Paul Daugerdas, a former Jenkens & Gilchrist lawyer, and two other defendants in what a judge called the biggest U.S. tax-fraud prosecution in history won a new trial after a juror disclosed she had lied about her past, including that she was an alcoholic and a suspended attorney.
U.S. District Judge William Pauley in Manhattan today overturned the convictions, ruling that the presence of Catherine Conrad, who was Juror No. 1, denied the three a fair trial.
“While Conrad claimed that she was a ‘fair and unbiased’ juror, this court cannot credit that assertion,” Pauley said in an opinion today. “Conrad is a pathological liar and utterly untrustworthy.”
Pauley upheld the conviction of a fourth defendant, David Parse, ruling that his lawyers, from the New York firm Brune & Richard LLP, had facts about Conrad’s background that they failed to tell the court before the case went to the jury.
“At a minimum, Parse’s attorneys had a suspicion that Juror No. 1 was not the person she represented herself to be during voir dire,” Pauley said, referring to the process of asking potential jurors questions to determine their fitness to serve on a panel. “That suspicion leavened into tangible evidence that Conrad was a monstrous liar.”
Susan Brune, the lead lawyer for Parse at the trial and a founding partner of Brune & Richard, didn’t immediately return a voice-mail message seeking comment on the ruling. Bobbi Sternheim, a lawyer appointed by the court in December to represent Conrad, didn’t immediately return messages seeking comment on today’s ruling.
Jurors in May 2011 convicted Daugerdas of more than 20 criminal counts stemming from an alleged 10-year tax shelter scheme. He faced more than 20 years in prison. The defendants claimed Conrad wouldn’t have been permitted to serve on the jury if she had told the truth about her background. Her presence on the panel deprived them of a fair trial, they said.
Pauley said the government should have “a strong incentive” to prosecute her for perjury. Federal prosecutors in Manhattan have removed themselves from considering whether to prosecute Conrad, according to Ellen Davis, a spokeswoman for the U.S. attorney’s office there. Federal prosecutors in Brooklyn will handle Conrad’s case, Davis said.
“Conrad lied about her educational, professional and personal background,” Pauley said in his opinion.
Conrad told the court her highest level of education was a bachelor’s degree, when she had actually received a law degree from Brooklyn Law School in 1997. She was admitted to practice in 2000 and was later suspended, which she also failed to tell the court.
Conrad lied about her residence, telling the court she lived in Westchester County rather than the Bronx. And she hid the fact that she had been arrested at least five times and that her husband is a career criminal.
In a hearing in February, Conrad admitted she had once stolen a bag of shrimp from a convenience store while drunk. Another time she punched a police officer in the stomach as he arrested her for drunk driving. At the time of the Daugerdas trial, there was an outstanding warrant for her arrest issued in Winslow, Arizona, after she was arrested for an altercation with her husband and failed to appear in court.
In the hearing, Conrad said she covered up her past to be “more marketable” as a juror.
The 10-week tax fraud trial included 9,200 pages of testimony from 41 witnesses, according to Pauley. Lawyers introduced 1,300 pieces of evidence, Pauley said.
In addition to convicting Daugerdas and Parse, who worked for Deutsche Bank AG unit Alex. Brown Inc., the jury returned guilty verdicts for Denis Field, the former chief executive officer at accounting firm BDO Seidman LLP; and Donna Guerin, a Jenkens & Gilchrist lawyer. A fifth defendant, former Alex. Brown accountant Robert Craig Brubaker, was acquitted.
Pauley said that one of Parse’s lawyers, Theresa Trzaskoma, knew during the trial that Juror No. 1 was a suspended lawyer, in spite of Conrad’s answers during voir dire. Pauley quoted e-mail exchanges among the Brune & Richard trial team on May 12, 2011, the day jury deliberations began in the case.
“What we found before voir dire was that maybe she was a suspended lawyer,” Trzaskoma told a paralegal on the trial team. Later in the day, she told the same paralegal, “Jesus, I do think that it’s her.”
Trzaskoma didn’t immediately return a voice-mail message seeking comment.
The case is U.S. v. Daugerdas, 09-CR-581, U.S. District Court, Southern District of New York (Manhattan).