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ORDER -1-

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON

AT SEATTLE

UNITED STATES OF AMERICA,

Plaintiff,

v.

WADE B. COOK, and LAURA M. COOK,

Defendants.

No. CR05-424Z

ORDER

This matter comes before the Court on Defendants’ Rule 29 Motion for Judgment of

Acquittal Based on Prosecutorial Misconduct and Deliberate Intrusion into the AttorneyClient Relationship, docket no. 277 (original motion filed at docket no. 275). For the reasons

stated in this Order, Defendants’ Rule 29 motion is DENIED.

I.

BACKGROUND

Defendants Wade Cook and Laura Cook were charged in an eight count Second

Superseding Indictment with conspiracy, income tax evasion, filing false tax returns and

obstruction of the Internal Revenue Service. After a jury trial, Defendant Wade Cook was

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ORDER -2-

found guilty of Counts 2-8; the jury was unable to reach a verdict as to Wade Cook on Count

1 and as to Laura Cook on all counts. At the conclusion of the Government’s case,

Defendants orally moved for judgment of acquittal under Rule 29. The Court deferred a

ruling on the motion to permit Defendants to file a written motion. That motion is now

before the Court.

The issues presented by Defendants’ Rule 29 motion relate to disclosures by Timothy

Berry, one of the Cooks’ former attorneys, to the Government during the investigation of this

case. Timothy Berry became an attorney on November 14, 1997. Prior to that date, while a

law student, Mr. Berry began employment with United Support Associates, a Wade Cook

related entity. Beginning in mid-1997, Mr. Berry started talking to the Cooks about

charitable remainder trusts and estate planning. The Court has previously ruled that there

was no attorney-client privilege on any matter prior to Mr. Berry becoming an attorney on

November 14, 1997. It is undisputed that Mr. Berry provided legal advice to the Cooks after

he became an attorney and until March 1999. However, the testimony is in conflict as to

what additional work was done and when documents were produced. 

The Government interviewed Mr. Berry several times between July 2003 and the trial,

and the Government issued a subpoena for his testimony and records in March 2004. Mr.

Berry testified before the Grand Jury in April 2004 and at the Cooks’ trial. Defendants claim

the Government engaged in misconduct in obtaining attorney-client privileged information

from Mr. Berry during the course of the investigation of the case. 

Defendants first raised their claims relating to Mr. Berry in October 2006 when they

filed a motion in limine seeking to exclude the testimony of Mr. Berry regarding any matters

within the scope of the attorney-client privilege and seeking to exclude all fruits of what the

Government learned from Mr. Berry’s disclosures to the Government. See Defs.’ Mot. in

Limine, docket no. 131 (the “Motion in Limine”). After briefing, the Court heard oral

argument on the Motion in Limine on December 14, 2006, at which time the Court denied in

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ORDER -3-

part and deferred in part the motion. The Court held that there was no privilege as to

communications prior to the time Mr. Berry became an attorney and also ordered the

Government to produce agent notes of the interviews with Mr. Berry and related material. 

The Government produced the agent notes on December 20, 2006, docket no. 195, and filed

a supplemental memorandum, docket no. 223. On January 16, 2007, the Court held an

evidentiary hearing regarding the factual issues presented in the Motion in Limine, and Mr.

Berry testified at length at that hearing. On January 22, 2007, the Court heard additional oral

argument on the Motion in Limine, and the Government filed a supplemental memorandum

on the issues, docket no. 243. On January 23, 2007, the Court issued an oral ruling and

entered written findings of fact; the Court concluded that Mr. Berry would be permitted to

testify at trial about communications with the Cooks after Mr. Berry became an attorney

based on the Cooks’ waiver of the privilege. Order, docket no. 246. The Court’s findings

and conclusions in its January 23, 2007 Order are incorporated by reference in this Order. In

its January 23, 2007 Order, the Court stated the following, which is directly pertinent to

Defendants’ Rule 29 motion now before the Court:

I find that the Government did not take any action to intentionally interfere

with the attorney-client relationship between the Cooks and Tim Berry. The

Government did not ask for and did not understand it was obtaining

information from Mr. Berry that would invade the privilege. To the extent Mr.

Berry told the Government more than he should – to the extent he revealed

confidential communications after he became a lawyer – it was done by Mr.

