Issue 328
March 18, 2005

INDEX

Articles

q Fraud Verdict Is Ominous for Toppled CEOs by Walter Hamilton, Lisa Girion and Thomas S. Mulligan

q Verdict Weakens Ignorance Defense by Brooke A. Masters and Carrie Johnson

q Behind Repeat Offender’s Release, Prosecution’s Helping Hand by Jim Dwyer

q High Court Condemns Conduct of Prosecutor by Maura Dolan

q A Dubious Account Led to 9 Years in Prison by Jim Dwyer

q In Schiavo Feeding-Tube Case, Notoriety Finds Unlikely Judge by Abby Goodnough

q Assisted suicide at center stage once again by Daniel Costello

The following article appeared on latimes.com on March 16, 2005:

Fraud Verdict Is Ominous for Toppled CEOs

Ex-WorldCom chief Ebbers is convicted of a huge accounting scam, though he professed ignorance. Such a claim may not help others.

By Walter Hamilton, Lisa Girion and Thomas S. Mulligan

Times Staff Writers

NEW YORK — The conviction Tuesday of former WorldCom Inc. chief Bernard J.

Ebbers for orchestrating an $11-billion accounting fraud could have deep repercussions for other disgraced executives who claim they were unaware of financial scams taking root beneath them.

A federal jury found Ebbers, 63, guilty of securities fraud, conspiracy and filing false documents with regulators. He was convicted on all nine counts that he faced. It was the government's biggest win yet in a string of victories against top corporate figures, including Silicon Valley financier Frank Quattrone and lifestyles entrepreneur Martha Stewart. He faces a possible prison term of more than 30 years.

There was little hard evidence against Ebbers — no smoking-gun e-mails or paper trails — and the defendant insisted the fraud was masterminded by Scott D. Sullivan, his onetime finance chief who became the federal government's star witness.

But it came down to this: Jurors couldn't see how the man who had built WorldCom from a small phone company in Clinton, Miss., to a global telecommunication colossus could not have known about the accounting scams that triggered the company's 2002 bankruptcy filing — the biggest in U.S. history.

"When you start a company … and you bring it up from nothing, it's hard to convince a jury that you are just too stupid to know what's going on," said Daniel J. Callahan, a veteran litigator. "This see-no-evil, hear-no-evil, speak-no-evil policy just doesn't fly."

Legal experts said the jury's decision boded poorly for toppled executives Kenneth L. Lay of Enron Corp. and Richard Scrushy of HealthSouth Corp., who are employing variations of the above-the-fray defense.

Lay faces trial in Houston in January on fraud and conspiracy counts stemming from Enron's 2001 collapse. Scrushy is on trial in Birmingham, Ala., for an alleged $2.7-billion fraud at HealthSouth.

"These guys are shaking in their boots now," said Andrew Genser, a white-collar criminal defense lawyer at Kirkland & Ellis in New York.

If anyone seemed poised to pull off the "know-nothing" defense, others said, it was Ebbers.

The former high school basketball coach and milkman twice flunked out of college. He disdained e-mail, denying prosecutors a weapon they had used effectively against Quattrone and others. And Ebbers almost never sold his WorldCom shares, testifying that he even had bought $5.3 million in stock a few weeks after he was forced to resign in 2002 under the cloud of a federal investigation.

In an interview, juror Aran Nulty said that the panel weighed the evidence carefully during eight days of deliberations, and did not rely on Sullivan's testimony alone.

The tipping point, she said, was the argument that Ebbers would have to know about WorldCom's troubles because of regular revenue statements and numerous other financial reports.

"We had to come to the conclusion that his testimony was not truthful," said Nulty, a grade-school teacher. "It wasn't that we were quick to dismiss what he said. It took us a very long time."

Duke University law professor Erwin Chemerinsky said he believed the jury's decision "will embolden prosecutors to bring more such cases."

"I think it puts more pressure on white-collar defendant CEOs to consider guilty pleas," he said.

Ebbers will be sentenced June 13, and a lengthy sentence could effectively mean life behind bars. He declined to comment after the verdict, rushing from the courthouse with his wife, Kristie, and grabbing a cab.

It was a sharp contrast with his demeanor during most of the seven-week trial, when Ebbers chatted with onlookers and posed for photographers.

Reid Weingarten, Ebbers' chief lawyer, said he would base an appeal in part on U.S. District Judge Barbara Jones' refusal to grant immunity from prosecution to former WorldCom Chief Operating Officer Ron Beaumont and two other former executives. He said they would have supported Ebbers' story.

Had they been able to testify without fear of prosecution, Weingarten said, they would have provided "powerful exculpatory evidence," Weingarten said outside the federal courthouse in Lower Manhattan.

"I'm extremely disappointed," Weingarten said of the verdict. "I know Mr. Ebbers, and I know the evidence in this case."

