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United States v. Mark

United States District Court, D. Nevada

May 25, 2017

UNITED STATES OF AMERICA, Plaintiff,
v.
DAVID MARK, Defendant.

          ORDER

          Lloyd D. George United States District Judge.

         In early 2008, Brian Pugh, a prosecutor, made a statement to David Mark that, the government has since conceded, was a grant of informal immunity. More than five years later, following the fifth day of Mark's trial, Mark moved to dismiss because the statement was a grant of immunity. The government did not contest that the statement was a grant of immunity, but argued that Mark had breached the immunity. Ultimately, the Ninth Circuit required that the indictment against Mark be dismissed because the government had not met its burden of showing Mark breached the agreement. Mark now moves for reimbursement of his attorney's fees and litigation expenses pursuant to 18 U.S.C. §3006A (the Hyde Amendment) (ECF No. 279). He argues that Pugh intentionally concealed the grant of informal immunity and fabricated the breach of that agreement. The government opposes the motion (ECF No. 283).

         The Court held an evidentiary hearing on the motion, and the parties filed post-hearing briefs (ECF Nos. 318 Attachment 1, [1] 327, 333). The government also moved to admit additional evidence (ECF No. 326), which Mark opposes (ECF No. 330). Mark further moves to strike the government's arguments that reference the additional evidence (ECF No. 331).

         The Court will deny the motion to strike, deny the motion to admit the additional evidence, and will deny the motion for reimbursement of attorneys' fees.

         Background

         In November 2007, Mark and Kim Brown met with the FBI to cooperate with a mortgage fraud investigation targeting the principals of the real estate company for which they worked. Several months later (possibly in early March 2008), [2] Mark and Brown met with Pugh (the Assistant United States Attorney prosecuting the company's principals) and other government agents. At the end of that meeting, Pugh made a statement to Mark and Brown that the government has since conceded was a grant of informal immunity. There is no documentary evidence of this meeting or of the statement Pugh made to Mark and Brown.

         In February 2011, Pugh telephonically interviewed Mark. The interview was documented in a 302, which 302 was disclosed to Mark's defense counsel. Mark was cooperative with the government in this interview.

         The government's attorneys testified that they telephonically interviewed Mark in July 2011, in a call originating from a speakerphone in the United States Attorney's office to the phone number previously used to telephonically interview Mark. During this telephonic interview, Mark's answers to Pugh's questions caused Pugh to conclude he could no longer use Mark as a witness.

         Phone records establish that a phone call did not occur in the precise manner to which the prosecutors had testified: that is, the record established that a phone call did not originate from a speakerphone in the United States Attorney's office to the number previously used to communicate with Mark in either June or July 2011. Pugh continues to contend that the phone call occurred. Mark contends this telephonic interview did not occur.

         In August 2011, Pugh prepared a target letter that he caused to be sent to Mark, notifying Mark that he was the target of an investigation. Mark's father, Miles Mark, contacted Pugh in response to the letter to inquire whether the matter could be resolved. Mark retained Michael Fawer to represent him. Fawer contacted Pugh several times. Eventually, a meeting occurred between Mark, Fawer, and Pugh (at which an agent was also present) on September 13, 2011. The agent took notes of the meeting, but did not reduce the notes to a 302. Following the meeting, the parties engaged in plea negotiations, and Mark signed a plea agreement in late September. Mark subsequently decided to not plead guilty. In December 2011, the government indicted Mark for his conduct related to the underlying mortgage fraud investigation.

         A week before Mark's trial, Mark and his father engaged in a search for and review of evidence in the custody of the FBI. They were escorted by an FBI agent who documented this event in a 302. The agent documented that “[Miles Mark] said the FBI told his son they would grant him immunity if he continued to provide them with information . . ..”

