The 4th Circuit Court of Appeals: Did Judge Friedman have a conflict of interest because of Hoffler? Did the Agnews deserve a new trial?

VIRGINIA BEACH (August 14, 2007) - - Aaron Michael Streett, a Houston-based lawyer with Baker Botts, couldn't say the appeal of Mike and Barbara Agnew was a 'slam dunk,' but he did say he didn't know how they could lose.

In finding the Agnews each guilty of 11 counts of bank fraud, 1 of conspiracy to embezzle, and 3 counts of money laundering, Norfolk federal judge Jerome Friedman reduced the maximum sentence from 135 months to 24 months in prison each.

Street and Paul F. Enzinna, based in Baker Botts' Washington, office took the Agnews' case pro bono - for free. That's how egregious the case against them had been.

In fact it is estimated that Baker Botts, the law firm headed by former White House Chief of Staff and Secretary of State James Baker spent an estimated $250,000 of the firm's own money in an attempt to bring justice to the Agnew case.

"These guys were fantastic," said Mike. "They worked extremely hard to perfect our appeal to the 4th Circuit and for that Barbara and I will forever be grateful."

Ironically, during oral arguments, the zeal of the government to convict, regardless of the evidence, carried over into the appeal, where Steve Haynie told the judges a blatant lie that 'the Agnews were shopping judges,' referring to the charge that Friedman should have recused himself.

Raymond Jackson, the original federal judge assigned the Agnew case did recuse himself, but not because he was asked to. He did it voluntarily after he learned the Katelin went to school and was a friend with his son at Norfolk Academy. See: Letter to Judge Jackson

The court, however, disregarded the fact Haynie lied to the court.

This conduct was symbolic of all that had happened to the Agnews from the day a bank examiner caught Resource Bank illegally administering a loan program to the Agnews called a Cash Flow Maximizer or Cash Flow Management plan.

The bank, which on Aug. 5 had agreed to help arrange a financial solution for the Agnews' AGM Concrete company, reneged the minute they left the meeting.

Without prior warning there were problems, the bank closed them down on Aug. 6, raided their offices the next day, taking everything not nailed down, including paper clips. What the bank didn't do was protect the company's millions of dollars worth of equipment sitting around Tidewater on various job sites.

The failure of the bank to secure equipment led to the theft of much of it and it has never been recovered.

Streett filed the Agnews' appeal on Nov. 18, 2004, including a request for oral arguments. Mike, Barbara, Streett, Enzinna, and others familiar with the case were highly optimistic Friedman's verdict would be overturned.

Does contaminated evidence mean anything?

How could the 4th Circuit uphold a trial based on contaminated, contrived evidence? Evidence taken from the Agnews without subpoena on Aug. 7, 1999, allowed to be rummaged through by God knows how many people as it was left unsecured in the bank halls and offices until the FBI finally took custody of it in November, 1999?

Documents were removed from the files and documents were added to the files that were aimed at helping convict.

The 4th Circuit even acknowledged the FBI voluntarily entered the case 10 days after AGM was raided by Resource after the female agent read a story about it in the newspaper. Resource had not asked for a criminal investigation.

Tentacles of the case ran the gamut of political power in Virginia from the bank, through Armada Hoffler to Wilder to a judge sitting on the 4th Circuit hearing the Agnews' appeal.

In his appeal, however, Streett confined his complaint to three issues:

Whether Friedman erred in not grant a new trial based on new evidence the Agnews discovered after trial that Friedman had been a partner in an 8-year, multimillion dollar office development deal with Dan Hoffler, A. Russell Kirk and others. Hoffler was AGM's biggest customer and left AGM unpaid for 2 draws in July, 1999 which contributed to their downfall.

Kirk was president of Armada Hoffler, director of Resource Bank, and president of Armada Hoffler. A witness for Armada Hoffler testified that the company lost about $2 MILLION because of the collapse of AGM.

Friedman refused when asked after the trial for a new trial, claiming no bias, no conflict of interest. The Agnews said they would never allowed Friedman to hear the case without a jury had they known of his business connections to Hoffler and Kirk.

The record also "...establishes that Kirk and Hoffler were victimized by the Agnews’ alleged fraud," the 4th Circuit was told.

Second issue was whether Friedman erred by denying the Agnews' motion for acquittal "...where the evidence was insufficient to support each of their convictions?'

And thirdly, whether the couple was sentenced in violation of the 6th Amendment of the Constitution "...when their sentence exceeded the statutory maximum based upon the facts found by the factfinder at trial?"

Streett said that the "...statutory maximum” to which they could constitutionally be sentenced was 6 months, the maximum Guidelines sentence supported by the facts found by the factfinder at trial. Instead, the Agnews were sentenced to 24 months, based solely on facts found by Judge Friedman in a separate sentencing hearing...".

One local judge who read about the Agnew case said, "If they had been in my court, I would have put the bank on trial, instead of the Agnews."

In the appeal, Streett said, "Perhaps recognizing the weakness of this basis for sustaining the Agnews’ convictions, the court went on to hold that even if the Bank’s officers “were aware of the defendants’ conduct, and somehow sanctioned this activity, this does not necessarily relieve the defendants of culpability.”

In the end, it turned out, Friedman used his somewhat skewed logic to find the bank's testimony, some of which was perjured, more believable than the Agnews. And that's what Streett told the 4th Circuit.

