Claiming federal authorities are retaliating against him "for his vigorous representation of criminal defendants," a Columbus, Ga., attorney is fighting back in court pleadings that accuse federal prosecutors of "outrageous governmental misconduct."
In one of a series of motions seeking to dismiss a federal indictment charging him with laundering illegal funds generated by a drug trafficking ring operated by his clients, Columbus lawyer J. Mark Shelnutt says federal authorities interfered with protected attorney-client relationships by recruiting not only his clients, but also criminal defense lawyers representing co-defendants of his clients and federal prosecutors with whom he was negotiating on behalf of clients, to secretly record his personal and telephone conversations.
An Atlanta criminal defense attorney not associated with the Shelnutt case, former federal prosecutor Wilmer "Buddy" Parker, said that Shelnutt's allegations could present problems for federal prosecutors if they pursued charges against Shelnutt's clients and Shelnutt simultaneously, because 11th U.S. Circuit Court of Appeals case law bars the government from going forward with the prosecution of an individual represented by a lawyer who is also under federal investigation.
"It's hard to justify the government's conduct" alleged by Shelnutt, said Parker. "But I'm extremely troubled from a defense lawyer's perspective, about other defense lawyers engaging in the conduct alleged here. How do these lawyers ever think they could be trusted by other members of the defense bar?"
Shelnutt was indicted last month on charges of conspiring to launder drug money from his client's drug ring and with 31 separate money-laundering counts stemming from legal fees paid to Shelnutt by accused drug ring members who hired him to defend them. The Columbus attorney also has been accused of aiding and abetting the drug ring in its conspiracy to distribute cocaine; failing to report cash payments greater than $10,000 that were made to him; attempting to bribe an assistant U.S. Attorney with college football tickets; tampering with witnesses; and making false statements to FBI agents.
Shelnutt's motions, filed by his defense attorney Thomas A. Withers of Savannah, accuse federal authorities of deliberately misleading Shelnutt about whether he was under investigation, in violation of the Columbus defense lawyer's constitutional rights and those of his clients. It also accuses federal agents who recruited one of Shelnutt's former clients to inform on the lawyer of providing that client with information that led him to make what federal authorities believed was a credible death threat against Shelnutt and then refusing the lawyer's request for protection.
According to a motion accusing federal prosecutors of misconduct, the government intensified an ongoing investigation of Shelnutt in August 2007, after Shelnutt informed one federal prosecutor that search warrant affidavits executed by a Columbus task force contained false information.
Last week, F. Maxwell Wood, U.S. Attorney of Georgia's Middle District, declined to comment on the allegations contained in Shelnutt's motion that accused federal prosecutors on Wood's staff of misconduct.
"It's a free country," Wood said of Shelnutt's claims. "He can make any allegations he wants. ... I'm sure the truth will come out eventually."
Wood, an appointee of former President George W. Bush, announced last month that he is stepping down effective July 31, leaving his position open for the Obama administration to fill.
Because of a conflict not specifically outlined in court pleadings, Wood said he has turned Shelnutt's prosecution over to Assistant U.S. Attorneys Carlton R. Bourne Jr. and David M. Stewart in the Augusta office of Georgia's Southern District.
A Middle District grand jury in Columbus handed down the 40-count indictment against Shelnutt. Wood's prosecutors still are pursuing related cases against members of the drug ring to which the federal grand jury has linked Shelnutt.
U.S. District Judge Clay Land of Georgia's Middle District in Columbus is presiding over Shelnutt's case.
Withers, Shelnutt's lawyer, declined to comment on the case.
DRUG DEALING CLIENT
The key allegations against Shelnutt, a 46-year-old graduate of Emory University's law school, stem from his defense of Torrance Hill, a former client former client convicted of drug trafficking who was arrested in May 2005 after a three-year joint investigation by federal, state and local authorities that culminated in what has been described as the largest drug bust in Columbus' history.
The money-laundering charges -- according to Shelnutt's personal attorney, Charles E. Cox Jr. and court pleadings filed by Withers -- are based on Shelnutt's acceptance of legal fees from Hill and others linked to Hill's drug ring and allegations that he ignored federal laws requiring him to report cash payments of $10,000 or more.
The false statement allegations, according to the indictment, stem from a conversation with Shelnutt that was secretly recorded by a federal prosecutor regarding how defendants in a federal drug investigation had paid Shelnutt and whether he had provided receipts for funds he received from his clients.
The bribery allegation stems from Shelnutt's alleged offer of a pair University of Georgia football tickets, with a face value of $25 a piece, to an Assistant U.S. Attorney in Columbus identified in the indictment only as "M.H." Assistant U.S. attorney Melvin E. Hyde Jr. of Columbus prosecuted Hill and a number his co-defendants. The indictment does not indicate that Shelnutt sought any favors in return for the tickets.
COOPERATING DEFENSE ATTORNEYS
Shelnutt's motion accusing the federal government of outrageous conduct identifies two attorneys, one from Atlanta and one from Columbus, as having cooperated with FBI agents investigating Shelnutt and, thus, violating the State Bar of Georgia's ethical conduct code.
The two lawyers identified by Shelnutt as FBI informants are Atlanta sole practitioner Derek M. Wright and attorney Mark A. Casto of Bennett & Casto in Columbus.
Shelnutt's motion claims Casto was "acting as an FBI informant" when he allegedly secretly recorded calls with Shelnutt at the FBI's request and then supplied them to the FBI.
