I don’t spend much time here talking about my cases. This isn’t a billboard for my practice. It’s a place for me to express thoughts, joke, and do whatever the hell I want to do. Lawyers who can’t have a conversation without telling their own “war stories” are annoying, and mostly full of crap. Lawyers who use their blogs to promote themselves, achieve success in “traffic” and little else.
But last Friday, after 11 days of trial and 2 and ½ days of deliberations, a federal jury said my client, I’ll call him “Jose,” (because his name is Jose), was not guilty of both conspiracy to commit wire fraud and wire fraud. Four of the other six defendants in the case received the same verdict. This ended a journey that began when Jose came to me three years ago.
An acquittal is of course not as common as a conviction. Most (97%) of criminal cases end in a plea, dismissal, or other type of resolution. Trials are the exception, and federal trials are an animal unto themselves. By the time a federal indictment is returned, often the feds have been working on the case for years.
Am I happy about the acquittal? Of course. Is it the reason for this post? No. I’ve won before. I hope to win again. The rule of the professional criminal defense lawyer, as opposed to the self-promoting “look how great I am” type, is that you take your acquittal and quietly move on to the next case. Most believe an acquittal is the result of “luck” or “technicalities,” or a jury gone wild. No sense in talking about the acquittal for too long, as it appears to be bragging, or garners the public’s “you got lucky with your guilty client” mentality. Few get acquitted on Law & Order, people don’t like it.
This case was different.
Jose is a maintenance man from Cuba. He started at his job 22 years ago making $6 an hour. He was laid off last year due to budget cuts. At the time he was making $24 an hour. In 22 years he never received a complaint, was never disciplined by his boss, and according to his employer, was a “good employee.”
When the real estate market was at its height, Jose and his fellow workers were approached about “making money in the real estate market.” As a maintenance man making $24 an hour and owning a modest home, Jose never thought of making money doing anything but fixing things. He was told by a fellow worker that because he had good credit, he could invest in homes that would be fixed up and sold, and when those homes sold he would receive $5,000 per home. The word “mortgage” was never used, nor was the word “fraud” or “scam.”
A fellow worker told him it was legal, so he handed over his driver’s license and social security card, put “no money down,” and sometime later, he received money.
A year later Jose received a visit from a federal agent. He made the rare decision to find a lawyer prior to talking to the agent, and that’s where I joined the party. Jose agreed to talk to the agent, who came to my office so Jose could tell him the story. The agent showed Jose mortgage documents with his signature. He had signed none of them, attended no closings, and the agent knew it. There was no doubt in my mind my client was going to be a government witness in an eventual case of mortgage fraud.
A year later a slew of government issued cars, agents, and guns descended on Jose’s house pre-dawn and arrested him. He had been indicted with 14 others. I called the agent to ask why there was no voluntary surrender. “The prosecutor said to arrest everyone, even the ones with lawyers who cooperated.”
At the center of the case was the already convicted leader and organizer of a $24 million dollar fraud enterprise – her homes, yachts, and sports cars already seized. In her effort to reduce her 10-year prison sentence, she laid out the entire fraud. Jose would face trial with other “straw borrowers” (those for whom mortgages were taken out in name only), as well as people who worked in the office whiting out loan documents, lying about who they were when lenders called, falsely verifying employment with fake phone numbers actually reaching cell phones of fellow employees of the fraudster, and a banker who created fake checks and false verifications of deposit.
The theory of prosecution of my client? He knew it was mortgage fraud.
The case was severed and 7 defendants went to trial first. There was a hung jury on all defendants. The straw buyers were acquitted on the wire fraud charge, but the jury deadlocked on conspiracy. The reason for the government’s stunning defeat – the jury hated the fraudster. The prosecutor, who called the result a “fluke,” would not be deterred. There would be no re-evaluation of the case, no attempt to make a deal with the straw borrowers in that case. Trial number two would proceed.
Now it was my turn, along with 5 other defendants.
This time the government would change strategy. No, not that strategy – they did their typical federal trial thing – turning over a witness list the morning of trial with 39 witnesses, leaving off a few others who sauntered in to testify. They also proudly had their case agents walk over to our table at the end of the first day of trial, and give us a few hundred pages of “Jencks Act” discovery – reports they’d had for months. They weren’t given out the morning of the first day because the prosecutor “forgot.” Throughout the trial other reports surfaced, and were handed out moments before the day’s witnesses would began to testify.
