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United States v. Gosy

United States District Court, W.D. New York

May 12, 2017

UNITED STATES OF AMERICA
v.
EUGENE GOSY, Defendant.

          DECISION AND ORDER

          HON. FRANK P. GERACI, JR., United States District Court Chief Judge

         INTRODUCTION

         The Sixth Amendment guarantees that “[i]n all criminal prosecutions, the accused shall enjoy the right . . . to have the Assistance of Counsel for his defence.” U.S. Const. amend. VI. Here, enforcement of that guarantee requires the Court to balance Defendant Eugene Gosy's right to an attorney of undivided loyalty against his right to be represented by counsel of his choosing.

         On February 2, 2017, United States Magistrate Judge H. Kenneth Schroeder, Jr. (“Magistrate Judge”) granted the Government's motion for a determination of conflict of interest (ECF No. 11) and removed attorney Jesse Baldwin as Defendant's counsel of record in this case. ECF No. 46; see ECF No. 49. Defendant now appeals. ECF Nos. 47, 53. For the reasons stated below, the Magistrate Judge's decision is affirmed.

         BACKGROUND

         A 114-count indictment charges Defendant with violations of 21 U.S.C. § 846 (conspiracy to distribute controlled substances), 21 U.S.C. § 841(a)(1) (unlawful distribution of controlled substances), 18 U.S.C. § 1349 (conspiracy to commit health care fraud), and 18 U.S.C. § 1347 (health care fraud). See ECF No. 1. With respect to the health care fraud counts, the Government alleges that, between October 2011 and August 2013, Defendant defrauded insurance companies who paid New York State Workers' Compensation claims by billing for medical services supposedly rendered or personally supervised by him as a “Board Authorized Health Care Provider” despite the fact that he was actually out of town when the services were performed. Id. Should this case proceed to trial, the Government will bear the burden of proving beyond a reasonable doubt that Defendant “knowingly and willfully” executed a scheme or artifice to defraud a health care benefit program. See 18 U.S.C. § 1347.

         The indictment specifically references two letters that give rise to the present dispute. ECF No. 1, at 17. The first letter, dated August 24, 2009, is a formal Administrative Warning sent to Defendant by the New York State Workers' Compensation Board. ECF No. 11, Ex. B (“Warning Letter”). The Warning Letter admonishes Defendant for certain acts of professional misconduct and reminds him that he must:

Personally and actively supervise all professional medical services performed by registered nurses or other persons trained in laboratory or diagnostic techniques in accordance with Workers' Compensation Law Section 13-b(1)(c). Reports of instruction for such treatment, the treatment itself, the patient's condition and progress shall be signed and maintained by you when you are acting as the supervising attending physician.

Id.

         The second letter, dated September 22, 2009, was sent to the Workers' Compensation Board by Defendant's attorney Jesse Baldwin. ECF No. 11, Ex. A (“Baldwin Letter”). The Baldwin Letter states that Defendant acknowledges receipt of the Warning Letter but has declined to sign it. Id. Importantly, the Baldwin Letter also states that Defendant “understands the regulatory requirements set forth in [the Warning Letter] and will make every effort to continue compliance with this and all other requirements applicable to medical providers rendering care to Workers' Compensation patients.” Id. The letters themselves were used as exhibits in the grand jury proceeding. ECF No. 33, at 7.

         To prove that Defendant acted “knowingly and willfully, ” the Government intends to call Mr. Baldwin as a witness. See ECF No. 33, at 8-10. The Government argues that Mr. Baldwin's testimony is necessary for two reasons. First, the Government intends to use Mr. Baldwin's testimony to introduce the Baldwin Letter into evidence as a statement made by an opposing party's agent pursuant to Federal Rule of Evidence 801(d)(2)(D). Second, the Government believes that Mr. Baldwin's testimony about the circumstances surrounding the Baldwin Letter will demonstrate that Defendant was aware of the New York State Workers' Compensation rules and intentionally circumvented them.

         Believing that Mr. Baldwin's role as a witness presented at least a potential conflict of interest between him and Defendant, the Government filed a motion before the Magistrate Judge requesting an inquiry and a determination as to whether Mr. Baldwin must be disqualified or whether Defendant could waive the conflict. ECF No. 11. The Magistrate Judge initially denied the Government's motion, ECF No. 16, and the Government appealed, ECF No. 17. After hearing argument from the parties and appointing independent counsel to advise the Defendant, this Court reversed the Magistrate Judge's decision and remanded for further proceedings. ECF No. 29. This Court found:

Although the extent to which a conflict exists is unclear at this time, it is evident that further investigation is necessary. Mr. Baldwin's representation of the Defendant in this case is potentially problematic not only because Mr. Baldwin may be called to testify as a fact witness, but also because the Defendant may want to raise a defense-such as good faith reliance on the advice of counsel- that puts his interests at odds with Mr. Baldwin's.