Streett's motion stated: "The Agnews were convicted of bank fraud for submitting invoices that represented work to be performed in the future while certifying by their signatures that the invoices represented completed work.

"Yet the undisputed evidence at trial showed that, prior to the submission of the allegedly fraudulent invoices, Resource routinely accepted invoices that plainly represented future work and invoices that lacked the signed certification.

"In light of these uncontroverted facts, there is insufficient evidence that the Agnews intended to deceive the Bank when it submitted additional invoices representing future work. Rather, the Agnews simply continued in a mutually agreeable course of dealing.

"Similarly, because the Bank regularly accepted unsigned invoices and invoices for future work, no reasonable factfinder could conclude that the Agnews’ signed certification was material to the Bank’s decision to purchase the allegedly fraudulent invoices.

"Because the evidence failed to prove essential elements of bank fraud, the Agnews are entitled to reversal of these convictions."

In its unpublished ruling, the court stated, ..."since this is an appeal from a denial of a motion for a judgment of acquittal based on insufficiency of the evidence, we recite the evidence in the light most favorable to the government."

2nd guessing the appealate judges

As the weeks passed after oral arguments, best guesses of court watchers were that since the long lag time, the decision would be favorable. The court was struggling.

Barbara try to politically analyze the decisions based on the 3 judges. During oral arguments the justices asked questions seemly favorable to the defendants.

There was only one worry: Judge Roger Gregory longtime relationship with X-Gov. L. Douglas Wilder and the fact that Hoffler was Wilder's closest confidant, Barbara said. See: Gregory's background.

"But," she reasoned, "he seemed as though he wanted to make sure the defense position was well presented during questions. You'd think that when you get to the Circuit Court level, even if you had been political, you wouldn't have to anymore," Barbara said.

Mike was wasting away in the Lee County Federal Prison, high in the mountains of southwest Virginia, as the days ticked by. There were more long 7.5 hour drives for Barbara and the kids just to spend a couple hours visiting their father.

They tried hard to keep spirits high, analyzing every ruling of the 4th Circuit as it was issued seeking a hint, a clue of the court's thinking and how it might affect their pending decision.

Justifying a judge's conflict of interest

The wait ended Sept. 2, 2005. The 4th Circuit upheld Friedman. Fires burned in the pits of their stomaches, Barbara said. Streett and Enzinna were flabbergasted and immediately thought of going to the U.S. Supreme Court.

"Of course, “[a] presiding judge is not . . . required to recuse himself simply because of ‘unsupported, irrational or highly tenuous speculation.

"Nor must a presiding judge “recuse himself simply because he possesses some tangential relationship tothe proceedings,” the 4th Circuit ruled, adding:

"Comparing the facts of this case with relevant precedent demonstrates that the district judge did not abuse his discretion by refusing to recuse himself in this case."

The final answer? "...a reasonable person reviewing the facts of this case would not question the judge’s impartiality."

Mike said that the court quoted 3 previous cases having to do with conflicts of interest or reasons for recusal. All involved jury trials, however.

Dealing with the issue of whether the judgement was not based on sufficient evidence, the court ruled: "When a motion for judgment of acquittal is based on insufficiency of the evidence, the verdict must be sustained if there is substantial evidence, taking the view most favorable to the Government, to support it." So much for innocent until proven guilty argument - the government has to be right, according to that argument.

Government gets the best terms!

Never mind that the evidence was tainted from the very beginning. That was not considered by the 4th Circuit and taking the view most 'favorable to the government,' hung the Agnews. You can't beat trumped up charges and evidence in that circumstance. And the 4th Circuit would give any credence to the Agnews evidence.

It then slammed the hammer down: "In conclusion, the district court did not err in denying the Agnews’ motion for a new trial based upon newly discovered evidence of judicial bias, and their motion for a judgment of acquittal....'convictions are AFFIRMED."

Despite Streett and Enzinna's disappointment and their conviction that a further appeal was warranted, Baker Botts pulled the plug and could not justify further pro bono legal support.

Mike got out of Bureau of Prison custody on June 2, 2006 and Barbara self-reported to Camp Cupcake - the Federal Women's Prison in Alderson, W.VA. - 4 days later. She is due to return home Dec. 31, 2007.

Now Mike and Barbara want someone to pay for what has happened to them. They vow to continue the fight until they get truth about who was responsible for what happened to them.

What about the $1 MILLION in stock illegally stolen from Mike?

Previous stories:

• A Tale of Miscarriage of Justice: Conspiracy or Coincidence?
• The view of the miscarriage of justice through eyes of an innocent teen: Miscarriage of Justice: Conspiracy or Coincidence - Part 2
• Miscarriage of Justice: Beach couple's American Dream becomes their worst nightmare
• Family helps daddy have a merry Christmas - even in prison
• Miscarriage of Justice: Death throes begin for AGM as Resource Bank reneges on deal and pulls financial plug
• When the FBI goes bad: SOMETHING STINKS ABOUT THE AGNEW CASE: FBI refuses to answer legitimate questions
• Miscarriage of Justice: The trial ends with a 'Hallelujah' shout from the federal judge
• Miscarriage of Justice: Barbara Agnew is more than Inmate No. 54498083
• Who are these people? What role did they play in Agnew Saga? Any?
  
  

Conspiracy? Coincidence?
NEXT: All you have to do is sign a release. We'll give you $4 MILLION.
How can anyone turn down a deal like that?