Berry. The Government did not improperly induce Mr. Berry to breach his

ethical duty of confidentiality to his client.

Order at 4. 

As a result of the Motion in Limine, the Court has previously considered and rejected

Defendants’ claims of government misconduct. Notwithstanding the Court’s ruling on the

Motion in Limine, Defendants now attempt to reargue issues previously rejected. Although

Defendants present essentially the same substantive arguments, the Rule 29 motion before

the Court seeks a different remedy than did the Motion in Limine – namely, the dismissal of

the Second Superceding Indictment against the Cooks rather than the exclusion of Mr.

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 The Motion in Limine, docket no. 131, did not move for the dismissal of the indictment,

despite the Court’s Minute Entry, docket no. 234, which indicates the contrary.

ORDER -4-

Berry’s testimony at trial.1 Nothing in Defendants’ present motion suggests that any remedy

is warranted for the government’s conduct in this case with regard to Mr. Berry. 

II.

STANDARD OF REVIEW

Defendants bring this “Rule 29 Motion for Judgment of Acquittal Based on

Prosecutorial Misconduct and Deliberate Intrusion into the Attorney-Client Relationship.” 

Rule 29 authorizes a motion for judgment of acquittal based on a determination that “the

evidence is insufficient to sustain a conviction.” FED. R. CRIM. P. 29. Here, Defendants’

motion is premised entirely on allegation of outrageous government conduct during the

criminal investigation of the Cooks and is not premised on an allegation of insufficient

evidence presented at trial. Defendants’ motion is more accurately described as a motion to

dismiss the Second Superceding Indictment. “All motions to dismiss an indictment must be

raised pretrial.” United States v. Lopez, 185 F.3d 870, 1999 WL 362967 at *4 (9th Cir. May

28, 1999) (noting that a post-trial motion to dismiss the indictment for outrageous

government conduct should be unreviewable); see also FED. R. CRIM. P. 12(b)(3)(B); United

States v. Figueroa-Ocampo, 138 Fed. Appx. 988, 989 (9th Cir. July 13, 2005) (a motion to

dismiss the indictment brought six months after trial is untimely under FED. R. CRIM. P.

12(b)(3)(B)).

Even assuming that Defendants may bring a Rule 29 motion based on outrageous

government conduct, such motions are only granted in “extreme cases.” United States v.

Fernandez, 388 F.3d 1199, 1238 (9th Cir. 2004). “Outrageous government conduct” means

that “the government conduct in securing an indictment was so shocking to due process

values that the indictment must be dismissed.” United States v. Holler, 411 F.3d 1061, 1065

(9th Cir. 2005) (quoting United States v. Montoya, 45 F.3d 1286, 1300 (9th Cir. 1995)). 

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ORDER -5-

Outrageous government conduct occurs when the government conduct “violates fundamental

fairness and is ‘shocking to the universal sense of justice mandated by the Due Process

Clause of the Fifth Amendment.’” United States v. Gurolla, 333 F.3d 944, 950 (9th Cir.

2003) (quoting United States v. Russell, 411 U.S. 423, 431-32 (1973)). Whether government

conduct is outrageous “turns on the totality of the circumstances,” United States v.

Marshank,

777 F. Supp. 1507, 1523 (N.D. Cal. 1991), and “is an issue of law.” United States v.

McClelland, 72 F.3d 717, 721 (9th Cir. 1995). 

“A court may exercise its supervisory powers to dismiss an indictment in response to

outrageous government conduct that falls short of a due process violation.” United States v.

Fernandez, 388 F.3d at 1239 (quoting United States v. Ross, 372 F.3d 1097, 1109 (9th Cir.

2004)). That power should be exercised only where the prosecutorial misconduct was

“flagrant” and “cause[d] substantial prejudice to the defendant.” Id.

A defendant who claims government misconduct based on invasion of the attorneyclient privilege is limited. The attorney-client privilege is an evidentiary privilege, not a

constitutional right. See Partington v. Gedan, 961 F.2d 852, 863 (9th Cir. 1992). The fact

that an attorney fails to assert an attorney-client privilege does not transform a lawful

investigation into government misconduct. See United States v. Rogers, 751 F.2d 1074,

1080 (9th Cir. 1985). For there to be outrageous government conduct, the government must

play an active role in an attorney’s egregious breach of his ethical obligations. See e.g.,

United States v. Marshank, 777 F. Supp. at 1524 (government actively collaborated with a

defendant’s lawyer to build a case against the defendant).

