Opinion ID: 1189282
Heading Depth: 1
Heading Rank: 4

Heading: Use of Hoffecker's Former Lawyer as a Government Witness

Text: Hoffecker argues that the Government's conduct in using Jack Field, his one-time attorney, as an informant was so outrageous that it violated the Due Process Clause of the Fifth Amendment to the Constitution and that the District Court erred when it rejected his requested jury instruction on the defense of reliance on advice of counsel. Field was Hoffecker's long-time friend and former business associate. Indeed, in July 1990, Field was his substitute counsel of record in a Federal Trade Commission (FTC) action, FTC v. Uni-Vest Financial Services & Charles P. Hoffecker, et al., No. 89-6382 (S.D.Fla.), which was filed in 1989 and was settled on July 15, 1991. But Field was only one of Hoffecker's attorneys as he was sued in over 100 other actions brought by the National Futures Association (NFA) and the Commodity Futures Trading Commission (CFTC), and he hired attorneys other than Field to represent him in those cases. In June 1996, Field reestablished contact with Hoffecker so that he could serve as a confidential informant for the Government. This initiation of contact from the outside of the current relationship between the confidential informant, Field, and the defendant, Hoffecker, gave the Government and the informant the opportunity to ensure that the informant kept his legal activities out of his dealings with Hoffecker, and Field and the Government took full advantage of this opportunity. Moreover, before this reunion, Field and Hoffecker essentially had been out of contact for approximately three years, a lapse of time that assisted Field in renewing their relationship on a basis other than that of an attorney and client. During their first renewed encounter, the two discussed a potential business arrangement involving the Amitex scheme: Hoffecker: Jack, I would like to do some business with you. Field: I'd like to do that, too. Supp. app. at 2. Later that same day, Field rejected any suggestion that he would be serving as an attorney to Hoffecker, Myers, Global, or Amitex: Field: . . . I'm sure I don't want to be a lawyer on this. . . . . Hoffecker: Okay. Okay. Field: I can find you. I know a good law firm over there. Hoffecker: . . . You don't have to be a lawyer on this, you could be a contributor, partner, a uh you know. Field: Consultant. Hoffecker: Yeah. Field: Business consultant. Hoffecker: Oh, yeah. Field: Business advisor. Id. at 5. Excerpts from subsequent taped conversations demonstrate that Hoffecker and Field both understood that Field was not serving as a lawyer for Hoffecker or his entities. In fact, on each occasion that Field made this clear, Hoffecker responded by indicating that he understood. See, e.g., id. at 26 (Field: I just want to try and put a deal together so I don't practice law anymore. Hoffecker: Right, I understand.); id. at 27d (Hoffecker: [Y]ou are a business man. . . . You're not a lawyer any more.); id. at 33b (Field: I don't want to get involved in giving legal advice. Hoffecker: I understand.). Hoffecker indicated that he was obtaining legal advice elsewhere. Instead of doing legal work, Hoffecker wanted Field to be a recruiter, setting up telemarketing boiler-rooms in the United States to solicit potential customers and generate income for Amitex and Global, for which Field would be paid a commission: Hoffecker: . . . [Y]ou, at this stage of the game can get involved in us, it's two ways, one at the legal side, and the other. . . . Field: [Unintelligible.] Hoffecker: Getting involved in dealer networking with us. That's where the money is. Field: Okay. Okay. I don't want to do any, any legal work. Id. at 23-24. Hoffecker: My thought was that basically what I would do, is I would put together a retail sales organization and that I would get someone like Jack [Field] or get Jack to be involved from a, uh, you know a business side. Where Jack could go out and hustle dealers, and sellers, basically. Id. at 33. Hoffecker arranged to compensate Field based on the interest charges generated from the purported loans Amitex extended to its customers, as well as the fees for the purported purchase and sale of physical commodities in the boiler-rooms Field set up. In short, Hoffecker and Field understood that Field would derive his compensation exclusively from the business he generated, apparently on the theory that you eat what you kill. Thus, Field did not receive a legal retainer or have a fee arrangement with Hoffecker or Amitex, and Hoffecker never paid Field for any legal services in the Amitex-Global scheme. During the course of the investigation, the Government, which was aware of the potential attorney-client relationship problem, instructed Field to state to Hoffecker clearly and repeatedly that he was not serving as legal counsel to Hoffecker or others. Hoffecker inadvertently accommodated the Government by repeatedly affirming his understanding that Field was serving as a business associate and not as legal counsel. Government investigators ensured that Field's prior legal work would not become implicated in the case by not inquiring about any previous privileged communications between Field and Hoffecker and by instructing Field not to divulge any potentially protected previous communications. To further ensure that such communications were not divulged, the Government employed a taint team to review all of the recorded conversations between