First – a disclaimer – I watched the DBSI trial in federal court here in Boise with considerable interest over the past three months and I admire the lawyers involved on both sides. I also had a client who was a witness (a key witness perhaps, after viewing a juror interview on local television).
I may not be seen as entirely neutral on this one but the case serves as such a great reminder of the difficulties defending against any federal felony charge.
Federal cases begin with the Government already way ahead – their investigations take years in cases like this one. They have more investigators and more time into the build up before indictment than you will ever have if you have to defend yourself. I watched a few years ago as a war chest of money (in the millions) was "burned" by east coast, big city, big firm lawyers who promptly got out of the case, coincidently, when the money ran out, and that was long before any indictment. The money that would be needed to fight governmental agencies and defend against a criminal indictment are now long gone, and so are the big time lawyers.
The federal government has unlimited resources, unlimited experience and the ability to out churn and burn almost any defendant. They can grind you up, and in a big case, like DBSI, that is precisely what they do. If you are under investigation, check out this post from 2010.
I think I had forgotten that as I watched the DBSI trial unfold.
By the time that case started, only the best lawyers and the best of circumstances would give the defendants a chance at avoiding conviction.
The defendants in DBSI had both, and still, jurors returned guilty verdicts within a few days deliberation on charges of securities fraud, and after a trial that lasted roughly three months. In part, the explanation for the speedy decision likely rests with the inherent advantage that comes with having spent years investigating and preparing for the trial.
Trials are wars. Epic battles. And such adventures are won by the best prepared and equipped.
Even the greatest lawyers can’t change the facts. They can craft a defense and move the conversation toward another way of interpreting a case history, but sometimes that may not be enough. Jurors in fraud cases hear that mountain of information, and watch the story unfold, but in the end they may not be moved from what they have heard – "scam." "Ponzi-scheme." "Millions of investor money gone."
Moving the needle in these case is so difficult. To defend here you have to "justify" the actions of men who were argued as having "taken millions" of investor money knowing their company was losing money without fully disclosing that fact.
DBSI presented the toughest of cases to win for any defendant.
Investors have lost plenty of money investing in stocks in big companies that lost traction. Rite-Aid. AIG. Shearson Lehman Brothers. Once the money is gone, they generally cannot "blame" anyone – although the "investment gurus" who touted each in the face of obvious problems seems to me to be partially responsible. But in each case, we made the investments. We made decisions. We took risks.
DBSI provided faces and bodies in the courtroom on which to focus blame. The investor decisions didn’t really seem to count. It didn’t matter that the investors had advisors, accountants and lawyers to review their decisions. What mattered were the faces of the defendants, the claims that these "suits" had special knowledge that had not been shared with investors before they parted with their cash.
Maybe the verdict simply reflects a deeper belief, that people with special knowledge of the underlying viability in an investment will shout it from the rooftops. But that is not always possible in the face of a crisis like the market meltdown and the real estate collapse. Condos bought for $300,000 eight or nine years ago may today be worth only $150,000. Who is to blame? The realtors, appraisers and bankers who should have seen it coming but kept selling, valuing and lending?
As a lawyer, DBSI just reminds me that there are tough cases that will eat up our lives and destroy our clients, sometimes no matter how hard we work.
And it reminds me that to win any case we need to focus our cases on themes that will play well with jurors. Ultimately the jurors will have to carry our clients to the other side if we are to win.
This is no knock against the great lawyers who defended the case. They fought like warriors. But even Ragnar Lothbrok and his Vikings ultimately must battle better equipped forces and circumstances favoring their opponents.
So too the fate of the DBSI defendants and their lawyers – and anyone facing off against the federal government.
Fighting the feds? Better get an army.