafter New York Rules specifically identify when a lawyer is obligated to disclose information to the Court The New York Rules are incorporated in the local rules of this Court See Southern District of New York Local Rule Relevant here is New York Rule a and which provides a A lawyer shall not knowingly make a false statement of fact or law to a tribunal or fail to correct a false statement of material fact or law previously Case Document Filed Page of Case Document Page42 of Case Document Filed Page of Case Document Filed Page of made to the tribunal by the lawyer fail to disclose to the tribunal controlling legal authority known to the lawyer to be directly adverse to the position of the client and not disclosed by opposing counsel or offer or use evidence that the lawyer knows to be false If a lawyer the lawyers client or a witness called by the lawyer has offered material evidence and the lawyer comes to know of its falsity the lawyer shall take reasonable remedial measures including if necessary disclosure to the tribunal A lawyer may refuse to offer evidence other than the testimony of a defendant in a criminal matter that the lawyer reasonably believes is false A lawyer who represents a client before a tribunal and who knows that a person intends to engage is engaging or has engaged in criminal or fraudulent conduct related to the proceeding shall take reasonable remedial measures including if necessary disclosure to the tribunal Also relevant is New York Rule which provides A lawyer shall reveal promptly to the court improper conduct by a member of the venire or a juror or by another toward a member of the venire or a juror or a member of his or her family of which the lawyer knowledge Each of these rules requires knowledge on the part of the lawyer and that knowledge must be actual knowledge The standard is a subjective one New York Rule contains this definition Knowingly known know or knows denotes actual knowledge of the fact in question A persons knowledge may be inferred from circumstances A leading Second Circuit case addresses the knowledge requirement In Doe Federal Grievance Committee F.2d nd Cir a district judge in Connecticut disciplined a lawyer who did not report his belief that an opposing witness had lied in a deposition The Connecticut and the New York rule at the time required a lawyer who receives information clearly establishing that.a person other than his client has perpetrated a fraud upon a tribunal I have also been asked to address the potential relevance of Rule of the New York Rules which says that a lawyer or law firm shall not engage in conduct that is prejudicial to the administration of justice This rule should not be read to expand Rule mens rea requirement of knowledge When the New York Rules of Professional Conduct were adopted to replace the Code of Professional Responsibility the courts chose the standard of knowledge the same standard as in the ABA Model Rules to replace clearly established which the Second Circuit had already interpreted to mean Hknowledge see i,i infra When a specific and considered rufe requires knowledge another and general rute should not be interpreted to impose a duty based on a lower standard There would be obvious notice and fairness interests implicated in doing so Case Document Filed Page of Case Document Page43 of Case Document Filed Page of Case Document Filed Page of shall promptly reveal the fraud to the tribunal Id at emphasis added quoting DR of the Code of Professional Responsibility The district judge concluded that Doe had information clearly establishing deposition perjury because he had clear and convincing evidence of the witnes perjury Id Doe himself testified that he believed that the witness had lied at the deposition Id at Without rejecting the lower courts factual finding that Doe had clear and convincing evidence of fraud on the tribunal the Doe Court held that clearly establishing required more It held that knowledge is required before the disclosure duty arises Id at Clear and convincing proof which is an objective test did not trigger a reporting duty That a lawyer strongly suspected fraud on the tribunal a subjective test was also insufficient Id at As the Court noted Our experience indicates that if any standard less than actual knowledge was adopted in this context i DR serious consequences might follow If attorneys were bound as part of their ethical duties to report to the court each time they strongly suspected that a witness lied courts would be inundated with such reports Court dockets would quickly become overburdened with conducting these collateral proceedings which would necessarily hold up the ultimate disposition of the underlying action We do not believe that the Codes drafters intended to throw the court system into such a morass Instead it seems that the only reasonable conclusion is that the drafters intended disclosure of only that information which the attorney reasonably knows to be a fact and which when combined with other facts in his knowledge would clearly establish the existence of a fraud on the tribunal To interpret the rule to mean otherwise would be to require attorneys to disclose mere suspicions of fraud which are based upon incomplete information or information which may fall short of clearly establishing the existence of a fraud We do not suggest however that by requiring that the attorney have actual knowledge of a fraud before he is bound to disclose it he must wait until he has proof beyond a moral certainty that fraud has been committed Rather we simply conclude that he must clearly know rather than suspect that a fraud on the court has been committed before he brings this knowledge to the courts attention Id Discipline was reversed.2 In an adversary legal system like ours mandatory disclosure rules which operate as a check on the premises of that system receive scrutiny and debate from the courts and the bar over their proper scope Furthermore American jurisdictions do not all agree on how to reconcile competing interests those of the client the tribunal and the adversary New York like most but not all jurisdictions has adopted Rules a and in identical or substantially I was the expert for Doe in the Connecticut disciplinary hearing Case Document Filed Page of Case Document Page1 of Case Document Filed Page of Case Document Filed Page of identical form and it has also adopted Rule These rules mandate disclosure of certain information to a court even if disclosure may harm the client and for Rule explicitly and Rule implicitly even if the information is protected as confidential client information See New York Rule But the duty arises only if the lawyer has actual knowledge A second decision also recognizes the delicate balance between the adversary system and duties to a litigation opponent or the tribunal In re Pennie Edmonds LLP F.3d nd Cir was an appeal of Rule sanctions When a party seeks Rule sanctions the target of the motion has a 21-day safe harbor within which to withdraw or correct the challenged submission If it does not the mental state applicable to liability for Rule sanctions is objective unreasonableness Id at When however a court initiates a sanction proceeding as by order to show cause there is no safe harbor Because the lawyer cannot take it back Pennie Edmonds holds that the required mental state is bad faith a subjective test like actual knowledge The Court explained that any regime of sanctions for a lawyers role in the course of representing a client inevitably has implications for the functioning of the adversary system Id In support of its holding the Court cited the interest of"a vigorous adversary system Id at In sum from the perspective of a lawyers ethical obligations the premises of our vigorous adversary system control unless the situation is governed by an express exception in ethics rules statutes judicial decisions or other law These exceptions which are written with appreciation of the need for precision give lawyers notice of the duties that override their adversarial obligations As the Supreme Court wrote in a different context in Polk County Dodson U.S Within the context of our legal system the duties of a defense lawyer are those of a personal counselor and advocate It is often said that lawyers are officers of the court But the Courts of Appeals are agreed that a lawyer representing a client is not by virtue of being an officer of the court a state actor under color of state law within the meaning of In our system a defense lawyer characteristically opposes the designated representatives of the State The system assumes that adversarial testing will ultimately advance the public interest in truth and fairness But it posits that a defense lawyer best serves the public not by acting on behalf of the State or in concert with it but rather by advancing the undivided interests of his client Id at footnotes omitted The question I turn to now is whether lawyers from Brune Richard LLP acted in violation of any of the exceptions to their duties in the adversary system by not disclosing certain information prior to their July letter to the Court See kdam.pdf last visited April The ABA Model Rules do not contain Rule In my view its mandate appears duplicative of a lawyers obligations under New York and Model Rule Case Document Filed Page of Case Document Page2 of Case Document Filed Page of Case Document Filed Page of DISCUSSION Events in March The Brune Richard lawyers had no duty to reveal to the court Trzaskomas discovery of a court order suspending a Bronx lawyer with the same name as juror Conrad None of the lawyers had knowledge that the Bronx lawyer and juror Conrad were the same person None even had clear and convincing evidence or strongly suspected the objective and subjective tests Doe rejected they were the same person Trzaskoma and Brune who was told of the discovery though not shown the suspension order that Trzaskoma discovered but did not print resolved to await juror Conrads voir dire answers Those answers including juror Conrads Bronxville address directly contradicted any identity between the juror and the lawyer This was in fact compelling If the sworn answers were true the juror was not the lawyer A contrary conclusion would require the lawyers to believe that a suspended lawyer would repeatedly perjure herself in federal court in order to sit on a jury Events in May Juror Conrad gave the Court a note asking if the jury was going to be instructed on vicarious liability and respondeat superior The contents of the note led Trzaskoma assisted by others at the firm to take another look at the issue the next day The suspension order and an earlier suspension order from were found Both identified a Bronx lawyer A paralegal discovered the Westlaw profile and forwarded it to Trzaskoma in an email that highlighted selected information After seeing the selected information but before reviewing the entire profile Trzaskoma wrote Jesus I do think its her but then after reviewing the entire profile changed her mind in light of the contradiction between the jurors voir dire answers and the limited information about lawyer Conrad different levels of education different addresses etc In addition Trzaskoma did not believe that the given age of the Bronx lawyer agreed with the apparent age of juror Conrad Trzaskoma discussed the issue with Brune and Edelstein later in the day All three concluded that juror Conrad was not the suspended lawyer Co-counsel with whom the matter was thereafter informally discussed thought the question not worth pursuing Because the Brune Richard lawyers did not believe let alone have actual knowledge that the juror and the suspended lawyer were the same person they did not present their information to the Court At least five lawyers based on what they had seen or been told reached this conclusion At this time as earlier no Brune Richard lawyer had actual knowledge that juror Conrad was lawyer Conrad Actual knowledge is the mental state that creates the disclosure duty underNew York Rules and There was no ethical duty to reveal a suspicion even a strong suspicion Any notion that silence was intended to preserve undetected a basis for a new trial motion in the event of conviction is belied by the lawyers actions There was no effort to seek a new Case Document Filed Page of Case Document Page3 of Case Document Filed Page of Case Document Filed Page of trial based on juror misconduct nor did the firm give any consideration to that possibility from the time of the verdict and until after receipt on June of juror Conrads letter to the prosecutor and the ensuing investigation Events in July The July Memorandum of Law The memorandum does not reference the discoveries in March or May There was no duty to do so I accept that the Brune Richard lawyers could anticipate a possible waiver claim and could see how the government could cite the information that they had in March and May to bolster that claim But the lawyer ethics rules impose no general duty to volunteer information that an opponent might use to support its argument and the exceptions in the rules cited do not create one specifically To put it otherwise in order to find a duty to reveal there must be a source of the duty Professional conduct rules do impose duties to reveal but they do so in a way that gives lawyers notice of their requirements No rule required disclosure of the information discovered in March or May Any such rule would have to specify the information required to be revealed and the level of confidence in the accuracy of that information Here the rules imposing a duty to disclose to the tribunal are Rules and These rules use actual knowledge as the level of confidence required for the duty to disclosure The information the lawyers had about the material they had gathered in March and May negates actual knowledge the actions of the lawyers are consistent only with a conclusion of a lack of actual knowledge In sum only if the lawyers had had actual knowledge in March or May would they have had to reveal that in July and they did not have actual knowledge In certain places the memorandum contains statements that are apparently alleged to imply that the Brune Richard lawyers did not have information about juror Conrads identity prior to June when they received a copy of her letter to the government Because the premises of the adversary system are central here instruction from the contiguous world of Rule is again apt The primary purpose of Rule is to deter baseless court filings but this goal must be considered in light of the fact that in an adversary system of litigation the essence of the lawyers task is to present issues of facts and law as favorably as fairly possible in support of the clients claim See United Nat Ins Co Latex Corp F.3d th Cir Therefore judges should impose sanctions on lawyers for their mode of advocacy only in the most egregious situations lest lawyers be deterred from vigorous representation of their clients Id citing Schlaifer Nance Co Inc Estates of Warhol F.3d nd Cir Desert Outdoor Advertising Inc City of Oakland WL at N.D Cal Apr Case Document Filed Page of Case Document Page4 of Case Document Filed Page of Case Document Filed Page of The lawyers wrote The tone and content of the letter which were in sharp contrast to the image Conrad had projected through the trial always head down taking notes caused defendants concern and prompted them to investigate Memorandum at And they later wrote This is not a situation where Conrad disclosed sufficient information to warrant inquiry by counsel Defendants had no basis to inquire whether Conrad was lying in response to each of the Courts questions Memorandum at internal citation and parenthetical quote omitted In my opinion these statements should be seen as true not merely literally true in a hypertechnical or crabbed sense of the word but true as reasonably read They do not become untrue because a reader may draw a false inference that the lawyers did not intend The jurors letter did cause concern and did prompt an investigation as the first quotation in the memorandum states That statement does not disclaim a prior search whether that prior search is called an investigation or something else I believe that focus on the word investigate which is not a term of art would be misguided here The sentence correctly describes what the letter caused the lawyers to do The second quote focuses on the voir dire in March and is also true as reasonably read The lawyers had concluded that the order suspending a lawyer with the same name as juror Conrad was not a basis for an inquiry into the truthfulness of juror Conrads answers Just the opposite Her voir dire answers in their view dispelled reason for inquiry A suspended lawyer would not lie under oath at voir dire they reasoned given the