A federal judge declared a mistrial Tuesday in the fraud and conspiracy case against personal injury attorney Noel Gage after jurors, who deliberated for one week, announced they could not reach a unanimous verdict.
Senior U.S. District Judge Justin Quackenbush dismissed the jurors in the early afternoon and, in an attempt not to taint future jurors on the case, asked them not to speak to the media. Although the judge does not have the authority to bar the jurors from commenting after they are released, the jury complied with his request.
Gage's defense team also declined comment.
U.S. Attorney Gregory Brower said he respected jurors' hard work over the five days, but was disappointed they could not reach a guilty verdict.
"We are confident in the case against this defendant and we look forward to a retrial," Brower said.
Quackenbush will set a new trial date during a telephone conference with attorneys Monday.
The federal government claimed Gage, 69, belonged to a network of Las Vegas doctors and personal injury attorneys who conspired with self-proclaimed medical consultant Howard Awand to inflate clients' medical costs, protect doctors from medical malpractice lawsuits and share kickbacks from legal settlements.
They referred clients with seemingly solid legal claims to one another, keeping the scam alive and the money flowing, according to prosecutors.
Awand is the only other alleged participant in the network to be indicted so far, although attorneys representing other doctors and lawyers mentioned in the investigation frequented the courtroom during Gage's trial.
Awand is scheduled to go to trial in the fall.
A Las Vegas defense attorney said the split in the deliberation room is significant. Because Quackenbush asked the jurors not to speak to reporters or attorneys on either side, it is unclear on what charges they were hung or how many jurors wanted a guilty verdict versus a decision of innocence.
"If there are three or four on the defense side, the government doesn't like to see that," said the attorney, who asked that his name not be used. "If there is a sole holdout, Gage has a major problem."
The attorney said if there is one holdout who prevents the jury from making a unanimous decision, it could be because that juror somehow relates or identifies with the defendant.
The day the jury retired to the deliberation room, Quackenbush tossed out 13 counts against Gage, which attorneys said is not uncommon. The jury was left to focus on one matter: the treatment of Melodie Simon. Simon underwent routine back surgery in 2000 and ended up paralyzed after a sac protecting her spine was punctured, allowing blood to push nerves against the spine.
She hired Gage to determine what caused her paralysis and to file a lawsuit against whomever was responsible. Gage initially told Simon that he could secure a judgment between $8 million and $10 million.
Ultimately, Simon received a $2.3 million settlement. After attorneys fees and costs, she received $1.3 million, an amount that she testified would never cover the cost of her medical needs.
Assistant U.S. Attorney Daniel Schiess told jurors the amount of the settlement plummeted when Gage entered the conspiracy with Awand without Simon's knowledge. Schiess said Gage backed off surgeons Dr. Mark Kabins and Dr. John Thalgott, who operated on Simon, because they were "Awand's boys." Gage feared that he would lose lucrative referrals if he angered Awand, Schiess said.
Gage's strategy on Simon's case took a sharp turn after Awand referred a personal injury case that ultimately settled for $18 million. Gage raked in $6 million from the settlement, Schiess said.
Three days after Gage received the referral, he decided that Simon's anesthesiologist, not the surgeons, caused her paralysis.
Schiess told jurors that Kabins waited 11 hours to perform emergency surgery when it was known that internal bleeding was causing Simon's paralysis. Thalgott, who was on a fishing expedition in Idaho, never called to check on Simon, even though he was aware of her declining condition, Schiess said.
Gage and the surgeons' behavior made it clear they were in cahoots with each other, Schiess said. He pointed out that even though the surgeons believed they might be sued, they met with Gage without legal representation.
It was during that meeting, Schiess said, that the three crafted a legal strategy to blame anesthesiologist Dan Burkhead.
During depositions in preparation for trial, both Kabins and Thalgott took the stand, but Gage never asked a question about the delay between Simon's initial diagnosis and the emergency surgery.
Thalgott testified that though the deposition took place a year after the catastrophic surgery, he never looked at Simon's records or researched what might have caused the paralysis before testifying.
Thalgott said Awand hired attorney Robert Eglet to represent the doctors during the depositions. Thalgott testified that he knew Awand's friendship with Eglet and Gage was a positive sign.
Contact reporter Adrienne Packer at email@example.com or (702) 384-8710.