Response in Opposition to Motion for Appointment of Additional Counsel — United States v. Denny Bhakta

Summary

The United States' Response in Opposition to Defendant's Motion for Appointment of Additional Counsel, filed May 9, 2023, in United States of America v. Denny Bhakta, Case No. 21-CR-3352-JLS. The United States opposes the motion for a second CJA attorney (ECF No. 54), at least until Defendant establishes that he is financially unable to obtain adequate representation. It asks the Court to require Defendant to explain how he is able to obtain representation in his civil suits, including a law firm and a solo practitioner he allegedly paid $484,300.66. It states that at least four different attorneys are currently representing Defendant in pending civil actions. It is signed /s/ Eric R. Olah.

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       Case 3:21-cr-03352-JLS Document 56 Filed 05/09/23 PageID.149 Page 1 of 5




 1 RANDY S. GROSSMAN
 2 United States Attorney
   AARON P. ARNZEN
 3 ERIC R. OLAH
 4 California Bar Nos. 218272 / 295513
   Assistant U.S. Attorneys
 5 United States Attorney’s Office
 6 880 Front Street, Room 6293
   San Diego, CA 92101
 7 Tel: (619) 546-7540
 8
     Attorneys for the United States
 9
                              UNITED STATES DISTRICT COURT
10
11                         SOUTHERN DISTRICT OF CALIFORNIA
12    UNITED STATES OF AMERICA,                  Case No.: 21-CR-3352-JLS
13
                     Plaintiff,                  THE UNITED STATES’ RESPONSE IN
14
                                                 OPPOSITION TO DEFENDANT’S
15          v.                                   MOTION FOR APPOINTMENT OF
                                                 ADDITIONAL COUNSEL
16    DENNY BHAKTA,
                                                 Date:        May 11, 2023
17
                     Defendant.                  Time:        9:30 a.m.
18
                                                 The Honorable Barbara L. Major
19
20         The United States opposes Defendant Denny Bhakta’s motion for the
21 appointment of a second CJA attorney (ECF No. 54)—at least until Defendant
22 establishes that he is financially unable to obtain adequate representation. In holding
23 Defendant to his burden, the Court should require that Defendant explain how exactly
24 he is able to obtain representation in each of his various civil suits, including:
25          The law firm and the solo practitioner he allegedly paid $484,300.66 (and up
26               to $1,500,000) for representation in a civil suit filed in state court, per a
27               declaration that Defendant signed under penalty of perjury on September 10,
28               2021;
       Case 3:21-cr-03352-JLS Document 56 Filed 05/09/23 PageID.150 Page 2 of 5




 1          The attorney currently representing Defendant in a different civil action that
 2            he filed in state court on December 22, 2022; and
 3          The three attorneys that currently represent Defendant in a civil action
 4            pending in federal court.
 5                                               I
 6                                          THE LAW
 7         “[T]he court should only appoint counsel if it is ‘satisfied after appropriate
 8 inquiry that the person is financially unable to obtain counsel.’” United States v. Kodzis,
 9 255 F. Supp. 2d 1140, 1143 (S.D. Cal. 2003) (quoting 18 U.S.C. § 3006A(b), and further
10 noting “the legislative history of the Civil Justice Act of 1964 shows that it is the court’s
11 obligation to ‘scrutinize all applications for representation’”). The Ninth Circuit has
12 long held “that the burden of proof of financial status is on the defendant who seeks free
13 appointed counsel.” United States v. Ellsworth, 547 F.2d 1096, 1098 (9th Cir. 1976);
14 United States v. Andrews, 674 F. App’x 636, 638 (9th Cir. 2017) (unpublished) (“We
15 therefore conclude that Andrews did not meet his burden of proof in showing a financial
16 need for CJA funds”).
17         Moreover, the appointment of counsel is revocable:
18                If at any time after the appointment of counsel the United States
19                magistrate judge or the court finds that the person is financially
                  able to obtain counsel or to make partial payment for the
20                representation, it may terminate the appointment of counsel or
21                authorize payment as provided in subsection (f), as the interests
                  of justice may dictate.
22
23 18 U.S.C. § 3006A(c); see also United States v. Birrell, 470 F.2d 113, 115, n. 1 (2d Cir.
24 1972) (“Indeed, 18 U.S.C. § 3006A(c), (f) indicates that the court is under a continuing
25 obligation to supervise appointments already made to insure that they reflect current
26 financial status.”); Kodzis, 255 F. Supp. 2d at 1144 (“the government, however, has an
27 interest and a responsibility to bring to the Court’s attention any possible misuse or
28 waste of public funds”); Guide to Judiciary Policy, Volume 7, § 210.40.20(g), available
                                                 2
       Case 3:21-cr-03352-JLS Document 56 Filed 05/09/23 PageID.151 Page 3 of 5