consequences to the lawyers ability ever to regain admission to practice In my opinion this conclusion was compelling It is also my opinion that the July memorandum taken as a whole does not show a knowing violation of the provisions of Rule It is true that even when a lawyer does not have a duty to speak if she does speak she may not knowingly misrepresent to a court or adversary But an unintended inference is not a misrepresentation The lack of disclaimer language in the memorandums true statements-the fact that the lawyers while focused on the new trial motion did not anticipate what a reader might infer and what they did not mean to imply is not an action that can support a finding of unethical behavior under the New York Rules The lawyers understandably now wish they had not included these passages as written Greater focus might have led them to anticipate how others might read them differently than intended and to omit them they were unnecessary to the motion ephrase them or add the history of their earlier research The July Telephone Conference In the July telephone conference the Court said that it wanted to ascertain from each of the defendants whether any of them were aware of the disturbing things that have been revealed by defense on this motion concerning Juror Number One Conrad The Court invited a response on the call or via letter TI7.askomas response was TI7.askoma We were not aware of the facts that have come to light and I think if your Honor deems it appropriate we can submit a letter Case Document Filed Page of Case Document Page5 of Case Document Filed Page of Case Document Filed Page of The Court All right I do Because I would like to make certain that any defendant who had a jury consultant on the matter also make certain that the jury consultant did not have any information on Juror Number One Trzaskoma The only thing additional that I would offer your Honor is-well we can address this in a letter I think its more appropriate This colloquy must be read in its rather brief entirety that is as a whole Trzaskomas statement implies that the answer to the Courts question from Brune Richard would not be that it had no information at all It would not require a letter to say only that It is instead clear that Trzakoma had something additional to offer and chose to accept the Courts invitation to say it in a letter which was done on July in a fashion that adequately disclosed the firms earlier research and internal communications on the subject The general rule is that statements must be taken in context and that related parts of a document must be taken together That a hasty reader might take the first paragraph out of context is not in the present circumstances enough to brand the memorandum as false The memorandum must be read as a whole Young City of Providence F.3d st Cir Rule appeal citations omitted CONCLUSION For the reasons stated my opinion is that the actions of the Brune Richard lawyers throughout the trial and in the months following with respect to the information they had obtained about Catherine Comad were entirely consistent with their responsibilities under the lawyer ethics rules Case Document Filed Page of Case Document Page6 of Case Document Filed Page of Case Document Filed Page of EXHIBIT A Case Document Filed Page of Case Document Page7 of Case Document Filed Page of Case Document Filed Page of STEPHEN GILLERS Elihu Root Professor of Law vice dean New York University School of Law Washington Square South New York NY tel fax stephen.gillers nyu.edu Stephen Gillers January AREAS OF TEACHING Regulation of Lawyers and Professional Responsibility Evidence Law and Literature Media Law PRIOR COURSES PUBLICATIONS Civil Procedure Agency Advocacy of Civil Claims Federal Courts BOOKS AND ANTHOLOGIES Regulation of Lawyers Problems of Law and Ethics Aspen Law Business 9th ed April The first edition of this popular casebook was published in Norman Dorsen was a co-author on the first two editions Stephen Gillers is the sole author of the third through ninth editions The first four editions were published by Little Brown Co which then sold its law book publishing operation to Aspen Regulation of Lawyers Statutes and Standards with Roy Simon and Andrew Perlman Aspen Law Business This is a compilation with editorial comment The first volume was published in Updated versions have been published annually thereafter As of the edition Andrew Perlman has joined as a co-editor Regulation of the Legal Profession Aspen This is page book in the Aspen Essentials series explains ethics rules and laws governjng American lawyers and judges Getting Justice The Rights of People Basic Books revised paperback New American Library May Case Document Filed Page of Case Document Page8 of Case Document Filed Page of Case Document Filed Page of PUBLICATIONS continued Stephen Gillers Investigating the FBI co-Editor with Watters Doubleday Ballantine None of Your Business Government Secrecy in America co-Editor with Dorsen Viking Penguin Id Rather Do It Myself How to Set Up Your Own Law Firm Law Journal Press Looking At Law School A Student Guide From the Society of American Law Teachers editor and contributor Taplinger NAL revised ed NAL third ed NAL The Rights of Lawyers and Clients Four Policemen in London and Amsterdam in Schrank ed American Workers Abroad MIT Press Dispute Resolution in Prison The California Experience and New Faces in the Neighborhood Mediating the Forest Hills Housing Dispute both in Goldmann ed Roundtable Justice Case Studies in Conflict Resolution estview Press The American Legal Profession in A Morrison ed Fundamentals of American Law Oxford University Press The Elsinore Appeal People Hamlet St Martins Press This book contains the text of Hamlet together with briefs and oral argument for and against affirmance of Prince Hamlets imaginary murder convictions The book arose out of a symposium sponsored by the Association of the Bar of the City of New York In the Pink Room in Legal Ethics Law Stories Rhode Luban eds Foundation Press also published as a freestanding monograph ARTICLES Guns Fruit Drugs and Documents A Criminal Defense Lawyers Responsibility for Real Evidence Stan Rev Is Law Still An Honorable Profession Professional Lawyer based on a talk at Central Synagogue in Manhattan Case Document Filed Page of Case Document Page9 of Case Document Filed Page of Case Document Filed Page of PUBLICATIONS ARTICLES continued Stephen Gillers Professional Identity Michael Franck Award Acceptance Speech Professional Lawyer Choosing and Working with Estate and Foundation Counsel to Secure an Artistic and Philanthropic Legacy in The Artist as Philanthropist_,_ volume page The Aspen Institute Program on Philanthropy and Social Innovation Virtual Clients An Idea in Search of a Theory with Limits Valparaiso Rev Tabor lecture The Charles Stimson Rule and Three Other Proposals to Protect Lawyers From Lawyers Hofstra Rev A Tendency to Deprave and Corrupt The Transformation of American Obscenity Law from Hicklin to Ulysses II Washington Rev Some Problem with Model Rule a Professional Lawyer ABA Symposium Issue Monroe Freedmans Solution to the Criminal Defense Lawyers Trilemma Is Wrong as a Matter of Policy and Constitutional Law Hofstra Rev In the Pink Room TriQuarterly Free the Lawyers A Proposal to Permit No-Sue Promises in Settlement Agreements Georgetown Legal Ethics with Richard Painter Lessons from the Multijurisdictional Practice Commission The Art of Making Change Ariz Rev Speak No Evil Settlement Agreements Conditioned On Noncooperation Are Illegal and Unethical Hofstra Rev reprinted at Defense L.J If Elected I Promise What Should Judicial Candidates Be Allowed to Say Ind Rev Legal Ethics Art or Theory Annual Survey Am The Anxiety of Influence Fla St Rev discussing rules that restrict multidisciplinary practice Can a Good Lawyer Be a Bad Person Inst Study of Legal Case Document Filed Page of Case Document Page10 of Case Document Filed Page of Case Document Filed Page of PUBLICATIONS ARTICLES continued Stephen Gillers Ethics paper delivered at conference Legal Ethics Access to Justice at Hofstra University School of Law April More About Us Another Take on the Abusive Use of Legal Ethics Rules Geo Legal Ethics Caveat Client How the Proposed Final Draft of the Restatement of the Law Governing Lawyers Fails to Protect Unsophisticated Consumers in Fee Agreements With Lawyers Geo Legal Ethics Participant Ethical Issues Arising From Congressional Limitations on Legal Services Lawyers Fordham Urban Law Journal panel discussion The Year the Product Law Inst Study of Legal Ethics paper delivered on the future of the legal profession at Hofstra University Law Schools conference Legal Ethics The Core Issues Getting Personal Law Contemp Probs Summer/Autumn contribution to symposium on teaching legal ethics Against the Wall Legal Ed ethical considerations for the scholar as advocate Participant Disqualification of Judges The Sarokin Matter Is It a Threat to Judicial Independence Brooklyn Rev panel discussion The New Old Idea of Professionalism The Record of the Assoc Bar of the City ofN March The Case of Jane Loring-Kraft Parent Lawyer Geo Legal Ethics Taking L.A Law More Seriously Yale L.J contribution to symposium on popular legal culture Protecting Lawyers Who Just Say No Ga St Rev article based on Henry Miller Distinguished Lecture delivered at Georgia State University College of Law Model Rule Gives the Wrong Answer to the Question of Corporate Counsel Disclosure Geo Legal Ethics Case Document Filed Page of Case Document Page11 of Case Document Filed Page of Case Document Filed Page of PUBLICATIONS ARTICLES continued Stephen Gillers The Compelling Case Against Robert Bork Cardozo Rev Ethics That Bite Lawyers Liability to Third Parties Litigation Winter Can a Good Lawyer Be a Bad Person Mich Rev Proving the Prejudice of Death-Qualified Juries After Adams Texas An Essay Review of Life in the Balance Pitt Rev cited in Lockhart McCree U.S Marshall dissenting What We Talked About When We Talked About Ethics A Critical View of the Model Rules Ohio St L.J The Quality of Mercy Constitutional Accuracy at the Selection Stage of Capital Sentencing U.C Davis Rev Berger Redux Yale L.J Review of Death Penalties by Raoul Berger Selective Incapacitation Does It Offer More or Less The Record of the Assoc Bar City ofN.Y Great Expectations Conceptions of Lawyers at the Angle of Entry Legal Ed Perspectives on the Judicial Function in Criminal Justice Monograph Assoc Bar City ofN.Y Deciding Who Dies Pa Rev quoted and cited as valuable in Spaziano Florida U.S Stevens dissenting also cited in Zant Stephens U.S Lockhart McCree U.S Marshall dissenting Callins Collins S.Ct Blackmun dissenting and Harris Alabama S.Ct Stevens dissenting Numerous articles in various publications including The New York Times The Nation American Lawyer The New York Law Journal The National Law Journal Newsday and the ABA Journal See below for selected bibliography Case Document Filed Page of Case Document Page12 of Case Document Filed Page of Case Document Filed Page of AWARDS VIDEOTAPES TRIBUTES OTHER TEACHING Stephen Gillers Recipient Michael Franck Award Michael Franck Award from the ABAs Center for Professional Responsibility The Award is given annually for significant contributions to the work of the organized bar noteworthy scholarly contributions made in academic settings and creative judicial or legislative initiatives undertaken to advance the professionalism of lawyers are also given consideration Adventures in Legal Ethics and Further Adventures in Legal Ethics videotape of thirteen dramatic vignettes professionally produced and directed and raising issues of legal ethics Author Producer Dinner at Sharswoods Cafe a videotape raising legal ethics issues Author Producer Amanda Kumars Case a 38-minute story raising more than two dozen legal ethics issues Author To Honorable Gus Solomon printed at Federal Supplement LXI and XCII Truth Justice and White Paper Harv Civ Civ Lib Rev to Norman Dorsen Irving Younger Scenes from the Public Life Minn Rev Visiting Professor of Law Harvard Law School Winter Semester Adjunct Professor of Law Yeshiva University Cardozo Law School Spring Spring and Fall Semesters Course The Legal Profession Adjunct Associate Professor of Law Brooklyn Law School Case Document Filed Page of Case Document Page13 of Case Document Filed Page of Case Document Filed Page of Stephen Gillers PRIOR EMPLOYMENT SELECTED TESTIMONY Private practice of law Warner and Gillers P.C Executive Director Society of American Law Teachers Inc Executive Director Committee for Public Justice Associate Paul Weiss Rifkind Wharton Garrison Judicial Clerk to Chief Judge Gus Solomon Federal District Court for the District of Oregon Portland Oregon Testimony on Nomination of Sandra Day OConnor to the Supreme Court of the United States Hearings before the Senate Committee on the Judiciary 97th Congress 1st Sess Sept Testimony on Habeas Corpus Reform Act of Hearings before the Senate Committee on the Judiciary 97th Congress 2d Sess April Testimony on H.R 225criminal Code Revision Act of Hearings before the House of Representatives Committee on the Judiciary 97th Congress 2d Sess April Testimony on Habeas Corpus Procedures Amendment Act of Hearings before the Senate Committee on the Judiciary th Congress 1st Sess November Testimony on and A A Proposed Code of Evidence for the State of New York before Senate and Assembly Codes and Judiciary Committees February Testimony before AB.A Coillinission on Women in the Profession Philadelphia February Case Document Filed Page of Case Document Page14 of Case Document Filed Page of Case Document Filed Page of SELECTED TESTIMONY continued PUBLIC LECTURES partial list Stephen Gillers Testimony on the nomination of William Lucas to be Assistant Attorney General for Civil Rights before the Senate Committee on the Judiciary Congress 1st Sess July Testimony on the nomination of Vaughn Walker to be United States District Judge for the Northern District of California before the Senate Committee on the Judiciary Congress 1st Sess November Tabor Lecture Valparaiso University School of Law April This event consisted of two lectures A public lecture was entitled Heres the Gun A Lawyers Responsibility for Real Evidence The Bench and Bar lecture which will be published in the schools law review is entitled Virtual Clients An Idea in Search of a Theory With Limits Paul Van Arsdell Jr Memorial Lecture University of Illinois College of Law March Do Lawyers Share Moral Responsibility for Torture at Guantanamo and Abu Ghraib Howard Lichtenstein Distinguished Professorship of Legal Ethics Lecture Series In Praise of Confidentiality and Its Exceptions delivered at Hofstra University School of Law November Henry Miller Distinguished Lecture Georgia State University College of Law May Protecting Lawyers Who Just Say No First Annual South Carolina Bar Foundation Lecture April University of South Carolina Law School Columbia South Carolina Is the Legal Profession Dead Yearning to Be Special in an Ordinary Age Philip Blank Memorial Forum on Attorney Ethics Pace University School of Law April The Owl and the Fox The Transformation of Legal Work in a Commodity Culture Speaker on Judicial Ethics ABA Appellate Judges Seminar and Flaschner Judicial Institute September Boston Massachusetts Baker-McKenzie Ethics Lecture Loyola University Chicago School of Law October Chicago Illinois Bias Issues in Legal Ethics Two Unfinished Dramas The Sibley Lecture University of Georgia School of Law Athens Georgia November Telling Stories in School The Pedagogy of Legal Ethics Case Document Filed Page of Case Document Page15 of Case Document Filed Page of Case Document Filed Page of PUBLIC LECTURES continued LEGAL AND PUBLIC SERVICE ACTIVITIES Stephen Gillers Participant Ethics in America series to be broadcast on PBS produced by Columbia University Seminars on Media and Society Participant Ethics in America series broadcast on PBS February and March produced by Columbia University Seminars on Media and Society Participant The Constitution That Delicate Balance Part II series broadcast on PBS February and March produced by Columbia University Seminars on Media and Society Lecturer on legal ethics and allied subjects in the U.S and abroad at hundreds of seminars CLE events and conferences organized by private law firms corporate law departments the District of Columbia Second Fourth Sixth Ninth and Federal Circuit Judicial Conferences American Bar Association Federal Bar Council New York State Judiciary New York City Corporation Counsel American Museum of Natural History Practicing Law Institute Law Journal Seminars state local and specialty bar associations including in Oregon Nebraska Illinois New York New Jersey Pennsylvania Rhode Island Vermont and