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United States v. Liberty

United States District Court, D. Maine

April 10, 2019



          George Z. Singal, United States District Judge.

         Before the Court is the Government's Motion for a Foster Hearing (ECF No. 25). On March 18, 2019, Defendant Liberty filed his Response (ECF No. 41) to the Government's Motion. On April 4, 2019, the Court held a hearing at which both sides submitted exhibits and the Court conducted a colloquy with Liberty under oath.

         To the extent that the Government's Motion requested a hearing and asked that the Court specifically inquire with Liberty regarding the topics listed in the Government's Proposed Questions (ECF No. 25-1), the Motion is GRANTED IN PART as reflected in the record of the Court's April 4, 2019 hearing. To the extent that the Government's Motion can be construed to request any other relief, the Motion is hereby DENIED.


         The Sixth Amendment generally guarantees the assistance of counsel to each defendant. See U.S. Const. amend. VI (“In all criminal prosecutions, the accused shall enjoy the right . . . to have the Assistance of Counsel for his defence.”). One element of this right is “the right of a defendant who does not require appointed counsel to choose who will represent him.” United States v. Gonzalez-Lopez, 548 U.S. 140, 144 (2006) (citing Wheat v. United States, 486 U.S. 153, 159 (1988)). Another element of this Sixth Amendment right is “a right to conflict-free representation.” United States v. Cardona-Vicenty, 842 F.3d 766, 771 (1st Cir. 2016) (quoting United States v. Hernandez-Lebron, 23 F.3d 600, 603 (1st Cir. 1994)).

         When it is brought to the attention of the Court that counsel retained by a particular defendant may have a conflict, the Court has a duty “as early in the litigation as practicable, to comment on some of the risks confronted [by defendant's choice of counsel, ] to insure that [the defendant is] aware of such risks, and to inquire diligently whether [the defendant] ha[s] discussed the risks with [his] attorney, and whether [he] understand[s] that [he] may retain [other] counsel.” United States v. Foster, 469 F.2d 1, 5 (1st Cir. 1972). Within the First Circuit, the process for fulfilling this duty is generally referred to as a “Foster hearing.”[1]

         In the following section, the Court briefly lays out the applicable facts based on the evidence received at the April 4th Foster hearing, including its colloquy with Defendant Liberty.


         On February 27, 2019, Defendant Liberty was indicted on ten counts, including four counts of wire fraud, three counts of money laundering, along with one count of conspiracy to commit wire fraud, one count of money laundering conspiracy, and one count of securities fraud. These criminal charges were the result of approximately two years of investigation into the financing of an entity known as Mozido by multiple federal agencies.

         As part of this investigation and as relevant to the pending motion, in May 2017, Erik Abbass, Mr. Liberty's brother-in-law and personal bookkeeper, received a subpoena for documents. Abbass then retained Attorney Mina of McCloskey, Mina & Cunniff LLC (“MMC”), to represent him in connection with responding to the subpoena. Attorney Mina subsequently sent responsive documents to Assistant United States Attorney Donald Clark in three installments between June 6, 2017 and August 18, 2017. All told, Abbass, through counsel, produced over 6, 000 files in response to the subpoena. The Government anticipates that some of these records may be offered as evidence at trial and that it may also call Abbass as a trial witness. MMC maintains that its representation of Abbass ended after the document production was completed. MMC presently considers Abbass a former client.

         Similarly, Angela Liberty (“Angela”), who invested in Mozido and is married to a cousin of Defendant Liberty, received a subpoena for documents in May 2017. Angela retained Attorney Mina of MMC, to represent her in connection with responding to the subpoena. Attorney Mina subsequently sent 47-pages of responsive documents to Assistant United States Attorney Donald Clark on June 20, 2017. Attorney Mina also represented Stanley Liberty (“Stanley”), husband of Angela Liberty and cousin of Michael Liberty, in June 2017. At the time, Stanley was asked to appear before the Securities and Exchange Commission (“SEC”) for an examination related to the SEC's investigation into the financing of Mozido. On June 28, 2017, Stanley, accompanied by Attorney Mina, sat for a transcribed interview.[2] The Government made no further requests of Stanley after this interview. As a result, MMC maintains that their representation of Stanley and Angela concluded as of July 2017. The Government represents that it does not anticipate calling either Stanley or Angela as witnesses in this matter.

         In August 2017, MMC secured signed Consent to Waiver of Conflict of Interest Forms from Defendant Liberty, Abbass, as well as Stanley & Angela Liberty. (See Def. Exs. A-C (ECF Nos. 41-1, 41-2 & 41-3).) As acknowledged in all three signed waivers, “MMC's representation of the Libertys and of Erik Abbass was undertaken by MMC at the request and with the assistance, cooperation and financial support of Michael A. Liberty.”[3] (Id. at PageID #s 176, 178, 180.) Each waiver also indicated that “based on the information presently known to MMC” the interests of these four individuals are “not adverse” and that there was not “a significant risk of a conflict of interest in connection with MMC's simultaneous representation” of all four individuals. (Id.) Nonetheless, all four indicated by signing their respective waivers that they sought to “knowingly and voluntarily” waive “any and all conflicts of interest[ ], potential, actual or otherwise.” (Id. at Page ID#s 177, 179, 181.)

         The Government acknowledges that it first raised the issue of a potential conflict with MMC's representation after the Indictment was filed and MMC attorneys were the only attorneys to enter an appearance on behalf of Defendant Liberty. Prior to that time, the Government represents that it did not raise any concerns about a potential conflict because it believed that MMC was acting as “local counsel” and that Defendant Liberty had additional conflict-free counsel who had attended meetings with the Government on behalf of Michael Liberty.[4]

         The Government also represents that it is concerned that Stanley & Angela Liberty may be current clients of MMC based upon the fact that MMC reached out to the Mega Victims Case Assistance Program (“MCAP”) on March 26, 2019. (See Gov't Exs. 8 & 9.) Beth Peterson, a MMC paralegal, made this contact in response to the Government having sent six unsolicited Victim Notification System (“VNS”) notices to Attorney Mina. (See Peterson Aff. (ECF No. 48), PageID #s 198-99.) These VNS notices were intended to provide information to Stanley & Angela Liberty that the Government is required to relay to any identified potential victims in a criminal matter. The notices were apparently sent to Attorney Mina, rather than directly to Stanley & Angela Liberty, based on Attorney Mina's earlier representation of the Libertys and the Government's concerns about complying with ethics rules limiting direct communication with persons who are known to be represented by counsel. See M. R. Prof. Conduct 4.2. ...

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