U.S. v. Tatum

• Decision Date: 14 August 1991
• Docket Number: No. 90-5709,90-5709
• Citation: 943 F.2d 370
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Gordon R. TATUM, Jr., Defendant-Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 370

943 F.2d 370

60 USLW 2207

UNITED STATES of America, Plaintiff-Appellee, v. Gordon R. TATUM, Jr., Defendant-Appellant.

No. 90-5709.

United States Court of Appeals Fourth Circuit.

Argued March 6, 1991.

Decided Aug. 14, 1991.

Richard Douglas Bernstein, Sidley & Austin, Washington, D.C., argued (Carter G. Phillips, Joan Anne McCaffery, on brief), for defendant-appellant.

Maury S. Epner, Asst. U.S. Atty., Baltimore, Md., argued (Breckinridge L. Willcox, U.S. Atty., Larry D. Adams, Asst. U.S. Atty., on brief), for plaintiff-appellee.

Before MURNAGHAN and NIEMEYER, Circuit Judges, and BRITT, District Judge for the Eastern District of North Carolina, sitting by designation.

OPINION

NIEMEYER, Circuit Judge:

Gordon R. Tatum, Jr. was convicted, following a bench trial, on three counts of bankruptcy fraud in violation of 18 U.S.C. § 152 and sentenced to three years on each count, the sentences to run consecutively. He was found guilty of concealing three automobiles (a Ferrari and two Mercedes Benz automobiles) from the trustee in bankruptcy and his creditors. He was also found guilty of giving false testimony about these automobiles, and others, and about his automobile restoration business at the meeting of creditors on April 11, 1984, and at a deposition conducted on December 6, 1984, in connection with the bankruptcy proceedings.

On appeal, Tatum contends that: (1) he was denied effective assistance of counsel because of multiple conflicts of interest; (2) his discharge in bankruptcy proceedings in which the United States (the IRS) was a creditor bars this action because of res judicata and collateral estoppel; (3) the elements of the crime were not proved; and (4) the district court's 15-month delay in rendering a decision of conviction violated his right to a fair trial.

Because we conclude that Tatum's counsel had conflicts of interest which deprived Tatum of the effective assistance of counsel during critical stages in the prosecution, we reverse and remand the case for a new trial. We reject his argument that this prosecution is barred by res judicata or collateral estoppel, and his remaining points are rendered moot by our remand order.

I

Tatum was engaged in the business of restoring expensive and collectible automobiles, usually Ferrari and Mercedes Benz automobiles. He worked from two service bays located at 9085 and 9087 Comprint Court in Rockville, Maryland. Because of his lack of capital, he typically borrowed money from his customers to enable him to purchase the automobiles, and, after he purchased them, he used them as collateral for the loans. Once the automobiles were restored, he sold them and shared the profits with the customers. For reasons that are not clear, however, Tatum became short of cash, and he began offering automobiles already collateralized as new collateral to obtain further loans from other lenders, including banks. By late 1983, he faced multiple civil judgments and decided to declare bankruptcy.

Before declaring bankruptcy, he formed a new corporation with his longtime mechanic, Andrew Greene, called GT Racing Limited, apparently to assist him in his prospective bankruptcy proceedings. He made Greene the president and sole stockholder of the company. He made himself the vice president. Even though GT Racing Limited never functioned as a corporation, in the forthcoming bankruptcy proceedings Tatum intended to make a distinction for disclosure purposes between personal assets and business assets which he attributed to GT Racing Limited. Also before declaring bankruptcy, Tatum moved a number of automobiles from his service bay at 9085 Comprint Court to 9087, which he then identified with the sign of a fictitious corporation, "Multi-Standard Corporation."

On February 14, 1984, Tatum filed a "bare bones" bankruptcy petition, which he supplemented a couple of weeks later with the various required schedules. Although the bankruptcy petition form required him to disclose assets that he owned or that were in his possession, he failed to disclose any automobiles, allegedly upon the advice of counsel. The bankruptcy form also required him to disclose all automobiles transferred within the year immediately preceding the bankruptcy filing. While Tatum had transferred, among other automobiles, two Mercedes Benz automobiles to William Mann well within the preceding year, he indicated on his petition that he had made no transfers, and he failed to list them as assets of his own or in his possession. At the time, Mann was associated with the law firm of Bernstein & Longest, which was advising Tatum on bankruptcy matters.

