Prosecutors seek to use old verdict

Federal prosecutors preparing for the retrial of Noel Gage have submitted a request to admit into evidence a guilty verdict reached in a civil lawsuit against the personal injury attorney more than a decade ago in El Paso, Texas.

The federal government claims the lawsuit demonstrates that Gage engaged in a similar pattern of fraud long before he was indicted in Las Vegas on charges he conspired with doctors and a medical consultant to boost medical costs and settlements, then shared the proceeds.

In exchange for providing kickbacks for doctor referrals, the 69-year-old Gage received cases that proved to be lucrative, according the Las Vegas indictment.

A jury that listened to a month's worth of testimony in February and March could not reach a verdict. Gage's new trial is scheduled to begin May 27.

Gage was charged with honest services fraud. Prosecutors claim he failed to file lawsuits against two surgeons, Drs. John Thalgott and Mark Kabins, who operated on former Olympian Melodie Simon because the doctors belonged to the network involved in the conspiracy.

Simon underwent routine back surgery in 2000. After the operation, internal bleeding caused nerves in Simon's back to press against her spine. Thalgott left for vacation the day after the surgery. The government claims Kabins, aware of Simon's dire situation, waited hours before performing emergency surgery. Simon, now 49, is a wheelchair-bound paraplegic.

The government claims that Gage backed away from the surgeons after he was promised a more lucrative case that he ultimately settled for $18 million. Though he initially told Simon she had a strong case that could result in a settlement of between $8 million and $10 million, the mother and physical education teacher only received $2.3 million.

According to court documents filed Friday, Gage was found guilty in 1995 of breaching his fiduciary duties and fraud for sharing his contingency fees with former clients. Gage had represented two chiropractors attempting to retrieve money from insurance companies. The Texas jury found that Gage defrauded his clients by convincing them to hire him and failing to disclose that the proceeds would be shared with former clients.

"Because this fraudulent conduct will counter Gage's defense that he did not engage in self-dealing regarding Melodie Simon and other clients, we request that evidence of the Texas conduct be admissible at trial," according to the motion filed by First Assistant U.S. Attorney Steven Myhre.

Myhre later noted that "the parallels are striking" between the Las Vegas and Texas cases.

Myhre cited statements to the jury by Gage's attorney, Thomas Pitaro, who repeatedly referred to Gage as a "skilled, knowledgeable and dedicated attorney." Pitaro told jurors that Gage did not have a case against the two surgeons and instead pursued the anesthesiologist believed to have caused the internal bleeding.

In his motion, Myhre argued that jurors be informed of the verdict.

"It is not uncommon for a person accused of fraud to defend himself by claiming that he acted in good faith, without any intent or motive to defraud anyone," Myhre wrote. "When that defense is raised, evidence of past acts of fraud in similar circumstances becomes highly relevant to the defendant's intent, knowledge, motive, and absence of mistake or accident."

Neither Pitaro nor Gage could be reached for comment late Monday.

Gage maintained his innocence to the Review-Journal last month and said he was looking forward to clearing his name.

"I can categorically tell you that I won't plead guilty to anything, because I'm not guilty," Gage said.