Letter, Potential Conflict Involving Andrew Citron — United States v. Peter Khaim, et al. (E.D.N.Y., Dkt. 38)

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Letter dated September 22, 2021 from the government to the Honorable Ann M. Donnelly, Case 1:20-cr-00580, Document 38, filed 09/22/21 (E.D.N.Y.), in United States v. Peter Khaim, et al. The government gives notice, in advance of the October 7, 2021 hearing, of a potential conflict involving Andrew Citron, Esq., who represents the defendant Arkadiy Khaimov. It states that Mr. Citron entered a notice of appearance as co-counsel for Khaimov and previously represented Khaimov's co-defendant Peter Khaim, including at Khaim's December 21, 2020 arraignment, and that Mr. Citron no longer represents Khaim. The government asks the Court to notify Khaimov of the potential conflicts and conduct an appropriate inquiry pursuant to Curcio. The signature block shows /s/ Andrew Estes, Trial Attorney.

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Case 1:20-cr-00580-AMD Document 38 Filed 09/22/21 Page 1 of 6 PageID #: 280

U.S. Department of Justice

United States Attorney
Eastern District of New York
TAD/JN:AE 271 Cadman Plaza East
F. #2020R01145 Brooklyn, New York 11201

September 22, 2021

By ECF

The Honorable Ann M. Donnelly
United States District Judge
United States District Court
225 Cadman Plaza East
Brooklyn, New York 11201

Re: United States v. Peter Khaim, et al.
Criminal Docket No. 20-580 (AMD)

Dear Judge Donnelly:

The government respectfully submits this letter to notify the Court, in advance of
the October 7, 2021 hearing in this case, regarding a potential conflict involving Andrew Citron,
Esq., who represents the defendant Arkadiy Khaimov.

The conflict is presented here because Mr. Citron has entered a notice of
appearance in this case as co-counsel on behalf of Khaimov (Docket Entry No. 37), and
previously represented Khaimov’s co-defendant and co-conspirator, Peter Khaim, including at
Khaim’s December 21, 2020 arraignment. The government understands that Mr. Citron also
previously consulted with Khaim in connection with United States v. Arkadiy Khaimov, 20-CR-
267 (SJF), a separate case that also involves fraud in connection with pharmacies. Further, the
government understands that Mr. Citron no longer represents Khaim.

The government advises the Court of this information pursuant to its obligation
under Second Circuit law so the Court may conduct the appropriate inquiry pursuant to United
States v. Curcio, 680 F.2d 881, 888-90 (2d Cir. 1982). See, e.g., United States v. Stantini, 85
F.3d 9, 13 (2d Cir. 1996); United States v. Malpiedi, 62 F.3d 465, 467 (2d Cir. 1995).

I. Applicable Law

A. Overview

The Sixth Amendment affords a criminal defendant the right to effective
assistance of counsel. See Wood v. Georgia, 450 U.S. 261, 271 (1981); United States v. Perez,
325 F.3d 115, 124 (2d Cir. 2003). That right, however, is not absolute and does not guarantee
Case 1:20-cr-00580-AMD Document 38 Filed 09/22/21 Page 2 of 6 PageID #: 281

the defendant counsel of his own choosing. See United States v. Jones, 381 F.3d 114, 119 (2d
Cir. 2004); United States v. Locascio, 6 F.3d 924, 931 (2d Cir. 1993). While there is a
“presumption in favor of the [defendant’s] chosen counsel, such presumption will be overcome
by a showing of an actual conflict or a potentially serious conflict.” Jones, 381 F.3d at 119
(citing Locascio, 6 F.3d at 931); see also Wheat v. United States, 486 U.S. 153, 164 (1988).