Georgia corporate law departments law schools and law firms Member ABA Commission __ appointed by the ABA President to study the future of lawyer regulation Chair American Bar Association Center for Professional Responsibility Policy Implementation Committee Member Member American Bar Association Commission on Multijurisdictional Practice Consultant Task Force on Lawyer Advertising of the New York State Bar Association Retained by the New Jersey Supreme Court in connection with the Courts review of the lawyer disciplinary system in New Jersey to provide an analysis of the strengths and weaknesses of Californias centralized disciplinary system and to report on the quality efficiency timeliness and cost effectiveness of the California system both on its own and compared with the system recommended for New Jersey by the Ethics Commission Re_port fil ec mbe_r Oral presentation to the Court March Case Document Filed Page of Case Document Page16 of Case Document Filed Page of Case Document Filed Page of LEGAL AND PUBLIC SERVICE ACTIVITIES continued BAR MEMBERSHIPS Stephen Gillers Reporter Appellate Judges Conference Commission on Judicial participation in the American Bar Association October 1990-August Member David Dinkins Mayoral Transition Search Committee Legal and Law Enforcement Member Committee on the Profession Association of the Bar of the City of New York Member Executive Committee of Professional Responsibility Section Association of American Law Schools Chair organized and moderated Section presentation at AALS Convention on proposals to change the ABA Code of Judicial Conduct Counsel New York State Blue Ribbon Commission to Review Legislative Practices in Relation to Political Campaign Activities of Legislative Employees Administrator Independent Democratic Judicial Screening Panel New York State Supreme Court Member Departmental Disciplinary Committee First Judicial Department Member Committee on Professional and Judicial Ethics Association of the Bar of the City of New York STATE New York FEDERAL United States Supreme Court Second Circuit Southern District of New York Eastern District of New York Case Document Filed Page of Case Document Page17 of Case Document Filed Page of Case Document Filed Page of LEGAL EDUCATION PRELEGAL EDUCATION DATE OF BIRTH OTHER ARTICLES J.D cum laude NYU Law School Order of the Coif Deans List University Honors Scholar B.A June City University of New York Brooklyn College November Selected Bibliography 1978-present Carter and the Lawyers The Nation July Stephen Gillers Standing Before the Bar Bearing Gifts New York Times July Judgeships on the Merits The Nation September Entrapment Where Is Thy Sting The Nation February Advice and Consent New York Times September Lawyers Silence Wrong New York Times February The Warren Court-It Still Lives The Nation September Burgers Warren Court New York Times September I Will Never Forget His Face New York Times April Warren Courts Landmarks Still Stand Newsday July Von Bulow And Other Soap Operas New York Times May Statewide Study of Sanctions Needed for Lawyers Misconduct New York Law Journal June Preventing Unethical Behavior Something New in Model Rules New York Law Journal August Proposed Model Rules Superior to States Code New York Law Journal October Case Document Filed Page of Case Document Page18 of Case Document Filed Page of Case Document Filed Page of Stephen Gillers Five Ways Proposed to Improve Lawyer Discipline in New York New York Law Journal January Poor Man Poor Lawyer New York Times February Proposals To Repair Cracks in Ethical Legal Behavior New York Law Journal April Unethical Conduct How to Deter It Through Education Bar Leader May/June The New Negotiation Ethics Or Did Herbs Lawyer Do Wrong New York Law Journal June The Real Stakes in Tort Reform The Nation July Bernhardt Goetz Vigilante Or Victim Toronto Star September The Message That the Goetz Trial Will Send Newsday August Amending the Ethics Code Solicitation Pre-Paid Plans Fees New York Law Journal November Amending the Ethics Code Conflicts of Interest Screening New York Law Journal November Amending the Ethics Code Confidentiality and Other Matters New York Law Journal November No-Risk Arbs Meet Risk Justice New York Times November The Meese Lie The Nation February Amending State Ethics Code Conflicts oflnterest Gone Awry New York Law Journal May The Lawyers Said It Was Legal New York Times June Feminists vs Civil Libertarians New York Times November Lessons for the Next Round in Picking a Justice Newsday November Weve Winked For Too Long National Law Journal December judicial membership in exclusionary clubs No More Meeses New York Times May In Search of Roy Cohn ABA Journal June book review Case Document Filed Page of Case Document Page19 of Case Document Filed Page of Case Document Filed Page of Stephen Gillers Do Brawley Lawyers Risk Serious Discipline New York Law Journal June Have the Brawley Lawyers Broken the Law New York Times July Report Demonstrates Why Meese is Unfit to Be Attorney General Atlanta Journal and Constitution July Ethical Questions for Prosecutors in Corporate-Crime Investigations New York Law Journal September Restoring Faith at Justice National Law Journal November Is Bush Repeating Rockefellers Folly New York Times September Standards Time The Nation January on the subject oflegislative ethics Abused Children vs The Bill of Rights New York Times August Words Into Deeds Counselor Can You Spare a Buck ABA Journal November Bad Apples ABA Journal at March book review The Gotti Lawyers and the Sixth Amendment New York Law Journal August Justice or Just Us The Door to Dan Quayles Courthouse Only Swings One Way ABA Journal June at Fighting Words What was once comical is now costly ABA Journal August at Sensitivity Training A New Way to Sharpen Your Skills At Spotting Ethics Conflicts ABA Journal October at Under Color of Law Second Circuit Expands Section Liability for Government Lawyers ABA Journal December at Cleaning Up the Mess Courts Are Taking the Duty to Investigate Seriously ABA Journal February at All Non-Refundable Fee Agreements Are Not Created Equal New York Law Journal February at Analyzing appellate decision prohibiting non-refundable fees The Packwood Case The Senate Is Also on Trial The Nation March at Conflict of Laws Real-World Rules for Interstate Regulation of Practice ABA Journal April at Case Document Filed Page of Case Document Page20 of Case Document Filed Page of Case Document Filed Page of Stephen Gillers Packwood II TheNation May Generation Gap ABA Journal June at On the use of a boycott in response to the Colorado anti-gay initiative Future Shocks ABA Journal August at Looking back on the practice of law in the 21st century from the year A Rule Without a Reason ABA Journal October at Criticism of the prohibition in Rule against a lawyer agreeing not to restrict future practice in connection with a settlement Too Old to Judge ABA Journal December at Supreme Court justices have life tenure Maybe they should not Truth or Consequences ABA Journal February at Discovery obligations Ethical Cannons in Symposium Twenty Years of Change Litigation Fall Stretched Beyond the Limit Legal Times March at Analysis of the office of Counsel to the President in light of Bernard Nussbaums resignation Same article was reprinted in the Connecticut Law Tribune the Fulton County Atlanta Daily Report and the Recorder San Francisco Putting Clients First ABA Journal April at Discussing cases on lawyers fiduciary duty Grishams Law The Nation April at The effect of popular culture on Whitewater reporting The Elsinore Appeal People Hamlet New York Law Journal October at Brief for Appellee State of Denmark This was a mock appeal from Hamlets conviction for the murder of Claudius Polonius Ophelia Laertes Rosencrantz Gildenstem held at the Association of the Bar of the City ofNew York on October Billing for Costs and Disbursements What Law Firms Can Charge and Clients Can Expect monograph published by Pitney Bowes Management Services Clinton Has A Right To Privacy N.Y Times at __ Filegate Was Bad Enough Now This N.Y Times at Article criticizing proposal to privatize certain security investigations of government personnel Whitewater How to Build a Case Using a Tainted Witness Los Angeles Times at Ml Hillary Clinton Loses Her Rights New York Times at Case Document Filed Page of Case Document Page21 of Case Document Filed Page of Case Document Filed Page of Stephen Gillers Shakespeare on Trials IV Federal Bar Council News June Florida Backs Out On a Deal New York Times at The Perjury Loophole New York Times at A2 discussion of perjury in connection with Kenneth Starrs investigation of President Clinton Any Method to Ginsburgs Madness Los Angeles Times at Ml discussion of William Ginsburgs public defense of Monica Lewinsky Whitewater Made Easy The Nation at A Highly Strategic Legal Chess Game Los Angeles Times June at Ml Starr Clinton legal maneuvers To Sleep Perchance to Dream New York Law Journal July at Humorous article about bored jurors Clinton Is No Ordinary Witness New York Times at The High Cost of an Ethical Bar The American Lawyer July/August at Clintons Choice Tell Truth or Dare to Gamble Los Angeles Times August at Ml Accurate Lies The Legal World of Oxymorons Los Angeles Times August at Ml A Fool For a Client The American Lawyer October at President Clintons legal representation in the Lewinsky representation The Presidency Out to End Clintons Mess and Be Happy Los Angeles Times October at Ml Protecting Their Own The American Lawyer November at Cant We All Just Practice Together Taking Down Trade Barriers on Lawyers Here and Abroad Legal Times November at Beyond the Impeachment Spectacle Los Angeles Times November at Ml The Perjury Precedent New York Times December at From the Same Set of Facts A Tale of Two Stories Los Angeles Times January at Ml about the Clinton impeachment trial Case Document Filed Page of Case Document Page22 of Case Document Filed Page of Case Document Filed Page of Stephen Gillers The Decline and Fall of Kenneth Starr Los Angeles Times February at Ml The Truth About Impeachment The American Lawyer March The Double Standard New York Times Book Review March at review of No Equal Justice by David Cole Four Officers One Likely Strategy New York Times Saturday April at The Man in the Middle Did George Ventura Step Over the Ethical Line The American Lawyer May discussion oflawyer whistleblowing in light of State George Ventura Reprinted as Whistleblower Esq in New York Law Journal May at page Your Client Is A Corporation-Are Its Affiliates Clients Too The New York Professional Responsibility Report May at Job Talk Scenes from the Academic Life The American Lawyer July at Satire about law school hiring The Other Y2K Crisis The Nation July 26/August at editorial about the year electoral races Walking the Confidentiality Tightrope ACCA Docket September/October remarks at ACCAs national conference in Things Old New The Code Amendments New York Professional Responsibility Report September at Clintons Chance to Play the King New York Times Sept at Al Overprivileged American Lawyer October at Discussion of First Amendment protection for journalists Controlling Conflicts Between Old and New Clients New York Professional Responsibility Report January at How To Spank Bad Lawyers American Lawyer February at A Weak Case But a Brave Prosecution New York Times Wednesday March at the Diallo case Conflicts oflnterest in Malpractice Cases New York Professional Responsibility Report March at The Courts Picayune Power New York Times Thursday April at Case Document Filed Page of Case Document Page23 of Case Document Filed Page of Case Document Filed Page of Stephen Gillers Some Misrepresentations Among Corporate Lawyers New York Professional Responsibility Report June at Was Hubbell Case About Getting Justice or Getting Even Los Angeles Times June at M2 comment on the U.S Supreme Courts decision in United States Hubbell decided June Who Owns the Privilege After a Merger New York Professional Responsibility Report July at Fighting the Future The American Lawyer July at Campus Visits Deconstructed Newsweek How To Get Into College Edition at The Court Should Boldly Take Charge New York Times Tuesday November at Floridas presidential election recount Who Says the Election Has a Dec Deadline New York Times Saturday December at Al Motive Is Everything in the Marc Rich Pardon New York Times Saturday February For Justice To Be Blind Must Judges Be Mute New York Times Sunday March at Section page Should Supreme Court Justices Have Life Tenure Reprinted in The Supreme Court and Its Justices Choper ed ABA Professionalism Symposium South Carolina Rev closing remarks No Lawyers To Call New York Times Monday December at Al9 ethical and constitutional obligations that will prevent lawyers from participating in military tribunals Let Judicial Candidates Speak New York Times Thursday March at A3 The Flaw in the Andersen Verdict New York Times Tuesday June at Why Judges Should Make Court Documents Public New York Times Saturday November at Al Its an MJP World ABA Journal December at Upholding the Law as Pretrial Publicity Goes Global New York Times Sunday April Sec at Case Document Filed Page of Case Document Page24 of Case Document Filed Page of Case Document Filed Page of Stephen Gillers Court-Sanctioned Secrets Can Kill Los Angeles Times Wednesday May reprinted May in Newsday Make a List New York Times June at advocating changes in the methods of judicial selection Conflicted About Martha American Lawyer September analysis of Martha Stewart indictment The Prudent Jurist Legal Affairs January/February On Knowing the Basic Rules of Advocacy New York Times February Sec at cross-examination in the Martha Stewart trial The Prudent Jurist Legal Affairs March/April Scalias Flawed Judgment The Nation April at Scholars Hucksters Copycats Frauds Washington Post April at B3 Outlook discussion of ethics of academics who put their names on newspaper opinion pieces written by industry The Prudent Jurist Legal Affairs May/June at Multi jurisdictional Practice of Law Merging Theory With Practice The Bar Examiner May Tortured Reasoning American Lawyer July analysis of government lawyer memos addressing the application of various treaties and laws to the treatment of Afghan prisoners Paying the Price of a Good Defense New York Times August Improper Advances Talking Dream Jobs with the Judge Out of Court Slate.com Augustl7 with Luban and Lubet Roberts Bad Decision Los Angeles Times September with Luban and Lubet No Privilege for Miers The Nation November Senators Dont Rubber-Stamp USA Today January at discussing the Senates advise and consent responsibility in connection with Alito nomination Ethics Column American Lawyer page January with Deborah Rhode Ethics Column American Lawyer page April with Deborah Rhode lPs Ed HdP(?9 gv?5?D uQ v??z w??z TB RM?Ӏ2?Ρ 8s2M K;q zb WI?Y?7 i?H 4?qR3?qRz j??s N?n?zv A Ux Q??z q?R.BЭ I??e d?O ZZىRo B?P5 m_t?H a CP _X d?9q TѴ U?