Three years ago, a special investigation concluded that federal prosecutors intentionally withheld evidence in a case against Alaska Senator Ted Stevens. Stevens was convicted by a jury in 2008 for failing to disclose gifts and that conviction factored into his reelection loss. In April 2009, Attorney General Eric Holder stated that prosecutors had withheld evidence that could have cleared Stevens, a violation of the law which was highlighted in the case of Brady v. Maryland. The 500-page special investigation report was noted by NPR as an event that "... shook the legal community, as law professors described it as a milestone n the history of prosecutorial misconduct." Since then, there have been few noted high profile cases of prosecutors withholding evidence, so the Stevens findings must have led to prosecutors cleaning up their act, right?
The answer to that question is far from clear. A little over a year ago, the Chief Judge Alex Kozinski of the Court of Appeals for the 9th Circuit stated that, “[t]here is an epidemic of Brady violations abroad in the land. Only judges can put a stop to it.” (U.S. v. Olsen 737 F.3d 625, 626). While some judges have taken this to heart and made prosecutors more accountable with sharing evidence, others have simply allowed the practice (withholding of evidence) to continue. One court in particular appears to have shifted the responsibility more towards the defense, even where the prosecutors purportedly mislead defense counsel into thinking that no additional evidence about its cooperating witness existed.
In a three-week trial in February 2010, George Georgiou was defending charges that he orchestrated a $55 million scheme. It involved the artificial inflation of stocks traded on the Pink Sheets and OTC Bulletin Board and also using those inflated stock as collateral on a loan. Georgiou (45), a Canadian citizen, would be found guilty and was subsequently sentenced to 300 months in prison (for those without a calculator that is 25 years). He is currently serving his sentence in a federal prison in Milan, MI where his release date is December 2031.
During his trail, the government presented a significant amount of information (trading records, loans, bank accounts, etc.) that was pretty damning to the Georgiou case. However, one government witness would testify directly to Georgiou's state of mind and his intent to defraud. That witness was Kevin Waltzer, who Philly.com described as having a talent for, "... getting victims to invest in worthless companies ..."
Waltzer, a business partner with Georgiou, began cooperating with the FBI in June 2006 and had also participated in briefings with the Security and Exchange Commission as part of a joint investigation. He recorded phone calls, sent emails and provided information on wire transfers to the FBI. Fourteen months later, Georigou, according to Waltzer's testimony, wired money to an account of an undercover FBI agent as part of a test transaction and was arrested as part of a sting operation. Georgiou testified in his own defense and said that he had wired the money as part of a personal loan for Waltzer. It was Georgiou's word against Waltzer's. Waltzer was the key government witness at trial and was on the stand for much of the trial.
Knowing that Waltzer would testify meant that Georgiou's attorneys would do their best to discredit him while on the stand ... that's how this game of justice is played. If the jury saw Waltzer as being not credible, it might bolster Georgiou's defense. Since Waltzer had been the government's main man during the investigation, the defense attorneys asked for any information they had on him. According to a brief filed by Georgiou's attorney Scott Splittgerber, a request was made to prosecutors about Waltzer, particularly concerning his mental health issues, drug use or treatment for those issues. The prosecutor's reply was that they were unaware of any additional information. During trial, Waltzer did admit to the occasional use of cocaine, but that it was not a problem. Waltzer's testimony must have been pretty convincing ... Georgiou was found guilty.
After Georgiou's conviction and sentencing, it came time for Waltzer to appear in a Philadelphia federal courtroom to see how much prison time he would receive. There, U.S. District Judge Stewart Dalzell showed his leniency in sentencing Waltzer to "only" 11 years in prison for his "extraordinary" cooperation. Waltzer had hoped for a lesser sentence and, like other defendants, had asked the judge to show some compassion citing that his criminal conduct "occurred when he was struggling with cocaine addiction .... regularly ingesting large amounts of cocaine and alcohol." Waltzer further said that he suffered from ADHD, bipolar disorder and panic attack disorder, "all of which were exacerbated by his use of cocaine which impacted his conduct." Waltzer even had his psychiatrist provide a report supporting his claims. So the government prosecutors knew this information and it seems that it might have been good thing for Georgiou's attorneys to use when questioning Waltzer on the stand ... like, "How do you remember all these dates, times, quotes and state of mind when you were stoned and suffering from various mental disorders?" Just saying.
Splittgerber filed an appeal of behalf of Georgiou claiming a Brady violation and that this information was known by the government but not disclosed to the defense. The 3rd Circuit sided with prosecutors and upheld Georgiou's conviction stating that the defense should have been more diligent in getting the information and that even if that information were made available it would not have affected the outcome of the trial (guilty). Had prosecutors simply mentioned Waltzer's current mental health and drug treatment/monitoring, something mandated by the court, the defense could have subpoenaed those SEALED records or asked the judge to review them to determine if they were relevant.
Waltzer has not finished cooperating against others. He is a witness in another criminal trial against Fred Montano who is accused of manipulating his company's stock, Falcon Ridge Development. Since the cat is out of the bag about Waltzer's various mental health and drug issues, Montano's lawyers are planning on bringing those up should Waltzer testify. That might be in doubt because Waltzer has been far from a good inmate since his incarceration.
In February, prosecutors turned over information about Waltzer at the request of Montano's lawyers. According to information filed in a motion in that case, "The government ... provided to the defense information that Waltzer has been hoarding pills of his prescription Klonopin while incarcerated at the FDC in Philadelphia pending the trail of Montano." It goes on to say that "... Waltzer could be hoarding these pills for distribution to other inmates in order to curry favor and/or other aspects of prison life to enhance his own situation of incarceration." That kind of stuff just does not look good.
While there have been no big Brady violation victories for defendants, there still seems to be a problem with prosecutors turning over information that does not serve them well. U.S. Justice Department recently ordered its lawyers to start turning over more information to criminal defense lawyers. This comes five years after AG Holder asked to have the charges dropped against Senator Stevens because of the egregious acts of prosecutors withholding information that led to the conviction of an innocent man.
Prior to this most recent DOJ order, an internal memo from Deputy Attorney General David Ogden on January 4, 2010, gave prosecutors a guideline for when they should turn over information to avoid violations of disclosure. One of those areas that would fall into the category as potentially important information to share about government witnesses was:
"Known substance abuse or mental health issues or other issues that could affect the witness's ability to perceive and recall events."
Guess the prosecutors in Philadelphia did not get that one.
Georgiou has been convicted of a serious crime and is serving some serious time. With or without Waltzer's testimony there is a substantial amount of incriminating evidence in the case but the government chose to put a witness on the stand that was not tested to the fullest extent possible because of a lack of information ... information that was withheld by prosecutors.
The Attorney General, Deputy Attorney General, even Congress can set policies or pass laws that are meant to compel prosecutors to be more forthcoming with evidence to share with defense counsel, however, I do not think we will see much progress until judges start overturning convictions. Geogiou's case seems to be a missed opportunity that could not only have helped George Georgiou, but the next defendant walking into the courtroom.
