United States v. Pena

Citation720 F.3d 561
Decision Date18 June 2013
Docket Number11–50484.,Nos. 11–50482,s. 11–50482
PartiesUNITED STATES of America, Plaintiff–Appellee, v. Adrian Edwardo PENA, also known as Adrian Edward Pena, Defendant–Appellant.
CourtU.S. Court of Appeals — Fifth Circuit

OPINION TEXT STARTS HERE

Joseph H. Gay, Jr. (argued), Assistant U.S. Attorney, Elizabeth Berenguer, Assistant U.S. Attorney, U.S. Attorney's Office, San Antonio, TX, for PlaintiffAppellee.

Donna F. Coltharp (argued), Assistant Federal Public Defender, Federal Public Defender's Office, San Antonio, TX, for DefendantAppellant.

Appeals from the United States District Court for the Western District of Texas.

Before STEWART, Chief Judge, and SMITH and WIENER, Circuit Judges.

CARL E. STEWART, Chief Judge:

This case entails two appeals from DefendantAppellant Adrian Pena's convictions and sentences for criminal offenses related to the bribery of two public officials to procure a multimillion dollar construction contract. Pena contends on appeal that the district court violated Federal Rule of Criminal Procedure 11(c)(1) by participating in his plea negotiations. Pena also asserts that the court's involvement caused his trial attorney, Thomas Stanton, to represent him under an actual conflict of interest which adversely affected Stanton's performance. Based on this alleged conflict of interest, Pena filed a motion to withdraw his guilty pleas, which the court denied. Pena appeals his convictions and sentences, as well as the district court's denial of his motion to withdraw his guilty pleas. We VACATE Pena's guilty pleas and sentences, and REMAND for further proceedings.

I. FACTUAL BACKGROUND & PROCEDURAL HISTORY
A. The Instant Offenses

In 2009, Pena was arrested in El Paso, Texas, and was charged in two separate indictments for conspiracy to commit mail fraud, mail fraud, and deprivation of honest services of a public servant. The charges arose from Pena's employment with the construction company for which he worked until 2007. Both indictments alleged that Pena paid bribes to El Paso County officials to obtain a multimillion dollar construction contract for that former employer. Stanton represented Pena in both cases.

B. Other Proceedings Involving Pena

At the same time that Pena was facing these charges, he was working for the construction firm of his father-in-law Carlos Nunez, SDVO Contractors, L.P. (“SDVO”). SDVO was involved in three controversies regarding an Arizona construction project for the Department of Defense (DOD)—two civil lawsuits and one criminal investigation:

1) Jeffrey C. Stone, Inc. v. SDVO1: a civil matter in Arizona, in which Pena was a named individual defendant;

2) Bank of the West v. SDVO Contractors, LP: a civil matter that was proceeding before Judge Montalvo, where Stanton represented SDVO; and

3) A criminal investigation into the Arizona project that potentially implicated Pena and several of Stanton's civil SDVO clients.

The litigation surrounding the Arizona project arose from the DOD's erroneous transfer of funds into SDVO's bank account and SDVO's subsequent withdrawal of most of those funds. Specifically, in April 2010, the United States Property and Fiscal Officer for the Arizona National Guard (USPFO) issued a termination-for-default notice to SDVO, ending the contract for the Arizona project. As a result of this termination, the USPFO demanded that the surety perform its obligation under the performance bond. In June 2010, however, the USPFO inadvertently wired a $733,720 payment for the project into SDVO's account at the Bank of the West (“the Bank”), not into the surety's bank account. When the surety and the USPFO realized the error and contacted the Bank to reverse the transaction or freeze the funds, the Bank advised that the funds had already been disbursed in their entirety, with the exception of an IRS levy placed on the account in the amount of approximately $159,000. In July 2010, the Bank filed a state interpleader action for the $159,000, naming as defendants SDVO, the IRS, and the DOD. After this interpleader action was removed to federal court, Stanton appeared as counsel for SDVO.

The criminal investigation relating to the Arizona construction project involved SDVO's alleged misappropriation of these same funds.

C. Pre-trial Proceedings for the Instant Offenses

In July 2010, an Assistant United States Attorney (AUSA) informed Stanton of an ongoing Arizona criminal investigation into SDVO. The AUSA notified Stanton that, because of that investigation, Stanton might have a conflict of interest in representing SDVO and Nunez in any criminal matters because of Stanton's representation of Pena in the instant proceedings. In response to this information, Stanton affiliated separate criminal defense counsel for SDVO and Nunez.