To determine if the defendant’s counsel is burdened by a conflict of interest, a
district court “must investigate the facts and details of the attorney’s interests to determine
whether the attorney in fact suffers from an actual conflict, a potential conflict, or no genuine
conflict at all.” United States v. Levy, 25 F.3d 146, 153 (2d Cir. 1994). An actual conflict exists
“when the attorney’s and the defendant’s interests diverge with respect to a material factual or
legal issue or to a course of action, or when the attorney’s representation of the defendant is
impaired by loyalty owed to a prior client.” Jones, 381 F.3d at 119 (internal quotation marks and
citations omitted). A potential conflict arises if “the interests of the defendant could place the
attorney under inconsistent duties in the future.” Id. (emphasis and citations omitted).

1. Mandatory Disqualification

If an attorney suffers from an actual or potential conflict of such a serious nature
that no rational defendant would knowingly and intelligently desire that attorney’s
representation, the court must disqualify that attorney. See United States v. Lussier, 71 F.3d 456,
461-62 (2d Cir. 1995). Such per se conflicts of interest are not only unwaivable, but are of such
a serious nature that if allowed to persist through trial and conviction, on appeal they result in
automatic reversal without requiring a showing of prejudice. United States v. Williams, 372
F.3d 96, 103 (2d Cir. 2004). As described more fully below, the Second Circuit has recognized
only two categories of conflicts that are unwaivable: where “counsel” is not admitted to the bar
of any court and where counsel is implicated in the defendant’s crimes.

2. Discretionary Disqualification

Regardless of the severity of the conflict or the defendant’s willingness to waive
the conflict, “[f]ederal courts have an independent interest in ensuring that criminal trials are
conducted within the ethical standards of the profession and that legal proceedings appear fair to
all who observe them.” Wheat, 486 U.S. at 160. “The question of [attorney] disqualification
therefore implicates not only the Sixth Amendment right of the accused, but also the interests of
the courts in preserving the integrity of the process and the government’s interests in ensuring a
just verdict and a fair trial.” Locascio, 6 F.3d at 931. Accordingly, “a district court should
decline to permit a defendant to be represented by the counsel of his choice if that representation
would undermine the integrity of the judicial process.” United States v. DiPietro, No. 02 CR
1237 (SWK), 2004 WL 613073, at *4 (S.D.N.Y. Mar. 29, 2004) (citing Wheat, 486 U.S. at 163).

3. Conflicts That May Be Waived

If a conflict is such that a rational defendant could knowingly and intelligently
choose to continue to be represented by the conflicted attorney, the Court must obtain directly
from the defendant a valid waiver in accordance with the procedures set forth in United States v.
Curcio, 680 F.2d 881 (2d Cir. 1982). See, e.g., Malpiedi, 62 F.3d at 470; Levy, 25 F.3d at 153;

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United States v. Iorizzo, 786 F.2d 52, 58-59 (2d Cir. 1986). In summarizing Curcio procedures,
the Second Circuit has instructed the trial court to:

(i) advise the defendant of the dangers arising from the particular
conflict; (ii) determine through questions that are likely to be
answered in narrative form whether the defendant understands
those risks and freely chooses to run them; and (iii) give the
defendant time to digest and contemplate the risks after
encouraging him or her to seek advice from independent counsel.

Iorizzo, 786 F.2d at 59; see also Curcio, 680 F.2d at 888-90. By relying on waivers of potential
conflict claims, courts are spared from having to wade into the intricacies of those claims.
United States v. Jiang, 140 F.3d 124, 128 (2d Cir. 1998).

Finally, the need for a Curcio hearing exists regardless of whether a case is
disposed of by way of guilty plea or trial. “A claim that counsel is conflicted is in essence a
claim of ineffective assistance of counsel.” Stantini, 85 F.3d at 15. Likewise, “[e]ffective
assistance of counsel includes counsel’s informed opinion as to what pleas should be entered.”
Boria v. Keane, 99 F.3d 492, 497 (2d Cir. 1996). Therefore, it necessarily follows that a
defendant has a right to conflict-free representation during the plea negotiation stage. See id.
(“[P]rior to trial an accused is entitled to rely upon his counsel to make an independent
examination of the facts, circumstances, pleadings and laws involved and then to offer his
informed opinion as to what plea should be entered.”) (quoting Von Moltke v. Gillies, 332 U.S.
708, 721 (1948) (emphasis added)); see also Stantini, 85 F.3d at 16-17 (suggesting that
ineffective assistance of counsel may be shown if attorney’s dual representation led to
inadequate advice “with respect to the advantages or disadvantages of a plea”).