Լ?m?d jE e?mR i C?3h ou?7Lj w??w ԡ?0r ϖ?T Xw5 jj z??n Q?S?d Case Document Filed Page of Case Document Page25 of Case Document Filed Page of Case Document Filed Page of Stephen Gillers Bush Postpones Election The Nation August satire Free the Ulysses Two Joyces First U.S Publishers Were Convicted of Obscenity Its Time to Clear Them The Nation February Twenty Years of Legal Ethics Past Present and Future Georgetown Legal Ethics symposium celebrating the 20th anniversary of the journal The Torture Memos The Nation April Bar None American Lawyer October globalization oflaw practice and how it will effect regulation of the bar Case Document Filed Page of Case Document Page26 of Case Document Filed Page of Case Document Filed Page of UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK UNITED STATES OF AMERICA PAUL DAUGERDAS DONNA GUERIN DENIS FIELD and DAVID PARSE ECFCASE Case No S3 Cr WHP AFFIDAVIT OF DAVID PARSE Defendants ST A TE OF NEW YORK ss COUNTY OF NEW YORK DAVID PARSE being duly sworn deposes and says My name i David Parse and I am a defendant in the above-captioned cas.e During jury selection or shortly thereafter I heard one of the lawyers at the Brune firrn I lieve it was Theresa Trzaskoma ay that there was a prospective juror or a juror who lilad the same name as a suspended attorney but that it was not the same person cannot recall if the lawyer was speaking to me or if I overheard her speaking to someone else A week after the verdict I met with the Brune lawyers to discuss possible post trial motiorns and appellate issues The possibility of a juror misconduct issue was not raised It was not until after the Brune firm filed its motion for a new trial that I karned that prior to jury deliberations the issue of Conrad being a suspended lawyer had resurfaced More precisely to the best ofmy memory it was after the July conference call that I learned i that on May Ms Trzaskoma had considered the pos ibility that Jura,r No I Case Document Filed Page of Case Document Page27 of Case Document Filed Page of Case Document Filed Page of was the suspended lawyer ii that a paralegal had generated a Westlaw report and i 1that the Brune lawy,ers had concluded that Conrad was not the suspended attorney and determined that there was no need to inform the Court Sworn to before me this day of August _a Notary Public OFFICIAL SEAL VILLIAM KAVANAUGH RY BLIC ST ATE OF ILLINOIS COMMISSION EXPIRES PAGES TO INTENTIONALLY LEFT BLANK Case Document Page28 of Case Document Filed Page of Case Document Filed Page of Case Document Page29 of Case Document Filed Page of Case Document Filed Page of CAC3PARC UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK UNITED STATES OF AMERICA DAVID PARSE Defendant CR WHP New York N.Y October p.m Before HON WILLIAM PAULEY I District Judge APPEARANCES Case Document Page30 of Case Document Filed Page of Case Document Filed Page of CAC3PARC In open court THE DEPUTY CLERK Case of United States of America David Parse Appearances for the government MS DAVIS Good afternoon your Honor Nanette Davis and Stanley Okula Jr for the government THE COURT Good afternoon Ms Davis MR SHECHTMAN Paul Shechtman for Mr Parse Ali Feingold who is a paralegal who has worked on this matter is with me and obviously Mr Parse is here THE COURT Good afternoon Mr Shechtman And I note the presence of Mr Parse at counsel table This is oral argument on the defendant Parse motion for a new trial Do you wish to be heard Mr Shechtman MR SHECHTMAN I do your Honor As your Honor now knows and from the papers there is only one issue here which is a question of ineffective assistance of counsel THE COURT If you can just pull the mike a i ttle closer It has been a long week MR SHECHTMAN I understand I think for all of us Justice OConnor once said that Strickland was the most cited case that she ever wrote and I say that because I assume the Court is quite familiar with it and the legal standard And obviously the standard is two part I ou ld like to think though I may be proven wrong that if we get to prejudice we should prevail But we can SOUTHERN DISTRICT REPORTERS P.C Case Document Page31 of Case Document Filed Page of Case Document Filed Page of CAC3PARC have that discussion The first question obviously is was the performance deficient here And that I think turns on the question of did the Brune firm make a strategic judgment on that fateful May day maybe even earlier during the voir dire itself And I not sure there is a great definition of strategic judgment but there is very good language in Justice Stevens dissent but I dont think the majority disagreed with it th a talks about a conscious choice between two alternatives borne of deliberation not happenstance inattention or neglect The Second Circuit has told us that it is not a strategic judgment when what is going on is oversight or carelessness or ineptitude I like to think about this as strategic judgments are situations where lawyers say one of two courses could have answered my clients interests I choose A after some thought It may be that is the wiser course But we retry a lot of cas es if we second guess lawyers in that situation and obviously the Supreme Court says we shouldn I say in our papers that if what went on here was one of two things If the Brune firm in that plaza conversation said the equivalent of lets sandbag the Court let go forward We know this information and we get a free bite at the apple It hard to think thats not a strategic decision SOUTHERN DISTRICT REPORTERS P.C Case Document Page32 of Case Document Filed Page of Case Document Filed Page of CAC3PARC and that of course is very similar to the Chappee case in the First Circuit Justice Stevens talks about it being a legitimate dec i i on but even an unethical one like sandbagging I think is going to turn out to bind the client The other way this could be a st ategic decision if what they said to themselves lets sandbag but more look she is a pro-defense juror given what we know about this checkered history lets keep her on because were likely to get an acquittal now Thats the governments view here Thats what theyve advanced in their papers And I think thats not at all what happened in this case I think the testimony and the Court referred to the testimony and said the facts were largely undisputed That doesn mean the inferences from them were ones that all sides were ready to adopt But I dont think the core facts were much in dispute at the hearing And what happened here particularly on that day of May the 12th is that Ms I will say Theresa because I have trouble with her last name I apologize had real second thoughts when she thought about that juror note and the legal words in it She then sent paralegals to work as your Honor knows the one thing about the Brune firm is they had an army of them And she got information back and her e-mail said something like Jesus I think its her And whether that is characterized as fleeting or a belief held longer than that there is no doubt that she thought it SOUTHERN DISTRICT REPORTERS P.C Case Document Page33 of Case Document Filed Page of Case Document Filed Page of CAC3PARC Whats always been odd to me is when she gets to the plaza how quickly she abandons it And whether it is because shes exhausted at the end of a long trial whether it because as she said she looked more at th is report and she thought it was more complicated whether it was because her seniors cowed her But as your Honor says the discussion there was superficial and never addressed th information that she had accumulated over the last hours And she simply goes along And she goes along with her two seniors who dont know of the Westlaw report but say to themselves it can be her There is no need to tell the judge Let go home its been a long day a long trial No we differed back at the time as to whether that was a waiver or not But there is no doubt that that is not a judgment that a lawyer should have made in that situation Your Honor referred to it as a tragic misjudgment and it was One of two things should have happened There should have been an investigation or there should have been someone saying why me investigate Lets just tell the Court and well go from there And neither of those things happened Instead people went home they spoke to their col leagues a day or two later and said geez she has the same name but it can be her And nobody said well lets do the easy thing and lets tell the Court As your Honor says a few days later we substituted a new juror and nobody thinks to SOUTHERN DISTRICT REPORTERS P.C Case Document Page34 of Case Document Filed Page of Case Document Filed Page of CAC3PARC themselves we could just tell the judge Strickland talks about counsel has a duty to make reasonable investigations or make a reasonable decision that makes particular investigation unnecessary And if ever there was a reason either to investigate more to unleash the Nardello firm or I say this respectfully unleash the Court Because as crazy as this woman was I ve always thought if your Honor brought her out and said are you the same person Im not sure her lying would have gone that far You may disagree with me on that but I think she would have had trouble there But nobody does it And nobody does it not because they were playing a strategic game that they were out to sandbag a court or they were out to get an acquittal They didnt do it because to use the Second Circuits word it was an oversight it was careless it was inept And if Im right about that then I think one has met the first prong here and then the question becomes prejudice And I can talk more your Honor the government doesnt argue sandbagging I can talk more about why I think this wasn look Ive read the Courts opinion I think only seven times And I know that the Court at the end of it talks about gambling But dont think the Court is making findings in that opin i on that there was a great strategy going on in that court I think your Honors findings are that these people really dropped the ball and they failed to do what they SOUTHERN DISTRICT REPORTERS P.C Case Document Page35 of Case Document Filed Page of Case Document Filed Page of CAC3PARC should have done as lawyers And then after that I ve always thought partly because they dropped the ball they were less than candid in what they said to the Court going forward THE COURT That last point is really another part of the analysis isnt it that why shouldnt this Court view Brune Richard lack of andor with the Court in making their motion as circumstantial evidence that they were in fact trying to conceal from the Court a strategic decision they made MR SHECHTMAN Look I think and the Court does in its opinion consider it as circumstantial evidence and it not a pretty picture But the question to me has always been what is it circumstantial evidence of And I think it is circumstantial evidence of a realization that they had a responsibility to tell the Court and they walked away that night and really left the Court in an untenable position such that at least two and I hope three defendants may be on trial again in the spring So I dont have any doubt that you can take that conduct and look back The question is do you look back and say to yourself these are people who knew they dropped the ball and were careless and inattentive and didn fulfill their obligations to the Court Or do you go bac and say these are people who made a strategic decision to game the system at an earlier time I dont hink there is any evidence to support that As Ive said before there is nothing in that plaza SOUTHERN DISTRICT REPORTERS P.C Case Document Page36 of Case Document Filed Page of Case Document Filed Page of CAC3PARC conversation THE COURT really thinking about beyond the plaza conversation at the time a month and a half later when they filed their motion they failed to disclose to the Court what they knew and when they knew it And a series of proceedings then occur essentially initiated by both the Court and the government to find out what they knew and when they knew it And their statements in their memorandum to the Court on their motion that they knew were wrong or misleading at the time that they made them to me MR SHECBTMAN You re not going to get much argument fro me on the point The Court has a sort of lovely phrase in the opinion about disclosure by iteration or something like that There is no doubt when you go from the telephone conversation to the document itself and then to and not wanting further discovery wanting your Honor to somehow address a preliminary issue and issues of privilege Your Honor knows I got in this case late and the first thing I did was to say what are we kidding ourself We are going to turn over those documents to the Court because worse comes to worst the Court is going to look at them in camera And if it is going to look at them in camera it is going to look at them I dont know you can say out of camera but its going to look at theim This is not a game I think what happened though is lawyers said to SOUTHERN DISTRICT REPORTERS P.C Case Document Page37 of Case Document Filed Page of Case Document Filed Page of CAC3PARC themselves we failed the Court I have said to myself a hundred times it is so easy the next morning or even that afternoon to walk back in and say to the judge Judge we think we don really believe this fo a variety of reasons but you should know the following That she has the same name there is other information here and whatever your Honor wants to do with it we dont think its her but we would be foolish if we didn bring this to your attention I think what happen ed to the Brune firm was after this revelation they said to themselves oh God we really did drop the ball But dropping the ball is ineffectiveness Dropping the ball to me is not strategy Look if your Honor looks at that conduct and I know and I say this respectfully I know how much that conduct eats at the Court because its wrong and the result of it is a very long trial in this courtroom has to be done again But I also dont think that one looks at it and says ah-ha there was a strategy going on I think the lawyers thought to hemselves that the Court is going to be very disappointed in us if it realizes that we didn come forward Right If it realizes we took for an answer it can be her when investigation or telling the Court was the better course If the Court concludes that that conduct is so egregious that circumstantially it proves strategy Im not SOUTHERN DISTRICT REPORTERS P.C Case Document Page38 of Case Document Filed Page of Case Document Filed Page of CAC3PARC going to win Were going to have a sentencing in January and not a trial in the spring But I don think you can read that much into it and I don think that in fairness to Mr Parse the record supports that But I understand your Honors views of the matter I cant say more THE COURT Other than the alleged deficiencies by the Brune firm regarding Juror No was Parses counsel otherwise constitutionally effective MR SHECHTMAN Look Ive never read a trial record where I didn say I wish they would have preserved that issue I wish they would have made that argument I think that cross-examination could have been stronger I came away from that trial thinking boy that Barry Berke is a great cross-examiner If you asked me was it constitutionally adequate you bet It was very solid defense by a group of very good lawyers So that one easy for me THE COURT Can you think of any circumstance where a Court could find both a waiver to an impartial jury and effective assistance of counsel MR SHECHTMAN Yes I think The simplest one is if it really was a strategic decision take the most blatant case the lawyer said to themselves free bite at the apple dont tell the judge If we get an acquittal the great thing about the double jeopardy clause is its over That is a waiver SOUTHERN DISTRICT REPORTERS Case Document Page39 of Case Document Filed Page of Case Document Filed Page of CAC3PARC under any definition Its also under Chappee in the First Circuit and I would bet it is also effective assistance Or its not ineffective assistance even though one can say thats back alley I cant remember the words in Chappee but they are not very flattering Even though you can say those things it got to be effective assistance because youre not going to let people get away with that game There is a perfect example You can have I ve done this as a grid and you can have if you put waiver and ineffective assistance you can fill out most of the four boxes There is a case in the Second Circuit that I stumbled across which is ores It is old enough there is a Judge Van Graafeiland dissent Flores is one where there is a waiver The trial lawyer I think says after trial look I ve come across this material this Rosario material but it wouldn have helped me very much And he says it at a time when it is per se reversible not to have turned over that material There is no harm ess error standard that how crazy New York law was And the First Department in New York Court of Appeals says waiver You say right on the record you re not pressing the issue The Second Circuit said ineffective assistance right How can a lawyer possibly having been handed a piece of paper which is a new trial card how can you not play it So there is a situation SOUTHERN DISTRICT REPORTERS P.C Case Document Page40 of Case Document Filed Page of Case Document Filed Page of CAC3PARC where you can have waiver but ineffective assistance And I think it is that that Judge Easterbrook had in mind when he said you have to think about each of these doctrines separately and you can probably have every combination of them THE COURT All right MR SHECHTMAN Look on the prejudice prong I would just say this There were acquittals on all but two of these counts Mr Parse is not situated that much differently than Mr Brubaker and the proof as it came in didnt come in much differently There is a sort of lovely irony here that the government cooperator who the Jenkins lawyer dealt with him was actually a witness and so the Kramer Levin firm got to cross-examine him And in a sense having him as a cooperator was helpful to their side because ey established that their client like the taxpayers and everyone else was told repeatedly this is lawful What distinguishes these two men is the quote backdate And what I ve tried to say in my papers is I think the government was very good at trial in turning this into a backdating case I don think thats what the Deutsche Bank records show They are doing these in February and March and putting them on February and March statements and theyre putting as of Theyre then going out to what a very