Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Every day for three months, after the Gold Club trial adjourned for the night, defense attorneys would meet journalists on the steps of the Richard B. Russell Federal Building in Atlanta to dismantle the prosecution’s case. Federal prosecutors seethed in frustration because Justice Department rules barred them from discussing the case. They feared the one-sided critique of witnesses each day would bias the jury, which they suspected was ignoring the judge’s admonitions not to read or view media coverage of the trial. Several times, prosecutors asked U.S. District Judge Willis B. Hunt Jr. to issue a gag order for the duration of the trial, and to question jurors to determine the extent to which they had been exposed to news reports. Hunt refused. In Assistant U.S. Attorney Arthur W. Leach’s first major interview about the case, the government’s lead prosecutor says the defense team’s dalliance with the media well may have poisoned the jury against him. And he says that if he had known of a string of informal contacts between the jury, former Gold Club owner Steven E. Kaplan and the media he “absolutely” would have taken “some kind of action.” He concedes, however, that he probably wouldn’t have asked for a mistrial, which would have required the government to repeat in the lengthy trial. Though Leach may not have known it, he had another problem behind the scenes. Leach’s colleagues in the U.S. Attorney’s Office “were working behind his back” in the midst of the trial to secure a plea bargain with Kaplan, according to one defense attorney. Midway through the trial, defense attorneys negotiated a guilty plea for Kaplan, nine of his employees, including four then on trial with him, and two compatriots at Delta Airlines. A month later, the jury acquitted Michael DiLeonardo — allegedly Kaplan’s pipeline to the Gambino crime family in New York — and former Atlanta police officer Reginald Burney. Former U.S. Attorney Richard H. Deane Jr. confirms that he asked Assistant U.S. Attorney Janis Gordon to negotiate the plea agreements in the middle of the Gold Club trial. Deane, now a partner at Jones, Day, Reavis & Pogue, says, “I thought it was in the government’s best interest to do so. … Certainly there is no such thing as a case that can’t be lost, no matter what the quality of the evidence is.” “Art was aware of [the plea negotiations],” says Deane. “It was not something done behind his back.” Defense attorneys say otherwise. Gordon negotiated with defense attorney Donald F. Samuel “behind Art Leach’s back and with Rick Deane’s approval,” Samuel told a seminar of the Georgia Association of Criminal Defense Lawyers here on Jan. 19. “I didn’t know that at the time,” he said later. I have heard that from people since. … It was certainly not something the defense lawyers wanted.” Samuel says that he handled the negotiations with Gordon, rather than Kaplan’s defense attorney, Steven H. Sadow, because “our view of it was, Steve and Art, they are hell-bent on demolishing each other in the courtroom. It didn’t make any sense, at 5:01 p.m. each day, that they go into a room and start negotiating. … It wasn’t meant in any way, shape or form to be derogatory [to Leach]. It was designed to get the right people to the table.” Leach won’t comment on the plea negotiations. But he had insisted earlier that any plea bargain would have to include prison time for all defendants, according to Samuel. The final agreement approved by Deane included prison time only for Kaplan. Everyone else received probation. Deane says he considered Kaplan’s plea in light of the goals the government wanted to accomplish — “close the club and prevent it, in our view, from being used for purposes of illegal activities” and secure from Kaplan an acknowledgement of guilt. The plea bargain accomplished those goals, he says. Deane will not say whether Leach favored the plea bargain. “In the final analysis, the decision came to me. … I thought it was in the government’s interest” to accept the plea. JUROR CONTACT It may be that the plea bargain was the best outcome the government could realize. Six jurors later wrote to Hunt that they would have voted to acquit the strip club owner. In an interview with the Fulton County Daily Report, one juror cited her encounters and brief conversation with Kaplan while she and another juror were eating at a downtown sandwich shop one day during the trial. That same juror recalled fondly in a letter to Kaplan after the trial how DiLeonardo would often smile and wink at the jury. Leach was unaware of many of those contacts, including the conversation with Kaplan. Those that he did witness disturbed him. He recalls that one day, as he left the courtroom, he spotted DiLeonardo standing by the elevator banks. “I said, ‘What are you doing, waiting for a train?’ ” Leach recalls. “ He had no answer. Then I saw jurors getting on the elevator.” Despite directions to court security officers to prevent such incidents, says Leach, they occurred repeatedly. As court reconvened after a break one day, an FBI agent spotted a juror passing a note to a young man sitting in the court gallery. The young man was not connected to the defense or prosecution but came to the trial each day to watch. During the recess, he had lent the juror a quarter to make a telephone call, and the note contained a quarter as repayment. Leach immediately objected to the unauthorized contact. Instead of admonishing the juror or the lender, “Judge Hunt got mad at me,” Leach says. Leach says other instances of inappropriate juror contact included defendants riding in the same elevator as jurors, defendants standing in the corridors where jurors congregated on breaks, and defendants sitting in witness rooms with the doors open where they could catch the eyes of people traversing the corridors. Each time, Leach says, he protested unsuccessfully to Hunt. “I didn’t know about the winks,” Leach says. Nor did he know that Kaplan had approached two jurors at the sandwich shop and offered to leave the restaurant if his presence made them uncomfortable. They told him it was unnecessary, but thanked him for his thoughtfulness. “Had I known what was going on, my reaction would have been immediate,” Leach says. Leach says contacts, whether formal or informal, with the jury by anyone but the court officers violates not only federal rules but Hunt’s explicit instructions to the jury at the beginning of the trial. Such contact provides a defendant with an opportunity “to make an impression,” Leach says. “The impressions are supposed to be formulated in the courtroom. … In my 21 years, I don’t know of a single other example where a defendant had the temerity to approach a juror during the course of a trial.” STRATEGIC ENCOUNTERS Leach says that such contacts with the jury may have been part of a larger strategy by the defense to make men accused of being gangsters seem like “nice guys” instead of “wise guys.” “The effort on their part is, potentially, to get those jurors in a frame of mind where they like the defendant,” he says. “Those sort of impressions created outside of the courtroom are inappropriate and wrong and contrary to the instruction of the court.” Leach also says he was taken aback by the cozy, often visibly affectionate relationship between some of the defendants and reporters covering the trial. And he was affronted by the daily televised news conferences that the defense — with the exception of DiLeonardo’s attorney, Craig A. Gillen — convened on the courthouse steps to offer a running commentary on the prosecutions’ witnesses. And Leach says he came to believe that the defense cultivated a relationship with the media “by design to get information to the jury,” which he believes routinely violated the judge’s admonitions not to read or view news accounts of the trial. “The whole media thing. … It was part of a strategy to humanize Kaplan, to strip away the Gambino influence.” In their daily news conferences on the federal building steps, defense lawyers — particularly Kaplan’s attorney Sadow — “have effectively made arguments to the jury based on material not in the record, hinted at evidence that will never be produced, expressed personal opinion about evidence and witnesses, and disclosed the testimony of witnesses who have already testified to upcoming witnesses,” Leach said in a motion asking the judge to restrict defense attorneys’ contact with the news media. Leach says that during the trial, it became obvious — in part through letters that jurors wrote to the judge — that some members of the jury “were tracking the media … and talking about what they were reading in the media. … For me, the worst part of all of it is to have [defense] counsel go out after a witness has testified, or even before a witness has testified, and call them incredibly reprehensible names.” Leach complained in a motion asking Hunt for a gag order that defense lawyers had described federal witnesses as paid liars, scoundrels, “the scum of the earth” and “two-bit thugs.” Samuel counters that Leach is being disingenuous when he accuses the defense of attempting to manipulate the jurors through media accounts. Instead, the defense attorney suggests, federal prosecutors orchestrated a series of leaks about the Gold Club investigation, issued an indictment exceeding 100 pages against the Gold Club in October 1999, and then called a news conference to announce it. At a recent legal seminar on white collar crime, Samuel says, he reminded Leach during a panel discussion of the trial, “You and Rick Deane, you call a press conference and say you’re going to put an end to organized crime, and then you want a gag order? If you don’t see the lack of symmetry there, if you don’t see the unfairness, you’re blind. “It’s not a question of polluting a jury,” he says. Jurors “could care less” what a defense attorney may tell the media about a federal