Jurors erred in Katakis’ obstruction conviction, appellate justices rule

Appellate justices have upheld a trial judge’s acquittal of former Modesto businessman Andrew Katakis on an obstruction-of-justice count, but the ruling may not help his drive for a new trial on a separate bid-rigging conviction.

In his early 2014 trial, federal prosecutors “invited the jury to ... engage in mere speculation” about deletion of emails incriminating Katakis, the justices found in the ruling, dated Aug. 31. Jurors convicted Katakis of both charges, but the judge soon agreed with Katakis that the jury had erred on the obstruction-of-justice count and threw it out.

Katakis asked for a new trial, contending that prosecutors’ arguments tainted the entire proceeding. That motion went into limbo when prosecutors appealed the acquittal.

The recent decision of the U.S. 9th Circuit Court of Appeals affirms the acquittal, slamming prosecutors for concocting alternate theories regarding the emails’ deletion when their initial theory collapsed. “Make no mistake, the (prosecutors’) original plan failed,” the three appellate justices said, calling one theory “half-baked” and saying there was “a gaping hole in (the) logic” of another.

“More is needed” when a defendant is facing 20 years’ imprisonment, the justices said.

However, their decision must not be mistaken as proof that the entire trial was corrupted, the appellate justices said, refusing to weigh in on Katakis’ claims of prosecutorial misconduct.

Katakis’ defense camp a year ago argued that errors leading to the obstruction-of-justice acquittal had prejudiced jurors against him on the other count. His appellate attorneys also said instructions to jurors were convoluted and blamed his original lawyer for failing to call witnesses who could have helped prove his innocence.

The trial judge will decide whether to grant Katakis a new trial, following a November hearing.

Katakis, who owned California Equity Management Group in downtown Modesto and was managing partner of Lenders Financial Group LLC, said he was duped by middlemen and that authorities ignored evidence that should have cleared him. He and others were accused of cheating at auctions of repossessed homes during the mortgage meltdown in 2008 and 2009 by freezing out honest buyers, splitting proceeds among members of their group and defrauding lenders.

This story was originally published September 9, 2015 at 9:56 AM with the headline "Jurors erred in Katakis’ obstruction conviction, appellate justices rule."