In a series of unexpected moves on Friday, the lead attorney representing accused racketeering boss Michael J. Miske Jr. asked to withdraw from the case, and his co-counsel came under fire from prosecutors for alleged conflicts of interest that, prosecutors say, should also disqualify her from continuing to represent the former business owner.

With the trial scheduled to begin in mid-April and last three to four months, the legal bombshell could potentially shake the case to its foundations.

Tom Otake, Miske’s lead attorney since August 2017, filed a motion Friday just before noon seeking to withdraw from the case, citing “a genuine conflict of interest that obliges me to withdraw from representation of Mr. Miske.”

Miske hired Otake and co-counsel Lynn Panagakos nearly three years before the former owner of Kamaaina Termite and Pest Control was named in a 22-count indictment and taken into custody at his Kailua home in July 2020.

Otake said his motion to withdraw was prompted by information disclosed to him by the government on Thursday, according to a declaration accompanying the motion. He said the latest information is “completely unrelated” to conflicts created by two obstruction of justice charges added to the case against Miske last month.

A third superseding indictment alleges Miske and at least two associates were involved in creating two fraudulent character reference letters, which were among seven letters turned over to Otake and Panagakos. The letters were later filed in federal court in an unsuccessful effort to obtain Miske’s release from custody pending trial.

By unwittingly handling the fraudulent documents, and presenting them in court, the attorneys became conduits for and potential witnesses to these alleged crimes, putting them in a sensitive and legally awkward, perhaps untenable, position.

But Otake said his request to step aside is “completely unrelated” to the conflicts created by their gathering and subsequent use of the fraudulent letters in court. 

However, Otake stopped short of disclosing the nature of the information that prompted his decision.

“For a variety of reasons, I do not believe it appropriate to share specifics about this issue in a public filing. However, if the Court so requires, I would be willing to share more information about this new issue during a sealed proceeding,” Otake said in his deposition.

Then Friday afternoon, Assistant U.S. Attorney Michael Nammar filed a 32-page motion asking for both Otake and Panagakos to be disqualified from continuing to represent Miske due to the legal complications caused by the faked reference letters. 

Both attorneys have “multiple, significant conflicts requiring their disqualification,” the motion alleges.

“Mr. Otake and Ms. Panagakos are percipient and material witnesses to the genesis, receipt, filing, and use” of the fraudulent reference letters, the motion argues. 

In addition, prosecutors consider Panagakos a witness to an additional act of apparent obstruction of justice that occurred when Miske met with Panagakos at her law office to review documents that revealed that another Miske associate had “flipped” and was now cooperating with prosecutors. Miske then sent text messages to another person that they “should not take calls from anyone ‘inside’ because Miske could ‘guarantee’ they were recorded.”

The motion to disqualify both attorneys alleges the trial will necessarily involve “evidence of events about which they have unique, firsthand knowledge — including events that are direct proof of charged crimes by Miske and a trial co-defendant,” creating many legal difficulties that would threaten the integrity of the trial for Miske as well as for his remaining co-defendants.

With the trial currently scheduled to begin in mid-April, this controversy over legal conflicts creates major issues for the courts to unravel.

However, Otake and Panagakos say there are measures short of disqualification that would be sufficient to mitigate the conflicts involving the fraudulent letters.

“Based on the information of which we are currently aware, Ms. Panagakos and I do not believe that any potential conflict issue arising from the addition of Counts 21 and 22 is unresolvable or unwaiveable, such that it would be sufficient to warrant depriving Mr. Miske of his fundamental Sixth Amendment right to counsel of choice, counsel who have been representing Mr. Miske for years,” Otake said in his declaration.

But prosecutors say the conflicts are so serious that both lead attorneys should be removed from the case. They argue Miske’s defense at trial can be handled by Reno-based defense lawyer Michael Kennedy, who was added to the Miske legal team late last year.

“Miske’s third attorney was retained after the United States made Mr. Otake and Ms. Panagakos aware of Miske’s obstructive conduct during numerous conversations beginning in August of 2022,” prosecutors said. Kennedy’s addition to the legal team was prompted by these discussions.

Kennedy is a former federal defender who started his own law practice in 2016 specializing in complex criminal cases. He has won acquittals in a number of high profile cases, according to his law firm’s website.

Prosecutors, in their motion to disqualify the two attorneys, argue that “although the case involves a high quantity of information and number of witnesses, the nature of the facts and evidence is not so insurmountably complex that Mr. Kennedy — who has now been counsel of record for two months — cannot get up to speed in the next several months.”

Late Friday afternoon, Judge Derrick Watson set a hearing on the government’s motion to disqualify Otake and Panagakos for Feb. 10.