III.

 ANALYSIS

Defendants contend the Government’s conduct violated Defendants’ due process

rights under the Fifth Amendment because evidence procured from Mr. Berry “irrevocably

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ORDER -6-

tainted the Government’s investigation – the fruit of the poisonous tree.” Defs.’ Mot., docket

no. 277, at 3. Defendants also ask the Court to exercise its inherent supervisory powers to

dismiss the indictment because the prosecutorial misconduct was “flagrant” and

“substantially prejudiced the Cooks.” Defs.’ Reply, docket no. 313, at 11. 

In support of their Rule 29 motion, Defendants rely heavily on several interactions

between Mr. Berry and the Government during the criminal investigation of this case. First,

Defendants argue that Mr. Berry improperly produced two documents, Exhibits 228 and 230,

to the Government, and Defendants suggest the admission of these exhibits and related

testimony at trial was critical to the Government’s case. Second, Defendants argue that the

Government’s subpoena to Mr. Berry on March 29, 2004, which requested his Grand Jury

testimony and all documents relating to the years 1998-2001, improperly sought attorneyclient privileged information. Lastly, Defendants argue that Mr. Berry improperly disclosed

information to the Government about the charitable remainder trust (“CRT”) and the Never

Ending Wealth Limited Partnership (the “NEW LP”). The Court addresses each of these

arguments in turn.

(1) Exhibits 228 and 230

Exhibit 228 is an undated “owner’s manual for CRT” written by Mr. Berry and

addressed to Eric Marler. Schill Decl. Ex. 4. On its face, it is unclear when Exhibit 228 was

prepared. Mr. Berry testified at trial that he provided Exhibit 228 to Mr. Marler in

September 1998. See Trial Transcript, docket 265, at 155. Even if Exhibit 228 was provided

to Mr. Marler after Mr. Berry became an attorney, Defendants have failed to establish that

the disclosure of the document to Mr. Marler, a financial consultant hired not by Mr. Berry

but by Mr. Cook, would be subject to the attorney-client privilege. Furthermore, Exhibit 228

is similar to Exhibit 229, which Mr. Berry prepared and provided to the Cooks before he

became an attorney. Exhibit 228 appears to be a later version of Exhibit 229; it contains no

confidential information not contained in the earlier version. Exhibits 228 and 229 were the

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2 Mr. Westinghouse’s “after attorney” notation on the back of Exhibit 230, Schill Decl.

Ex. 11, represents Mr. Westinghouse’s good faith effort to date this letter. This notation was

disclosed to Defendants approximately one year before trial. Johnson Decl., docket no. 311, ¶

7, Ex. 1 at 4 (referencing Bates numbers TB000001-000212, which includes Ex. 230).

ORDER -7-

subject of extensive direct and cross examination at the evidentiary hearing. As the

Government notes, Exhibit 228 contains “boiler plate legal analysis” relating to the

administration of a CRT. 

Exhibit 230 is an undated letter to Wade Cook from Mr. Berry. Schill Decl. Ex. 3.

This exhibit was also the subject of extensive direct and cross examination of Mr. Berry

during the evidentiary hearing. Based on the dating of publications referenced in the

document and the testimony at the evidentiary hearing, it now appears Exhibit 230 was

prepared after Mr. Berry became an attorney. See Gov’t Suppl. Mem., docket no. 243, at 2;

Schill Decl. Ex. 2 (Tr. of Evidentiary Hearing) at 160:3-9. However, like Exhibit 228,

Exhibit 230 appears to be a later version of Exhibit 229. More importantly, nothing

contained in Exhibit 230 was material to the principal issues litigated at trial – e.g., Did the

Cooks fund the CRT and thereafter “borrow” assets from the CRT with the intent of

repaying the loans? 

The notion that Exhibits 228 and 230 were crucial to the Government’s case could not

be further from the truth. As the Government established at trial, the CRT created by the

Cooks had no substance. “It was merely an illusion to mask the Cooks’ tax evasion.” Gov’t

Resp., docket 311, at 9. There was substantial evidence presented at trial that the CRT

signed by the Cooks was never implemented and funds were systematically and improperly

removed from the CRT. The CRT had no trustee, no bank account, no records, no genuine

charitable purpose, and no tax returns were ever filed. Moreover, there is no clear evidence

that the Government knew during the course of its investigation that Mr. Berry prepared

Exhibits 228 and 230 after he became an attorney.2

 Accordingly, the Government’s receipt

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ORDER -8-

of Exhibits 228 and 230 from Mr. Berry cannot be considered shocking to due process

values, “flagrant,” or the cause of any substantial prejudice to the Cooks.

