"Two original defendants, former Las Vegas lawyer Shawn Hackman and James Farrell, a stock transfer agent from Salt Lake City, pleaded guilty to charges and agreed to testify for the prosecution."
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Mistrial declared in federal securities fraud case in Las Vegas
By: KEN RITTER - Associated Press
LAS VEGAS -- A federal judge is being asked to throw out criminal charges against three men after a mistrial was declared in a case that prosecutors allege involved a multimillion dollar securities fraud.
Lawyers for Daniel Chapman, Sean Flanagan and Herbert Jacobi said in documents filed in U.S. District Court in Las Vegas that allowing the government to retry the racketeering, money laundering and wire fraud case "would serve as a reward to prosecutors who had caused the mistrial."
Prosecutors have alleged Chapman, Flanagan, Jacobi and others created shell corporations and sold securities while hiding the fact that they controlled all the shares of stock -- a scheme regulators refer to as a "box job." Each faces decades in federal prison if convicted.
But the trial collapsed Feb. 7, after 12 days of testimony and 20 witnesses.
U.S. District Court Judge James Mahan ruled the U.S. attorney's office in Las Vegas failed to disclose to defense lawyers that several prosecution witnesses had previous criminal convictions and made plea deals with the government.
Natalie Collins, spokeswoman for U.S. Attorney Daniel Bogden in Las Vegas, declined comment Tuesday. The judge gave the government until Feb. 21 to respond to the request to dismiss charges, and he scheduled a Feb. 27 hearing.
Lawyers representing Flanagan, Chapman, and Jacobi did not immediately respond to messages seeking comment.
In court documents filed Monday, they claim constitutional due process violations and a "persistent and flagrant" pattern of misconduct by prosecutors, who announced a 64-count indictment in August 2003 accusing five people of bilking investors out of at least $14 million.
The indictment accused them of taking over schemes begun in the early 1990s by Las Vegas businessman Peter Berney, who was convicted in a related case and testified in the current case. Another Las Vegas businessman, Robert Potter, allegedly anchored the scheme with Jacobi. Potter was to be a witness in the current case.
Two original defendants, former Las Vegas lawyer Shawn Hackman and James Farrell, a stock transfer agent from Salt Lake City, pleaded guilty to charges and agreed to testify for the prosecution.
Flanagan and Chapman are Las Vegas attorneys. Jacobi is a former New York lawyer who pleaded guilty in New York to related charges that he conspired to receive stolen FBI records about the fraud investigation.
Their defense lawyers contend the government improperly added an investigator to the witness list last month, at the start of trial, and that some of his investigative notes and memos were not turned over to the defense as required.
They also allege the prosecution withheld that a key government witness had been convicted and sentenced for crimes related to the alleged securities racket, and that the criminal records of three other government witnesses were kept secret.
"This is a case where material witnesses testified without the defendants having the benefit of information that could have been used for cross-examination," the defense lawyers argue. |
