Violation could lead to dismissal of indictments against mortgage title officers
LAS VEGAS — Evidence that Nevada Attorney General Catherine Cortez Masto and her office engaged in rampant prosecutorial misconduct in the pursuit of two mortgage-servicing industry employees grew even stronger this week.
Masto’s chief deputy attorney general John Kelleher — lead prosecutor in the November 2011 high-profile felony prosecution of two Lender Processing Services (LPS) title officers — was inflamed with a powerful personal conflict of interest when he set out to get a grand jury to indict LPS employees Gary Trafford and Geri Sheppard, assert their attorneys.
[T]he lead prosecutor had a serious, undisclosed, disabling conflict of interest tied directly to Trafford. Specifically, in September 2011, the lead prosecutor received a notice of default (“NOD”) identifying Trafford’s employer as the processor of foreclosure documents for the lead prosecutor’s personal residence.
Two days later, the AG sent its chief investigator to the home of [LPS employee] Tracy Lawrence, where she was threatened with arrest if she did not assist in the AG’s attempt to make a case against Trafford.
To support their claim, defense counsels summarize an audio recording of the AG's chief investigator, Todd Grosz, uncovered during discovery:
On Thursday, September 8, 2011 — just two days after the NOD on Mr. Kelleher's home was filed — the AG's chief investigator, Todd Grosz, and his partner went to the home of Trafford's colleague, Tracy Lawrence, on "short notice." … As soon as he stepped in the door, Mr. Grosz said that he was "under the gun" and was "being pressed" by the AG's office. …Importantly, Mr. Grosz also told Ms. Lawrence at the outset: "We have a prosecutor who is pissed. He wanted us to hook you up today.... He wanted us to arrest you now." …The AG's investigators then proceeded to "interview" Ms. Lawrence for information to use against Trafford.
Lawrence, the LPS employee who testified in the grand jury proceedings conducted by Kelleher, committed suicide shortly thereafter.
The most serious allegations against Masto, personally, is that she knowingly concealed from both the court and defense counsel Kelleher’s “disabling” conflict of interest — even though she was well aware of it.
According to the defense brief:
Ten months after the NOD was filed for the lead prosecutor's home, Attorney General Cortez Masto revealed in an online report that the lead prosecutor had been removed due to a conflict of interest concerning his "personal foreclosure crisis." …However, the AG's office never disclosed this conflict to the Court, Trafford or his counsel. Instead, research by the defendants' counsel turned up the lead prosecutor's personal foreclosure documents and exposed the apparent connection between the lead prosecutor's conflict and Trafford's prosecution.
What defense counsel had discovered online in October was an 8 News Now story reported by Colleen McCarty in April. It revealed that Kelleher had resigned from the AG’s office after Masto, in March, had replaced him as head of the office’s 23-person criminal unit.
“Cortez Masto ordered the move based on what she called a conflict of interest surrounding Kelleher's personal foreclosure crisis,” reported McCarty.
Many of the model rules of ethical conduct adopted by the American Bar Association and, subsequently, by the Nevada Supreme Court as the rules of professional conduct for Nevada attorneys appear to have been violated by both Kelleher and Masto.
Rule 1.7, on conflicts of interest, states that “a lawyer shall not represent a client if the representation involves a concurrent conflict of interest,” which is defined as “a significant risk that the representation of” his client “will be materially limited by … a personal interest of the lawyer.”
Moreover, under Rule 1.8, when “lawyers are associated in a firm,” the prohibition that “applies to any one of them shall apply to all of them.”
Under Rule 3.1, it is a violation for a lawyer to “bring … a proceeding, or assert or controvert an issue therein,” where there is no “basis in law.” However, notwithstanding a clear understanding in Nevada law that the document-signing activities of Trafford, Sheppard and Lawrence did not constitute forgery, say the defense attorneys, Masto and Kelleher nevertheless arraigned the three LPS employees on forgery charges.
Rule 3.3 prohibits a lawyer knowingly making “a false statement of fact or law to a tribunal or fail[ing] to correct a false statement of material fact or law previously made to the tribunal by the lawyer.”Neither Kelleher nor Masto, however, according to the defense brief, ever sought to correct the record regarding Kelleher’s repeated mischaracterization of Nevada law before the grand jurors.
Rule 3.4, “Fairness to Opposing Party and Counsel,” prohibits an attorney from concealing “material having potential evidentiary value.” However, both Kelleher and Masto concealed from grand jurors and the court Kelleher’s massive conflict of interest. Additionally, Kelleher — the grand jury transcript reveals — repeatedly blocked grand jurors’ efforts to learn whether Tracy Lawrence signing Gary Trafford’s name with his authorization, truly constituted “forgery” under state law.
The same rule also prohibits an attorney from “knowingly disobey[ing] an obligation under the rules of a tribunal.” Masto, as an officer of the court — much less as the state attorney general — would normally have been thought to have had a clear obligation to inform both opposing counsel and the court of what she acknowledged was Kelleher’s personal conflict of interest.
Rule 3.8 requires prosecuting attorneys to “refrain from prosecuting a charge that the prosecutor knows is not supported by probable cause,” and also “make timely disclosure to the defense of all … information known to the prosecutor that tends to negate the guilt of the accused …, and, in connection with sentencing, disclose to the defense and to the tribunal all unprivileged mitigating information known to the prosecutor.”
Under Rule 5.1, “Responsibilities of … Supervising Lawyers,” Masto shares responsibility for Kelleher’s violation of the Rules of Professional Conduct, as she had “direct supervisory authority” over him and effectively ratified his conduct by failing to inform the court of his egregious conflict of interest, which her actions later showed she clearly knew about.
“[I]t is evident that Trafford is the victim of an overzealous prosecution and unfairly biased grand jury presentation by a prosecutor whose own foreclosure documents were processed by Trafford's employer,” state the LPS manager’s attorneys.
“Indeed, the law is clear that a prosecution team cannot administer justice or preserve the fairness and impartiality required of grand jury proceedings when its lead team member has a conflict of interest.”
For precedent, they cite a U.S. Supreme Court case, United States v. Gold, which held that a prosecutor who makes a presentation to the grand jury while operating under a conflict of interest is an “unauthorized” person before the grand jury — requiring immediate dismissal of the indictment.
According to a supplemental brief filed by the AG’s office November 26, Judge Carolyn Ellsworth, hearing the case for the 8th Judicial District on October 27, “expressed a concern about the wording of the indictment. Specifically, the counts … which contain[ed] the term ‘forgery’ were of concern to the Court. In particular, the Court found that there could be no forgery if the person whose signature was signed had given consent.”
Masto’s office was asked for comment but did not respond by deadline.