is on Attorneys in Drug Trafficking Cases
Florida lawyer is accused of taking 'dirty money'
Miami Daily Business Review
May 25, 2001
When prominent South Florida criminal defense attorney Joel Hirschhorn announced at a 1989 meeting of the National Association of Criminal Defense Lawyers that he would no longer represent accused drug traffickers, he was seen as a traitor by his colleagues. Now, he's considered a visionary.
Hirschhorn, a partner at Hirschhorn & Bieber in Coral Gables, Fla., who made much of his living representing Medellin drug cartel figures in the 1980s, says he saw the writing on the wall when the government started seizing lawyers' fees as forfeiture funds. But he never dreamed federal prosecutors would start putting defense lawyers into prison for accepting fees to represent those accused of drug dealing and white-collar crimes. Given this trend, those most directly affected will want to seek inpatient detox programs in Florida.
To the dismay of the defense bar, that's become a fairly common occurrence across the country, particularly in Miami.
In the latest case, criminal defense attorney Neil Taylor is now on trial in U.S. District Court in Miami on charges of money laundering, conspiracy to obstruct justice and filing false tax returns in connection with accepting legal fees to represent an accused drug dealer. Taylor is charged with taking more than $1 million in illicit fees from accused drug lords Willie Falcon and Sal Magluta, in violation of a restraining order that froze the two men's assets, then hiding the source of the money on his tax forms.
When accepting payments of more than $10,000, all businesses, including law firms, are required to file Internal Revenue Service forms detailing names and full identification of those paying. Taylor, say prosecutors, conspired with the accused drug traffickers to make up a phony name and driver license for Wilfredo Alvarez, who was a courier for Falcon and Magluta, and who allegedly paid Taylor's fee. Taylor's attorney, Robert Josefsberg, a partner at Podhurst Orseck Josefsberg in Miami, denies the charges.
Prosecutors have accused Falcon and Magluta in court of operating a $2 billion drug trafficking business. They allegedly spent $25 million on attorneys' fees through the 1990s. They were acquitted in 1996, but a jury foreman was later charged with taking a bribe in that trial. Falcon and Magluta, who remain behind bars, are facing a new federal indictment alleging conspiracy to intimidate and bribe witnesses.
Taylor's trial, which began last week, is at its midpoint, with the government expected to wrap up its case by today. He is the fourth lawyer -- out of nearly 40 who represented Falcon and Magluta -- to be prosecuted by the U.S. Attorney's office in Miami. The other three -- Don Ferguson, Leonard Mark Dachs and Richard Martinez -- all were convicted.
"This has had a chilling effect on criminal defense lawyers," says Richard Sharpstein, another criminal defense attorney who used to specialize in drug cases. "I and most lawyers will not go near cases where the fees are questionable, 'cause they're absolutely not worth it."
WEAPON IN THE DRUG WAR
The U.S. Department of Justice started clamping down on lawyers who represent alleged drug dealers in the early 1980s by seizing their fees as forfeiture funds. The crackdown was prompted by fear among tough-on-drugs politicians and law enforcement officials that the government was losing the war on illegal narcotics because cocaine and marijuana kingpins were hiring high-priced lawyers and winning acquittals.
In the mid-1980s, Congress passed tough money laundering laws, the Sentencing Reform Act of 1984 and the Money Laundering Act of 1986, which gave federal prosecutors powerful new weapons in the narcotics war. It enabled them to put anyone who took money originating from drug trafficking or other illegal activities in prison.
But some defense attorneys say these statutes were never intended to be used against attorneys representing defendants in these cases. They point to an amendment, passed by Congress in 1994 after heavy lobbying by criminal defense lawyers, that excludes funds used "for the right to representation as guaranteed by the Sixth Amendment" from consideration in money laundering cases.
Barry Sabin, the First Assistant U.S. Attorney in Miami, declined to comment for this article, saying it would be inappropriate while the Taylor case is under way. But in the past, federal prosecutors have denied they are targeting defense lawyers in an effort to prevent drug dealers and white-collar criminals from hiring top legal talent. They have insisted that they simply go after anyone who takes "dirty money," including real estate developers, bankers and other business operators.