Appeals courts seldom overturn jury verdicts, however, and experts noted that generally only prosecutors grant immunity.

In a statement, U.S. Atty. Gen. Alberto R. Gonzales said the government was "satisfied the jury saw … that fraud at WorldCom extended from the middle-management levels of this company, all the way to its top executive."

In many ways, the trial boiled down to a credibility contest between Ebbers and Sullivan, the former chief financial officer.

Sullivan pleaded guilty to his role in the fraud last year, and faces up to 25 years in prison. He cooperated with prosecutors in exchange for a leniency recommendation when he is sentenced later this year.

In his testimony, Sullivan described how he doctored WorldCom's books in the wake of the dot-com collapse beginning in 2000, and said Ebbers was fully aware of what he was doing. Sullivan recounted conversations in which he asked Ebbers to warn investors about WorldCom's troubles, but his boss instead instructed him to "hit the numbers" that Wall Street expected.

Prosecutors portrayed Ebbers as a demanding boss who was deeply involved in WorldCom's finances — even ordering the elimination of free coffee and demanding that bottled-water dispensers be filled with tap water to save money, according to testimony.

Ebbers wanted to conceal WorldCom's problems, prosecutors said, because he had used his WorldCom stock as collateral for $400 million in personal bank loans. Revealing the extent of WorldCom's troubles would have sent the stock reeling and forced Ebbers to sell his shares at deflated prices, prosecutors said.

The defense contended that Ebbers had no financial acumen, that he delegated all accounting responsibility to Sullivan and that Sullivan implicated Ebbers simply to help himself.

Ebbers portrayed himself in homespun terms during two days on the witness stand. He testified that he got into the telecom business by chance when he invested with some friends in a Mississippi phone company that grew into WorldCom through a series of mergers.

Some experts said Tuesday that his testimony might have backfired.

"It gave the jury a chance to see that he was not the kind of person who was oblivious to what was going on," Genser of Kirkland & Ellis said.

Through ever-larger acquisitions — ending with the 1998 purchase of MCI — Ebbers

built WorldCom into a global network provider second only to AT&T Corp.

The Canadian-born Ebbers became a billionaire, with holdings that included yachts and the 83,000-acre Douglas Ranch in British Columbia, Canada's largest working cattle operation.

In the late 1990s, changes in the telecommunications industry hit WorldCom hard. A glut of fiber-optic cable laid by new competitors such as Global Crossing Ltd. led to sharp price drops. Even so, the company was valued at $35 billion when Ebbers stepped down in the spring of 2002.

But that June, an internal auditor found bookkeeping errors, and the company began to unravel. WorldCom filed for bankruptcy protection July 21, 2002, listing $104 billion in assets. That dwarfed Enron's $63-billion bankruptcy filing the year before.

Today, a year after emerging from bankruptcy as MCI Inc. and moving corporate headquarters to Ashburn, Va., the company is about to be sold at a price far below its once-bloated value to either Verizon Communications Inc. or Qwest Communications International Inc.

MCI directors have accepted Verizon's offer of $6.7 billion in cash and stock, even though the financially shakier Qwest has offered $8 billion. Qwest is reportedly increasing its bid, and MCI must decide by Thursday whether Qwest's offer is significantly better. If it is, Verizon will have a week to revise its bid.

Whichever company buys MCI will inherit a jumble of more than a dozen networks that Ebbers never successfully integrated into one cohesive system. Verizon figures it would spend $3.5 billion more to consolidate the networks. Qwest would probably rely on its own nationwide system, using MCI to fill in crucial areas.

But the acquirer also will get a company that has held onto its business customers and has about 15% of the large corporate market. That is second only to AT&T, which controls 30% of the big-business market.

Despite WorldCom's successes, some in the telecom industry had long questioned Ebbers' prowess.

After WorldCom acquired MCI in 1998, analyst Kenneth McGee at consulting firm Gartner Inc. went to the company's Mississippi headquarters to interview Ebbers and top executives. What he found scared him.

"There was such an absence of management abilities," McGee recalled. "They were so out of their league."

At the time, McGee told investors that Ebbers "will ruin" the company.

"When we said that, we never expected it to be anything like this," he said.

* * * * *

Verdict Weakens Ignorance Defense

Former Executives Of Enron, HealthSouth Also Blame Underlings

By Brooke A. Masters and Carrie Johnson

NEW YORK, March 16 -- Former WorldCom Inc. chief executive Bernard J. Ebbers found out Tuesday what it feels like to take the ultimate gamble and lose.

Facing a criminal case in which prosecutors had no documents clearly linking him to the multibillion-dollar central fraud, Ebbers, 63, took the stand, admitted he had no clue about what was happening in his own company and endured a humiliating cross-examination. On Tuesday, 12 New Yorkers convicted him anyway.