(2) Grand Jury Subpoena - March 2004

Defendants also rely heavily on a subpoena to Timothy Berry on March 29, 2004,

which requested his Grand Jury testimony and documents for the years 1998-2001, including

“letters, notes, memoranda, proposals, instructions or correspondence relating to” the Cooks

and their trust and partnership entities at issue in this case. Schill Decl., docket no. 277, Ex.

1 (Defs.’ Trial Ex. A-48). The fact that the subpoena requested testimony and production of

documents for a period when Mr. Berry was an attorney does not provide a basis for the

claimed relief sought in the Defendants’ motion. The Government advised Mr. Berry during

their first meeting in the summer of 2003 that they did not intend to ask for or receive any

confidential information protected by an attorney-client privilege. Defendants have not

identified any new documents produced pursuant to this subpoena that violated any attorneyclient privilege. To the extent Mr. Berry testified or produced privileged material, it was at

most a breach of the attorney’s ethical duty of confidentiality to his clients. See United

States v. Rogers, 751 F.2d at 1080.

(3) CRT / Never Ending Wealth LP

Defendants contend that because no documents referring to NEW LP existed prior to

March 1998, Mr. Berry’s provision of information about the Cooks’ charitable remainder

trust/limited partnership structure to the Government violated the attorney-client privilege. 

Defendants also contend that the Government’s attempts to show evidence that about the

charitable remainder trust/limited partnership structure prior to November 1997 are

misleading. 

These contentions are unsupported by the evidence. The Cooks both testified, in their

pretrial sworn statements in 2005, that the CRT was Mr. Berry’s idea, that Berry drew

diagrams of how royalties would be held in a limited partnership, and that the CRT

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3 The Cooks specifically testified the CRT formation documents were not backdated.

Laura Cook Transcript at 56-59; Wade Cook Transcript at 143. Although subsequent testimony

at trial by others raises serious questions as to whether this testimony was true, there was no

government misconduct in believing that these documents were created prior to Mr. Berry’s

admission to the bar. 

ORDER -9-

formation documents were first signed on October 14, 1997 and November 1, 1997.3

Various exhibits and Mr. Berry’s testimony provide substantial evidence that the creation of

the CRT and Mr. Berry’s advice to the Cooks regarding a limited partnership occurred before

Mr. Berry became an attorney. See Pls.’ Trial Exs. 226, 227, 229, 231, 234a-d, 425 and 426. 

The Cooks made no secret of the charitable remainder trust/limited partnership structure and

discussed it at various seminars. Defendants do not dispute the Government’s contention

that the Cooks’ charitable remainder trust was also voluntarily disclosed to Washington

Mutual Bank in 2000 and to the Federal Trade Commission in 2002. Gov’t Resp. at 10. 

Moreover, the Cooks’ prior criminal defense counsel provided various documents

referencing the structure to the Government. The Government also asserts that it was aware

of the NEW LP prior to any contact with Mr. Berry. Johnson Decl. ¶¶ 2-5. It is highly

unlikely that Mr. Berry’s disclosure of information about the charitable remainder

trust/limited partnership structure to the Government violated the attorney-client privilege. 

Certainly, the Government’s receipt of such information does not shock due process values,

was not flagrant, and did not cause substantial prejudice to the Cooks.

IV.

CONCLUSION

There is no basis for a dismissal of the indictment in this case. The Government did

not take any action to intentionally interfere with the attorney-client relationship between the

Cooks and Mr. Berry. Mr. Berry testified at the evidentiary hearing and at trial that the

Government has never asked him to disclose any confidential information and to the best of

his ability he has avoided providing privileged materials to the Government. Defendants

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ORDER -10-

have failed to establish any government conduct which would constitute a due process

violation or justify the Court’s exercise of its supervisory powers to dismiss the indictment.

IT IS SO ORDERED.

DATED this 4th day of April, 2007.

AThomas S. Zilly

United States District Judge

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