accomplished tax preparers who were getting February March statements And know there was a mistake and are then filing SOUTHERN DISTRICT REPORTERS P.C Case Document Page41 of Case Document Filed Page of Case Document Filed Page of CAC3PARC tax returns At the end of the day the governments brief takes you at great pains through each of those three backdating transactions And I should say quote backdating transactions What you learn is what is un isputed is that what happened istakes in the craziness of this law firm where you were churning these things out every December and taking a portion of the losses into income the tax loss in the craziness of that and mistakes were made And trades were done to try to correct the mistakes You cant dispute that The only question at the end of the day as I say in the papers is mens rea And the mens rea when you read the governments evidence he bottom line is he must have known And he must have known because he was an accountant And what we know on that is I think for two years in the he was a junior accountant at some thousand dollars a year There is not a shred of evidence that he ever took a class that taught quote the annual accounting rule and I think the Court knows the Second Circuit precedent that says must have known is an argument but its no of great weight And Ill stop with this I have to say I wasnt in the mustve known category This wasnt something that I was taught in tax law Maybe I forgot it and maybe the answer is its so obvious you didn have to teach it But I said to SOUTHERN DISTRICT REPORTERS P.C Case Document Page42 of Case Document Filed Page of Case Document Filed Page of CAC3PARC myself the other night if somebody had said to me and again I apologize for the example wont try to belabor it But December in year one if I gave shares of IBM to a charity and shares to my daughter right and I said to my broker just move them into those to charity to my daughter And the broker made a mistake And heres what makes it so tricky The shares to the charity were IBM the shares to my daughter were Philip Morris They reversed it The charity calls January 2nd and says we can take tobacco stock We cant accept our gift I call the broker I say what about this He says we ll just reverse it It was our mistake We ll send the Philip Morris to your daughter and well send the IBM to the charity And they reverse it and they put as of December 2B because they reverse it and do it at December prices and it all shows up the January statement If I said to Mr Parse if I said to me the Court may be situated differently the Court been educated by this trial If I said can put that tax deduction my year one return in that situation even though it was mistake it never got accepted Id say I dont know you should ask a tax lawyer And that what Mr Parse said He made the transactions he made the change not a single document at Deutsche Bank reflected that this happened other than the as of which was a reflection of what the pricing was SOUTHERN DISTRICT REPORTERS P.C Case Document Page43 of Case Document Filed Page of Case Document Filed Page of CAC3PARC Im sitting here with a tolling agreement from the Southern District in a case of mine which says as of January Which is faxed on January But everybody wanted it to be effective two days before because that was the agreement as happens in the Southern District It happens everywhere And it doesnt mean backdating In this case it means this is the price But all that is a long way of saying there is no proof that he knew this rule There is no proof it was discussed with him There is no proof he thought he knew these transactions were wrong And at the end of the day when ones argument is he mustve known thats a weak reed particularly when this prejudice notion is harmless error like After all you have Justice Marshalls dissent in Strickland that says it should have been harmless error it should have been under the government burden When you do harmless error analysis you say two things What is the nature of the error and whats the proof The nature of the error here is that a government partisan out to get him in particular was on the jury Thats a pretty serious error The proof far from overwhelming As I say I think if I can get you to the prejudice prong we ought to see you in April and not in January and I hope thats the case THE COURT Thank you Mr Shechtman Ms Davis does the government want to be heard SOUTHERN DISTRICT REPORTERS P.C Case Document Page1 of Case Document Filed Page of Case Document Filed Page of CAC3PARC MS DAVIS Yes please your Honor Good afternoon your Honor I glad to see that Mr Shechtman has conceded that other than this particular area Mr Parse did in fact receive what can only be described as a platinum plated defense with a defense team that most defendants can only dream of MR SHECHTMAN I dont think I quite went that far your Honor MS DAVIS I do think though that had Mr Shechtman been here at trial and seen the forces that were mustered in Mr Parses favor he would have to admit that it is a rare scene in such a courtroom for an individual defendant Your Honor the crux of it is that defendant Parse is seeking to be rewarded now for the strategic choices of his attorney regarding Catherine Conrad and their knowledge of her Choices for which he has already benefited in the form of acquittals on the conspiracy and the tax evas i on counts We submit as we said in our papers that we believe that Mr Shechtman has me neither prong of the Strickland standard in that he cannot show ineffective assistance of counsel and he cannot show prejudice This Court in its ruling on the motion for new trial regarding Catherine Conrad has already found that the Brune Richard law firm knew that Catherine Conrad and Juror No were th same person and chose to gamble with the jury that SOUTHERN DISTRICT REPORTERS P.C Case Document Page2 of Case Document Filed Page of Case Document Filed Page of CAC3PARC they had Your Honor that in our view ends the inquiry completely That finding alone is sufficient to defeat a finding of ineffective assistance of counsel The Second Circuit has made very clear as have other circuits that you cannot as a defense counsel basically engage in a heads we-win-tails-you lose strategy when it comes to your trial conduct We know that based on the documentary evidence and the evidence that was adduced at the hearing as well as the evidence that was put forth in the affidavit of Susan Brune that the Brune Richard law firm had the suspension opinion prior to voir dire and chose not bring it to this Courts attention As we all know engaged in subsequent invest igation regarding Juror No when Theresa Trzskoma started to have certain doubts about her after the receipt of Juror No note Its quite clear that this is not a case where the defense counsel had been given a piece of information and did nothing Thats quite quit not what happened here In fact we know that prior to voir dire they discussed the suspension opinion they chose not to bring it to the Courts attention Instead rely i ng simply on the voir dire answers even though as this Court pointed out far more trivial issues were aired by all of the parties by the government and indeed by the Court in terms of trying to figure out who would be good jurors They chose not to bring that to the Courts attention then SOUTHERN DISTRICT REPORTERS P.C Case Document Page3 of Case Document Filed Page of Case Document Filed Page of CAC3PARC which I think is very significant And it is significant in part because I think if we can say anything that we all know based on the Brune Richard defense of Mr arse that if they had any actual and real concern about a suspended attorney being on this jury if they really thought that that was not in their client interest you know we all know that they would have brought it to the Court attention during voir dire And if not at voir dire then after the results of the Theresa Trzskoma investigation This is absolutely a situation where the Brune Richard lawyers on May after the investigation that they had they looked at a ll the alternatives We know because Laurie Edelstein testified at the hearing they considered the three possible alternatives They considered whether or not they should do more investigation and Susan Brune said no They considered whether or not they shou bring it to the Courts attention and they said no So they decided to do nothing And it is that conscious and deliberate choice that we believe means that they made a strategic choice that cannot form the basis of ineffective assistance of counsel How do we know in the governments view that this indeed was a tactical choice As this Court just pointed out with regard to the questioning of Mr Shechtman they did not bring that knowledge to the attention of the Court either in the brief where they made it appear as if they first learned SOUTHERN DISTRICT REPORTERS P.C Case Document Page4 of Case Document Filed Page of Case Document Filed Page of CAC3PARC of this after the receipt of the jury of Ms Conrad letter to the government in May after the verdict And worse even in the conference calls with tbe Court they continued to make it appear and resist the Court and the government learning that knowledge Mr Shechtman seems to want to characterize this as them wanting to hide their mistakes But its quite clear and Susan Brune and Laurie Edelstein testified we would not have told this Court but for the Court pressing That to me speaks of a decision made early on and continuing through the briefing that they wanted the juror on the panel but they wanted the Court not to know exactly what they knew because they understood and as was acknowledged at the hearing that that was damaging to their ient THE COURT Wou you address the prejudice prong MS DAVIS Yes your Honor Your Honor we believe that there is more than adequate evidence indeed overwhelming evidence of defendant Parses criminal involvement in the corrupt endeavor to obstruct the IRS and in the mail fraud count The defense co ceded in its papers that Mr Parse was involved in the backdated transactions We think backdated transactions is a perfectly adequate description of them We also submit your Honor that Mr Parse background as a CPA even a non-practicing CPA is under case law relevant to his intent and circumstantial evidence of his SOUTHERN DISTRICT REPORTERS P.C Case Document Page5 of Case Document Filed Page of Case Document Filed Page of CAC3PARC incident We know he was instrumental and indeed Carrie Yackee cited to more than a dozen instances during her testimony where she made clear that she was acting at the instructions of and with the knowledge of David Parse in implementing all of these complex and varied transactions that had to be effectuated in order to change the results of the three sets of transactions Its actually four because Coleman and Blair were two separate taxpayers She understood that this was being done for tax purposes This is Carrie Yackee the sales assistant Nice woman but not nearly as sophisticated as Mr Parse To suggest that the jury could not find or infer that he knew exactly why these transactions were being effectuated not for any real investment reason not because they had figured out that in February and March the year after the transactions had been done that somehow it would have been a better investment to have not invested in Cisco stock but instead to have invested in foreign currency To suggest that the jury could not have found that Mr Parse knew that the reason that these were being done was to effectuate tax losses for the prior year is simply ludicrous Your Honor the defendant was faxed information relating to the tax returns themselves This wasnt just a one way street between David Parse office and Jenkins Gilchrist but it was at least a two-way street between Deutsche Bank and Jenkins Gilchrist and a lso the accountants SOUTHERN DISTRICT REPORTERS P.C Case Document Page6 of Case Document Filed Page of Case Document Filed Page of CAC3PARC So it quite clear the jury was entitled to infer that he knew that this was being done to change the results of the tax losses He a lso k.new and there is more than a plethora of evidence on this that each of these tax shelter transactions had to be completed by year end And that why as Mr Bair testified and others testified it was a real effort Sandra Burnside you might recall Mr Daugerdas secretary testified about the avalanche of work that went on in December at the end of the tax years in order to finalize these transactions Well that avalanche of work hit the offices of Mr Parses desk And as Carrie Yackee testified Carrie Yackee desk as well So to suggest that he was not aware this was being done in order to defraud the IRS as the true results of the transact i on we submit is unsupportable There was a suggestion in Mr Shechtmans brief I don think he touched on it todayr but the suggestion was that these transactions these as of transactions were approved by Deutsche Bank Well first of all Carrie Yackees testimony here that she was going to Mr Parse for approval on these transactions There is also no idence to suggest that anyone other than Mr Parse and Carrie Yackee at Deutsche Bank knew the full picture of what went on which was that these transactions for these particular taxpayers were tax shelter SOUTHERN DISTRICT REPORTERS P.C Case Document Page7 of Case Document Filed Page of Case Document Filed Page of CAC3PARC transactions that had to be done by the end of the year that had been done by the end of the year pursuant to instructions that had been given by Jenkins Gilchrist to Deutsche Bank had been implemented properly by Mr Parse in the first instance and now were being requested to redo them to achieve a different result This I think is a distinction that makes Mr Shechtman example of the broker mistake an apple to our orange or an orange to our apple which is that this is not an instance where Mr Parse takes an instruction from a client and screws it up Implements it wrong Rather they did everything that they were supposed to do the way it was supposed to be done and there are results to show for that It only because the tax loss that they wanted to get from these results was not correct that it required anything to be done after the end of the year We suggest that the evidence was overwhelming to support Mr Parse knowing and criminal involvement in both the corrupt endeavor to obstruct and impede the IRS and in mail fraud THE COURT Anything further MS DAVIS Your Honor there are other pieces of evidence which we ve detailed in our briefing but Which I will not go through again here I did want to just note though that the Second Circuit SOUTHERN DISTRICT REPORTERS P.C Case Document Page8 of Case Document Filed Page of Case Document Filed Page of CAC3PARC has stated that you can find that where there has been a split verdict as is the case with Mr Parse that is evidence of a lack of prejudice We had argued in the original motion for new tri a and we renew that as well Finally your Honor with regard to the letter of Catherine Conrad to the government which was referenced in the defendant briefing she talked about their discussions and deliberations with regard to David Parse And interestingly what she also said which was not mentioned by Mr Shechtman in his brief as that that struggle ended when they asked the Court to reread the definitions of wilfully and knowingly Different states for different counts MR SHECHTMAN Well Ill wait I apologize to the Court MS DAV!S And interestingly their verdict exactly tracked that difference between wilfully this was required in the conspiracy count and for the tax evasion counts and knowingly which was really the mens rea relating to other ones So you might say that they had a struggle To the extent we can even be considering that letter at all because of Rule but I think its quite clear that they made a deliberate and informed decision about making a distinction drawn on the evidence as apply to the law Thank you THE COURT Thank you Ms Davis SOUTHERN DISTRICT REPORTERS P.C Case Document Page9 of Case Document Filed Page of Case Document Filed Page of CAC3PARC Mr Shechtman do you want to be heard further MR SHECHTMAN I will and I will try to be brief Judge I think real four points The government has repeated at the argument here what it said in its brief Which was that Mr Parse benefited from the strategic choice that his clients made and Ill hold the strategic choice point for second But I take that to mean that he got acquitted here because she was on the jury And that my father used to say arguments were nonsense on stilts and that is nonsense on stilts I mean your Honor knows exactly what happened here There was a partisan in the jury room a woman who couldn follow instructions and the like Your