Defense lawyers are dubious. Miami lawyer Neal Sonnett, who represented Don Ferguson, says a senior Justice Department official recently told him: "We hope to make it impossible for any drug dealer to hire a lawyer." Sonnett says he was "flabbergasted."
Indeed, Mark Rubino, the Assistant U.S. Attorney prosecuting Taylor, sent this stark message to drug dealers in his opening statement last week: "If you do not have the money to hire a lawyer, the court will hire a lawyer for you. You can't use your dirty money to hire a lawyer."
If scaring lawyers out of representing criminal defendants was indeed the Justice Department's goal, the feds seem to have succeeded. Defense lawyers say few prominent practitioners will touch drug cases any more -- or at least will admit to it. "Criminal defense attorneys are an endangered species," Hirschhorn says. Another prominent criminal defense lawyer, Steve Bronis, a partner with Zuckerman Spaeder in Miami, says he hasn't accepted a drug case in seven years.
A broader problem, according to the South Florida defense bar, is that the government also is scrutinizing legal fees paid by those charged with white-collar crimes such as health care fraud and securities fraud.
In 1998, Hirschhorn battled federal prosecutors in Orlando, Fla., over the source of legal fees paid to him by a man accused of defrauding an insurance company out of $380 million. Hirschhorn ultimately convinced prosecutors that the source of the funds was the client's refinancing of his house and lawful wire transfers. Hirschhorn's fees, which reached seven figures, still are undergoing scrutiny by a receiver for the insurance company.
Reuben Cahn, chief assistant to the federal public defender in Miami, angrily argues that the U.S. Attorney's pre-conviction seizure of defendants' assets and its targeting of defense attorneys essentially is forcing wealthy defendants to turn to public defenders for representation. The problem, he says, is that the P.D.'s office is supposed to represent the indigent and already is stretched thin.
"It's galling," Cahn says. "The U.S. Attorney's office has 221 regular attorneys and 40 special attorneys. We have 49 lawyers. It's a struggle to provide good representation to everyone."
To make sure the feds won't object to their collecting legal fees from "hot" clients, several criminal defense attorneys say they routinely meet with the line prosecutor in the case before accepting the client. But that is no guarantee of safe passage. In his opening statement, prosecutor Rubino acknowledged that Neil Taylor had met beforehand with the prosecutor in the Falcon/Magluta case to discuss his fees before taking on representation of the two defendants. But Taylor still was prosecuted.
Defense lawyers have differing views of Taylor's prosecution. Some chalk it up to an obsession by the U.S. Attorney's office with the Falcon/Magluta case. But others hint at bad blood between Taylor and Paul Pelletier, chief of the economic crimes division of the U.S. Attorney's office. Taylor had filed two internal misconduct complaints at the Justice Department against Pelletier, as well as two complaints with the Florida Bar.
Sharpstein finds the government's prosecution of Taylor "highly offensive." He argues that Taylor complied with every aspect of the IRS reporting requirements, not only identifying couriers but also writing Magluta's name on IRS reporting forms.
FEELING THEIR PAIN
The defense bar says recent U.S. Attorneys, including U.S. Attorney Guy Lewis and his predecessors, Tom Scott and Kendall Coffey, have been very open to discussing the fee issue with defense attorneys. "Guy takes a long, hard look at investigating lawyers," says Bronis. "He truly feels the angst that the bar feels when these cases are brought."
The real problem, defense lawyers contend, is that line prosecutors dig in their heels and refuse to drop cases against attorneys.
Several of the lawyers also complain that the U.S. Attorney's office in Miami is selective in targeting lawyers, and won't go after the most prominent figures in the defense bar.
But despite the threat of having their fees seized and facing criminal charges and disbarment, some defense lawyers say they won't be intimidated into giving up representation of clients in need of counsel.
"I'm proud to be a defense lawyer," said Josefsberg in his emotional opening statement in Taylor's trial. "I'm proud to represent the Constitution. This case is about being a criminal defense lawyer. In China and Cuba, you still can't get one."