witness with a checkered past when they have just spent eight hours listening to him in the courtroom. What the news media did manage to do, Samuel believes, was influence Deane as to the actual strength of his case. “The press was generally unfavorable to the government,” he says. “Rick viewed the case as going down the tubes,” not because of what Leach told him but because, “He was reading it in the newspaper. Somehow, we got Rick Deane on our side. … I think it’s the best example of using the press to win a case without using it to pollute a jury.” Leach says there were other setbacks for the prosecution that may have influenced the outcome of the trial. Foremost was Kaplan’s willingness to pay not only his own legal bills but those of his co-defendants, provided they stuck together and declined to make individual deals with federal prosecutors. The final tally of those fees, Sadow told Hunt during Kaplan’s sentencing hearing, was about $4 million. Kaplan also continued to pay, until U.S. marshals closed the Gold Club on Aug. 2, the salaries of the four employees on trial with him as well as those of five other members of his staff who were awaiting trial. “I tried to point out to the court the insidious aspect of that financial arrangement,” Leach says. In court briefings, Leach noted “the inherent dangers” that arise when a defendant is represented by a lawyer paid by a co-defendant. Prior to the trial, Hunt questioned the defendants and warned them that such arrangements created possible conflicts of interest. But they elected to cast their lot with Kaplan. When Kaplan decided to plead guilty, federal prosecutors required that he persuade his employees to plead out, too. They did. But in testifying at Kaplan’s sentencing, those defendants made it clear that they had done so only reluctantly. “I would never have pled guilty,” former Gold Club manager Jimmy Carillo told Hunt during the hearing. “I would have stood trial. On my own, it would never have happened.” Said Kaplan’s chief financial officer Larry Gleit at the same hearing, “Steve had to work very hard to get everybody to plead. … Steve said, ‘It’s what makes sense for all of us.’ “ But, Gleit insisted, Kaplan did not offer anyone cash, a job or other financial incentives, nor did he threaten that others who entered pleas might end up testifying against them. “I don’t have knowledge of that,” he said. There were other rulings that hampered the prosecution. Leach says that U.S. Magistrate C. Christopher Hagy’s decision not to revoke Kaplan’s bond in September 2000 was “a blow.” Leach had asked for the revocation, claiming that Gold Club bouncers and other Kaplan associates were intimidating grand jury witnesses, following them from the courthouse after they testified. In one case, he said, they had attacked a former dancer. “The tactics were clearly tactics the Mob had used in New York,” Leach says. Hagy’s decision to let Kaplan remain free on bond “immediately made all my witnesses feel very vulnerable.” The message, according to Leach: “that the government couldn’t protect them.” When Craig DePalma, a convicted racketeer, refused to testify against DiLeonardo after appearing before a federal grand jury, Leach says his prosecution of DiLeonardo was gutted. Other federal witnesses had testified that DePalma physically transferred an extortion payment to DiLeonardo at a Mafia member’s wedding. Hunt then rejected Leach’s appeal to introduce DePalma’s grand jury testimony. However, Gillen was able to convince Hunt to allow him to introduce a portion of that testimony in which DePalma denied ever giving any money directly to DiLeonardo. Leach says the entire grand jury transcript would have told a different story. He says he can’t discuss specifics because grand jury proceedings are secret. TRACKING THE INVESTIGATION But, from the beginning, what most hampered the government’s investigation into the Gold Club’s alleged links to the New York Mafia was Kaplan’s ability to track the probe, Leach says. As FBI agents fanned out to question the strip club’s estimated 400 employees about possible illegal activities, Kaplan’s staff would report back to him in detail about what questions the agents had asked. “By the time we came in for a search in March 1999, there was a different set of criminal activities occurring at the Gold Club” than had been detailed in the search warrant affidavit, Leach says. As the grand jury investigation proceeded, Kaplan and his attorneys thoroughly debriefed grand jury witnesses and, in many cases, prepared them for their testimony, Leach says. In fact, Kaplan hired a law firm — Schulten, Ward & Turner — to represent hundreds of Gold Club employees who became grand jury witnesses, according to Sadow. As a result, Leach says, “Kaplan’s ability to monitor what the government was doing was as good if not better than our ability to monitor what was going on in the Gold Club.”

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.