As a result, the other corporate titans on trial and awaiting trial for equally large financial crimes -- HealthSouth Corp. founder Richard M. Scrushy and Enron Corp. leaders Kenneth L. Lay and Jeffrey K. Skilling -- should be sleeping uneasily, outside legal analysts said.

"This is a fatal blow to the 'the CEO is above it all and out of the loop' defense," said defense attorney Jacob S. Frenkel. "This goes to show that CEOs can be held accountable for false filings" to the Securities and Exchange Commission even when they do not get personally involved in the preparation. Ebbers was convicted of seven false-filing counts, even though he personally signed only two of filings.

The Ebbers verdict could serve as a bellwether for the current crop of corporate scandals because his defense -- that he was misled by trusted underlings -- is echoed in claims from the leaders of Enron and HealthSouth.

"He is one of the most prominent CEO defendants, and, in deciding whether to settle criminal cases, lawyers are going to be looking to see what happens in other cases," said Robert J. Giuffra Jr., a partner at Sullivan & Cromwell LLP in New York.

Earlier high-profile defendants such as Martha Stewart and Frank P. Quattrone were tried for personal misdeeds, and the heads of Tyco International Ltd. and Adelphia Communications Corp. simply argued that their actions were not criminal.

By contrast, Ebbers's defense lawyers conceded fraud had occurred but sought to distance their client from it.

Lead attorney Reid H. Weingarten argued that the government's star witness -- former finance chief Scott D. Sullivan -- was falsely accusing Ebbers of crimes to cut his own prison time.

But that strategy set the case up as a "he said-he said" case and put strong pressure on Ebbers to testify and contradict Sullivan's assertion that he repeatedly told Ebbers in private meetings that he was making improper expense and revenue adjustments.

Once on the stand, Ebbers was put into the position of repeatedly having to explain how he could have missed $800 million swings in a key expense area at a time he was canceling the company coffee service to save $4 million.

In the end, according to one of the jurors, some panel members decided not to believe either Ebbers or Sullivan, preferring instead to seek corroborating evidence from documents and witnesses they perceived to be honest.

After the verdict, Weingarten defended his decision to put Ebbers on the stand. "I thought it was an easy decision, and I thought he did fine. . . . I would do it again today," Weingarten said.

Outside lawyers agreed the decision made sense, but they noted that the defense team was fighting a difficult battle. "It wasn't as if Ebbers was testifying against a very appealing witness" in Sullivan, said Angela C. Agrusa, a litigator who specializes in complex financial fraud cases. "What you can't overcome is that the company lost a lot of money, and he is the boss."

Still, the analysts cautioned, every jury is independent, and there are enough differences between Ebbers's case and those of the Enron and HealthSouth bigwigs that Tuesday's win for the government does not automatically translate into a defeat for the other defendants.

Lay, like Ebbers, claims to have been kept in the dark by subordinates, but he may do better because of the role he played at Enron and the complexity of the fraudulent partnerships that ultimately brought it down, they said.

Lay served as the outside face of the company for years, dealing with investors and hobnobbing with politicians and international leaders, rather than running day-to-day operations. Unlike Ebbers, who was convicted of participating in WorldCom's fraud from its beginning, Lay is charged mainly for optimistic statements he made to investors and employees in the weeks before Enron filed for bankruptcy protection.

"Lay will have to consider that the Ebbers jury didn't buy the out-of-the-loop defense, but what else can he do? He can't argue there wasn't a fraud," said former federal prosecutor David M. Rosenfield. A spokeswoman for Lay declined to comment.

For his part, Scrushy's attorney Donald V. Watkins took pains to distinguish his client's case from that of Ebbers. For one thing, Watkins said, Scrushy, 52, is on trial in Birmingham, a city he has lavished with charitable contributions. For another, HealthSouth never filed for bankruptcy protection, unlike Enron and WorldCom.

"As we have consistently stated throughout the course of the trial . . . unlike Enron and WorldCom, HealthSouth was, and continues to be, a solid and real company," Watkins said. "This fine company was inspired and developed by Richard Scrushy, and we expect full vindication at the conclusion of the trial."

Lay, 62, may also think pleading guilty is not an option, the outside lawyers said.

"I don't know that a conviction is going to put pressure on people to plead guilty, particularly if you're 60 years old and looking at a guideline sentence of 15 or 20 years," said Lawrence Byrne, a partner at White & Case LLP. "That's effectively a life sentence, so what choice do you have but to go to trial?"

Still, Ebbers's conviction sends a strong warning that jurors will be skeptical of business executives who pocketed hundreds of millions of dollars yet claim they were simply functioning as a "coach" rather than running the show.

"The message to others awaiting like trials as well as those running other corporate giants is clear: If you play in big leagues, but only intend to coach, expect to get benched to the nearest federal prison," said Charna E. Sherman, a defense attorney.