opinion couldnt be stronger on the point And she was fighting the good fight to convict him on percent So to say we got the benefit of having her on there because we were acquitted isn worthy respectfully of the government And the related po i nt this was a split verd ic it is a split verdict because she couldnt carry the ba as far as she wanted to but not because Mr Parse benefited by her presence The second thing I say is this I take it there are two competing visions of what happened here and at the end of the day your Honor is going to have to decide One is that what happened in that court your Honor in the plaza is that SOUTHERN DISTRICT REPORTERS P.C Case Document Page10 of Case Document Filed Page of Case Document Filed Page of CAC3PARC what was said was look dont be stupid it can be her to do any more would be a waste of the court time Thats what I think happened That what I think the record shows The other is lets be smart Shell be a great juror because she is a suspended lawyer Or lets be smart If we leave her on we get two bites at the apple The latter two I think are strategic but be careful in the follow i ng sense The first one is a choice It is a choice to do nothing You cannot have a case in which there is not in a sense a choice if it coming up in an ineffective assistance claim I can cite you to Breakiron and Johnson Armentrout In our brief lawyers are making choices In those cases the question is are they informed choices are they reasonable choices are they competent choices are they strategic choices And if the choice is dont be stupid it cant be her that is not a strategic choice that is a tragic misjudgment Implicit in the word misjudgment is that someone making a choice But if it is a tragic misjudgment I think its ineffective assistance The next thing Id say is this We re told that there can be any doubt that these transactions were effectuated so that there would be tax lawyers and tax losses in the prior year and it ludicrous to think otherwise Of course thats why the transactions were being done There is no doubt that why these transactions were being done in February or March SOUTHERN DISTRICT REPORTERS P.C Case Document Page11 of Case Document Filed Page of Case Document Filed Page of CAC3PARC But the real question is did Mr Parse know that that was defrauding the government Right ook the avalanche of ork here was in December But t.he question is if you made a mistake like in my example can you undo it And you have to appreciate what the government has said to you today It has essentially said if it is a broker mistake like in my hypothetical then maybe a reasonable broker could think you could undo it But if it is a lawyer mistake you can And thats a very different version of the annual accounting rule than I ve ever heard before Right And if my hypothetical is one in which a reasonable broker could think leave it up to the tax lawyers I am not sure what happened in this case isnt in that same category We ended up with an argument about the contents of the note and how your Honor should interpret them to show whether there was prejudice here All of this began with the government saying to us be careful Rule has its limits The one thing know and the Th ird Circuit case in Breakiron is quite good on talking about whether one looks at this subjectively or objectively you can aw inferences from that juro note in deciding whether there was prejudice here for two reasons One precludes it and two that note was written by Catherine Conrad and I still dont think the United States wants to be standing up in a court and saying SOUTHERN DISTRICT REPORTERS P.C Case Document Page12 of Case Document Filed Page of Case Document Filed Page of CAC3PARC rely on what THE arguments on afternoon MS Catherine Conrad said COURT All right Counsel thank you for your the motion Decision reserved Have a good DAVIS Thank you o0o SOUTHERN DISTRICT REPORTERS Case Document Filed Page of Case Document Page13 of Case Document Filed Page of Case Document Filed Page of ZUCKERMAN SPAE DER LLP PAUL SHECHTMIAN Partner Pshechtman wckerm"n com The Honorable William Pauley United States District Judge Southern District of New York Pearl Street Room New York NY AVENUE OFTHE AMERICAS 31ST FLOOR NEW YORK MY fax iucke/man co BY HAND March Re United States David Parse et al Cr WHP Dear Judg Paule This letter is respectfully submitted on beha of David Parse who is sc heduled to be sentenced for tax-related crimes on March For the reasons di sc ussed below we believe that a non-incarcerative sentence would be a fair and parsimonious one ee United States Dorvee 3d 2d Cir it is the sentencing courts duty to impose a se ntence sufficient but not greate than necessary to comply wi th the specific purposes set forth at U.S.C a A Background Dav id Parse was born in Detroit Mi higan on Decemb er I Hie was the you gest of five chi dren of Sy via and Henry Par se A World War II veteran Dav i ids fat er worked two job for most of hi life He was a mailman by day and a factory worke:r a night Davids mother worked part-time as a aundress in a ocal restaurant The two paren ts instilled WASHING TON DC EWVORK TAMPA BA LTIMORE Case Document Filed Page of Case Document Page14 of Case Document Filed Page of Case Document Filed Page of ZUCK RMAN SPAE DER LLP The Honorable William Pau ey IJJ March Page2 in their ch i i dren the importance of work education family and respect for othe Se letter of Bridget Rodgers Dave comes from a blue-collar background his dad was a mailman and his mom was a saint David attended locaJ Catholic schools where he excelled in academics and sports See letter of Scott Mordell David was an academic sports and social leader among our hig schoo class He started on the varsity basketball team as a freshman and was among the top players in the state his senior year Although recruited by several colleges he chose to attend the University of Michigan a state school and gave up playing organized sports What he did not give up was his work ethic David got his first job at age delivering the Detroit News to his neighbor Every day after school and on weekends he rode his bicycll on his route I eighth grade he began working part time in a local restaurant as a busboy the same restaurant whe his mother eaned linens He worked there on weekends during the school year and to hours a week in the summer The job enablc him to purchase a used car fo With a car he could drive ac oss town to work at a famou seafood restaurant beginning his senior year in high school it became his regular employer David graduated from Michigan in with a bachelors degree in Business Administration He put himself through college commuting from Ann Arbor to Detroit to work as a waiteir in the seafood restaurant A though most of his time went to studies and work David Letters from David family and supporters are attached as an appendix to this submission Case Document Filed Page of Case Document Page15 of Case Document Filed Page of Case Document Filed Page of ZUCKERMAN SPAE DER LP The Honorable William Pauley I March Page enjoyed his co ll ege years immensely and many of his closest frie ds are Michigan classmates To this day he tailgates with friends before Michigan footbal games and donates g,enerously to the sc ool See letter of Kenneth Norwick our tailgate group has become like an extended family foc sed on he children lette of Bridget Ro gers even tho gh he has never mentioned it I know David has been a generous do or to he University siness Degree and Broke age Industry Employ ent After graduati from Michigan David worked two years at Touche Ross as an accou tanlt doing audits for ocal businesses and not for profi institutions In August he left the finm and reenro ll ed in Michigan to get an MBA degree Again he paid is own way He lived at home comm ted to schoo and went back to waiting tab es He graduated i with a major in Finance and Economics a obta i ned emp oyment at Goldman Sachs in Detroit as a broker From to his i ndictment in Dav i enjoyed considerable success as an investment consu tan for institutions and high net worth individuals When Goldman left De roit David moved to Kidder Peabody i Troy Michigan and the to Cred i Suisse First Boston int Chicago ln he was recruited to join A ex Brown Sons which was subsequern tl acq ired by Bankers Trust and then Deutsche ank The name on the front door anged but Davids respons i ili ties did not Case Document Filed Page of Case Document Page16 of Case Document Filed Page of Case Document Filed Page of ZUCKERMAN SPAE DER LLP The Honorable William Pauley I March Page4 As a broker David had to long-tem1 customers and his goal was to assist them to invest their money wisely A former business associate writes this about him A the Ch icago offices of Credit Suisse First Boston I interacted with David on a constant basis during our tenure at the firm I literally could overhear hi phone calls with clients In aU of our interactions I found David to be dilig ent intellig ent and most of all honest David always put his clients interests first and prided himself on his abi lity to protect their assets He took very serio sly his fiduciary duty and our entire group relied upon him as a sounding board when evaluating the appropriateness of investment vehicles As an example of how much I trust David in business years ago I asked him to consult on the endowment fund for an inner city high schoo that I oversee As you can imagine I would only ask David to participate if I was completely convinced of his character Letter of Phil Allen Others who have worked with David sound the same theme ee letter of Jeffrey De Young he would always put clients first and do the right thing when the market was starting to unravel Dave was the first to pull his clients out in spite of his lo ss of revenue letter of Susan Manske i my opinion Dave has always been a stra ight shooter a coinservative investor protecting his clie nt from downside risk and a sta un ch supporter of ethical behavior letter of John and Kathryne McGuire David chose the ecurities business so that he could help his clients protect their assets he truly understood his fiduciary obligations and put his client interest first In all bis years as a broker David received no comp aint:s from his customers fo his investment advice David has been sued by seve ral taxpayers whose tax shelters were disallowed Case Document Filed Page of Case Document Page17 of Case Document Filed Page of Case Document Filed Page of ZUCKERMAN SPAE DER LLP The Honorab William Pauley Ill March Page In David was introduced to Paul Daugerdas his re ationship with Daugerdas and the Jenkens Gilchrist firm is discussed in Part below Family Community and Friends David met Theresa Austerberry when they were at business school together and they have been married for years They have supported each others careers when Theresa found a better position at McKinsey Chicago office David left Kidder Peabody to move with her and have devoted themselves to family and community They have three boys ages and whom they have rai sed conscientiously The etter of David bro th er i aw James Yetter describes it best David three sons my nephews are wonderfu young men with exceptional character traits that I know are a direct result of Daves strong parenting He treats tbem with a very good combination of ove caring and high expectations They a ll have ore to do and househo ld sponsibilit ie They are expected to have jobs in the summe They have a healt regard and respect for others Stu tim is sac ed Responsib i iti es are not to be taken light lt not enforced it an expectation Letter of James Yetter Other letters confirm Mr Yetter observa ti ons See etter of Andr ew ill er is mpha i and influ enc on hi chil ren have also resulted in good specilt we ll rou nd ed and acad mic kids Jetter of Phil All Dav id teaches by example and xtolls the values of hard wo rk and mutual respect everyone pitches in whether it is preparing a fami Case Document Filed Page of Case Document Page18 of Case Document Filed Page of Case Document Filed Page of ZUCKERMAN SPAE DER LLP The Honorable William Pa ul ey Ill March Page meal helping a younger sibling do his homework letter of Thomas Carnaghi David is truly a model father who se ts the bar high for his boys For the past years David has devoted much of his fr ee time to coaching youth sports tearn in hi co mmunit In bis tter to the Court Phil Allen describes the pth of David commi tm nt I our town Little League Base all organization David bas held every volunteer position from an assistant coach to a team manager I have seen him do eve ything from raking baseball fields to throwing batting practice During basketball season David has also been the coach or assistant coach for num erous grammar sc hool teams 1f there is one example the depth of David commitment to coac hin it i the basketbal training sessi on designed and managed for students outside of the organ ize teams he coac hed On his own initiati ve David arranged for a gym be available during the week for all ch ildren even tho se ho didnt make a team There are not many ofus who would find the time to make uch an impact th lives of the chi dren in their community Letter of Phil Allen see also letter of John and Kathryne Maguire coaching childre is often a diffi ult and thankless job in a sma ll community David as ee a leader in Hin sda in olunt ee ring his time and knowledge lp our community As the Presentence Report notes Theresa as had serious ea lth probl in ce ln February Theresa began experiencin severe dizziness and the episodes often as ed hou rs and somet im es da ys Neck pain eart palpitation and stomach pain fo ll owed Se ette of Theresa Parse A battery of te sts has proven negative and medication and a ange of di hav give some re li ef But hea lth i ss ue which may be stress-related continue to plague er Case Document Filed Page of Case Document Page19 of Case Document Filed Page of Case Document Filed Page of ZUCKERMAN SPAE DER LLP The Honorable William Pauley I March Page As the letters reflect coaching for David is about more than teaching a 12-year old to tum a double play He wants the kids to develop their athletic skills and for them to be as successful as possible but he clearly believes that there are things more important than winning games Letter of Charles Austerberry see also letter of Theresa Parse Dave understands how sports can teach children valuable life lessons David relates to each child individually and gives each a chance to play When a boy with severe disabilities was on the basketball team David made sure every other boy went out of his way to help him tnake a basket before the end of the season Id As one observer notes David measured personal approach contrasts markedly with the loud cacophony typically employed by those who attempt to coach childrens sports teams Letter of Charles Austerberry What may best reflect Davids character is his commitment to his friends In their letters to the Court many of them recount stories of Davids support in their times of need See letter of Bridget Rodgers when was pregnant and told I had an infection that would cause One parent whose child is a gifted athlete writes this about David The thing that has endeared me most to Dave is the way he coaches the basketball Over the years he has coached my son Dave is always calm guiding teaching and encouraging the boys in a way that is so helpfu Dave has gone out of his way to tell my wife Kimberly and me how special is as an athlete and he encourages us to continue his development The vast majority of coaches in our community are screamers and not teachers and are singularly focused on their own kids Dave is different I sincerely appreciate the many hours Dave has spent with my son Letter of Venanzio Arquilla Case Document Filed Page of Case Document Page20 of Case Document Filed Page of Case Document Filed Page of ZUCKERMAN SPAE DER LLP The Honorable William Pauley Ill March Page horrifi i rth defects Dave cried openly with us and discussed the moral eth i cal and emotional dilemmas this raised letter of James Yetter when our friends daughter was on her death bed Dave flew in from Chicago to provide support letter of Andrew Miller when my son was diagnosed and hospitalized with a menta illness David was there to counse and encourage me etter of Thomas Camaghi when my then year old daughter had a brain aneurysm burst David drove in from Chicago to spend time with me and my family he spoke with me every day during the three plus weeks of this ordeal As one friend puts it Dave is a giver not a taker if you need some help he is the friend you can call Letter of Kenneth Norwick Notably David good deeds have involved his time and effort and not his money Nor has he sought recognition fo what he bas done Just the opposite is