Federal prosecutors' foundering money laundering case against embattled San Jose lawyer Jamie Harley has reached a federal appeals court.
On Tuesday, the 9th U.S. Circuit Court of Appeals will hear arguments in the government's appeal of a judge's 2011 decision setting aside Harley's convictions for laundering money for a former client. The U.S. attorney's office has urged the 9th Circuit to reinstate the convictions, arguing that former Chief U.S. District Judge James Ware should have left the jury verdict intact.
The three-judge panel is hearing the case at a special session at Stanford University's law school.
A federal jury in July 2010 convicted Harley, formerly known as Jamie Harmon, of five counts of laundering money for former client Christian Pantages. The allegations stem from an indictment charging Harley, a former Santa Clara County prosecutor and now criminal defense attorney, of laundering more than $100,000 Pantages made in trafficking in stolen computer equipment.
But after the trial, Ware decided he had given improper jury instructions, saying they were so vague that they did not ensure the jury could properly evaluate the government's proof.
Federal prosecutors appealed while also indicating they plan to retry Harley if their case in the 9th Circuit is unsuccessful.
In court papers, prosecutors called Ware's decision "a legally erroneous analysis" that had no bearing on the jury's decision to convict Harley. In addition, the government notes that Harley's defense lawyers never contested the legality of the jury instructions Ware later reconsidered.
Harley's lawyers argue that Ware was correct to set aside the convictions because the jury instructions raised the possibility of confusion. Ware "properly found a new trial was warranted," they told the 9th Circuit.
A federal grand jury indicted Harley in 2008, jeopardizing her legal career as a result of her controversial legal work with Pantages and others. The State Bar has disciplined her for misconduct involving six separate clients unrelated to the Pantages matter, and it had suspended her from practicing law for six months.
During the trial, prosecutors alleged that Harley funneled $127,550 that Pantages earned from selling stolen Cisco equipment into her attorney-client trust account, and then wrote a series of checks to Pantages and his wife knowing the money was from peddling stolen technology.
Harley has denied knowing the money was tainted or that Pantages was involved in an illicit business.
Howard Mintz covers legal affairs. Contact him at 408-286-0236 or follow him at Twitter.com/hmintz.