* * * * *

The following article appeared on nytimes.com on March 7, 2005:

Behind Repeat Offender's Release, Prosecution's Helping Hand

By Jim Dwyer

A jailhouse informer, charged with impersonating a police officer and killing a Long Island man in January, was able to avoid deportation at the end of a prison term last year because of a series of extraordinary interventions by the Queens district attorney's office, according to newly disclosed state and federal records.

The informer, Reginald Gousse, 31, is a Haitian citizen with a long history of kidnapping, police impersonation and armed robbery, but he had testified for the prosecution at one of the city's first trials brought under the 1995 death penalty statute and was given a major break in his own pending cases. Mr. Gousse also received another, far more unusual

benefit: using legal means, prosecutors manipulated his criminal record so he was able to avoid deportation to Haiti. Richard A. Brown, the Queens district attorney, said he wanted Mr. Gousse to remain in the country so he would be available to testify again.

To thwart efforts by federal immigration authorities to deport him, Queens prosecutors helped him withdraw a guilty plea in February 2004 that he entered 12 years earlier for a 1992 armed robbery, and for which he had already served the full sentence. In its place, they allowed him to substitute a lower-level offense that did not meet the threshold for

expulsion from the country.

Additionally, they delayed his sentencing on other, more recent violent crimes until the day he was released from custody, March 24, 2004. This had the effect of keeping him out of the state prison system - protecting him from retaliation for his work as an informant, but also shielding him from the scrutiny of federal immigration authorities.

"Someone did him an extraordinary favor," said Frank Kelly, one of the lawyers recently appointed to represent Mr. Gousse.

After he was set free last March, the police and prosecutors say, he began a series of fresh crimes that ended with the killing of James Gottlieb, 49, of Garden City, a husband and father of three. Mr. Gottlieb was stopped by a man impersonating a police officer as he drove home from his job as an assistant bank manager, prosecutors say. Mr. Gousse has denied the charges.

The Queens district attorney said he had no regrets about his office's handling of Mr. Gousse, because his testimony helped the prosecution of the killers of an off-duty police officer and the owner of a check-cashing store. "The murder of Mr. Gottlieb this year is no less a tragedy than were the murders of Detective Charles Davis and Ira Epstein," Mr. Brown said. "The only person responsible for the actions of Reginald Gousse is Reginald Gousse himself."

At the time the prosecutors made their deal with him, Mr. Brown said, they did not realize that he was not a citizen or that a federal immigration judge had already ordered him deported. When they found out several years later, Mr. Brown said, they exerted themselves to resolve his deportation problems to make sure he would remain available.

"We wanted to keep him here," Mr. Brown said. "We knew if he was returned to Haiti, we would have great difficulty getting him back, in the event we needed him back for appellate purposes or a new trial."

Federal immigration officials said that Mr. Gousse was precisely the kind of dangerous criminal whom the law requires to be expelled from the country after his debt to society has been paid, and that the actions by the prosecutors had foiled their efforts. "It was 100 percent our intention to deport this guy at the first available opportunity," said

Manny Van Pelt, a spokesman for the federal Immigration Customs and Enforcement agency. "They basically absolved the conviction."

Immigration law specialists and criminal defense lawyers said they were astounded by the complex intercessions by Queens prosecutors on Mr. Gousse's behalf. Under recent immigration law, people who have minor violations, like jumping a subway turnstile three times, can be subject to deportation. Prosecutors in Queens and elsewhere in New York have routinely refused to reopen even petty criminal cases to help immigrants avoid expulsion.

"It's rare that a noncitizen is allowed to change a plea, as usually there is strong opposition from the prosecutors and the court system generally," said Manuel D. Vargas, a lawyer who is the author of the handbook "Representing Noncitizen Criminal Defendants in New York State."

Mr. Gousse's case provides a glimpse of the high-stakes bargaining with criminal witnesses in serious cases, the especially vexing problems posed by jailhouse informers and the intense bonds that can develop between law enforcement officials and sources. District Attorney Brown said that such witnesses have a strong motive to lie, but also enjoy close access to other prisoners. Jurors are told to weigh the credibility of witnesses,

like informers, who receive benefits for their testimony.

The saga of Mr. Gousse, however, shows that a full accounting of the benefits was not presented to the jury that heard him testify, in large part because layers of his problems and the prosecutors' determination to help with them did not emerge publicly until long after the case had ended.

A Life of Crime

Mr. Gousse was born in Haiti on June 11, 1973, and moved to Queens when he was 10 years old. Most of his life in the United States has been spent behind bars. He was first arrested on Jan. 1, 1990, in Fort Lauderdale, Fla., caught in the act of robbing a grocery store. In the 15 years since then, he has spent all but 17 months in jail for one offense or another.

