Modesto real estate investor Katakis files motion for new trial

06/04/2014 1:54 PM

06/04/2014 5:49 PM

Modesto real estate investor Andrew Katakis’ March bid-rigging conviction should be thrown out because prosecutors played dirty tricks, instructions to jurors were convoluted and his own attorney failed to call witnesses who could have helped prove his innocence, Katakis claims in a bid for a new trial.

Katakis’ sentencing, initially scheduled for Monday, has been postponed until Sept. 15 while a judge reviews the new-trial motion, filed this week in federal court in Sacramento.

After a four-week trial and four days of deliberating, jurors on March 11 declared Katakis guilty of rigging bids at public foreclosure auctions in San Joaquin County and of obstructing justice by trying to throw off investigators. He hired a new law firm and successfully persuaded the judge last month to toss the second charge because, the judge said, no rational jury could have concluded that Katakis had destroyed emails.

The new law firm, Keker & Van Nest of San Francisco, interviewed associates of Katakis who had stood ready to testify on his behalf but never were contacted by his trial lawyer, the motion says.

One worked for Katakis for four years and described him as honest and ethical, and told the new law firm that prosecution witnesses had assured him that Katakis knew nothing about the conspiracy to rig bids, the document says. The other was a conspirator who pleaded guilty long before Katakis was indicted; he had told prosecutors Katakis was not involved in the scheme and would have said so at trial, but was not called to testify, according to a sworn declaration.

That’s consistent with Katakis’ claims that he merely provided investment money for most of the 254 homes in question and did not control his agents.

Eleven conspirators pleaded guilty. At Katakis’ trial, prosecutors said the men cheated at auctions of repossessed homes during the mortgage meltdown in 2008 and 2009, defrauding lenders and freezing out honest buyers while splitting proceeds among members of their group.

Katakis, who owned California Equity Management Group in downtown Modesto and was managing partner of Lenders Financial Group LLC, contended that he was duped by middlemen and that prosecutors ignored evidence that should have cleared him.

His trial lawyer, Paul Pfingst of San Diego, was not prepared because his sport utility vehicle was burglarized three days before the trial started and his computer, external hard drive and notes were stolen, says a court brief. He was granted a one-week postponement.

Jurors could not fairly weigh Katakis’ defense, the 38-page motion says, because prosecutors continued to insist that he erased emails to cover his tracks even after their computer expert was discredited and that theory proven false. “Like toxic sludge, the government’s repeated references to the false DriveScrubber evidence seeped across the record of this trial, irreparably tainting Katakis’ conviction” with “prejudicial spillover,” the document says.

At one point, U.S. District Court Judge William Shubb said he was disappointed that prosecutors persisted in that attack and speculated that “leaving such a flimsy obstruction case in front of the jury might actually work in Katakis’ favor by reducing the strength of the other charges against him,” his new lawyers wrote.

They figure that “mind-bogglingly ambiguous” instructions confused jurors, nudging them to find Katakis guilty of a charge aimed not at him but at an auction crier, who stood trial at the same proceeding and was acquitted.

Shubb at another point acknowledged that a government charge made little sense, “while requiring jurors to march through an impenetrable thicket of verbiage that ‘no rational trier of fact’ could understand,” the document says. “No defendant’s liberty should depend on a jury’s ability to untangle this linguistic train wreck.”

Katakis’ defense “was sapped of its vitality by (his lawyer’s) failure to investigate, poisoned by the government’s false evidence and then administered a death blow by a convoluted jury instruction,” the motion reads.

His attorneys have asked for a July 14 hearing on the new-trial request.

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