When Casto made those recordings, according to the motion, Shelnutt was representing drug ring leader Hill in a separate Harris County drug case near Columbus. Casto was representing Hill's co-defendant, Shawn Bunkley. Three weeks after Casto allegedly recorded those phone calls with Shelnutt, Bunkley was indicted on federal charges stemming from the Harris County case. Federal authorities, who according to Shelnutt's motion considered Bunkley as a witness against Shelnutt, arranged for Casto to represent Bunkley in the federal case.
Shelnutt's motion describes the government's alleged use of Casto to gather evidence against a fellow defense attorney as "shocking" and "troubling" given that his client and Shelnutt's client were co-defendants in at least one case. "Casto's status as a cooperating government informant plainly constituted a personal interest which created an actual conflict with [defendant] Bunkley's interest," Shelnutt's motion stated.
On Monday, Casto declined to comment on specific allegations contained in Shelnutt's motion, saying that it "has made me a witness in the case."
But, he said, "I am not an FBI informant, and any allegation that I violated any bar rules or ethical rules is ridiculous, and it is just absurd that he would make that allegation."
Shelnutt's motion also accuses Atlanta lawyer Wright of assisting the FBI in intruding on Shelnutt's attorney-client relationship with Hill via Hill's then-wife, Tamika Hill.
Shelnutt originally had represented Tamika Hill. According to Shelnutt's motion, after Hill hired Wright to defend her, Wright asked Shelnutt to continue to help in her defense. But Shelnutt did not know that Hill had begun cooperating with federal drug agents, who sent her to Shelnutt's office wired with an audio and video recording device -- a month before her husband entered his final plea agreement in the federal drug case.
"The government subverted the defense function in the federal and state proceedings then pending against [Torrance] Hill and his associates and undermined the fairness and integrity of those proceedings," Shelnutt's motion states. "The government was able to record Mr. Shelnutt speaking with Ms. Hill about her husband's pending case, then craft their strategy accordingly."
Late Monday, Wright told the Fulton County Daily Report in a voice mail: "I am not an informant in the Shelnutt case nor do I play a role as any informant or really a witness whatsoever in that case."
Co-defendants of Shelnutt's clients and a fellow defense lawyer were not the only one's taping conversations with Shelnutt without his knowledge. Shelnutt's motion also accuses Assistant U.S. Attorney Jason M. Ferguson of acting as an FBI informant by secretly recording telephone conversations and a face-to-face meeting with Shelnutt without the lawyer's knowledge.
During that face-to-face meeting, Shelnutt, citing federal court precedents requiring the government to acknowledge a conflict when a defendant is being represented by an attorney who is simultaneously under investigation, asked whether he was a target of a federal investigation. Shelnutt said that if he were a target, he could not continue to defend Hill, according to his motion.
Ferguson, according to the motion, misled Shelnutt, "even when directly confronted by Mr. Shelnutt regarding his need for the information in order to fulfill his ethical obligations to his client," the motion states. "Courts in this and other jurisdictions have condemned similar misleading representations or omissions by officials regarding the true nature of an official inquiry."
It was the recording from that meeting that federal authorities later played for Shelnutt's client, Hill, according to the motion, in an attempt to recruit Hill to assist in the investigation of Shelnutt. Shelnutt had been recorded on that tape acknowledging that a former client had tipped federal authorities to Hill's illegal drug enterprise, according to Shelnutt's motion.
Shortly after Hill heard the tape, a federal prosecutor called Shelnutt's attorney to notify him that there had been a credible threat on Shelnutt's life. However, according to Shelnutt's motion, "The FBI assigned the two agents who were investigating Mr. Shelnutt to investigate the death threat," while refusing to provide Mr. Shelnutt with any security.
Atlanta defense lawyer Parker, while not involved in the Shelnutt case, is familiar with the conflicts that can occur when the government investigates lawyers. Fifteen years ago Parker prosecuted lawyer Fredric W. Tokars on charges of racketeering, laundering drug money for his client drug dealers and arranging for the 1992 murder-for-hire of his wife.
Parker suggested that there are multiple problems arising from the alleged conduct of federal prosecutors and fellow defense attorneys in the Shelnutt case.
When Tokars attempted to represent a client drug dealer early in the federal investigation, federal prosecutors informed Tokars that he had a conflict of interest because he had incorporated the nightclubs suspected of laundering drug money and would have to step down as defense counsel.
"I think the law is very established" in the 11th U.S. Circuit Court of Appeals, Parker told the Daily Report. "If the government is investigating an attorney, then the government cannot allow that attorney to represent another who the government is likewise prosecuting. ... Whether you disclose to the attorney or not [that he is a target] depends on whether you can justify, in the interest of justice, non-disclosure.
"But in making that decision as to whether you can justify non-disclosure, you certainly cannot go forward with the prosecution of an individual being represented by the target attorney."
Parker also challenged the government's recruitment of defense lawyers in seeking to make their case against Shelnutt. "I don't believe the government can invade the defense camp," he said. If defense lawyers were taping Shelnutt under the direction of the FBI or federal prosecutors, "It is no different from the government wiretapping an individual communication between an attorney and his or her client. Lawyers acting under the supervision of the government are deemed under the law to be government agents. They might as well be FBI agents with badges."
Such an action could well violate the constitutional rights of Shelnutt's clients as well as clients of the lawyers acting on behalf of the FBI, Parker said.
Parker dismissed any suggestion that collusion by defense attorneys with the FBI could be justified by claiming a better deal for their clients. "So you would knowingly violate the code of conduct by getting a better deal for your client?" he asked. "That would mean the ends justify the means. ... The means, arguably, would appear to violate the ethical code of conduct as well as the constitutional rights, if not of their clients, of Shelnutt's client."