true be has been reluctant to ask others to write on his behalf because asking for something in return has never beern his way See United States Cooper 3d 3d Cir noting that defendant actions were not detached acts of charity but were in a very real way hands on persona.I sacrifices which have had a positive impact on the lives of others The Instant Offen se As noted above David met Paul Daugerdas in but the relationship between Deutsche Bank and Daugerdas began earlier In the early Jason Shih was one of a group of brok rs in A ex Brown San Francisco office who began executing bond s:horts for Daugerdas clients When Shih was tran sfe rred to Ch i cago to supervise the office he ontinued Case Document Filed Page of Case Document Page21 of Case Document Filed Page of Case Document Filed Page of ZUCKERMAN SPAE DER LLP The Honorable WilliamH Pauley March Page the relationship Shih introduced David and his partner Rod McKay to Daugerdas and they began doing business As the Court knows Deutsche Banks participation in the tax she:lters was approved at the bank highest levels That fact coupled with the prominence of th,e Jenkins firm and the knowledge that other law and accounting firms were marketing similar products gave David comfort that the tax shelters were lawful Like many others he believed that Daugerdas and his partners had found a loopho that could be exploited until it was closed From to I tax shelter trades became a part of David business As we see it the jury accepted the proposition that David was not a culpable participant in the overall Jenkins tax she ter scheme His acquitta on the tax conspiracy count and the bstantive tax evasion count and the complete acquit al of his co-defendant Craig Brubaker confirm the point The jury it seems concluded that David did not know that a lack of economic substance made the Jenkins she ters illegal If that is correct then Davids convictions for mail fraud and tax obstruction eflect his involvement in the three backdating transact i ons In each instance trades effected in one year were used to gene ate tax See Tr discussing letter from Irwin Mayer to Bob Price A ex Browns general counsel Tr confirming that approva from legal credit tax and compliance had been olbtained for the Homer transaction Case Document Filed Page of Case Document Page22 of Case Document Filed Page of Case Document Filed Page of ZUCKERMAN SPAE DER LLP The Honorable William Pauley I March Page losses in the prior year The prosecution focused on those transactietns in its umrnatiorns as did the jury in its deliberations Guidelines Calcu at i on 1n it preliminary Report the Probation Office calculates an offense level of and a Guidelines range of to months It assumes a tax los amount of billion and adds point for sophis icated mean 2Tl.l and specia ski ll We hav written to Probation and asked it to reconsider that calculation Under the Courts rules its final Report is due after ours and so we ummari ze here our argument that the Guidelines range sho uld be far lower than where Probation has preliminarily put it Juror No etter to AUSA Okula goes far to show that Davids conviction was only for th bac kdating transactions did have qualm with Mr David Pars I solely held out for two days on th co spiracy charge for him I wanted to convict not only on that charge but on Tuesday May we had asked for the Jud ges clarification of illfull and knowi ngl I believe and I had to throw in the towel I did fight the good fight how ever and I felt tha Mr Parse played hi integral part and was a key element in the elaborate scheme/scam The backdating was enough for the other charges Letter of Ca therin Conrad emphasis added Case Document Filed Page of Case Document Page23 of Case Document Filed Page of Case Document Filed Page of ZUCKERMAN SPAE DER LLP The Honorable William Pauley I March Page Our lower Guidelines calculation begins from the premise that Mr Parse was convicted only of the three backdating transactions If that is so then the pr,oper loss calculation is this Coleman Blair Aronoff Toporek TOTAL These numbers are based on the additional assessments calculated by the lRS which are in evidence Moreover if the Guidelines calculation is based only upon the three ba,ckdating transactioms then the enhancement for sophisticated means shou not app While i is true that the tax shelters created fraudulent tax losses through a series of complex transactions the backdatirng invo ved only correcting certain trades canceling a transaction i stock and effecting one in foreign currency The new ansactions were shown in Deutsche Banks books in the month in which they occurred No records were altered Thus this is not an instance of hiding as:sets or transactio or both through the use of fictitious entities corporate she ll or offshore financial accounts See Commentary 2Tl.l Application Note Likewise an enhancement for special skills under 3B is unwarranted The Report ta i tes that Mr Parse ed his special skills as a former stock broker and CPA to materially facilitate his design and implementation of the highly-complex financial products that were involved in different tax shelters Mr Parse however had no role in designing the Case Document Filed Page of Case Document Page24 of Case Document Filed Page of Case Document Filed Page of ZUCKERMAN SPAE DER LLP The Honorable William Pauley March Page tax shelters and did not function as a CPA He gave no investment advice and the tratdes were executed by his assistant In short his role as a broker in the three backdating transactions is too thin a teed to support this enhancement If all of this is correct then Mr Parse should be at offense level with a Guidelines range of to months Of course we believe that even that calculation produces a range that is sti ll far too harsh See Smirlock United States U.S Dist Lc xis at noting that the amount of loss that actually winds up resulting from a persons conduct can be arbitrary and may not reflect culpability Bowman The Failw of thi Federal Sentencing Guidelines A Structural Analysis Colum Rev at or near the root of virtua ll every serious critic i sm of the guidelines i the concern that they are too harsh Conclusion In her sentencing submission Donna Gue ri catalogued the sentences that have been imposed on those who designed and marketed illegal tax shelters See Guerin Am Sentencing Mem ECF No They have varied greatly in ength What makes this case i fferent is that David Parse did not design or market tax shelters he was a broker executing trades ndeed to our knowledge of all of the brokers who performed that function for Jenkins and other llaw finns he and Craig Brubaker were th only two people who were prosecuted and he is the one who stands convicted Case Document Filed Page of Case Document Page25 of Case Document Filed Page of Case Document Filed Page of ZUCKERMAN SPAE DER LLP The Honorable William Pauley lTI March Page As noted above we believe that jury co victed David for his involvemen in three backdating transactions from which be barely profited He has a lr eady ffered great for at cond ct in ce when the crim in al investigation commenced this matter as hung over him Hi once-thriving brokerage business as collapsed His wifes health has uffered See pra i children have felt the sti of comments from othe have learned o,f David conviction And the st i gma of the conviction haunts David especially because it is a1ntitheticaJ lo the values with which he was raised See ette of Theresa Parse our lives have e:ssentia ll been pla ed on hold as we try to raise our three sons in a safe and secure env ironment More than years ago the United States Supreme Court eminded hat the uniform and co stant tradition for the sen encing judge is to consider every convicted person as an individual and every case as a unique st ud in uman fai ings at sometimes mitigate some ti mes magnify the cr im and the punishment to ensue Koon United States U.S In this subm i ss i on we have tried to how that David Parse is a fundamen1lally decent man He believ es in fami bard work helping others and being actively involv ed iin community The conduct fo hi ch was conv ict ed we believe was at the periphery of the Jenkins scheme On hi eco rd we respectful submit that a non-incarcerative sentence wou be just I would not diminish respect for the law See United States Ade son F.S pip.2d D.N.Y if ever a man is to receive credit for the good he Case Document Filed Page of Case Document Page26 of Case Document Filed Page of Case Document Filed Page of ZUCKERMAN SPAE DER LLP The Honorable William Pauley Ill March Page has done and his immediate misconduct assessed in the context of his overall life hitherto it should be at the moment of his sentencing Respectfully submitted Paul Shechtman PS/wr cc AUSA Stanley Oku a Jr AUSA Nanette Davis In Gall United Sta es U.S the Supreme Court emp asized tlilat a non incarccrati ve sentence does not mean letting an offender off easily The Court wrote Id at We recognize that custodial sentences are qualitatively more severe than probationary sentences of equivalent tenns Offenders on proba ti on are nonetheless subjec to several standard conditions that substantia ll restrict eir liberty Probationers may not eave the judicial district move or change jobs without notifying and in some cases receiving pennission from their probation officer or the court They must report regularly to their probation officer permit unannounced visits to their homes refrain from associating with any person convicted of a fe ony and refrain from excessive drinking Most probationers are a so subject to individual special conditions imposed by the court PAGES TO INTENTIONALLY LEFT BLANK Case Document Page27 of Case Document Filed Page of Case Document Filed Page of EXHIBIT-250 Case Document Filed Page of Case Document Page28 of Case Document Filed Page of Case Document Filed Page of Jenkens and Gilchrist Clients Restitution Calculation Pa5 g8 e2 Cl-6 ent Trans-11 on ear Tax19 enef-9 Tak-10 en per Ret-10 rn Tax17 Def-11 enc-12 per In10 te10 st th10 per In10 te10 st Tot-9 al-6 eres-11 Total Allendu ff Phillip SOS ugus-11 illiam-19 O1 al-6 r1 eri-6 al-6 r1 eri-6 Ros-11 ari-6 ayne at-9 hel-6 bi-6 gai-6 at-9 hel-6 eph M8 arc-11 a at-9 hel-6 eph Henry e1 rnard,-9 ephen Cai-6 r1 Loui-6 Sh8 o8 r9 Sa8 le Cal-6 bert-10 M8 hael-6 Carl-6 oel-6 M8 Carrut-10 Herm-22 an Denni-6 Ri-6 hard Devet-11 Denni-7 M7 Dot-10 ennet-10 gel-7 Fri-6 r1 hur Sh8 o8 r9 Sa8 le Ge7 cse7 illia7 Sh8 o8 r9 Sa8 le Georgi-6 ohn Gol-6 dberg,-10 M8 Sh8 o8 r9 Sa8 le Gol-6 ei-6 Robert-10 Sh8 o8 r9 Sa8 le Gorm-22 Robert-9 rry Harvanek-12 even ens-11 Robert-10 Debra e2 lley6 h2 illip a2 h2 hort-7 a2 oeni-6 Thom-22 as hort-9 al-6 Low17 enberg,-10 Lus-11 vardi-6 Laurenc-11 a9 te9 ll Ja9 e9 SO7 Case Document Filed Page of Case Document Page29 of Case Document Filed Page of Case Document Filed Page of Jenkens and Gilchrist Clients Restitution Calculation Pa5 g8 e2 Cl-6 ent Trans-11 on ear Tax19 enef-9 Tak-10 en per Ret-10 rn Tax17 Def-11 enc-12 per In10 te10 st th10 per In10 te10 st Tot-9 al-6 eres-11 Total M8 erc-11 hant-9 illiam-19 O1 Ow17 Denni-6 M8 ark-11 et-9 ers-11 Ronal-6 ol-6 Hunt-10 er onc-11 Lyl-6 ori-6 v4 r1 ugeni-6 urc-11 el-6 M8 orri-6 Rags-11 dal-6 Sh8 o8 r9 Sa8 le Rags-11 dal-6 HV hort-9 al-6 Rags-10 dal-5 Sh8 o8 r9 Sa8 le Rags-10 dal-5 TS-8 hort-8 a1 d1 Ral-5 ph hort-9 al-6 huet-8 r3 illiam-20 OS-7 Sc-6 hue tt r9 illiam-14 SOS al-6 Ri-6 hard r1 ene pec-11 Donal-6 uart-10 Thom-22 Tat-8 e1 o1 eph anek-11 Greg al-6 Carol-6 ggi-6 Gl-6 enn ul-6 Tot-9 al-6 Cl-6 ent-10 I4 n5 terest on5 RA5 was calcu5 lated5 th5 rou5 g6 h5 I4 n5 terest on5 RA5 was calcu5 lated5 th5 rou5 g6 h5 I4 n5 terest on5 RA5 was calcu5 lated5 th5 rou5 g6 h5 Case Document Filed Page of Case Document Page30 of Case Document Filed Page of Case Document Filed Page of PAGES TO INTENTIONALLY LEFT BLANK Case Document Page31 of Case Document Filed Page of Case Document Filed Page of UNITED STAT-9 ES DISTRICT COURT SOUTH-9 ERN DISTRICT OF NEW YORK UNITED STAT-9 ES OF11 AMERICA S3 Cr WHP14 AUL DAUG15 ERDAS DONNA UERIN DENIS FIELD and DAVID ARSE Defendan-9 ts AMENDED SENTENCING EMORANDU9 OF13 THE UNITED STAT-9 ES REGARDING15 DEF10 ENDANT DAVID9 ARSE Case Document Page32 of Case Document Filed Page of Case Document Filed Page of TABLE-10 OF9 CONTENTS Preliminary32 Statement Relevant acts A The D9 efe11 ndant Educ9 ational B9 ackg18 round and Work History34 The12 Offe12 nse Conduct Parse Participation in the Fr10 audulent Ka10 sperzak/Calphalon Tax Shelter Parse Personal Tax Evasion Parse Participation in the Fr9 audulent ackda12 ting of14 Transa16 ctions The ndictment Trial Ne10 Trial Ruling9 and the PSR The O9 bjections to the PSR-10 Restituti-9 on Sentencing14 Guidelines Discussion a Analy34 sis The Na11 ture a9 nd Circumstance9 of the Of9 fense10 History30 and Chara12 cter9 istics of the Def10 endant The Ne11 ed To Af10 ford Ade12 quate De12 terre12 nce The Ne11 ed To Avoid Unw9 arr10 anted Sentenc12 Dispar10 ities The Appr10 opriate Sente9 nce Conclusion Case Document Filed Page of Case Document Page33 of Case Document Filed Page of Case Document Filed Page of UNITED STAT-9 ES DISTRICT COURT SOUTH-9 ERN DISTRICT OF NEW YORK UNITED STAT-9 ES OF11 AMERICA S3 Cr WHP14 AUL DAUG15 ERDAS DONNA UERIN DENIS FIELD and DAVID ARSE Defendan-9 ts AMENDED SENTENCING EMORANDU9 OF13 THE UNITED STAT-9 ES REGARDING15 DEF10 ENDANT DAVID9 ARSE The United States respe10 ctfully36 mits this memorandum for the Court considera12 tion in connec12 tion with the sentenc9 ing of defe16 ndant David Parse or 215the defe11 ndant which is schedule9 for Ma9 rch p.m relim17 inary Statem17 ent Following12 an eleve10 n-we9 ek trial that included over exhibits witnesses eig12 ht day34 of jury31 delibera11 tions and jury31 notes the jury31 on May33 convicted David Parse on one count of corr15 uptly26 obstructing10 and impeding due administration of the nterna9 Revenue9 aws in violation of9 U.S.C a Count T9 wenty34 of the Redac9 ted S3 ndictment and one ount of mail fra10 ud in violation of and Count Twenty40 F9 ive of the Redac9 ted S3 ndictment The jury)31 acquitted Parse of the conspirac12 count and three9 counts of tax evasion Those convictions stemmed from David Parse integ10 ral role in one12 of the larg15 est tax fra10 ud scheme14 ever char11 ed the details of which ar11 spelled out in the indictment aga16 inst him S3 Cr WHP and the trial rec11 ord ncorpor15 ating10 the fac11 tual alleg14 ations in the conspirac12 count Count Twenty Case Document Filed Page of Case Document Page34 of Case Document Filed Page of Case Document Filed Page of char11 ed Parse Donna Guer9 in Denis Field and Craig12 Br10 ubaker11 with a wide-r10 ang14 ing corr10 upt endea12 vor to obstruct and impede the RS in connec12 tion with the design marke9 ting implementation and defe11 nse of f9 our tax shelters known as Short Sale Short Option APS and HOMER ikewise incorporat-20 ng10 the fac11 tual alleg19 ations of the conspirac12 count Count Twenty35 F9 ive char11 ed Parse along12 th Paul Daug16 erda16 Guer14 in Field and Br10 ubaker11 with mail fra10 ud as to the overa11 rching scheme9 to defr10 aud hroug13 the desig11 marke14 ting implementation and defe11 nse of the enkens Gilchrist tax helters The proof at trial demonstrated that Parse an investment repr15 esenta14 tive at Deutsche11 Ba11 nk Alex Br10 own and cer16 tified public acc12 ountant participa14 ted as a key34 actor9 in the larg15 est criminal tax fra10 ud in history28 That fra10 ud which fea11 tured Parse five-y43 ear11 involvement in four fraudul ax shelters resulted in the cre11 ation of over billion tax deductions or benef11 its billion in Guidelines tax loss and well in excess of million in actua10 loss to the United States Trea12 sury37 Parse role in the fra10 ud as one of the principal Deutsche11 Ba16 nk employ30 ees who steere12 bank clients to the tax shelters established the evane12 scent broker10 ag14 acc12 ounts se shelters executed the cruc11 ial Trea12 sury32 short sale and options 215investments executed the al rs betwee12 acc12 ounts and who helped fac11 ilitate the fashioning17 of the options and other financ9 ial instruments used in the shelters was indispensable to the shelters succe11 ss Consequently30 Parse arne11 substantial commission ncome f9 rom his role in the tax shelters over million For9 the rea11 sons spelled out below and in the Probation Depa10 rtment Presentenc12 nvestig9 ation Report 215PSR we submit that Parse conduct and the resulting10 harm is deser10 ving of a signific15 ant prison sentenc9 Case Document Filed Page of Case Document Page35 of Case Document Filed Page of Case Document Filed Page of RELEVANT FA9 CTS Defendan-9 Educational ackground Work His-9 tory Parse obtained his bache12 lor deg14 ree11 in busines-10 administration from the University32 of Michig9 an in and his Master