A federal appeals court has upheld a 15-year-plus sentence against George David Gordon, a former Tulsa, Okla., lawyer, for securities fraud.
On March 15, the U.S. Court of Appeals for the Tenth Circuit affirmed the sentence of 15 years, eight months issued by Judge James Payne of the Northern District of Oklahoma. Payne also issued a restitution order of $6.2 million and a forfeiture order that included up to $1.7 million in equity in Gordon’s home and all the funds in his law firm bank accounts.
Gordon, who practiced securities law but is now disbarred, was convicted in May 2010 of violating federal securities laws through his involvement in a "pump-and-dump" scheme, which entails artificially inflating the value of particular stocks then selling them at a substantial profit. Payne sentenced him in October of that year.
The scheme began in 2004, and Gordon was indicted in 2009 on various counts of wire fraud, securities fraud, money laundering, making a material false statement to a federal official and obstruction of official proceedings.
Gordon and several co-conspirators acquired millions of shares of so-called "penny stock" from very small public companies. They created false documents to more easily trade the stocks. They also orchestrated trading among individuals involved in the scheme to make it look as though the stock was actively trading. In addition, they used faxes and emails to promote the stock with misleading and false advertisements. Further, they used bank accounts of numerous individuals and organizations, which they controlled, to launder the money.
Ultimately, they lied to the U.S. Securities and Exchange Commission about their crimes.
Judge Jerome Holmes wrote the opinion, joined by judges Harris Hartz and Terrence O’Brien.
Holmes first rejected Gordon’s argument that the government’s seizure of his assets deprived him of his Sixth Amendment right to counsel: "Even though Mr. Gordon’s assets may have been incidentally constricted by the government’s conduct, he has not demonstrated that he was denied access to funds to pay for his defense in any substantial sense."
Holmes added, "In light of the district court’s findings regarding Mr. Gordon’s access to considerable financial resources to pay his counsel, we will not engage in speculative ping-pong about the potential for harm to his defense resulting from the government-initiated restraints on his property—even assuming that those restrains were improperly imposed."
Holmes detailed how copious evidence supported the convictions. He rejected Gordon’s claim that the district court erroneously dismissed a juror who told court staff that her views of personalities in the case could be a roadblock for the jury, but never indicated which side she favored.
He also affirmed the government’s use of two witnesses who testified that Gordon advised them to take the Fifth Amendment. Holmes wrote that did not taint Gordon’s own use of his Fifth Amendment right not to testify at his own trial.
Gordon’s lawyer, William Lunn Jr., a Tulsa solo practitioner, said that Gordon is disappointed and that he was denied due process. Lunn said Gordon’s property was seized for more than two years , and he was denied a hearing on his motion to dismiss on the grounds that the government’s forfeiture violated his constitutional rights.
"As a result of the government’s seizure of his assets, he could not pay for anyone to review and analyze the hundreds of thousand of pages of documents relating to his case," Lunn said.
The Justice Department declined to comment, according to spokesman Michael Passman. Claire McCusker Murray of the department’s Criminal Division, Appellate Section, argued for the government.
Sheri Qualters can be contacted at email@example.com.