After he finished his sentence in Florida in 1992, he returned to New York. Five months later, he committed the first crime as an adult that could have led to his expulsion from the United States, the robbery of an auto body shop in Queens Village. "I handcuffed the auto body shop owner to his file cabinet," Mr. Gousse later testified, then took a Nissan

Pathfinder and $3,000 cash.

Arrested a few days after the robbery, Mr. Gousse was sentenced to two to six years. In 1993, a year after he arrived in prison, immigration authorities began deportation proceedings on the grounds that he was an aggravated felon, and in November 1997, an immigration judge ordered that he be deported at the conclusion of his prison term.

In an unusual twist, Mr. Gousse avoided expulsion when his term ended the following month: he was transferred to the custody of Florida authorities, to serve about two months for violating probation. And for reasons that are not clear, when he was released from prison in Florida in February 1998, the authorities did not turn him over for deportation. Nevertheless, the order remained in effect.

He returned to New York, and in early May 1998, he carried out two elaborate robberies - first stealing a car at gunpoint from a dealership, then fitting it with lights so he could pose as a policeman and waylay the manager of a Staples store on his way home. "I approached the man with the red light on, ordered him out of the vehicle, and when he said, 'Why am I being asked to get out of the vehicle?' I said something to the effect, 'You have outstanding warrants,' " Mr. Gousse later testified. At gunpoint, he took the man to an apartment, strapped him to a chair with duct tape and forced him to reveal the store's security codes.

At Rikers Island in the summer of 1998, Mr. Gousse struck up a relationship with George Bell, a 19-year-old man awaiting trial in the killing of the off-duty police officer and the owner of the check-cashing store, a capital murder case. In September 1998, Mr. Gousse wrote to prosecutors, saying he had acquired evidence "of colossal relevance" from Mr. Bell in the killings. Mr. Gousse had not witnessed the crime - he was in prison at the time - but he said that Mr. Bell had confessed to him.

He testified against Mr. Bell the following year, and as a reward, prosecutors recommended that Mr. Gousse serve five years for the robberies of the car dealership and the Staples, instead of the 21 years he might have received. While that deal was openly discussed in court, there was no mention of his immigration problems.

"Everyone thought he was an American citizen," District Attorney Brown said. It was not until 2003, when Mr. Gousse was near the end of his five-year term, that prosecutors learned that he was an immigrant and that the 1997 deportation order was still in effect, Mr. Brown said.

The only way to keep him in the country was to undo the legal basis for the deportation, which was Mr. Gousse's 1992 conviction for robbery. So on Feb. 26, 2004, 12 years after he first admitted the crime, Mr. Gousse appeared in court as his own lawyer and, claiming that he was given bad advice by his lawyer in 1992, asked a judge to substitute a charge of possession of stolen property, which carried a term of less than one year and would not subject him to automatic deportation.

The judge asked an assistant district attorney who was handling the matter in court for the day, "Is there a reduced sentence that you will recommend?"

The prosecutor replied, "Yes, your honor, a definite term of five months."

That new plea, said Mr. Van Pelt of the immigration agency, effectively killed the deportation order.

Deportation Looms

Yet that was not the end of the elaborate solutions to Mr. Gousse's immigration problems. New convictions loomed. Although he had pleaded guilty to his 1998 crimes in 1999 as part of his deal, by last March, Mr. Gousse still had not been formally sentenced for them. Prosecutors had asked the judge for a postponement, an approach occasionally taken with criminals who are also cooperating witnesses in other cases.

Under New York law, Mr. Gousse's guilty pleas could not be entered as convictions until the day he was sentenced. Any one of the convictions would have been serious enough to lead to his deportation.

At Mr. Gousse's sentencing on March 24, 2004, an assistant district attorney, Brad Leventhal, urged his immediate release. He had, after all, completed, and actually exceeded, the agreed term of five years. "This defendant has done everything that he ever promised to do, and we are very happy to fulfill our commitments at this time," Mr. Leventhal said.

The judge, Roger Rosengarten of State Supreme Court, urged Mr. Gousse to put his freedom to good use and said, "You'll be home by sometime this afternoon, I hope." No one mentioned his immigration status, and no restrictions were placed on his movements.

Because he was immediately released from custody, immigration authorities had little chance of catching up with him. "Had he re-entered the correction system, he would have been back on our radar screen," said Mr. Van Pelt, the immigration spokesman.

District Attorney Brown said that he was "comfortable" with the deal his office struck with Mr. Gousse because he had offered information about the robberies and killings at the check-cashing business that could only have come from one of the killers: George Bell.

However, Mr. Bell's lawyers, Sonya Zoghlin and Mitch Dinnerstein of the Capital Defenders Office, argued that everything Mr. Gousse claimed to have learned about the crime from Mr. Bell, including some mistaken information, could also have been learned from newspaper articles and legal papers that Mr. Bell kept in his cell at Rikers Island. The judge at the trial, Arthur J. Cooperman of State Supreme Court, refused to permit a

defense investigator to testify about those materials. Mr. Bell was found guilty and sentenced to life without parole.