Field and Hoffecker. Before the first trial, Hoffecker moved to dismiss the indictment based on his claim that the Government had engaged in outrageous conduct. In the alternative, Hoffecker moved to suppress evidence of his conversations with Field. After several days of hearings, the District Court issued oral and written findings that there had not been an attorney-client relationship between Field and Hoffecker and denied Hoffecker's motions. We review the District Court's rulings on the outrageous conduct claim recognizing that [b]ecause outrageous government conduct, a constitutional claim, is a mixed question of law and fact, `[w]e exercise plenary review over the district court's legal conclusions, and review any challenges to the court's factual findings for clear error.' United States v. Lakhani, 480 F.3d 171, 181 (3d Cir.2007) (second alteration in original) (quoting United States v. Nolan-Cooper, 155 F.3d 221, 229 (3d Cir. 1998)). We also are aware that we repeatedly have noted that we are extremely hesitant to find law enforcement conduct so offensive that it violates the Due Process Clause. United States v. Voigt, 89 F.3d 1050, 1065 (3d Cir.1996). The Government's conduct can be regarded as so offensive that it requires the dismissal of an indictment only if it is most intolerable. United States v. Jannotti, 673 F.2d 578, 608 (3d Cir.1982). Thus, a court should not dismiss an indictment `each time the government acts deceptively or participates in a crime that it is investigating.' Nolan-Cooper, 155 F.3d at 231 (quoting United States v. Mosley, 965 F.2d 906, 910 (10th Cir.1992)). To elevate a violation of the attorney-client privilege to a constitutional claim of outrageous misconduct, a defendant must demonstrate (1) the government's objective awareness of an ongoing, personal attorney-client relationship between its informant and the defendant; (2) deliberate intrusion into that relationship; and (3) actual and substantial prejudice. Voigt, 89 F.3d at 1067 (footnote omitted). The District Court found that the Government did not engage in outrageous conduct because there was not an attorney-client relationship between Field and Hoffecker at the time of the investigation when Field was pursuing his confidential activities. Accordingly, the relationship between Hoffecker and any person or entity involved in this case and Field could not satisfy the first Voigt requirement for a finding of outrageous misconduct. Indeed, the court stated that there barely was a former relationship in the traditional and understood sense of attorney-client. . . . App. vol. 8 at 35. The court found that the government was well aware of a potential attorney-client relationship problem, took steps to avoid it, or screen for it. Id. at 37-38. Accordingly, the court found that notwithstanding a prior attorney-client relationship, Field could nonetheless be a government informant without running afoul of attorney-client law. Id. at 34. The court found that the recorded conversations among Hoffecker, Field, and others occurred in the context of build[ing] Field into the existing business entity, id. at 12, and establishing Field as a business associate who would help Amitex establish sales rooms, from which Field would earn a commission. The court further found that Hoffecker could not have had any objectively reasonable understanding that Field was functioning as his attorney. The court found that, instead, Hoffecker's objectively reasonable understanding was that Field was his business partner, who would be compensated as a business co-venturer, and that Field would not be taking the legal end, but rather the networking room related end. . . . Id. at 34. The court noted that [i]t would be clearly unreasonable for Hoffecker to believe, based upon what was said, that Field was his lawyer. Hoffecker made it clear he had lawyers. Id. at 34. Accordingly, the court found that Hoffecker had not shown that the Government's conduct was outrageous. Notwithstanding the voluminous evidence showing that Field repeatedly told Hoffecker that he did not want to act as his lawyer, Hoffecker contends that there was an attorney-client relationship between him and Field during the Government's investigation and points to a number of snippets of conversation between the two men that he contends support his claim. For example, Hoffecker claims that Field acknowledged Field's role as a `legal counsel or legal consultant. . . .' Appellant's Br. at 21. In context, however, Field actually was making clear that he was not serving as Hoffecker's legal counsel: Hoffecker: So, basically, if we, if you could get us some rooms and we could use, you know, have you as a, as a, a legal counsel or, or legal consultant, let's say. . . . Field: As a business consultant. I don't want to, I don't want to do law practice. I don't want to do legal shit. Hoffecker: A business consultant from a, from a legal standpoint. Field: I can business consult on what I think is the way to set it up and ways to set it up. That's just from strictly business side. Once it's set up, you probably need somebody to look at it and give you an opinion letter. Hoffecker: Right. . . . . Hoffecker: . . . [W]ell you can call it business consulting, you can call it legal consulting, I don't care what you call it, you know I mean we know that you have a legal mind that's, that's one of the better ones so we understand that that's, that, that any kind of business consulting see would be from a legal