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DOJ Attorneys Mishandle Evidence In NY Mortgage Fraud Case

The Justice Department's prosecution of developer Robert "Bob" Morgan and his co-conspirators has promoted concerns reaching DOJ's upper tiers, reports the Rochester Democrat & Chronicle. One of Morgan's attorneys called that some responsive steps by federal prosecutors nothing short of "extraordinary." Once heralded by the Justice Department and other federal law enforcement agencies as a sweeping $500 million mortgage fraud case, the prosecution was resolved with mostly misdemeanor pleas and no prison time for the accused. The prosecution was derailed by multiple missteps in the handling of evidence by Justice Department attorneys; defense attorneys maintained the lapses were intentional misconduct, while prosecutors instead insisted they were not purposeful. Morgan, once one of western New York's leading commercial and apartment developers, and some of his business colleagues were accused of swindling banks out of hundreds of millions of dollars in loans with lies about property values. However, prosecutors made apparent misrepresentations to judges about the evidence in the case, did not, until late in the case, turn over to the defense a seized cellphone that Morgan's lawyers contended showed proof of his innocence, did not review significant amounts of digitized content from computers seized during raids of Morgan's businesses, and misplaced for a period of time other laptops taken during the searches.

A court filing shows that in the aftermath of the plea deals, the Department of Justice ordered a review of the prosecution. DOJ is developing a plan for the "best practices for the handling" of evidence in "future cases and investigations." The Department of Justice said it is working to "strengthen its mentoring program and to relieve managers from carrying caseloads so they can spend more time supervising line (prosecutors) and focus on case management." An Office of Professional Responsibility investigation is unsurprising, given the prosecuton's troubles and allegations of misconduct, but the other measures are far from routine, Joel Cohen, an attorney for Morgan and a former federal prosecutor who focused on white-collar and securities fraud cases, said, "This suggests this has been taken very seriously at the senior-most levels to assure that these kinds of errors don’t occur in the future not only in the Western District of New York but throughout the Department of Justice." U.S. District Court Judge Elizabeth Wolford consented to release a version of the Department of Justice's filing, which includes about three pages of redacted information spread out among its 13 pages. Michael Grygiel, an Albany-based attorney for the Democrat and Chronicle said, "Allowing the public to judge the propriety and efficacy of these remedial steps is necessary to promote public confidence in the fair administration of the criminal justice system."


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