Lawyer cleared in mortgage fraud case wants feds to pay legal fees

A New Orleans lawyer whose mortgage fraud conviction in Las Vegas was overturned because of government misconduct now wants the government to pay his legal fees.

David Mark filed court papers seeking roughly $215,000 in attorney fees and expenses, alleging the record in his case "shrieks of prosecutorial misconduct and fabrication, if not perjury."

Mark was convicted in April 2013 of conspiracy and fraud charges in one of the state's largest mortgage fraud cases. He was later sentenced to three years in federal prison by now-retired Senior U.S. District Judge Philip Pro.

Mark contended at his trial and in his appeal that he was indicted after federal prosecutors falsely accused him of violating an immunity agreement to testify against the key players in the mortgage fraud scheme. He was alleged to have "feigned memory loss" shortly before the trial.

In July a federal appeals panel tossed out the conviction after concluding that Pro relied on a "scant record" and "inaccurate" information from prosecutors about the immunity breach when he denied a defense motion to dismiss the case against Mark.

"When the government promises not to prosecute a witness in exchange for his cooperation, it cannot then indict the witness unless it proves that he failed to cooperate," the panel wrote.

After the case was dismissed, Mark's New Orleans lawyer, Michael Fawer, said Mark was "needlessly" put through the emotional trauma of a trial because of misconduct by prosecutors in the Nevada U.S. attorney's office.

In court papers last week, Fawer alleged that Assistant U.S. Attorneys Brian Pugh and Sarah Griswold falsely told Pro that the immunity breach occurred during a July 2011 telephone conversation with Mark.

Mark contended he never had the conversation and documents later obtained from the U.S. attorney's office by the defense showed no record of the call.

"If, in fact, there was no call in July 2011, there was no breach and Mark's prosecution was a blatant violation of the immunity bestowed upon him," Fawer wrote in his motion.

He said Pugh and Griswold "concocted" the story to explain away their failure to live up to the immunity agreement with Mark.

Obtaining legal fees from the government is more common in civil litigation.

Earlier this year a Reno federal judge ordered the U.S. attorney's office to pay a Hawaii man nearly $147,000 in expenses after the man successfully fought for the return of $167,000 authorities unlawfully seized from his motor home on a Nevada highway. The government is appealing.

Fawer acknowledged in an interview last week that requesting legal fees in criminal cases is rare, but he said Mark's case meets the criteria established under a 1997 federal statute known as the "Hyde Amendment.

The statute, written by the late Illinois Rep. Henry Hyde, allows criminal defendants to recoup legal expenses when a federal judge finds that the government's conduct was "vexatious, frivolous or in bad faith."

"In the grand scheme of things, there are any number of cases in federal court all over the country brought as a result of government actions conducted in bad faith," Fawer said.

In Mark's case Senior U.S. District Judge Lloyd George would have to make a bad faith finding.

U.S. Attorney Daniel Bogden declined to discuss Fawer's motion, but said his office will file a written opposition.

"The Government disputes the defendant's arguments in its motion for reimbursement of attorney's fees and expenses, and will be filing a timely response in Court," Bogden said.

Bogden has previously said that mistakes were made and corrected in Mark's case.

Griswold remains with the office prosecuting mortgage fraud cases, but Pugh has since left to take a job with the federal public defender.

Mark, who is not a licensed Nevada attorney, in November 2007 gave the FBI information that led to the indictment of a prominent couple in the mortgage industry in connection with fraud that prosecutors alleged cost banks more than $52 million.

Prosecutors promised Mark immunity if he continued to cooperate against mortgage broker Steven Grimm and his ex-wife, real estate broker Eve Mazzarella.

Both defendants were convicted and given stiff prison terms and are waiting for word on their appeals.

Contact reporter Jeff German at jgerman@reviewjournal.com or 702-380-8135. Follow @JGermanRJ on Twitter.