During this same time, the government also filed a notice of its intention to use evidence of other crimes, wrongs, or acts for the instant proceedings, pursuant to Rule 404(b) of the Federal Rules of Evidence. Specifically, the government sought to adduce evidence that, in January 2010, Pena contacted a subcontractor on the Arizona project on behalf of SDVO to discuss a possible kickback of contract funds. In August 2010, a pretrial services officer sent the district court a memorandum advising that a recent FBI report contained allegations that, while out on bond, Pena had misappropriated the funds inadvertently deposited into the SDVO bank account. The court however took no action adverse to Pena as a result of this report.

D. Plea Negotiations and the Court's Reference to the “SDVO Matter”

On December 1, 2010, the district court held a chambers conference with the attorneys, which the court neither recorded nor transcribed. At that conference, Stanton told the district court that Pena and the government were engaged in plea negotiations and that Stanton expected those negotiations would be successful. The district court's response to this information is the focal point of this appeal.

There are three different versions of the district court's response. First, Stanton's filing on the same day as the chambers conference suggests that the court said it wanted Pena to resolve the SDVO matter before the court would accept Pena's plea. According to Stanton, the court told him that it had received information that money related to SDVO had been “missing and misapplied.” Second, the government recalls the district court saying that it would give Pena full credit for acceptance of responsibility if he resolved the SDVO matter concurrently with his guilty plea to the instant offenses. Third, at a hearing in May 2011, the district court stated on the record that it recalled saying that the SDVO matter should be “resolved concurrently with the resolution of this case.” Likewise, the district court's order following the hearing states: “At the conference the Court mentioned [the SDVO interpleader action] and stated its opinion that the civil case should be resolved by the time of the plea hearing [for the instant offenses].” Following the court's statements, Stanton asked for the opportunity to respond to the allegations, but the court denied this request.

E. Stanton's Conflict–of–Interest Claim and Motion to Withdraw as Counsel

On the same day as the chambers conference, Stanton notified Pena via email that he (Stanton) might have a non-waivable conflict in representing both Pena and SDVO. Pena responded that he could not allow Stanton, “under any circumstances,” to cease representing him in the SDVO matters. Pena then appears to have told Stanton that he would continue pro se in the instant criminal matters. Pena wrote that he would not sign the plea agreement unless it included the condition the district court had imposed and that he would request that the prosecutor enforce the condition.

Later that day, Stanton filed a motion under seal notifying the district court of his conflict of interest and asking the court to vacate the trial date and permit him to withdraw from Pena's case. Stanton reminded the court that he represented SDVO in the interpleader action regarding the same monies the court mentioned in chambers, which was pending in the same judge's court. In addition, the Jeffrey Stone case was pending in Arizona, and that case also “involve[d] the construction project made the basis of the Government's payment to SDVO.” Although Stanton had obtained separate counsel to represent SDVO and Nunez, he “continue[d] to be one of three lawyers representing SDVO in several [civil] matters.” Stanton reasoned that, because he continued to represent SDVO and because the district court had ordered that the SDVO matter pending before it be resolved before it would accept Pena's plea agreement, Stanton was ethically required to: 1) notify Nunez, SDVO, and Pena of his conflict of interest; 2) inform Nunez that he could not waive the conflict as it affected Pena; 3) withdraw from the SDVO litigation; and 4) withdraw from representing Pena. Stanton stated that, although he could not disclose the full extent of the conflict, he could not recommend that Pena accept terms that Stanton could not accomplish ethically and that were unenforceable.

Stanton also told the district court that, in response to the chambers conference, Pena had directed him to remain as his counsel in the SDVO litigation, but that Stanton believed this request was against both Pena's and Stanton's interests. Stanton asked the court to: 1) vacate the trial date; 2) recuse itself or reassign the case; 3) permit Stanton to withdraw; 4) accept the plea based on the terms the parties had discussed prior to the chambers conference; and 5) not factor in the SDVO litigation for any sentencing matters.

The district judge's law clerk phoned the parties the next day, December 2, 2010. The law clerk told the parties that the court had changed its mind about the need to resolve the SDVO matter before the court would accept Pena's plea and that the parties were to “disregard” its statement....

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