When preparing his defense of a client accused in a multibillion-dollar illegal tax shelter scheme, Barry Berke had high barriers to overcome: a witness for the prosecution was seeking to incriminate his client; this man, he believed, had already demonstrated his exceptional persuasive abilities by duping lawyers and accountants from Dallas to Germany; and he needed to hold jurors’ attention during his planned four-day cross-examination of that witness. Finally, he needed to somehow distinguish his client from his four co-defendants.

Berke accomplished all of the above through a bit of role playing using a simple prop — a red handkerchief. Sans hankie, he told jurors, he would be Barry Berke, the white-collar defense partner from New York’s Kramer Levin Naftalis & Frankel. When he stuck the cloth into his breast pocket, however, he assumed the identity of an imaginary real estate developer from Florida interested in finding out how he could shield his income from the IRS through the use of these “tax solutions.”

Berke hoped to demonstrate how his client had been manipulated by the prosecution’s witness to believe the scheme was legitimate. “If it worked, we thought it could be very persuasive to the jury,” Berke said.

The U.S. Department of Justice began investigating Dallas-based law firm Jenkens & Gilchrist in 2006 for selling fraudulent tax shelter schemes. In 2007, the firm acknowledged orchestrating the schemes and sending fraudulent opinion letters to clients. In 2009, the government indicted five individuals: two partners in Jenkens’ Chicago office, a BDO Seidman LLP tax partner and two investment bankers from Deutsche Bank A.G.

Prosecutors, who declined to comment for this story, alleged that Craig Brubaker, one of the Deutsche Bank employees and Berke’s client, “participated in the design, marketing, and implementation” of the tax shelters and received “substantial commissions” through the scheme. His primary contact at Jenkens was Erwin Mayer, a Chicago partner who would become the prosecution’s star witness. “By the time Erwin Mayer started to cooperate, it looked pretty bad for us,” Berke said.

A BIT OF THEATER

To set the stage for his crucial cross-­examination of Mayer, Berke opened with a parable about a farmer taking his sheep to market. Along the way, the farmer meets a stranger, whom he warms to as the stranger assists him in various ways. The farmer eventually asks the stranger to watch his flock while he negotiates with buyers, returning to find both his flock and the stranger missing. “He came to be persuaded of the stranger’s ability to help him, and he came to trust the stranger’s good intention,” Berke said, according to a transcript.

Berke continued: There were two Erwin Mayers, he said. The first, cooperating with the prosecution, was testifying that everyone involved knew of the scheme’s fraudulent nature. The other told wealthy investors and his co-defendants that the scheme merely took advantage of tax loopholes and was legal.

“The idea was, how to take the jurors from the reality they were seeing in the courtroom and show them the reality that our client saw,” he said. “What we really wanted to do was take the jury back to see the Erwin Mayer that our client saw.”

Berke had deployed props in the past, but what to use now? A 10-gallon hat or bolo tie would highlight Brubaker’s Texan heritage, he reasoned, but a red handkerchief was a symbol of wealth and privilege.

“I told the judge I would be doing something a little unorthodox,” Berke said. The judge responded, “You’re taking my adage to keep the jury from falling asleep a little far, but I’ll allow it,” Berke said.

Thrusting the handkerchief into his pocket, Berke became the Florida real estate developer consulting Mayer. At first, Mayer stuck to the story he had laid out for the prosecution and seemed to suggest that the shelters could land the client in hot water.

Fortunately for Brubaker, whom Berke described as a “prolific e-mail writer,” the paper trail between him and Mayer spelled out an entirely different story. Sliding the handkerchief from his pocket, Berke used the correspondence among Mayer, Brubaker and the clients to refute his testimony with his own words.

“I think that having the jury see in action what our client was hearing was very helpful,” Berke said. “I do feel that we were able to turn Erwin Mayer into a net positive.”

When it came time to present his closing remarks, Berke once again deployed the red handkerchief — to subconsciously remind the jury of Mayer’s pitch during cross-examination. “If you’re going to do something unorthodox, you tailor it in a way to make it more memorable for the jury,” Berke said. “With five defendants, you have to make sure the jury remains focused on your client.”

Of the five defendants, only Brubaker won acquittal on all charges, but not before lengthy deliberations he described as “the most horrible experience” someone can go through. He recalled the reading of the verdicts: “All of a sudden, you realize that you’re either going to be crucified or exonerated,” he said. “At the end, you feel like you just ran across a machine gun range and you’re touching all your parts — ‘Did they get me?’ ”

Berke sounded a note of caution about using props. “I think that the most important thing when considering to do something novel or creative is to make sure there are no flips that can be done,” he said. On occasion, ideas “ended up on the cutting-room floor, either because the government could flip it on me or it wouldn’t work.”

Rob Stigile can be contacted at rstigile@alm.com.