New Jersey: Where “Troublesome Practices” Draw No Sanction

A rare discipline decision of the New Jersey Supreme Court

This disciplinary matter involves serious allegations that a private attorney engaged in unethical conduct and improperly influenced the prosecution of two individuals by the Cumberland County Prosecutor’s Office (CCPO). Certain aspects of the alleged behavior — if proven — would constitute conduct prejudicial to the administration of justice and violate Rule of Professional Conduct (RPC) 8.4(d). The prosecutor’s office, of course, has a preeminent role in the enforcement of criminal laws. Prosecutors, not private counsel, have significant discretionary authority about whether to pursue criminal charges and how to proceed. As a result, the Court must examine not only whether the allegations are supported but also who bore responsibility for certain conduct in question.

National Freight, Inc. (NFI), was the victim of an alleged fraudulent scheme carried out by Trident, LLC. In March and April 2008, Trident passed NFI five bad checks that totaled $168,000. Trident went out of business in May 2008. Days later, NFI filed a civil lawsuit against Trident and its corporate principals. Several other creditors forced Trident into bankruptcy. The bankruptcy proceeding preempted the civil suit, which was dismissed.

In June 2008, NFI’s security manager, James Matlock, signed criminal complaints against Trident’s principals. An assistant prosecutor reviewed the matter and declined to pursue charges. NFI then retained Helmer to act as a “middleman” between the company and the CCPO and persuade the office to prosecute. Helmer worked in the CCPO from 1985 through 1989 and served as the First Assistant Prosecutor in 1988 and 1989. Helmer contacted Assistant Prosecutor David Branco, then chief of the major crimes and organized crime bureau for the CCPO. The two had previously worked together at the Prosecutor’s Office and had become good friends. Branco discussed the NFI/Trident matter with Helmer, and Helmer urged Branco to pursue criminal charges.

Branco assigned the case to G. Harrison Walters, a line prosecutor who had been with the office for three years and had little prior experience handling white collar cases. On May 27, 2009, Branco met with Helmer, Matlock, and NFI’s general counsel. Branco called Walters into the meeting while it was underway. Branco and Helmer ran and “dominated” the meeting, according to Walters. The following plan was agreed on: the CCPO would seek a sealed indictment against Trident’s principals; arrest them in New Jersey by surprise; request high bail amounts; allege that the bail money represented the proceeds of a crime at a bail source inquiry; and arrange for the bail monies to be used as restitution for NFI. Had the plan worked, NFI, an unsecured creditor in the bankruptcy proceeding, might have received payment for its losses outside of the bankruptcy process.

Walters conducted no independent investigation of NFI’s allegations against Trident. In an email to Walters, Helmer sketched out ten criminal charges for an indictment, and Walters directed his secretary to draft a ten-count indictment that followed Helmer’s outline. Walters presented the case to the grand jury with Helmer as the sole witness. The grand jury indicted Trident and its principals on all ten proposed counts. The following day, a Superior Court Judge signed arrest warrants against the principals, which listed bail at “$150,000 Full Cash.” Branco admitted that a higher-than-standard bail amount was sought, among other reasons, “to get as close to the restitution amount as possible.”

The plan fell apart when CCPO detectives refused to carry out the arrests. The trial court later dismissed the indictment with prejudice. The CCPO did not appeal. After an internal investigation, the CCPO fired Branco and suspended Walters for six weeks without pay. The CCPO also referred Helmer and Branco to the Office of the Attorney General and made a referral to the Office of Attorney Ethics (OAE) about Helmer, Branco, and Walters.

The OAE filed a disciplinary complaint against Helmer. A special master concluded that the OAE failed to prove by clear and convincing evidence that Helmer violated the RPCs charged. A majority of the Disciplinary Review Board agreed with the dismissal of the RPC 3.4(g) charge but found that Helmer violated RPCs 8.4(a) and (d).

HELD: In this case, because the record lacks clear and convincing evidence that respondent orchestrated the alleged misconduct, the OAE’s complaint must be dismissed. That said, the record highlights a series of troublesome practices and leaves a number of questions unanswered. The Court briefly addresses some of those areas to offer guidance to private practitioners and prosecutors.

The Rule provides that “[a] lawyer shall not present, participate in presenting, or threaten to present criminal charges to obtain an improper advantage in a civil matter.”

A special master found the charge was not proven

the special master found that the OAE did not demonstrate how Helmer’s conduct could have given rise to an improper advantage in a civil matter. The special master observed that the CCPO, not Helmer, indicted Land and Pessiki; that Helmer could not control  arrest or the setting of bail; and that no advantage could have been gained in the bankruptcy proceeding in any event.

The special master viewed the charge under RPC 8.4(a) as “derivative of the RPC 3.4(g) charge.” The special master likewise concluded that the alleged violation of RPC 8.4(d) rested heavily upon the RPC 3.4(g) charge. A finding of conduct prejudicial to the administration of justice, he noted, “entirely discounts the independent conduct of at least two prosecutors ” and “the involvement of several judges,” whom Helmer did not control.

Before the Disciplinary Review Board, the majority found conduct prejudicial to the administration of justice

A majority of the DRB voted to censure Helmer. Three members would have found a violation of RPC 3.4(g) as well. Two members voted to dismiss all of the charges and filed a dissent.

The court disagreed

To be clear, it would be unacceptable — and prejudicial to the administration of justice — for a private attorney to manipulate the criminal process by drafting charges, causing prosecutors to present them, and causing an inappropriately high bail to be set to serve as restitution for the attorney’s client. In the unlikely event that might happen, it would amount to a perversion of the justice system.

Helmer’s conduct here pushed the envelope, but we cannot conclude from the record that he orchestrated or induced such a scheme. Although he actively encouraged a criminal prosecution and advocated for restitution for his client, to place primary responsibility on Helmer for what occurred overlooks the role and decision-making authority of the prosecution team.

The court found that Helmer’s advocacy as the victim’s attorney did not exceed permissible bounds

Woven into a number of the above allegations is the claim that Helmer, a former prosecutor and seasoned defense attorney, manipulated an inexperienced line prosecutor. In our system, practiced defense attorneys routinely interact with less experienced prosecutors, just as veteran prosecutors often work opposite less experienced counterparts. Both sides, of course, can seek guidance from colleagues, fellow counsel, or supervisors. The advantage that comes with experience does not implicate ethical questions as long as counsel on both sides abide by the canons of professional responsibility

 (Mike Frisch)