Atty Convicted For Refco Fraud Gets New Trial: 2nd Circ. (Law360)

By Amanda Bransford

The Second Circuit said Monday that a former Mayer Brown LLP partner sentenced to seven years in prison for his part in a $2.4 billion fraud scheme at Refco Inc. is entitled to a new trial because of the trial judge's mishandling of the jury.

A three-judge panel vacated the Southern District of New York's conviction, saying that court had violated Chicago lawyer Joseph P. Collins's rights by having a private conference, without first notifying counsel, with a juror who had reported being threatened by another juror.

"When a supplemental instruction is given ex parte, without first consulting counsel, it violates a defendants' right to be present," U.S. Circuit Judge Denny Chin wrote in the court's opinion.

The problem with the jury began in July 2009, when the panelists informed the court they were having difficulty coming to a unanimous decision, according to the opinion.

Juror Four disagreed with the others and said in a note to the court that another juror had threatened to cut off his finger and that he believed the rest of the jury was trying to force him to agree with their opinions on the case, and the jury foreman told the court in a note that Juror Four had offered to barter his vote, the opinion said.

U.S. District Judge Robert P. Patterson did not immediately read these notes into the record, but instead held a private conference with Juror Four and emphasized to him the importance of getting the case resolved, Judge Chin wrote.

The Second Circuit panel decided this amounted to a supplemental instruction, and could have prejudiced the opinion of a juror holding a minority opinion.

"We cannot ignore the possibility that Juror 4 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," the judge wrote.

Judge Chin said he believed Judge Patterson was a competent and experienced judge trying to manage the situation but that he acted too quickly. The trial court could have avoided the problem by initially sharing the note with counsel and asking for input, he said.

Collins was convicted by the lower court in March 2010 for helping now-defunct brokerage Refco hide hundreds of millions of dollars in debt and liabilities. He was sentenced to seven years in prison after the jury found him guilty of one count of conspiracy, two counts of securities fraud and two counts of wire fraud in connection with the scheme.

The U.S. Department of Justice declined to comment on the case Monday. Representatives for Collins did not immediately respond to a request for comment.

Judges Guido Calabresi, Denny Chin and Susan L. Carney sat on the panel for the Second Circuit.

Collins is represented by William Schwartz, Jonathan Bach, Katheleen Cassidy, Jason Koral and Reed Smith of Cooley LLP.

The case is United States v. Joseph P. Collins, case number 10-1048, in the U.S. Court of Appeals for the Second Circuit.

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