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The muttering started early Monday morning in William Alsup’s federal courtroom as lawyers began the latest phase of an arson/insurance fraud case that has sent prosecutors, defense lawyers and the judge into revolving paroxysms of frustration. A burned-out car found near a rural airport last year triggered a federal terrorism probe. And while the probe turned up nothing more nefarious than an insurance scam, the husband and wife who were implicated made conflicting statements in an apparent effort to protect one another. Things only got more difficult once prosecutors indicted the couple � sparking a contentious run-up to trial that included the wife’s lawyer, Nina Wilder, getting served with a subpoena from prosecutors in the federal building hallway. The case against Luis Gonzalez and Katherine Paiz has been a spectacle for the San Francisco federal building’s criminal practitioners for weeks. Gonzalez was convicted on some counts Friday, while jury selection began Monday for Paiz. U.S. Attorney Scott Schools joined a packed gallery for some of the proceedings last week. According to court filings and the husband’s attorney, both admitted to various versions of a scheme to fake the theft of their Honda, which was found near the rural Byron Airport on the east side of Mount Diablo. While Gonzalez confessed to the actual immolation, his admission contained inconsistencies. But so did his wife’s � she alternately blamed the fire on associates of her husband, and took responsibility for the overall scheme herself. With a couple that seemed intent on protecting one another, the prosecutors were hesitant to drop the most serious charge � an arson count against both defendants that carries a 10-year mandatory minimum prison sentence � or to let the two stand trial separately, something that Alsup this summer agreed to do. On Monday morning, it was Assistant U.S. Attorney William Frentzen’s turn to seethe. When the question came up of whether Paiz would defend herself at trial by blaming her husband, her attorney Wilder told the judge that her client “was always going to point the finger at her husband.” “Unbelievable,” was all Frentzen could squeeze out between his clenched teeth. The case had taken a major step toward resolution on Friday. After a jury heard oral arguments, climaxing with Frentzen brandishing a charred gas can and repeating Gonzalez’s statement that “I burned the shit,” the panel convicted the husband of the fraud and conspiracy counts. But it acquitted him of arson, despite Gonzalez’s confession. Gonzalez’s lawyer, Assistant Federal Public Defender Daniel Blank, said that while he was disappointed with the convictions, “We were, of course, relieved by the acquittal on that count. Mr. Gonzalez didn’t burn the car.” Blank added that his client had already offered to admit to the other counts. “We were prepared to concede the wire fraud counts,” he said. “In fact, prior to trial, we had offered to plead guilt to the wire fraud if the government would dismiss the fire count.” A spokeswoman for the San Francisco U.S. attorney’s office declined to comment. But court documents show that Paiz had also agreed to plead guilty to the fraud counts. Standing in their way, though, was the arson count and its 10-year mandatory minimum sentence, which would have to run consecutive to any sentence from the fraud counts. SPLITTING THE CASE Alsup split the case in August � against the arguments of prosecutors, who were doubtful of the defendants’ credibility. Defense lawyers said Gonzalez, if tried separately, would offer testimony that could help exonerate his wife, sparking a bitter fight over whether the case should be split. Frentzen and Assistant U.S. Attorney Robert Rees balked at the prospect; they said conflicting statements the husband and wife had given to FBI agents in apparent attempts to protect one another from prosecutors called into question Gonzalez’s credibility. In court documents, the prosecutors say Paiz had initially blamed associates of her husband for the fire; she later took that statement back. At the same time, Gonzalez accepted blame for the arson, though parts of his confession � including his assertion that he walked the 15 miles from the Byron Airport to his home in an hour � apparently failed to convince the jury. In his closing statement, Blank said his client offered a false confession to protect his wife in a terrorism probe. Alsup at first refused to hold two trials, but later reversed his ruling, to the ire of prosecutors. Gonzalez’s trial began last week, and it didn’t take long for more friction to arise over the issue of who was blaming � or accepting blame on behalf of � whom. On Thursday, Wilder � who represents Paiz, but was in the audience at Gonzalez’s trial � was served with a subpoena. The prosecutors wanted her to testify about her client’s plea talks in their case against Gonzalez. Wilder, a partner at Weinberg & Wilder, declined to provide a copy of the subpoena and said she doesn’t want to discuss the case until it resolves. The prosecutors ended up not calling Wilder to the stand. Nonetheless, the hearing turned out to be nearly as combative as the rest of the case. And in the middle of it, Alsup reminded all the lawyers of one way to make the problems go away. “I can’t make [Paiz] plead guilty. I’m not going to go there,” he told Wilder. “I don’t want anyone reading this transcript and thinking I pressured you to plead guilty, so we’re just going to go ahead and have a trial,” he added. Opening statements are scheduled to begin today.

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