"I believe my client George Bell was wrongfully convicted based, in part, on the false testimony of Reginald Gousse," Mr. Dinnerstein said. Prosecutors, however, note that Mr. Bell admitted the crime in a videotaped statement.

News accounts of the killing on Long Island this year of Mr. Gottlieb - another business person stopped by a police impersonator - reminded Mr. Dinnerstein of the events in the Staples robbery. He called a crime-tips line, and his information led Nassau County detectives to focus on Mr. Gousse, said Detective Lt. Dennis Farrell of the Nassau County Police homicide squad.

Elizabeth Gottlieb, Mr. Gottlieb's wife of nearly 25 years, said she had gone through all the possibilities about his journey home on the evening of Jan. 5. He was shot less than a mile from their home. What if her husband had not moved last summer from a bank branch in Brooklyn to one in Cedarhurst, so he could be nearer home? What if she had not insisted on cooking that night, and he had instead stopped for a take-out dinner?

Then there is the matter of Mr. Gousse.

"If he had gotten what he deserved for those other crimes and stayed in jail - but you can't dwell on that," she said.

* * * * *

The following article appeared on latimes.com on March 4, 2005:

High Court Condemns Conduct of Prosecutor

By Maura Dolan

Times Staff Writer

SAN FRANCISCO — The California Supreme Court, condemning a Los Angeles County deputy district attorney's conduct in a death penalty case, ruled Thursday that

prosecutors should not intentionally tell different juries that two defendants committed the same crime when only one could have been responsible.

In 1988, two men, Peter Sakarias and Tauno Waidla, attacked Viivi Piirisild with a hatchet and a knife in her North Hollywood home.

The men had separate trials. In both, the court found, Los Angeles Deputy Dist. Atty. Steven Ipsen, the prosecutor, "inconsistently and falsely" told jurors that it was the defendant before them who had delivered the deathblow. Both men were convicted and sentenced to death.

Thursday's 6-1 ruling overturned the death sentence for Sakarias. The court allowed Waidla's death sentence, saying that enough evidence supported it.

The justices said Ipsen, now a vice president of the State Bar of California, had manipulated the evidence "intentionally and without good-faith justification."

"The prosecutor's unjustified use of inconsistent and irreconcilable factual theories to convict two people of a crime only one could have committed — or to obtain harsher sentences for both on the basis of an act only one could have committed — violates due process," Justice Kathryn Mickle Werdegar wrote for the majority.

A spokesman for state Atty. Gen. Bill Lockyer, who had defended the use of inconsistent arguments, said the ruling would give "clear guidance" that prosecutors "should settle on one theory and argue it consistently."

"While another case may come down the road where things are highly ambiguous, the caution to district attorneys is to err on the side of identifying a single theory," Lockyer's spokesman said.

The court's opinion noted that under some circumstances, a significant change in evidence might justify a prosecutor's changing his or her theory between trials.

Cliff Gardner, an attorney for Sakarias, said Lockyer's warning to prosecutors was long overdue.

"The state should not have defended this prosecutor for 10 years," Gardner said. "The vast number of prosecutors would never try a stunt like this. This guy got caught, and the state should have 'fessed up earlier."

Los Angeles County Dist. Atty. Steve Cooley said he was concerned that the court had found that Ipsen acted in bad faith and that he would "take appropriate action" after further review of the ruling.

"Prosecutors must be candid and truthful in all dealings with the court and counsel," Cooley said. "Candor includes never seeking to mislead a court or jury."

Cooley said a committee would decide whether to hold another trial on Sakarias' sentence. Without a retrial, Sakarias would automatically receive a life sentence without possibility of parole.

Ipsen, who could not be reached Thursday, said last month that he altered his arguments between trials because his view of the evidence had changed.

Legal ethicists generally say that prosecutors should not present inconsistent arguments when they know that one must be false. Courts, however, have been divided over how far prosecutors can go.

Justice Marvin R. Baxter dissented in Thursday's ruling. As long as Ipsen didn't falsify the evidence, he had the right to make the best case against each defendant, Baxter said.

"There is no doubt that Sakarias and Waidla together committed the first-degree murder of Viivi Piirisild with special circumstances, and that both men were enthusiastic participants in the gruesome attack," Baxter wrote.

Sakarias and Waidla, Estonians who had been conscripted into the Soviet army, escaped into what was then West Germany and eventually settled in the United States. They met Piirisild through Estonian community groups in Los Angeles.

Piirisild, an Estonian community activist, and her husband befriended the two men. They invited Waidla to live with them, giving him household jobs to pay for his room and board. Sakarias visited.

Eventually, the relationship between the Piirisilds and Waidla soured, and he moved out.