         Mark's trial was conducted in March 2013, before the trial judge previously assigned to this matter. Mark was represented by Fawer, with Mark's father appearing as co-counsel. On March 15, 2013-the fifth day of trial-Pugh asked Brown whether, when she came to talk with Pugh and other government agents (after meeting with the FBI in November 2007), she was concerned about being prosecuted. Brown's answer was that she wasn't concerned. Pugh then asked Brown if she was “given any assurances in that regard?” Defense counsel objected before Brown could answer, and an extensive colloquy occurred between counsel and the Court. Eventually, the Court directed the parties to meet, which they did later that day (the March 15, 2013, meeting).

         On March 18, 2013, Mark moved to dismiss the indictment asserting, in part, that during the March 15, 2013, meeting, Pugh had acknowledged to defense counsel that he had granted immunity to Mark. Mark subsequently asserted that this was the first time that Pugh had disclosed the immunity agreement to defense counsel. In its response, the government acknowledged that Pugh had granted informal immunity to Mark, but asserted that Mark had breached his obligation to cooperate during a phone call on or shortly before July 14, 2011.

         Following an evidentiary hearing, the court credited the testimony of the prosecutors, found that Pugh had granted immunity to Mark, but also concluded that Mark had breached the immunity agreement in the July 2011 phone call. Accordingly, the Court denied Mark's motion to dismiss the indictment.

         Following the trial, Mark moved for reconsideration. He relied upon a phone record he had subpoenaed from the government, which record established that two phone calls had been placed from the U.S. Attorney's office to a Louisiana-based phone number in January and February 2011, but that no call had been placed between the office and that phone number in June or July 2011. Mark argued the phone record established that the government attorneys had fabricated their testimony regarding the phone call.

         In opposition, the government argued the subpoenaed phone record did not prove that the phone call never occurred. Rather, the government argued the phone record showed only that the prosecutors' memories as to how the phone call was initiated were mistaken. The trial judge denied the motion to reconsider.

         On appeal, the Ninth Circuit noted:

The district court did not explain why, despite the new phone records, it chose not to hold a further evidentiary hearing or otherwise reconsider its earlier order denying the motion to dismiss. In light of the scant record supporting the government's claim of a breach and clear evidence that key details of the government's story were inaccurate, the district court abused its discretion when it failed to either grant Mark's motion for reconsideration or order an additional evidentiary hearing.

         More particularly, the Ninth Circuit noted:

Perhaps at a further evidentiary hearing the prosecutors could have reconciled their recollections that a call happened with all of the apparent evidence to the contrary. But the government has urged us not to remand for an evidentiary hearing and instead has expressed a desire to stand on the existing record. When asked whether remanding the case for a further evidentiary hearing would be appropriate, the government attorney stated: “I can't imagine that at a further evidentiary hearing . . . that anything else is going to get unearthed.” When pressed further on whether the government would “stake its claim” on the existing record, he answered “correct.” We therefore evaluate whether, on the current record, the government met its burden of proving that Mark breached.

         The Ninth Circuit found that, on the record before it, the government had not met its burden of proving Mark breached the informal immunity agreement. The Ninth Circuit held that “the district court's failure to either grant Mark's motion for reconsideration or order an additional evidentiary hearing was an abuse of discretion.” The circuit court then reversed the denial of the motion to reconsider and remanded with directions to dismiss the indictment.

         Mark now moves, pursuant to the Hyde Amendment, for an award of his attorney's fees and costs that he incurred in his defense.

         Analysis

         Pursuant to the Hyde Amendment, this court “may award to a prevailing party, other than the United States, a reasonable attorney's fee and other litigation expenses, where the court finds that the position of the United States was vexatious, frivolous, or in bad faith, unless the court finds that special circumstances make such an award unjust.” 18 U.S.C. §3006A Note.

         Whether Mark is a Prevailing Party?

         Relying upon United States v. Chapman, 524 F.3d 1073, 1089 (9th Cir. 2008), the government argues that Mark is not a prevailing party because he did not prevail on the merits relevant to his ...


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