Corporate Law

2nd Circuit Axes Refco Lawyer's Conviction in $2.4B Fraud Case, Says Judge Erred re Juror Note


Convicted by a federal jury in New York in 2009 and sentenced to seven years in a $2.4 billion corporate securities fraud case, a former Mayer Brown partner today won a vacation of his conviction.

Because Joseph Collins was denied his constitutional right to be present at every stage of his trial, because of a judge’s erroneous handling of a juror note, he must be given a new trial, a federal appeals court ruled. Collins has been free on bail while his appeal was pending.

Sent a note by the jury foreman that accused another juror of refusing to deliberate and offering to barter his vote, the trial judge did not share it with counsel at that time. However, U.S. District Judge Robert Patterson did inform the lawyers he had received the note and planned to discuss it with a juror. Defense counsel went on the record as “not consenting” to this approach, recounts the New York City-based 2nd U.S. Circuit Court of Appeals in its written opinion (PDF).

During the ex parte discussion, which was transcribed by a court reporter, the judge “gave the juror what amounted to a supplemental instruction, emphasizing the importance of resolving the case,” the opinion says. When the judge read the note and the transcript into the record, after the discussion was complete, defense counsel sought a mistrial, arguing that the deliberative process had been tainted.

Such ex parte communications with jurors are pregnant with possibilities for error, and the judge made mistakes in this case by failing to disclose the contents of the note to Collins and allow his counsel an opportunity for input before speaking to the juror, the opinion explains. “Because of the delicate nature of jury deliberations, even seemingly innocuous ex parte communications between the court and the jury can amount to reversible error.”

Here, the mistakes were not harmless error, the three-judge panel ruled, because the juror’s decision-making may have been affected by the judge’s supplemental instruction during the ex parte session:

“We cannot say, with ‘fair assurance,’ that the district court’s errors in this case did not substantially affect the verdict,” the panel says in the opinion. “The court singled out a dissenting juror, and emphasized to him the importance of reaching a verdict. We cannot ignore the possibility that [the juror] walked out of the ex parte conference with the impression that he should not stand in the way of a prompt resolution of the case.”

As detailed in an earlier ABAJournal.com post, Collins was initially convicted of helping executives of client Refco Inc. cover up losses prior to the company’s bankruptcy in 2005, weeks after it went public.

An attorney for Collins told Bloomberg in a written statement that “after this long fight, we are very gratified by the Court of Appeals’ decision.”

The U.S. Attorney’s office in Manhattan declined to comment.

Collins was convicted in 2010 and is now 61. His retrial will not be helped, from the prosecution’s standpoint, by the death last week of a key cooperating witness at age 60, reports the New York Times’ Dealbook blog.

The Associated Press and Reuters also have stories.

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