B. Prior Representation of Co-Conspirator

An attorney’s representation of a co-conspirator presents an inherent conflict of
interest. A serious conflict may also arise if the defendant wished to cooperate with the
government’s investigation and testify as to facts inculpating the other client. See Locascio, 6
F.3d at 931; United States v. Iorizzo, 786 F.2d 52, 57 (2d Cir. 1986); Restatement (Third) of the
Law Governing Lawyers § 121 (2000) (recognizing that a serious problem arises when “there is
a substantial risk that the lawyer’s representation of the client would be materially and adversely
affected by . . . the lawyer’s duties to . . . a former client . . . .”). This is because a lawyer owes
an absolute duty of loyalty and confidentiality to both his current and former clients. See United
States v. Yannotti, 358 F. Supp. 2d 289, 295 (S.D.N.Y. 2004); United States v. Rahman, 861 F.
Supp. 266, 274 (S.D.N.Y. 1994); ABA Model Code of Professional Responsibility, Ethical
Consideration 4-6. That duty, which remains in force even after representation ends, precludes
the lawyer from disclosing matters revealed to him by reason of the confidential relationship,
absent release from that duty under the law. See Rahman, 861 F. Supp. at 274; EC 4-6 (“The
obligation to protect confidences and secrets of a client continues after the termination of
employment.”). Therefore “unless the . . . client waives these obligations, the attorney’s . . .
representation creates the potential for a serious conflict of interest.” Yannotti, 358 F. Supp. 2d
at 295. Furthermore, in evaluating an actual or potential conflict of interest, actions of any

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member of a law firm are imputed to every member of the firm. E.g., United States v. Jiang, 140
F.3d 124, 127 (2d Cir. 1998).

That means that, in representing a current client, a lawyer may not use privileged
information obtained from another client. See United States v. James, 708 F.2d 40, 45-46 (2d
Cir. 1983); United States v. Cunningham, 672 F.2d 1064, 1072-73 (2d Cir. 1982). Moreover, in
representing a current client, a lawyer may not attack other clients through cross-examination or
argument to the jury. See United States v. Pizzonia, 415 F. Supp. 2d 168, 177-78 (E.D.N.Y.
2006); Rahman, 861 F. Supp. at 277; United States v. Massino, 303 F. Supp. 2d 258, 262
(E.D.N.Y. 2003) (“Because of [the attorney’s] prior representation of [the cooperating witness],
[the attorney] cannot ethically cross examine [the cooperating witness] without his consent.”);
United States v. Falzone, 766 F. Supp. 1265, 1275 (W.D.N.Y. 1991) (finding it improper for an
attorney to cross-examine his prior client because the attorney is in a position to use information
gleaned from the prior representation “either purposely or inadvertently”).

The duty of loyalty to his other client thus effectively precludes a lawyer from
vigorously cross-examining the other client or commenting on his credibility, which may be
essential to the effective representation of the present client. See United States v. Kelly, 870
F.2d 854, 856-57 (2d Cir. 1989) (finding disqualification necessary because the defendant’s
interests would best be served by “vigorous cross-examination of the informant in a manner
wholly inconsistent with the informant’s interests” — a task that defense counsel could not
perform without “violat[ing] the rights of the informant” to expect continued loyalty and
confidentiality from his former attorney); Malpiedi, 62 F.3d at 469 (finding that the lawyer was
prohibited from seeking to “conduct a thorough, no-holds-barred cross-examination . . . because
of [the lawyer’s] obligations as [the witness’s] prior attorney”).

