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Are ‘Red Flags’ Good News For Bourke?

The U.S. Second Circuit Court of Appeals issued an opinion this week that could mean Frederic Bourke has a better chance to win a new trial.

In the appeals court, four executives of General Re and AIG won new trials after being convicted of securities fraud and related charges.

The court’s opinion included a warning to prosecutors about ignoring ‘red flags’ that signal a cooperating witnesses might give false testimony.

Bourke’s lawyers wrote about the same kinds of red flags two months ago.

They asked Judge Shira Scheindlin for a new trial, saying Bourke’s prosecutors “had access to documentary evidence conclusively showing that the walk talk [Hans] Bodmer described in his well-scripted testimony could not have taken place in February.” Prosecutors put Bodmer on the stand anyway.

In the Second Circuit case, Richard Napier, a senior executive of Gen Re, testified against the four defendants. There were warning signs that some of Napier’s testimony might be fabicated and that prosecutors knew it.

The Second Circuit said, “No doubt it is dangerous for prosecutors to ignore serious red flags that a witness is lying, and the government will doubtless approach Napier’s revised recollections with a more skeptical eye on remand.”

Ellen Podgor discussed the case on her white collar crime prof blog.

Bourke was sentenced to a year and a day in prison following his 2009 conviction for conspiracy to violate the FCPA and the Travel Act.

Prosecutors admitted during Bourke’s appeal (in the same Second Circuit) that they knew a crucial government witness might give false testimony. But they said Hans Bodmer’s mistake was a harmless error and didn’t hurt Bourke.

“[C]ontrary to the government’s repeated assertion,” Bourke’s latest filing said, “Bodmer’s false testimony about the ‘walk talk’ was not just a harmless mistake about dates. The entire event was fabricated. . . . The prosecution’s cooperating witness thus invented one of the key events in the case.”

Bodmer, a Swiss lawyer who helped Viktor Kozeny move money that was used to bribe Azeri officials, pleaded guilty seven years ago to conspiracy to launder money. His cooperation with prosecutors might earn him a lighter sentence.

Bourke’s lawyers said in June:

Because the test is “knew or should have known,” this motion [for a new trial] must be granted even if the Court finds that the prosecutors acted in subjective good faith but ignored the red flags that abounded.

Judge Scheindlin hasn’t set a hearing date for Bourke’s motion. He’s free on bail pending his appeal.

Download Frederic Bourke’s June 17, 2011 reply memorandum in support of motion for new trial based on newly discovered evidence here.

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