Calif. Defense Attorney Accused of Money Laundering

The arrest of a controversial defense attorney has raised complicated questions about an advocate's duty to refuse tainted fees. Federal agents appeared at Jamie Harmon's office to tell her that she faced a grand jury indictment for money laundering, according to a second-year associate of Harmon's who spoke to The Recorder on her behalf. Harmon had no idea she was under investigation, Theodore Stalcup said. "It was a complete out-of-the-blue lightning bolt from above," he said. "Not the best day."

Dan Levine

The Recorder

2009-01-13 12:00:00 AM

The arrest of a controversial San Jose, Calif., defense attorney had South Bay lawyers chattering Friday and raised complicated questions about an advocate's duty to refuse tainted fees.

Federal agents appeared at Jamie Harmon's South First Street office at 1 p.m. Thursday to inform her that she faced a grand jury indictment for money laundering, said Theodore Stalcup, a second-year associate of Harmon's who spoke to The Recorder on her behalf. The agents told Harmon to appear in a federal magistrate's court down the street in two hours.

Harmon, a former Santa Clara deputy district attorney, had no idea she was under federal investigation, Stalcup said.

"It was a complete out-of-the-blue lightning bolt from above," Stalcup said. "Not the best day."

According to the indictment prepared by Assistant U.S. Attorney Richard Cheng, Harmon once represented Christian Pantages, a computer equipment dealer. Pantages allegedly sold stolen "high-tech" goods to IT resellers. He hired Harmon to defend state court charges, Stalcup said.

In December 2003, Pantages signed two checks from suppliers over to Harmon, totalling $127,550, the indictment says. A week later, Harmon wrote a series of checks back to the client's wife totalling $45,000 -- including three consecutive checks on the same day for $10,000 each. The lawyer wrote Pantages' wife another check a year later for just over $54,000.

Prosecutors allege those fees came from stolen goods, and that Harmon "knew that the property involved in the financial transactions -- represented the proceeds of some form of unlawful activity." Magistrate Judge Patricia Trumbull released Harmon on $100,000 bond. Pantages received $50,000 bond; he could not be reached for comment.

As of noon Friday, Harmon had not yet hired a lawyer, Stalcup said. The associate acknowledged the money transfers between his boss and Pantages, but said Harmon was merely returning unused retainer fees. She had no knowledge the money originated from a criminal enterprise, Stalcup said.

"How would she know? This guy was the officer of a corporation, and the checks came from a legitimate source," he said.

News of Harmon's indictment was a hot topic in Santa Clara County's district attorney's office, according to two prosecutors working there. Lawyers were not particularly surprised by the details, they said, given Harmon's recent troubles.

A California State Bar trial over a battery of counts concluded last month, with closing briefs due at the end of February. Among the allegations, State Bar prosecutors say Harmon failed to appear on behalf of clients, gave incorrect advice and lied to clients, according to the complaint.

Harmon's attorney for the State Bar proceeding, Jonathan Arons, said his client was willing to admit some mistakes, such as accepting fees from a third party while failing to have the requisite paperwork demonstrating that she still owed her duty to the client. But most of the State Bar charges are way overblown, Arons said.

"She was more than willing to say she made some mistakes in some instances, but who hasn't made mistakes? Everybody's human," Arons said. "Does it rise to the level of deliberate and intentional misconduct? No."

State Bar prosecutor Manuel Jimenez said his office is seeking disbarment. His boss, Lawrence Dal Cerro, declined to comment on whether the State Bar had been working with federal investigators, but said that in general, the Bar has good relationships with law enforcement and that they often share information back and forth.

Beyond the State Bar, Harmon generated controversy in the JonBenet Ramsey case when she claimed to represent John Mark Karr, a suspect in the case. But it turned out Harmon did not represent Karr, the San Jose Mercury News reported at the time. Karr was never charged.

Criminal defense lawyers have a duty not to trade in funds that come from suspected illegal sources, said Hastings College of the Law ethics expert Rory Little. They also cannot remain willfully ignorant, he said.

"If somebody walks in, says here's $80,000 in cash, and what I want is to retain you for a parking ticket, and then you give back $72,000, that's a problem," he said.

Harmon is due back before Trumbull on Wednesday at 9:30 a.m. for an identification-of-counsel hearing, according to the U.S. Attorney's office.