A juror’s cover-up of her identity as a suspended lawyer led a federal judge yesterday to order new trials for three defendants in the Jenkens & Gilchrist tax shelter case. But the judge denied a new trial for a fourth defendant, finding his lawyers had reason to know the juror’s real identity and kept that knowledge to themselves.
Southern District Judge William Pauley (See Profile) said juror Catherine M. Conrad “made a calculated, criminal decision to get on the jury” that convicted Jenkens & Gilchrist tax specialist Paul Daugerdas and Donna Guerin; Denis Field, a former BDO Seidman CEO; and David Parse, a former Deutsche Bank Alex.Brown banker. Conrad, the judge said, told “breathtaking” lies about her education, her involvement in civil litigation, the criminal history of herself and her husband and her situation as a suspended lawyer with a drinking problem.
“The human toll her deliberate lies inflicted on the parties, their counsel, the witnesses, and the jurors who faithfully served, is inestimable,” Pauley wrote in a 63-page opinion in United States v. Daugerdas, 09 Cr. 581, that closed with the suggestion that Conrad be prosecuted for perjury.
Daugerdas, Guerin and Field won new trials, but Parse did not, having been deemed by the judge to have waived any objection because his lawyers at Brune & Richard failed to disclose to the court, until after the fact, that they were suspicious of Conrad’s real identity and had investigated her during trial.
“This case lays bare the damage that ensues when the obligation to be forthright is cast aside,” Pauley wrote, adding stern words for Susan Brune, Laurie Edelstein and Theresa Trzaskoma of Brune & Richard, and faulting them for only gradually disclosing the extent of their investigation into Conrad until there was pressure from the government and the court.
Pauley was upset over the sheer waste of time and money in a trial that took three months, had 41 witnesses and 1,300 exhibits in evidence, and 22 million documents produced in discovery.
Daugerdas, Guerin, Field and Parse were convicted on May 24, 2011, by Conrad and 11 other jurors of selling illegal tax shelters to wealthy clients so they could claim paper losses that saved them hundreds of millions of dollars.
Conrad’s real identity was only exposed post-trial, after she sent a letter to the lead prosecutor, Southern District Assistant U.S. Attorney Stanley Okula, saying “KUDOS to your team,” praising the government’s handling of the case and commenting on deliberations.
Pauley held a two-day evidentiary hearing in February in which the Brune & Richard attorneys defended their actions and expressed “regret” that a July 2011 brief seeking a new trial for their client did not disclose their investigation.
Peppered at the hearing by Assistant U.S. Attorney Nanette Davis to admit there were “material omissions” in the brief, Brune would only concede there were “shortcomings.”
It was clear at the hearing that Trzaskoma during trial had been looking into whether the Catherine Conrad who said she was a housewife was the same Catherine Conrad who was a suspended attorney. Trzaskoma intensified her efforts during closing arguments, after Conrad on May 11, 2011, sent a note to the judge asking whether the judge intended to instruct the jury on vicarious liability and respondeat superior.
On May 12, as Trzaskoma, Edelstein and Brune walked across Foley Square Plaza, Trzaskoma raised the possibility the juror was actually the suspended lawyer. When Trzaskoma asked Brune whether she should keep investigating, Brune told her, “No, just leave it.”
Pauley reviewed e-mails sent by Trzaskoma to a paralegal during jury deliberations on May 12, including one in which she wrote, “Jesus, I do think it’s her.”
At the point Trzaskoma was making this “immediate, unvarnished reaction” that was “tantamount to an excited utterance,” Pauley said Trzaskoma knew of an appellate court 2010 order refusing to lift attorney “Catherine M. Conrad’s” 2007 suspension from the practice of law, knew that the same person had participated in a lawsuit pending in Bronx Supreme Court, and knew she was associated with a Robert J. Conrad, an immigration judge who is her father.
“Any fair reading of these e-mail exchanges show that Parse’s attorneys had actionable intelligence that Conrad was an imposter,” Pauley said. “That knowledge demanded swift action to bring the matter to the Court’s attention. Further investigation would have been easy and prudent. But Parse’s attorneys chose to do neither.”
Pauley said Conrad was actually biased and said, “Such a person has no business sitting on a jury in judgment of others.”
“Conrad is a pathological liar and utterly untrustworthy,” he said. “Her animus toward lawyers—like Defendants here—was evident not only in her comment that most attorneys are criminals but also her attitude at the evidentiary hearing. Her comment that all attorney are ‘crooks’ was a direct statement of bias against the Defendants.”
This was no help to Parse, as the judge imputed the actions of Brune & Richard to their client.
“Ultimately, a defendant waives his right to an impartial jury if defense counsel were aware of the evidence giving rise to the motion for a new trial or failed to exercise reasonable diligence in discovering the evidence,” he said. “To be sure, actual knowledge of facts disqualifying a juror is an absolute bar to any challenge to that juror after a verdict.”
He added, “But a defendant cannot consciously avoid learning the truth in the hope the jury verdict will be in his favor.”
Pauley urged the government to prosecute Conrad for perjury, saying, “The prospect of preserving a tainted jury verdict should not temper the Government’s resolve to call Conrad to account for her egregious conduct.”
As for the Brune & Richard attorneys, Pauley said their argument that they relied on Conrad’s voir dire answers was “unpersuasive.”
“At a minimum, Parse’s attorneys had a suspicion that Juror No. 1 was not the person she represented herself to be during voir dire,” he said. “That suspicion leavened into tangible evidence that Conrad was a monstrous liar. And Parse’s attorneys knew—or with a modicum of diligence would have known—of Conrad’s misconduct before the jury rendered its verdict. But they gambled with the jury they had.”
Christopher Gair of Jenner & Block in Chicago, the lead lawyer for Daugerdas, said yesterday, “It’s a good day when justice is done,” but that he was not surprised by the judge’s decision.
“I’ve only been surprised by one thing in the course of these post-trial proceedings, and that’s when it was established [that Conrad had lied about her identity] that the government didn’t immediately join our motion asking for a new trial,” he said. “Their job is to do the right thing.”
Mark Rotert of Stetler Duffy & Rotert in Chicago represented Guerin.
Sharon McCarthy of Kostelanetz & Fink represented Field.
“I think very highly of the attorneys from Brune & Richard because they are superb lawyers,” McCarthy said. “The lies that Conrad told during voir dire are just remarkable, stunning. There is no precedent for this sort of jury misconduct and the court’s decision granting a new trial is the right one.”
Paul Shechtman of Zuckerman Spaeder represented Parse at the hearing.
@|Mark Hamblett can be contacted at email@example.com.