Here was the change: They would not call the fraudster, and they would lightly tread on the extent of the fraud – leaving it up to the jury to determine whether the clients signed any documents. They knew they were all false, but hey, maybe they weren’t…… Their theory would be that the clients handing over their driver’s license and social security cards started into motion this massive fraud – and they should be held responsible.
The height of the disingenuious presentation of evidence was a witness who did exactly what Jose was accused of doing, but wasn't indicted. The only difference was that the witness waited a while to accept his check because he had second thoughts. He did, eventually, take the check. In closing the prosecutor argued that he "walked away." I had to remind the jury that he actually "stepped away," for a little while.
The government screwed this case up from the beginning. Instead of working out deals from the bottom up, they went from the top down. The jury wasn’t buying it. How could the government claim that these people knew of all this fraud when it was clear the fraudster did everything to hide who she was and what she was doing, including filling out change of address forms for all the straw borrowers so that the mortgage correspondence went to a P.O. Box instead of their homes?
The government made some bets here. They bet on the environment out there – the anger over foreclosures, the understanding that the collapse of the real estate market is why the economy is tanking. They bet that the jury would convict anyone who had anything to do with mortgage fraud, even if in fact, they had no knowledge they were participants in a mortgage fraud scheme. They bet that the excused potential juror who claimed (as some potential juror always claims) that “if they were indicted, they must have done something wrong,” shared a similar thought with a few of the 12 who were seated to hear the case.
Why was the jury out for 2 ½ days? I don’t know. I think jurors are more skeptical when they are about to acquit, than when they are going to convict. I’ve heard many statistics, but one I believe is that 80% of potential jurors show up for jury duty prone to convict. Maybe when they hear a case and do not have proof beyond a reasonable doubt, especially in a case like this – with 8 boxes of evidence and dozens of witnesses - they second guess themselves. “Are we really going to tell the government they didn’t prove their case?”
My client didn’t just get lucky here, beat the rap, or escape justice. He was innocent. Yes, for all those who said after the trial “what did he do,” the answer is “nothing.” He was an unknowing participant in a scam. The government had to prove that at the time he handed over his information, he knew that it was fraud. No one came to court to testify to that. No one said “I told Jose it was a scam, that we would forge documents, that multiple loans would be taken out in his name.” Jose of course was approached because he wouldn’t know, because he wouldn’t ask questions, because he wasn’t as smart as the fraudster.
The government just wanted a jury to find beyond a reasonable doubt that he knew, because they are the government, and well, they only prosecute guilty people.
They wanted to send a message – don’t be an idiot, don’t get scammed, or you will go to federal prison.
This was not about an acquittal, a framed verdict form on an office wall, or an “attaboy” from my colleagues. This was about how the government can create criminality from stupidity, from naivety, from a desire to send a message to society that is mired in an environment of blame.
Jose was found not guilty because he was not guilty. The fact that he had to endure the possibility of being locked up in federal prison over his conduct is shameful. That the government brings cases to trial because they think they can craft a case that will leave a jury wondering about guilt, and forgoing the burden, is both scary and a derogation of their duty as prosecutors.
This was the first case I can remember where I said not a word to the prosecutor the entire time. No “good morning,” no “good evening,” no nothing that wasn’t necessary for the discharge of my professional duty. I could not bring myself to converse with a lawyer whom I believed was prosecuting an unjust cause. This was a case where the government believed they could prove guilt, whether it was there, or not. In the presentation of every loan, the question was asked: “how much was Jose borrowing here?” He wasn’t borrowing anything. The reports the government had of their multiple interviews with the fraudster and other witnesses, gave them knowledge that Jose didn’t take out any loans. Still, maybe they could get a jury to believe otherwise. Maybe then they could send that message that getting scammed is a crime. Maybe then they could prosecute every old lady and gullible American who buys into a scam.
This is a case where my joy over the acquittal is tempered with my disgust for the government in even bringing this case. The prosecution was a waste of time and money. The presentation of evidence was disingenuous. The government knew what happened here, but acted throughout trial as if “hey, we’re not sure.”
That this case ended in a not guilty is a tribute to the fleeting thought that the system, despite a prosecutor who tosses discretion in favor of an attempt to prove criminality, can still work.
As I said in my closing: “this case isn’t even close.” There was no knowledge, no intent, and no specific intent to defraud. None. Zero. Still, I engaged in a war with the federal government, who poured water on the jury and asked them to trust that it was raining.
They were smart enough to look up.
Brian Tannebaum is a criminal defense lawyer in Miami, Florida practicing in state and federal court, and the author of The Truth About Hiring A Criminal Defense Lawyer.
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