Notwithstanding the limitations outlined above, a defendant can generally waive
potential conflicts arising from his attorney’s prior representation of a co-conspirator. See Perez,
325 F.3d at 124 (citing United States v. Fulton, 5 F.3d 605, 613 (2d Cir. 1993)). The Second
Circuit has recognized that “[o]ur cases . . . support allowing waiver of the conflict that arises
when an attorney must cross examine a former client in order to effectively represent a current
client.” United States v. Oberoi, 331 F.3d 44, 50 (2d Cir. 2003). Such a waiver is allowed
because:

Although such a conflict might require a defendant to abandon a
particular defense or line of questioning, he can be advised as to
what he must forgo; he “can then seek the legal advice of
independent counsel and make an informed judgment that balances
the alteration in the trial strategy against the perceived effect of
having to get a new and perhaps less effective defense counsel.”

Perez, 325 F.3d at 124 (quoting Fulton, 5 F.3d at 613).

II. The Government’s Proposal

The government respectfully submits that Mr. Citron’s representation of Khaimov
and prior representation of Khaim give rise to a potential conflict of interest, but that, in view of

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the nature of the conflict, Khaimov can waive his rights and continue to be represented by Mr.
Citron as co-counsel to Khaimov’s other counsel-of-record, Isabelle Kirshner, Esq. and Wayne
Gosnell, Esq. of Clayman and Rosenberg, LLP.

The government therefore respectfully submits that the Court should conduct a
Curcio inquiry to ensure Khaimov’s waiver of the conflict is knowing and voluntary.
Specifically, the government proposes that the Court advise Khaimov as follows:

I am advised that your attorney has previously represented your co-
defendant, an individual the government has identified as your
coconspirator. Your attorney has certain ethical obligations to this
other client. For example, it might be a conflict of interest for your
attorney to investigate leads, introduce evidence or make
arguments on your behalf that might tend to incriminate or cast
suspicion on his other client.

Your attorney also may have privileged information from his other
client that could assist in your defense but that he could not
disclose because of his ethical duties. It also is possible that
another attorney could take a certain position with respect to your
involvement (or non-involvement) in the crime charged against
you or your relationship with your coconspirators, whereas your
attorney may be ethically barred from pursuing such a defense
strategy due to contrary information he may have obtained from
his other client.

There may be other issues, in addition to the ones that I’ve just
described, that can arise in which your attorney’s ability to do
certain things might be affected by the fact he has represented
another client in matters related to this case. No one can foresee
every possible conflict of interest.

Do you have any questions about what I have just explained to
you? Can you tell me in your own words what you understand the
potential conflicts of interest to be?

You have the right to be represented by an attorney who does not
have any possible conflicts of interest in representing you at all
stages of this case, including any plea negotiations. If you proceed
with your attorney, you will be giving up that right. Do you
understand that?

Have you discussed these issues with your attorney?

You also have the right to consult with an independent attorney
who can advise you about the possible conflicts of interest that
might arise if you proceed with your attorney. Do you understand
that?

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Case 1:20-cr-00580-AMD Document 38 Filed 09/22/21 Page 6 of 6 PageID #: 285

You are not under any pressure to make a decision about this right
now. You are entitled, if you wish, to a reasonable period of time
to think about these matters, or to consult further with your lawyer
or with another lawyer before you advise the Court what you wish
to do.

CONCLUSION

For the foregoing reasons, the Court should notify Khaimov of the potential
conflicts raised above and conduct an appropriate inquiry pursuant to Curcio. The Court should
further advise the defendant regarding his right to conflict-free representation and determine if he
can waive those rights.

Respectfully submitted,

JACQUELYN M. KASULIS
Acting United States Attorney
Eastern District of New York

JOSEPH S. BEEMSTERBOER
Acting Chief
Criminal Division, Fraud Section
U.S. Department of Justice

By: /s/
Andrew Estes
Trial Attorney
Criminal Division, Fraud Section
U.S. Department of Justice
(718) 254-6250

cc: Andrew Citron, Esq. (via email)
Counsel of Record (via ECF)

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