deg14 ree11 in business administration from the same school in PSR-11 Parse also was a licensed stockbroker tment adviser and passed various secur10 ities and investment adviser exams Fr14 om to Parse acte10 as an investment adviser at Goldman Sachs Kidder Peabody34 and Credit Suisse First Boston Fr9 om throug11 April Parse was employ30 ed as an inve9 stment repre11 sentative at Deutsche16 Ba11 nk Alex rown in its Chicag13 office12 Fr9 om April to the prese10 nt Parse has been self-e16 mploy31 ed at his company36 Union Capital a financ10 ial consulting irm which is curr10 ently30 dormant The fense Cond-10 uct The fac11 ts conce12 rning11 Parse offe10 nse conduct will not be repe11 ated here11 in at leng17 th as those fac11 ts re compre9 hensively33 set forth in the10 trial rec11 ord and the PSR-9 Acc10 ording11 ly28 we are11 confide9 nt that a lt of he foreg14 oing and he subm-9 issions made by26 the parties the ourt is thoroug11 hly familiar with the sc9 ope and na12 ture of the10 defe11 ndant cr11 iminal conduct Severa11 aspec14 ts of that offe10 nse conduc11 bear9 additional discussion Parse Part-4 c5 o1 Fraudu lent K8 asperzak/-20 ter-20 Parse assisted in dvising the share10 holders of the Calphalon cookwa10 re company36 primar9 ily members of the Kaspe14 rzak fa mily31 owner9 of the company36 and sever10 al key34 employ30 ees on the order10 ly28 dispositi-10 on of their share10 of Newe12 ll stock acquir9 ed in a stock swap as a result of the sale of The fac11 ts de11 scribed in this section ar10 based on the Probation Depa10 rtment Presentenc12 Report 215PSR the trial rec)11 ord documents that the Gover9 nment has produce11 to the defe16 ndant in discovery38 and Gove10 rnment interview10 of var9 ious witnesses Case Document Filed Page of Case Document Page36 of Case Document Filed Page of Case Document Filed Page of the Calphalon company36 to Newe17 ll Parse was introduced to Peter Ba11 rnhar10 Calphalon Ex-9 ecutive Vice-11 President Sara ane Kaspe9 rzak Dea10 Kaspe9 rzak and other members of the Kaspe9 rzak family in As a result of the work that Parse was doing in helping10 the Calphalon stockholders dispose of heir Newell shares Parse be12 came10 awa10 re of10 the arg17 tax-14 able ga10 ins that the tockholders would rec11 eive a meeting12 at Parse office17 Parse introduced Peter Ba11 rnhar10 to Paul Daug16 erda11 then an Altheimer Gra9 partne9 for the purpose of having)12 Daug16 erda11 pitch a tax shelt-11 he Calphalon share10 holders Parse subsequently22 ed a meeting12 with Daug16 erda11 the Calphalon share10 holders and sever10 al attorney37 law firm of Shumaker oop Kendr9 ick that meeting12 and in Parse prese10 nce as Dea10 Kaspe14 rzak testified at trial Daug16 erda16 opened with the red flag15 statement that the information that he was about to provide was completely34 confide9 ntial and that the share10 holders could not even share10 it with the shareh-10 own investment advisors or acc12 ountants Tr Daug16 erda11 then descr10 ibed the tax shelter which he said would result in the share10 holders pay34 ing virtually29 no taxes on the ains Kaspe9 rzak further16 testified wer14 told that the profit potential was very37 low and that oing forwa12 rd should we choose to forwa12 rd if we wer9 out the matter that our intent was in fac11 to make a profit but in order10 for this tax shelter to ork there9 had to be in eff10 ect a loss to balanc10 off the ains from the stock sale Tr The urg)13 ing by30 Daug16 erda11 for the share10 holders to make false statements about their intent is wholly28 inconsistent with good f9 aith all of which Par10 se witnessed The testimony25 of Erwin May33 er and other trial witnesses made clea10 that the expected short term duration of the Trea12 sury32 note transac12 tions combined with the lack of volatility22 of the specific Trea12 sury37 notes chosen for the transac12 tions meant that the short sale was virtually29 cer11 tain to produce only28 a small loss or ain on this purported investment Case Document Filed Page of Case Document Page37 of Case Document Filed Page of Case Document Filed Page of arse ersonal Tax Evasion Parse executed his own fra10 udulent SOS tax shelter transaction to eliminate the ains he ear11 ned in and rec16 eived a fre10 fra10 udulent opinion letter from The losses Parse cre16 ated wer9 larg15 er than Parse neede12 for the ear11 sug9 esting9 tended to eliminate taxes in more than one ear11 On his tax return Parse claimed a fra10 udulent loss evading16 in taxes on over milli-10 on in income See GX Parse Tax Return GX RS Certifica9 te essment and Pay30 ments for Parse Taxes GX Opinion etter for Parse Parse16 rec11 eipt of a ee-7 letter which would have othe10 rwise ost him no ess than and likely25 more had he paid the oing ate for a opinion letter violated Deutsche11 Ba11 nk10 ift prohibition policy30 and almost cer11 tainly violated that it constituted his rec16 eipt of an unlawful commission or ift by30 a bank officia10 See l8 U.S.C unlawf10 ul for any34 bank employ30 ee to acc12 ept any34 thing of value intended to be re9 war9 ded in conne10 ction with business of bank arse artic9 ipation-9 in the Fr12 audu-12 lent Backdatin-9 of ransactions As detailed in pa12 rag22 raphs of the PSR-11 Parse conduct involved not only36 assisting in the desig16 marke14 ting and implementation of the fra10 udulent tax shelters but also the implementation of11 fra10 udulently28 backda12 ted when Donna Guer9 in and others at rea11 liz-10 ed that the shelters had been implemented incorre12 ctly30 or not consistent with the clients wishes with respe10 ct to Parse ecute10 a short options deal throug16 Using9 a conse11 rvative fee12 resul-11 a opinion letter value Parse only28 deducte10 just over million of the in losses on his return and thus ha11 available10 just unde9 milli-10 on in losses to use on future tax returns Although Parse ultimately26 did not utiliz-14 those additional losses bec11 ause he reve11 rsed his own transac17 tion when the RS beg14 an investiga11 ting the proper10 view of Parse own fra10 udulent transac12 tion should take into acc12 ount the full amount of fr10 audulent bene12 fit he produced Case Document Filed Page of Case Document Page38 of Case Document Filed Page of Case Document Filed Page of the amount or na9 ture of the10 tax oss The fac11 ts conce12 rning11 all of the backda12 ting will not be repe11 ated at leng12 th here11 in is useful to note howeve10 the following9 fac11 ts as they32 rela9 te to Parse i Parse was the key34 to the succe11 ss of the backda12 ted transac12 tions without his ag19 ree11 ment and participa9 tion orney37 wer9 power9 less to corr10 ect the mistakes ii the corr)10 ections neede12 for the Aronoff11 transac12 tions are ref10 lected in David Parse own handwr9 iting on GX re10 flec9 ting the orig11 inal transac12 tion and GX re10 flec9 ting the revised transac12 tion showing9 that he fully29 understood the nature9 of the backda12 ng10 i the corr)10 ection of the transac12 tions require12 a complex series of steps including reve11 rsals of transfe11 rs of assets betwee12 acc17 ounts reve11 rsals of alre9 ady34 complete9 stock and fore10 ign curr10 ency38 transac12 tions and execution of new of fore10 ign curr10 ency43 and stock trade9 nd iv the backda12 ting occur11 red with not just one client but sever15 al and occur11 red in two differ11 ent tax ear11 tax ear11 for the Aronoff11 family31 members and tax ear11 for Michae9 Toporek Gre9 Bla9 ir and Matthew9 Coleman his sentencing14 memorandum Parse11 attempts to excuse the bac16 kdating10 by30 claiming15 ave no investment advice10 and the trade9 wer9 executed by30 his assistant Parse9 Sent Mem at This statement is not only28 a shameless attempt by30 Parse to throw his subordinate under the bus but also a testament as to just how perve16 rted these tax shelters wer9 that the investment broker15 who otherwise touts his trea9 tment of his long-11 time clients id at a broker10 David had to long term customers and his oal was to assist them to invest their money32 attempts to make much of the fac16 that he was not iving investment advice10 to the backda12 ting clients or as the evidenc10 showed to any39 of the other tax shelter clients As to Parse sug14 estion that the backda12 ting ransactions wer9 done not by30 Parse but by30 Carrie9 Yac10 kee his sales assistant Parse Case Document Filed Page of Case Document Page39 of Case Document Filed Page of Case Document Filed Page of Sentencing14 Mem at the evidence showed and ee testified persistently23 consistently33 and cre11 dibly26 that she acte10 at all time14 the instruction of David Parse Given the fore10 oing Parse attempt to blame her for his criminal conduct is istent with the fac16 ts it is also in a larg15 er sense inexcusable To the extent that Parse trial and curr10 ent counsel have sug9 ested and continue to sug9 est that the backda12 ting transac12 tions we16 re approve11 by30 Deutsche16 Ba11 nk the only28 approva11 ls w9 ere11 from Parse himself and on some of the trade9 tickets the signa11 ture of the branc11 manag16 er appea12 Moreove10 there9 is no evidenc10 that the branc11 manag16 er knew of the purpose and animus for the backda12 ted transac12 tions To the extent that a branc11 manag16 er actua10 lly31 knew what was occur16 ring16 that fac11 would only28 rende11 the bra12 nch mana15 er co-c11 onspirator a9 nd not excuse Parse riminal conduct Howeve12 complex the tax shelters the fra10 udulent backda17 ting was nothing more than arde11 varie9 ty28 fra15 ud committed to achie10 ve impermissible tax results Basic pr9 inciples of tax r9 eporting13 such as the annual acc12 ounting rule prohibit the chang18 ing of tax results throug11 tran-15 a ctio12 car11 ried out afte9 the close of the tax ear11 Carrie9 Yac10 kee testified that she understood based on her Yac10 kee made clea10 that the utsche Ba16 nk approva11 ls on the backda12 ted transac12 tion wer9 actua10 lly26 instructions from David Parse11 You also testified bout acting17 in acc10 ordanc11 with Deutsc9 he ank policy34 corr10 A Corre9 ct Are11 ou awa10 re w9 hat Deutsc14 he ank14 policy29 is for the use of11 as of da10 tes on trade15 A don know of the spe11 cific policy37 How do ou know ou acte10 in acc10 ordanc11 with the policy34 A was dire10 cted wha12 to do by26 my28 boss So when ou say33 ou acte10 in acc10 ordanc11 with policy32 ou mean ou followed our boss order10 A And presumed tha10 he would follow policy33 So Tr Case Document Filed Page of Case Document Page40 of Case Document Filed Page of Case Document Filed Page of conver11 sations with David Parse that the steps of the transac12 tions had to be completed by35 the end of the ear11 ac-7 eve the tax benef11 its Given this clea15 leg17 al imperative Parse willingness to participa9 te in such conduc11 can only34 be viewe12 as bra10 zen misconduct The Ind-12 ictm18 ent Trial New Trial Rul-9 ings the SR On Marc10 the rand jury31 returned a third superse9 ding ndictment char11 ing Parse Guer9 in Daug16 erda11 May33 er and Br10 ubaker11 in thirty27 one counts Parse in particula9 was char11 ed with a conspirac12 he defr10 aud the RS to commit tax evasion and to commit mail and wire fra10 ud Count One well as thre9 counts of ax evasion relating10 to the ax shelter transactions of three separ10 ate tax shelter clients Counts Seventee15 Eig9 hteen and Ninetee10 Parse was also char)11 ed in Counts Twenty35 and Twenty35 F9 ive with eng14 ag14 ing in a corr10 upt endea12 vor to obstruct and impede the RS and mail fra10 respe10 ctively37 essentially32 throug11 the same conduct underly35 ing the Count One conspirac12 char11 On Februa9 ry33 trial commence17 ag14 ainst Parse a9 nd his co-def16 endants On ay34 the jury31 found Parse uilty24 on Counts Twenty35 and Twenty35 F9 ive and not uilty24 on Count One and Counts Seventee10 throug11 Ninetee15 Subsequently29 the Court denied Parse motions for ne14 trial based on juror misconduct and ineffe12 ctive assistance9 of counsel As a result of Parse convictions he fa11 ces maxi-10 mum of ear11 in prison connec12 tion with Parse sentenc9 ing the Probation Offic10 as prepa11 red a Presentenc12 nvestig9 ation Report the 215PSR which calc10 ulates the defe11 ndant Sentencing14 Guidelines offe10 nse levels As calc10 ulated by30 Probation the final offe10 nse level is calling12 for a Sentencing14 Guidelines sentenc9 at the statutory30 maxi-10 mum ear11 imprisonment PSR-11 The brea11 kdown of Parse Guidelines ca11 lculation is as follows Case Document Filed Page of Case Document Page41 of Case Document Filed Page of Case Document Filed Page of A base9 offe10 nse leve9 of pursuant to and tax able PSR An incre9 ase of levels pursuant to U.S.S.G beca)12 use offe10 nse involved sophisticated means PSR An incre9 ase of levels pursuant to U.S.S.G beca12 use the defe11 ndant used his skills as a broker10 and CPA to materia9 lly31 fac16 ilitate his desig16 and implementation of the highly36 complex financ9 ial products that wer9 involved in the differ11 ent tax shelters PSR-11 Parse has no criminal history28 points Thus with a final offe10 nse level of Parse Guidelines-17 acc12 ording11 to the PSR-11 ields a final advisory39 Guidelines rang17 of months Howeve12 due to the combined statutory30 maxi-10 ma of Counts Twenty35 and Twenty35 F9 ive the Guidelines term of9 imprisonment is imited to mont-10 hs PS-9 The Ob-9 jec11 tions to the SR Parse has leveled three9 objections to the calc10 ulation of the Guidelines specific10 ally30 to i the loss calc15 ulations for Guidelines purposes ii appli-10 cation of the sophisticated means enhanc12 ement and i the appli)-10 cation of the use of a specia9 skill Parse objects to being12 held responsible for Guidelines loss alculations purposes for the full amount of loss ener11 ated by30 the corr10 upt endea12 vor and scheme9 to defr10 aud the nterna9 Revenue9 ice Parse arg17 ues that fair rea11 ding of11 the jury33 ver9 dict is tha9 Par11 se was convicted only28 for his ole in hat the rese10 ntence10 Report desc9 ribes as thre12 instance11 of fra12 udulent kdating15 Def9 endant Parse position is contra9 ry33 to law and has no basis in reliable9 fac11 First Parse contention that he is being12 held responsible for acquitte-9 conduct ignor11 es the fac16 that he was convicted on the10 broad corr10 upt ndeavor11 and scheme9 to defra12 ud ndeed the10 Second Circuit Court of Appe9 als has held follows Under9 a the court in calc10 ulating a defendant offense10 level was to take Case Document Filed Page of Case Document Page42 of Case Document Filed Page of Case Document Filed Page of into acc12 ount inter defe11 ndant own acts and omissions-9 see id a A as we9 ll as 215all re10 asonably35 fore15 seea11 ble ac10 ts and omi-10 ssions of ot-9 hers in further11 ance17 of the jointly22 underta9 ken criminal activity30 id a and 215all harm that resulted from the acts and omissions-9 specifie15 in subsection a above and all harm that was the object of such acts and omis-10 id a mphasis added United tates Reifler,446 F.3d 2d ir alterations in orig11 inal See also United States Nash Fe15 Appx WL15 Cir summary35 order10 re10 jecting12 defe16 ndant claim that he be held liable only32 for the raudule9 nt transac10 tions in which he was direc9 tly26 involved loss should be based on fore10 seea11 ble loss from fra10 United States Singh F9 3d 2d ir court upheld finding15 of full loss for sentenc16 ing uidelines purposes despite some acquittals matters not that various phases of the execution of the scheme14 wer9 reje14 cted by30 the jury31 for rea11 son or rea16 sons unknown Singh opinions reg17 arding15 the leg12 ality28 of his billing prac11 tices wer9 reje9 cted by30 the jury32 which clea11 rly21 fo und ex istence of an overa11 ll fra10 udulent scheme9 United States ichittello F.3d 2d Cir upholding9 loss utations in RI20 CO case11 to the campa10 ign financ9 scheme9 Har9 tman is liable a co-c11 onspirator for 217all rea16 sonably36 fore15 seea11 ble acts and omissions-9 in further11 ance12 of the conspirac12 U.S.S.G a cause11 there9 was evidenc10 that Har9 tman was well awa10 re of the larg15 er scheme9 the district court did not err15 in inding that Har9 tman was liable for the entire9 loss suffere12 by30 the NYCCFB11 United States Senninge12 Fe10 Appx WL15 at 10th Cir summary35 order10 cour10 upheld attributing full los-8 from mail fra10 ud scheme14 to efraud the RS and Colorado Depa10 rtment of Revenue9 he court looked at the Senninge12 invol-9 vement in that scheme9 concluding14 her actions did not involve 217simply26 filling in blanks on amende10 retur-12 The district court found Senninge12 cre11 dibilit-10 to the entire opera11 tion She lent her cre11 dibilit-10 as having17 been an RS auditor to this opera11 tion and she knew she Case Document Filed Page of Case Document Page43 of Case Document Filed Page of Case Document Filed Page of