At the meeting of creditors on April 11, 1984, Tatum, repeating the positions he took in his bankruptcy petition, testified that he had no automobiles and that he had transferred no automobiles in the preceding year. He also stated in connection with GT Racing Limited that Greene was its only officer and that he and Greene held equal ownership interests. In fact, Tatum was the vice president of GT Racing Limited and Greene held all the stock. In practice, however, Tatum was the only person with control over the corporation. Greene apparently was Tatum's mechanic who was paid a weekly wage. Similar statements were made in a deposition on December 6, 1984. The deposition was noticed in an adversary proceeding within the bankruptcy proceeding by one of the creditors of Tatum whose loan had been secured by a Ferrari.

When bankruptcy fraud was first being investigated by the government in 1986, Tatum retained David Gavin, a partner in the firm of Mann, Longest & Gavin, as his attorney. Mann, Longest & Gavin was a successor firm to Bernstein & Longest. In connection with the same investigation, Gavin also represented Tatum's mechanic, Greene, in his testimony before the grand jury on December 4, 1986, and Mann, his own law partner, in his testimony before the grand jury on December 11, 1986. Gavin was also the partner of Darrell Longest, who had provided Tatum with bankruptcy advice. (Tatum contends that it was pursuant to the advice of these attorneys that he did not list the automobiles on the bankruptcy schedules filed on March 2, 1984, and that one of their files, which was lost or destroyed, would have exculpated Tatum by confirming that Tatum had in fact supplied his counsel with a list of the automobiles in preparation for the bankruptcy filings.)

When it became apparent to the government that Gavin might have conflicts of interest in representing Greene (Tatum's mechanic), Mann (his law partner) and Tatum, the United States Attorney wrote Gavin advising him that these individuals (Greene, Mann and Tatum) "include the target and two subjects of investigation." The letter also stated that the role of Darrell Longest (Gavin's law partner who advised Tatum on bankruptcy matters) "raises many questions for us." The letter suggested that the government would have to seek a decision from the presiding judge on these potential conflicts.

At or about the time of Tatum's arraignment, the United States Attorney again wrote Gavin and stated,

Please be advised this office believes your firm has a serious conflict in continuing to represent Mr. Tatum inasmuch as you represented GT Racing Limited, Andrew Greene, and William A. Mann, a law partner of the firm. We believe this matter is serious enough that we are compelled to bring it to the court's attention.

Thereafter, and still several months before trial, Paul F. Kemp entered his appearance as counsel for Tatum. Although Kemp took the lead thereafter and the trial was conducted by him, Gavin sat at the trial table and continued to assist him. At the beginning of trial, when Kemp introduced Gavin to the court, he stated that the case was very complicated and that he needed the assistance of Gavin "to bring me up to speed in the investigation that has been going on for some years now." Kemp pointed out, however, that he, and not Gavin, would ask the questions. The government, nevertheless, expressed continuing concern that Gavin would continue "as a member of the defense team because of those prior associations." The government advised the court that Mann would be called as a government witness and Longest would be called as a defense witness. In particular, it noted that Gavin, who represented Mann before the grand jury, would be in a position "to directly or constructively conduct a crossexamination of someone who is his client and law partner." Kemp persisted in having Gavin available to assist him at trial. Acknowledging that Mann was an "intimate fact witness with respect to at least two of the Mercedes and one of the other automobiles indirectly, at least, involved in this case," Kemp sought to allay the government's concerns by noting that Gavin did not become a partner with Mann until 1986. At the same time, however, Kemp did acknowledge the benefit that Gavin would provide by being at the trial table because his knowledge of "the labyrinthine facts of this case is superior to mine." The court in deferring a decision on the issue, stated, "It seems to me that it is a little premature to address these issues you have just mentioned." J.A. 559.

Gavin continued to sit at trial table with Kemp throughout the trial, and Greene and Mann were called as government witnesses and Longest as a defense witness.

II

The right to counsel guaranteed by the Sixth Amendment in criminal cases assures that a defendant will be given the effective assistance of counsel. Effectiveness of representation is measured against a standard of reasonable competence. Strickland v. Washington, 466 U.S. 668, 687, 104 S.Ct. 2052, 2064, 80 L.Ed.2d 674 (1984). Representation is ineffective when counsel's performance has "so undermined the proper functioning of the adversarial process that the trial cannot be relied on as having produced a just result." Id. at 686, 104 S.Ct. at 2064. To be constitutionally significant, a deficiency in ...