United States v. James Michael Farrell
921 F.3d 116 (2019)
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Rule of Law:
A lawyer who knowingly receives and distributes proceeds from an ongoing criminal enterprise to pay for the legal fees of the enterprise's members, falsifies financial records, and instructs witnesses to withhold information from investigators, crosses the line from providing legitimate legal services to being a co-conspirator guilty of money laundering and obstruction of justice.
Facts:
- From 2009 to 2013, James Michael Farrell, a lawyer, served as the 'consigliere' for the Nicka Organization, a multi-state marijuana trafficking ring led by Matt Nicka.
- Nicka established a 'defense fund' with proceeds from marijuana sales to hire lawyers for organization members who were arrested. Farrell received over $100,000 in cash from this fund.
- Farrell used the drug proceeds to write checks from his law firm's account to pay other lawyers (Brown and Tully) to represent organization members (Mitchell and Constantinides), thereby concealing the illegal source of the funds.
- Farrell falsified his own law firm's client transaction records to disguise the cash payments from the Nicka Organization, attributing payments to members who had never actually paid him.
- For organization member Jacob Harryman, Farrell advised him not to disclose the illicit source of a seized watch to the DEA and subsequently filed affidavits in the DEA forfeiture proceeding with forged signatures.
- Farrell instructed another organization member, Ryan Forman, who was cooperating with the government, to only tell prosecutors what they already knew during his proffer meeting, effectively directing him to withhold material information.
- Farrell engaged in a sham transaction with Forman, exchanging Forman's $10,000 check for $10,000 in cash provided by Farrell, in order to falsely 'show on the books' that Farrell had been legitimately paid.
- Farrell used cash from the defense fund to purchase money orders and deposit them into the jail commissary account of an incarcerated organization member, Michael Phillips.
Procedural Posture:
- James Michael Farrell was indicted by a federal grand jury in the District of Maryland in October 2015.
- Farrell filed a pre-trial motion to suppress recorded conversations with two government informants, arguing they violated the Sixth Amendment.
- The U.S. District Court for the District of Maryland, the trial court, denied the suppression motion.
- Following a fourteen-day trial, a jury found Farrell guilty on ten counts, including money laundering conspiracy, substantive money laundering, and obstruction of justice, while acquitting him on two counts.
- Farrell filed post-trial motions for judgment of acquittal and for a new trial, both of which the district court denied.
- The district court sentenced Farrell to 42 months in prison.
- Farrell, as the appellant, appealed the criminal judgment to the U.S. Court of Appeals for the Fourth Circuit.
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Issue:
Does a lawyer who receives cash from a drug trafficking organization, uses those funds to pay legal fees for other members and support an incarcerated member, falsifies financial records, and advises members to withhold information from investigators, commit the crimes of money laundering, obstruction of justice, and witness tampering, rather than simply providing legitimate legal services?
Opinions:
Majority - King, Circuit Judge
Yes. A lawyer who engages in such activities commits the crimes of money laundering, obstruction of justice, and witness tampering. The evidence was overwhelming that Farrell was not merely a defense attorney but an active participant and 'consigliere' of the criminal organization. The motion to suppress the recorded conversations was properly denied because the attorney-client privilege belongs to the client, not the lawyer, and the cooperating witnesses had waived any potential privilege; furthermore, no attorney-client relationship existed at the time of the recordings. The evidence was sufficient for the money laundering convictions because Farrell knew the funds were illegal drug proceeds and his actions of paying other lawyers and falsifying records were designed to conceal the money's illicit source. The convictions for obstruction were supported by evidence that Farrell corruptly forged affidavits and instructed a witness to withhold information, which are wrongful acts intended to impede official proceedings.
Concurring - Thacker, Circuit Judge
Yes. The author concurs with the majority's conclusion but writes separately to emphasize that the decision should be read narrowly and limited to the egregious facts of this case. The opinion should not be interpreted to place defense attorneys in legal jeopardy for the zealous representation of criminal defendants in the normal course. Farrell's conviction was based not on his legal advice, but on his direct participation as a 'consigliere and fixer' in the money laundering conspiracy, conduct that is far removed from standard legal practice.
Analysis:
This case serves as a critical warning to criminal defense attorneys regarding the boundary between zealous advocacy and criminal complicity. It establishes that actions such as knowingly managing illicit funds to coordinate a 'collapsed defense' for a criminal organization, falsifying financial records to hide the source of those funds, and counseling clients to mislead investigators are not protected legal services. The decision reinforces the principle that a law license is not a shield for participating in a client's ongoing criminal enterprise and that lawyers who become 'consiglieres' or 'fixers' can be prosecuted as co-conspirators. It also underscores that the attorney-client privilege cannot be invoked by an attorney to suppress communications when the clients themselves have waived it by cooperating with the government.