On a July morning, when the Piirisilds were away, Waidla and Sakarias broke into their home. When Viivi Piirisild returned, the two men attacked her with a hatchet and a knife. After killing her, they stole her credit cards and jewelry. They were arrested near the Canadian border weeks later.

The coroner said Piirisild had died of multiple wounds, several of which could have been fatal.

According to statements by the defendants, Waidla had attacked Piirisild with the blunt end of the hatchet in the living room when she entered the door. Sakarias used a knife to stab her.

The two men then dragged her body back to a bedroom, where Sakarias said he hit her twice more with the hatchet. The coroner said the victim had a scrape on her back that was consistent with having been dragged. The scrape was made after her death, the coroner said.

Waidla was tried first. It was Ipsen's first murder case. Ipsen suggested to the jury that Waidla had inflicted the massive strike that he called "the deathblow," in the living room.

Ipsen said the scrape on the victim's back proved that she was dead when she was dragged into the bedroom.

About eight months later, Sakarias went to trial. This time, Ipsen argued that Sakarias, not Waidla, had "finally ended" Piirisild's life with a strong blow from the hatchet blade.

In Sakarias' trial, Ipsen contended that the woman had died in the bedroom, not in the living room. This time, he did not tell the jury about the scrape on her back.

Both Sakarias and Waidla challenged their death sentences on the grounds that their due process rights to a fair trial had been violated by Ipsen's use of contradictory arguments.

The California Supreme Court appointed a referee to determine what happened in the two trials.

After a hearing, Los Angeles County Superior Court Judge Thomas Willhite Jr. concluded that Ipsen had made "an intentional strategic decision … to maximize the portrayal of each defendant's culpability."

The judge found that "the great weight of evidence" indicated that Piirisild had died in the living room, before Sakarias chopped at her head in the bedroom.

In upholding Waidla's sentence, Werdegar said it was appropriate to do so "where the probable truth of the situation can be determined — where we are able to say which of the prosecution theories was likely true and which false."

The justices declined to say what they would have done in a case where the evidence was completely ambiguous and the truth could not be discerned.

* * * * *

The following article appeared on nytimes.com on March 16, 2005:

A Dubious Account Led to 9 Years in Prison

By Jim Dwyer

On Sept. 6, 1996, as Raffaela Stride watched the evening news, she saw the Queens district attorney announce the arrest of a drug gang that operated inside bars in Bayside and Flushing. The district attorney, Richard A.Brown, said the gang was led by three men, one of them named John McDonnell. The investigation, including wiretaps and surveillance, had been under way for a year, Mr. Brown said.

Those final bits of information grabbed Mrs. Stride's attention. Just two days earlier, her grandson, Anthony Vitiello, had been sent to prison for attempted murder, almost entirely on evidence from the same John McDonnell.

In fact, Mr. McDonnell, the man her grandson was accused of shooting, said he had been attacked by Mr. Vitiello hours after refusing to loan him $20. He described himself to jurors as a law-abiding citizen who ran a pest-control business. The trial prosecutor, for his part, told the jury that while Mr. McDonnell once had problems with the law, those were all in his past.

No one mentioned the vast web of new evidence - wiretaps, informants, sales to undercover officers - that the district attorney's office had already gathered on Mr. McDonnell, his drug associates and the bars they had seized control of. By the time the charges against Mr. McDonnell made news, Mr. Vitiello had already boarded a bus for the ride upstate to begin prison terms that totaled 19 to 54 years.

This afternoon, Mr. Vitiello, now 38, is scheduled to return to the same Queens courthouse where he was convicted, this time to hear a judge effectively end his imprisonment, decades early. Unlike other prisoners who have freed themselves early, Mr. Vitiello has not been exonerated.

Instead, after nine years, he found a federal judge who was prepared to hold the district attorney's office responsible for not revealing the criminal activities of its main witness, and for not correcting the lies he told on the witness stand.

Facing an inquiry by that judge, the prosecutors have consented to Mr. Vitiello's early release, as long as he leaves prison with the same number of convictions that he brought with him still formally attached to his record. These include the attempted murder of Mr. McDonnell and, in a separate matter, a manslaughter conviction in the death of a woman Mr. Vitiello claimed to have shot in self-defense. Mr. Vitiello's lawyer said his client continued to deny shooting Mr. McDonnell but accepted the deal with prosecutors to quickly gain his release.

For all its complex turns, the Vitiello case underscores the hurdles that often must be crossed before prosecutorial misconduct or mistakes can be corrected.

No one, after all, denied that under long-established case law, Mr. Vitiello should have been given the prosecutor's information about Mr. McDonnell. It could have supported the defense argument that many people had stronger motives to shoot him than Mr. Vitiello, who apparently was no more than a casual acquaintance. The material also might have been used to impeach Mr. McDonnell's credibility, since prosecutors concede that he lied about being a law-abiding citizen.