 1 at <https://www.uscourts.gov/sites/default/files/vol_07.pdf> (“The prosecution and
 2 other interested entities may present to the court information concerning the person’s
 3 eligibility”). 1
 4                                               II
 5                                        ARGUMENT
 6         The United States opposes Defendant’s motion for the appointment of a second
 7 attorney in this case because it is not clear that he is financially unable to obtain adequate
 8 representation. As noted above, Defendant bears the “burden of proof of financial
 9 status” and the Court is to “scrutinize all applications for representation.”              In
10 determining whether Defendant has met his burden, the Court should consider the
11 following (presumably undisputed) facts:
12          Both a law firm and a solo practitioner represented Defendant in a civil action
13             in San Diego County Superior Court. In a declaration Defendant signed under
14             penalty of perjury and filed in that case, Defendant claimed to have paid
15             “attorney fees” to that law firm and solo practitioner and “also paid significant
16             sums to litigation support vendors and our Texas and Oklahoma based
17             counsel.” Exhibit 1 at 2. Specifically, Defendant claimed to “have expended
18             $484,300.66 in attorney’s fees in costs” as of September 10, 2021. Id. at 3.
19
20
21
           1
              See also Crim. L.R. 44.1(a) (requiring appointment of counsel be made in
     accordance with the District’s CJA Plan); U.S. District Court for the Southern District
22   of California Criminal Justice Act Plan, Section VII, D-7, available at
23   <https://www.casd.uscourts.gov/_assets/pdf/attorney/CJA%20Plan.pdf> (“If at any
     time after appointment of the Federal Defender or panel member, the district judge or
24   magistrate judge finds that the accused is financially able to obtain an attorney, in whole
25   or in part, for legal or other provider services in connection with the representation, the
     judge may terminate the appointment of the Federal Defender or panel member, order
26   that any funds available to the accused be paid as provided in 18 U.S.C. § 3006A(f), or
27   take other appropriate action including permitting the Federal Defender or panel
     member to continue to represent the client and order that the client reimburse part or all
28   of the cost of representation to the Government.”).
                                                  3
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 1          A different attorney is now representing Defendant in a different civil suit that
 2             Defendant filed on December 22, 2022.            The complaint summarizes
 3             Defendant’s prior legal representation and states that a second law firm
 4             represented him in the SEC’s investigation and terminated its representation
 5             while Defendant “owed $41,713.44 in unpaid legal fees and costs.” See
 6             Exhibit 2 at 11, 14. The complaint seeks as relief “[d]isgorgement of all fees
 7             paid and cancellation of all fees that are alleged to be due by the [solo
 8             practitioner and law firm that represented Defendant in the prior civil action]
 9             comprised of approximately $1,500,000[.]” Id. at 17.
10          Three different attorneys are representing Defendant in a civil suit pending
11             before Judge Lorenz. See Case No. 3:21-CV-02085-L-MSB.
12         Thus, at least four different attorneys are currently representing Defendant in
13 pending civil actions. And those four attorneys are distinguishable from (1) the law
14 firm that represented Defendant in the SEC investigation and (2) the solo practitioner
15 and law firm Defendant paid at least $484,300 (and up to $1,500,000) for representation
16 in a prior suit.
17         The United States is not requesting that the Court terminate the current CJA
18 appointment or order reimbursement at this time on the basis of the above facts alone.2
19 Rather, the United States requests only that the Court require Defendant to explain at
20 least (1) how he previously paid for two law firms and a solo practitioner and (2) how
21 he is paying the four attorneys that currently represent him in pending civil actions.
22         2
              Of course, termination and reimbursement are remedies available to the Court.
23   United States v. Dangdee, 608 F.2d 807, 809 (9th Cir. 1979) (“Only if the United States
24   Magistrate or the court finds that the person is financially able to obtain counsel may
     the appointment be terminated.”); United States v. Harris, 707 F.2d 653, 662 (2d Cir.
25   1983) (affirming district court’s termination of appointed counsel based on defendant’s
26   failure “to prove financial inability to afford counsel”); United States v. Lefkowitz, 125
     F.3d 608, 621 (8th Cir. 1997) (upholding a district court order that a defendant
27   reimburse $316,693.70 for the costs of his defense, noting “[s]uch an order is expressly
28   authorized by 18 U.S.C. § 3006A(f)”).
                                                 4
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 1 And given that this criminal action is based on the demonstrable lies that Defendant told
 2 to defraud investors—including his family and friends—out of millions of dollars he
 3 squandered at casinos, the United States recommends that the Court require Defendant
 4 to provide such explanations and give a detailed accounting of his ability to afford
 5 representation in this case under penalty of perjury.
 6
 7        DATED: May 9, 2023                               Respectfully submitted,
 8                                                      RANDY S. GROSSMAN
 9                                                      United States Attorney
10                                                      /s/ Eric R. Olah
11                                                      ERIC R. OLAH
                                                        AARON P. ARNZEN
12                                                      Assistant United States Attorneys
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