Pubdate: Mon, 25 Jan 2010
Source: Ledger-Enquirer (Columbus,GA)
Copyright: 2010 Ledger-Enquirer
Author: Alan Riquelmy


Federal Prosecutors Say Its Case 'Was Grounded In A Series Of Compelling Facts'

Federal prosecutors argued in a response filed Friday that a motion 
by Columbus attorney Mark Shelnutt, who wants attorney fees and 
expenses awarded to him, should be denied.

Shelnutt, acquitted in November by a jury on charges including money 
laundering, aiding and abetting a conspiracy to distribute cocaine, 
attempted bribery and making false statements, argues in a Dec. 15 
motion that prosecutors waged a "baseless, vexatious, frivolous, bad 
faith, harassing and stubborn" case against him.

Stating that he paid or must pay attorneys more than $190,000, and 
that he incurred some $35,000 in expenses while defending himself, 
Shelnutt argues that prosecutors had evidence before trial that 
cleared him of any alleged crime. Also, prosecutors knew or should 
have known that all 40 of the original charges in the May 21 
indictment couldn't be supported by the facts, Shelnutt adds.

The prosecution was grounded in a series of compelling facts," the 
prosecutors' response states, "including: The testimony of five 
witnesses that they transferred $250,000 of drug cash to defendant 
.. the IRS analysis of more than 10,000 pages of financial records 
which eliminated any legitimate source for defendant's cash flow; and 
defendant's inculpatory words and actions on audio and video 
recordings and in the letter to (Assistant U.S. Attorney Mel Hyde) 
requesting immunity for himself."

Prosecutors, the government's response states, "did not seek out this 
prosecution; this matter was assigned to it. In fact, the prosecutors 
had never even heard of defendant before being assigned this case."

Hyde Amendment

A 1997 law, referred to as the "Hyde Amendment," enables a judge to 
award reasonable attorney's fees and expenses to a defendant when a 
judge finds that the United States's position was "vexatious, 
frivolous or in bad faith."

Prosecutors state in their response that while a judge may award a 
defendant attorney's fees and litigation expenses, the defendant is 
responsible for showing he is qualified to it.

The Eleventh Circuit has recognized that 'it is obvious that a lot 
more is required under the Hyde Amendment than a showing that the 
defendant prevailed at the ... trial ... stage of the prosecution,'" 
the motion states.

The entire case focused on what Shelnutt said and did with the 
$250,000 he allegedly got from Hill's drug organization, prosecutors 
state. Grand jury documents seen by Land and evidence at trial show 
that the allegations were "factually sustainable," the motion continues.

Prosecutors had reason to believe Shelnutt could be convicted, based 
on Land's rulings on motions before trial and the prosecution 
process, which involved a number of agencies.

In their response, prosecutors detail the circumstances that led them 
to their case against Shelnutt, starting with the May 2005 bust of 
Torrance Hill's drug organization.


Shelnutt's indictment alleged a connection to Hill, whom Shelnutt 
once represented.

Hill, who testified against Shelnutt at his former attorney's trial, 
pleaded guilty to drug charges in 2006 and is serving a 24 1/2-year sentence.

Hill's former wife, Tamika Hill, also was once represented by 
Shelnutt. In fall 2006, she told federal agents about Shelnutt 
telling her to get drug money owed to Torrance Hill and bring it to 
him, the government's response states.

Prosecutors also allege that an IRS agent couldn't account for large 
amounts of cash coming through Shelnutt's law firm after looking at 
financial and tax records.

After a secretary in Shelnutt's law firm appeared before a federal 
grand jury in summer 2008, Shelnutt's attorney contacted prosecutors 
about a possible plea agreement to a felony, failing to file a Form 
8300 cash transaction report, the motion states. Plea negotiations 
continued until February 2009, when an agreement couldn't be reached 
on a plea to a money laundering charge, the prosecutors' motion states.

Two counts of failing to file a FINCEN Form 8300 were dismissed by 
prosecutors during Shelnutt's trial as were one count each of witness 
tampering and making a false statement.

Shelnutt was indicted in May, and U.S. District Court Judge Clay 
Land, who presided over the trial, denied a number of Shelnutt's 
motions seeking to dismiss the counts against him, prosecutors state.

Claims that Shelnutt received cash totalling about $250,000 in 
Torrance Hill's drug money were testified to by five government 
witnesses, prosecutors argue.

In its closing arguments, prosecutors used much of their time on the 
alleged concealment of those funds, the Friday motion states.

After prosecutors' closing arguments, Land said he would instruct the 
jury that " is not a federal crime to conceal a legitimate 
attorney's fee, even if the fee comes from illegal proceeds. To be 
money laundering, the concealment must be concealment of illegal 
proceeds other than those that are paid for legitimate attorney's 
fees," the motion states.

Jurors then spent more than 10 hours deliberating before finding 
Shelnutt not guilty, prosecutors add.
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