NEW YORK (AP) – A Chicago lawyer sentenced to seven years in prison in a $2.4 billion fraud at Refco Inc. is entitled to a new trial because of errors the judge made in dealing with the jury, a federal appeals court said Monday.
The 2nd U.S. Circuit Court of Appeals overturned the conviction of Joseph P. Collins, saying U.S. District Judge Robert P. Patterson erred when he failed to disclose the contents of a jury note and didn’t include lawyers when he spoke with a juror accused of trying to barter his vote.
“This sequence of events deprived Collins of his right to be present at every stage of the trial. Because the deprivation was not harmless, we vacate and remand for a new trial,” the appeals court wrote.
The lawyer from Winnetka, Ill., was convicted in July 2009 of conspiracy and other charges. Federal sentencing guidelines had called for 85 years in prison.
The trouble with the jury became clear after one juror claimed that another juror had threatened to cut off his finger or have her husband “take care of you,” according to the appeals ruling. The following day, the jury foreman wrote a “private note” saying that the juror who complained about physical threats ran into trouble with other jurors after he tried to “barter” his vote by making it contingent on a charge to be voted on later, the appeals court recounted.
The appeals court said Patterson did not read the note into the record or inform lawyers of its contents, but instead spoke privately with the juror, telling him that his behavior was not conducive to getting the trial resolved. The juror responded that he was frustrated by having to endure insults from other jurors. “I don’t think I signed up to endure being called a jerk,” he said.
After the private meeting, the judge read the juror’s note to the lawyers and a transcript of his private meeting into the record. The defense asked for a mistrial.
In ruling, the 2nd Circuit in an opinion written by Judge Denny Chin said it was understandable that Patterson wanted to act quickly “in the face of accusations of vote bartering and other misconduct.”
But the court added that the “circumstances here were not so exigent as to justify depriving defense counsel of an opportunity to be heard.”
Refco was once one of the nation’s largest independent commodities brokers.
The company in the mid-1990s sustained hundreds of millions of dollars of losses through losing trades and engaged in an elaborate campaign to cover them up, attracting the attention of federal authorities. Refco filed for bankruptcy in 2005, just weeks after going public and soon after revealing that a $430 million debt owed to the company by a firm controlled by former Refco CEO Phillip Bennett had been concealed.
Before its fall, Refco employed some 2,400 employees in 14 countries. Bennett is serving 16 years in prison after pleading guilty to conspiracy to commit securities fraud.
William J. Schwartz, Collins’ lawyer, said: “After this long fight, we are very gratified by the Court of Appeals decision.”
A spokeswoman for prosecutors said the government had no comment.
(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)