Nevertheless, during those nine years of Mr. Vitiello's appeals, the district attorney was able to persuade a total of seven New York State judges to either reject or ignore the issue, according to Mitchell Briskey, the Legal Aid Society lawyer who represents Mr. Vitiello.

The prosecutors argued that the assistant district attorney who tried Mr. Vitiello did not know about the investigation of Mr. McDonnell, which was being handled by a different part of the office. "If we had known it, we would have disclosed it," said Jack Ryan, the chief assistant to Mr. Brown. He acknowledged, though, the responsibility for disclosure

generally falls on the entire office under the doctrine of "imputed knowledge."

In addition, the prosecutors, in fighting to preserve their conviction, had advanced a novel argument that there was a "law enforcement exemption" that permitted them to withhold the information about Mr. McDonnell because revealing it would have jeopardized the undercover investigation.

They maintained that this exemption trumped Mr. Vitiello's right to use the material to defend himself in the unrelated case.

The prosecutors made this argument when Mr. Vitiello was first appealing his conviction, and when he was acting as his own lawyer. They did not pursue it after he began receiving advice from Mr. Briskey.

The situation began to change last year after Mr. Vitiello asked the federal courts to intervene, claiming that his constitutional right to a fair trial had been violated. A United States District Court judge in Brooklyn, Allyne R. Ross, agreed that his claim was "substantial," and a magistrate judge working with her, Joan M. Azrack, later ordered the

prosecutors to turn over records of their surveillance of Mr. McDonnell, and also said that two former prosecutors and an executive assistant district attorney, Peter Crusco, could be questioned under oath.

The skeletal wiretap records showed that on at least one occasion, Mr. McDonnell discussed Mr. Vitiello with one of his confederates in the drug network, according to Mr. Briskey. On Sept. 16, 1995, according to a wiretap log maintained by the investigators working with the district attorney's office, Mr. McDonnell spoke with an associate. "Talk about Anthony Vitiello," according to an entry that is a running summary of the conversation.

"This showed that they had actual knowledge, at the time, of the connections between Anthony Vitiello and the John McDonnell who was the target of their investigation," Mr. Briskey said.

These were log entries, however; the full transcripts of the conversations were never turned over, Mr. Briskey said. Had the case continued, these might have shown more explicit knowledge on the part of the prosecutors, Mr. Briskey said. "It remains an unresolved issue," he said.

The district attorney's office, however, denies that the two sides of the office knew what the other was doing, Mr. Ryan said. "We do the right thing in this office, not because it is in a book somewhere that we have to do it, but because that has been the policy of Judge Brown since he became the district attorney," he said.

Moreover, he said, the prospect of surrendering more records or of senior prosecutors being forced to testify under oath had no bearing on the decisions about how Mr. Vitiello's case should proceed.

Instead, Mr. Ryan said, as Mr. Vitiello's request began moving through the federal courts, appellate lawyers in his office advised him that case law made the entire office responsible for sharing the information about Mr. McDonnell with the Vitiello defense, whether or not the trial prosecutor specifically knew it.

That made it likely that the court would overturn the conviction for the shooting of Mr. McDonnell, and to retry the case would have been difficult, Mr. Ryan said, since Mr. McDonnell was murdered in 1999, three years after Mr. Vitiello went to prison. He died before facing trial on the charges that attracted Mr. Vitiello's grandmother's attention.

An additional factor that influenced their decision, prosecutors said, was that Mr. Vitiello had won the appeal of his earlier manslaughter conviction. With that case overturned, and the conviction for the attempted murder of Mr. McDonnell in jeopardy, Mr. Ryan said that the goal of the prosecutors was to establish, for the record, that Mr. Vitiello had two convictions.

Under an agreement with Mr. Briskey, prosecutors agreed to drop the original attempted murder conviction, which had been contested on constitutional grounds. Mr. Vitiello would enter new pleas to both the manslaughter and the attempted murder charges, and he would be sentenced to a minimum of four years. Since he has already served nine, he would be eligible for almost immediate release.

"It's as if this defendant won the lottery twice," Mr. Ryan said.

Mr. Briskey disagreed. "Neither decision involved any luck whatsoever," he said. "Both involved the courts enforcing well-known, longstanding obligations of fair play and fundamental constitutional protections."

As for the shooting of Mr. McDonnell, Mr. Vitiello struck an agreement with prosecutors to accept a conviction using a rare legal formula, known as an Alford plea. In it, a defendant agrees to accept the consequences for the crime but does not take responsibility for it.

"We wanted it recorded that he has two convictions, in case this defendant does it again," said Mr. Ryan.

Mr. Briskey said that Mr. Vitiello took the deal so he could get out of jail. "He continues to deny any involvement in the crime," he said. "He took the plea to have an opportunity to go on and have a law-abiding, peaceful and constructive life."

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