twist, I'm sure. Field: It would be from my background experience but it wouldn't be real legal advice, I just, I just don't want to get in that box, frankly. I don't like doing that, I've done it too damn long, and I don't want to be limited in making money to what lawyers' fees are. Hoffecker: I see. Supp.App. at 17-18. The other pieces of conversation that Hoffecker cites as support for his claim of outrageous Government conduct similarly do not support his claim and, when viewed in context, instead refute it and we see no reason to recount them here. Hoffecker also claims that the declaration of Christopher Holly confirms Field's status as a lawyer for Hoffecker. In fact, Holly merely stated that he was present on five or six occasions between June 1993 and May 1995 when Field and Hoffecker purportedly had phone conferences involving a CFTC case against Hoffecker. Holly's declaration does not mention specific subjects discussed, but generally states that Field offered legal advice to Hoffecker in these 1993-1995 conversations. The District Court found that Holly, like other persons surrounding Hoffecker, used Field as a strategist, but that use did not create an attorney-client relationship between Field and Hoffecker during the 1993-1995 period, let alone when Field cooperated with the Government in 1996-1998. The District Court's finding surely is unassailable under any standard of review. Hoffecker next claims that the testimony of John Leubsdorf, who was qualified as a professional responsibility expert, demonstrates that Field's and Hoffecker's interactions impacted on an existing legal representation. Appellant's Br. at 24. In analyzing Leubsdorf's testimony, however, the District Court noted that even Leubsdorf would agree that the professional responsibility rules do not apply in the absence of an attorney-client relationship. Because a past attorney-client relationship does not establish that an attorney-client relationship continues until a later time, United States v. Evans, 113 F.3d 1457, 1463 (7th Cir.1997), Hoffecker's claim only can succeed if he shows that he and Field had an attorney-client relationship between 1996 and 1998. Even if we exercised plenary review of all aspects of Hoffecker's outrageous conduct claim, we would conclude that the District Court correctly determined that Hoffecker and Field had a business relationship, not an attorney-client relationship, during the Government's investigation when Field was acting as its informant. Indeed, we cannot help but wonder why Field's extraordinary efforts to keep an attorney-client relationship out of his dealings with Hoffecker did not cause such an experienced confidence man to be suspicious of Field but apparently they did not. Surely there is a delicious irony in the circumstance that Field and the Government conned the con man. Overall, to call the evidence supporting Hoffecker's claim thin would be generous as microscopic would be the more appropriate word. There was no evidence showing that Field acted as Hoffecker's attorney; in fact, at every opportunity Field reminded Hoffecker that he was not his attorney and did not want to be his attorney. Their relationship during the Amitex investigation was not that of an attorney and a client, and did not come close to being one. Hoffecker has not shown that Field acted as a legal advisor to him, Amitex, or Global, or that it was reasonable for Hoffecker to believe that Field was acting as his attorney. Accordingly, we conclude that that the Government's investigation did not interfere with an attorney-client relationship between Hoffecker and Field as there was no relationship with which to interfere and therefore the District Court properly denied Hoffecker's motion to dismiss the indictment or suppress evidence. We next consider whether the District Court erred in refusing to give a jury instruction on the defense of reliance on advice of counsel that Hoffecker requested. We consider this point on an abuse of discretion basis. See United States v. Leahy, 445 F.3d 634, 642 (3d Cir.2006). Certainly a district court is bound to give the substance of a requested instruction relating to any defense theory for which there was any foundation in the evidence. United States v. Blair, 456 F.2d 514, 520 (3d Cir.1972). But a court also ha[s] to avoid diverting the jury by idle speculation and frivolous considerations. A confused jury can give as improper a verdict as one which has failed to receive some significant instruction. Therefore, the charge should direct and focus the jury's attention on the evidence given at trial, not on far fetched and irrelated ideas that do not sustain a defense to the charges involved. Id. (citation omitted). There was no evidence that Hoffecker and Field had an attorney-client relationship between 1996 and 1998, or that Field gave him legal advice, on which Hoffecker relied. As the District Court found, Hoffecker's argument that Field performed a legal function was specious. App. vol. 53 at 84. Inasmuch as there was no evidentiary support for the instruction, the court correctly did not give the instruction which would have been unjustified and confusing to the jury. Accordingly, the District Court did not abuse its discretion when it rejected Hoffecker's requested advice of counsel instruction. Indeed, it would have been legal error for the court to have given the charge and thus, even on a plenary review basis, we would reach the same result that we reach on this point.