Id. at 3.

         Upon remand, the Magistrate Judge held oral argument and received written submissions from both parties. See ECF Nos. 31, 33, 38, 40, 49. The Magistrate Judge concluded that although it is impossible to predict with certainty the precise nature of the proof at trial or the arguments raised by both sides, Mr. Baldwin's status as a witness creates an unwaivable conflict of interest between him and Defendant. See ECF No. 49, at 8-16. Accordingly, the Magistrate Judge removed Mr. Baldwin as Defendant's counsel of record in this case. ECF No. 46.

         Although he found that the conflict is unwaivable, the Magistrate Judge observed that any harm to Defendant is mitigated by two key factors. First, in addition to Mr. Baldwin, Defendant has also retained attorneys Herbert Greenman and Joel Daniels to represent him in this case. ECF No. 49, at 14 (noting that Mr. Greenman and Mr. Daniels “are two of the most well qualified, experienced defense criminal trial lawyers in the Western District” while Mr. Baldwin's practice is primarily focused on civil cases). Second, the Magistrate Judge pointed out that although Mr. Baldwin could no longer serve as Defendant's counsel of record, he is not barred from communicating with Defendant or Defendant's other attorneys. Id. at 20-21, 31.

         LEGAL STANDARD

         Because the Magistrate Judge removed Mr. Baldwin pursuant to his authority under 28 U.S.C. § 636(b)(1)(A), this Court will review that decision to determine whether it was clearly erroneous or contrary to law. 28 U.S.C. § 636(b)(1)(A) (“A judge of the court may reconsider any pretrial matter under this subparagraph (A) where it has been shown that the magistrate judge's order is clearly erroneous or contrary to law.”); Local R. Crim. P. 59(b)(1).

         DISCUSSION

         The Sixth Amendment right to assistance of counsel “was designed to assure fairness in the adversary criminal process.” Wheat v. United States, 486 U.S. 153, 158 (1988). In most cases, fairness dictates that the defendant “may be represented by any counsel who will agree to take his case.” United States v. Cain, 671 F.3d 271, 293 (2d Cir. 2012) (quoting United States v. Cunningham, 672 F.2d 1064, 1070 (2d Cir. 1982)). But “while the right to select and be represented by one's preferred attorney is comprehended by the Sixth Amendment, the essential aim of the Amendment is to guarantee an effective advocate for each criminal defendant rather than to ensure that a defendant will inexorably be represented by the lawyer whom he prefers.” Wheat, 486 U.S. at 159. The right to effective assistance of counsel includes the right to be represented by an attorney who is free from conflicts of interest. Wood v. Georgia, 450 U.S. 261, 271 (1981).

         In United States v. Levy, 25 F.3d 146 (2d Cir. 1994), the Second Circuit set forth the two-step analysis that district courts must follow whenever the “specter” of a conflict of interest arises between a criminal defendant and his chosen attorney. First, at the “inquiry” stage, the court must “investigate the facts and details of the attorney's interests to determine whether the attorney in fact suffers from an actual conflict, a potential conflict, or no genuine conflict at all.” Id. at 153. An actual conflict occurs “when, during the course of the representation, the attorney's and the defendant's interests ‘diverge with respect to a material factual or legal issue or to a course of action.'” Winkler v. Keane, 7 F.3d 304, 307 (2d Cir. 1993) (quoting Cuyler v. Sullivan, 446 U.S. 335, 356 n.3 (1980)).

         Second, if the court's inquiry reveals the existence of an actual or potential conflict, the court has a “disqualification/waiver” obligation. Levy, 25 F.3d at 153. So long as the conflict does not fundamentally impair the lawyer's representation, the defendant may make a knowing and intelligent waiver of his right to conflict-free counsel pursuant to the procedure set out in United States v. Curcio, 694 F.2d 14 (2d Cir. 1982). However, if the conflict is “such that no rational defendant would knowingly and intelligently desire the conflicted lawyer's representation, ” then the court must immediately disqualify the attorney. Levy, 25 F.3d at 153; see also Cain, 671 F.3d at 293-94. Although the Sixth Amendment creates a presumption in favor of the defendant's counsel of choice, this presumption “may be overcome not only by a demonstration of actual conflict but by a showing of a serious potential for conflict.” Wheat, 486 U.S. at 164. In determining whether to accept a defendant's waiver, the Court is also mindful that “[f]ederal courts have an independent interest in ensuring that criminal trials are conducted with the ethical standards of the profession and that legal proceedings appear fair to all who observe them.” Id. at 160.

         Here, this Court agrees with the Magistrate Judge that there is a serious potential for a fundamental conflict of interest between Mr. Baldwin and Defendant and that a waiver would be unacceptable. Defendant, through his two remaining attorneys, raises various arguments in ...


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