Federal prosecutors convinced a judge that Thomas Otake had conflicts of interest with other defendants. Trial is still seven months away.
Noted island defense attorney, Thomas Otake, has been abruptly terminated as counsel of record and lead trial lawyer for former Honlulu business owner Michael J. Miske Jr., who is accused of controlling and directing a racketeering organization that operated behind the facade created by several well-known Miske-owned companies.
In a court order signed Thursday afternoon, Magistrate Judge Kenneth J. Mansfield ruled Otake’s prior representation of two other clients in criminal proceedings “related to” the charges pending against Miske creates a legal conflict of interest. Prosecutors say both prior clients will be called as witnesses in the trial of Miske and six remaining co-defendants, creating a conflict requiring Otake’s removal from the case.
After being informed of the apparent conflict by prosecutors several weeks ago, Otake had taken the initiative, admitting a serious conflict and filing a motion to remove himself from the case. However, following a hearing on Jan. 18, Mansfield denied Otake’s motion.
Thursday’s order reconsidered and reversed that decision, granted Otake’s motion to withdraw, and ordered him removed from the case effective immediately.
An appeal may follow, although its chances of success are unknown, and Otake is frozen out of the case while any future appeal is being considered.
The government identified Otake’s two prior clients only as Client 1 and Client 2.
Prosecutors say Client 1 assisted several others who have pleaded guilty to being part of a drug trafficking conspiracy and who are also expected to be witnesses at Miske’s trial.
“Among other things, Client 1 assisted with packaging drugs for distribution and with transporting T.T. to drug deals. For example, Client 1 is expected to testify that J.S. and T.T. arranged to smuggle drugs into a correctional facility housing defendant Dae Han Moon,” the government said in a supplemental memo in support of its motion.
In addition, according to the government, “Mr. Otake and his co-counsel … should have been aware that Client 2 was substantially linked to Miske’s criminal activities.”
Client 2 was allegedly given one of five stevedore union positions that Miske reportedly purchased. He was favored, in part, “because Client 2 ‘does some of Miske’s dirty work,’” according to the supplementary memo.
Another government report, described in the supplementary memo, was turned over to defense counsel last year. It indicated Client 2 “committed criminal acts on Miske’s behalf, such as violent assaults.” Another separate report described Client 2 as “a fighter” who “collected debts for Miske.” Miske allegedly arranged for Client 2 to be placed in a union job “as a reward for (his) services.”
These additional details about the nature of Otake’s conflict appear to have convinced Mansfield to reverse his earlier stance and allow Otake to withdraw from the Miske case.
The legal drama continued Friday morning when federal Judge Derrick Watson presided over a hearing on two motions, the first to disqualify both Otake and his co-counsel, Lynn Panagakos, as a result of a different set of conflicts, and a second to split off two counts of obstruction of justice against Miske to a separate trial, suggested as a means of avoiding their removal from the case altogether.
The government’s case was argued by Clare Connors, former Hawaii attorney general and now U.S. Attorney for the District of Hawaii. Arguing for Miske’s defense was Reno, Nevada-based Michael Kennedy, a long-time federal defender now in private practice, who was added to the Miske legal team last year.
Two of the letters were later determined to have been fraudulent, and serve as the basis for two counts of obstruction of justice, which were added to the case in a third superseding indictment in December.
The government said it intends to call both attorneys as trial witnesses related to the two charges, setting up the argument over whether this is a conflict that can only be resolved by disqualifying the attorneys.
The motion to sever the two obstruction of justice charges would allow Kennedy to handle the trial on those two charges, while clearing the way for Otake and Panagakos to remain as key parts of the larger trial on the other 20 charges, according to the defense team’s legal filings.
Kennedy forcefully argued during Friday’s hearing that the allegedly fraudulent letters represent “manufactured conflicts” that could easily be avoided at trial by establishing essential facts through documentary evidence and the testimony of other witnesses who were involved in the process.
Kennedy also argued it would would create a constitutionally impermissible hardship to strip Miske’s defense of its two most knowledgeable attorneys, and a violation of his 6th Amendment right to the attorneys of his choice.
In legal memos submitted to the court, and again during the hearing, it was repeatedly noted that Miske retained Otake and Panagakos in August 2017, three years before he was indicted and arrested. At the time, the FBI had obtained a search warrant for a Boston Whaler Miske had purchased not long before the disappearance and alleged murder of Jonathan Fraser. The warrant alerted Miske to the need to retain legal counsel, which he promptly did.
Miske already had a relationship with Otake, who had represented him in a case involving an assault at Miske’s M Nightclub in downtown Honolulu, and Otake and Panagakos have spent many years working on Miske’s case since they were retained in 2017.
In addition, Panagakos has become the attorney most familiar with the unprecedented mountain of evidence amassed by the government in the case against Miske and his co-defendants. If she were disqualified on the basis of the alleged conflicts, her loss of knowledge would impact not only Miske but also each of his co-defendants, Kennedy argued.
Kennedy also hit back at the government, alleging that it knew, or should have known, about the fraudulent letters when they were first filed in court in 2020, but waited until the summer of 2022 to discuss the matter with Otake and Panagakos, and until last month to file a motion for disqualification.
In a memo filed in advance of the hearing, Miske’s attorneys argued the government actively concealed information about the false letters, and then “has inexcusably delayed in filing its motion to disqualify based on an alleged conflict.”
The delay, they argue, has been prejudicial to Miske’s defense and should preclude granting the motion to disqualify Otake and Panagakos.
However, the government argued that after learning of the allegedly fraudulent letters, it had to investigate whether this was true.
In its motion to disqualify, the government explained it had taken a series of investigative steps, “including a series of federal search warrants, federal grand jury subpoenas, and witness interviews,” in order to corroborate that the first letter was fraudulent. FBI agents attempted to interview those who wrote the other letters, and subpoenaed documents related to the character reference letters from Otake and Panagakos. Rather than purposeful delays, these were necessary investigative steps, the government argues.
Watson recessed Friday’s hearing shortly before noon, without providing notice as to when or if it will be reconvened. The judge did not disclose any inclination as to how he might rule on the motions. Court minutes issued later Friday only said that motions were taken under advisement and an order will be issued later.
At the end of the hearing, Watson bristled at a suggestion the latest delay in the trial, recently moved back from April to September, was caused by the court. He reminded those present that he had received a request to continue the trial dates to September that had been stipulated, or agreed to, by both prosecutors and defense. The court didn’t initiate the delay, but agreed to the delay requested by attorneys on both sides, he said.
Watson also suggested attorneys review their summer vacation plans, as well as weekend schedules, “because we are going to trial in September.”
“Buckle up,” Watson advised, “and get ready.”
Read the judge’s order below:
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Ian Lind is an award-winning investigative reporter and columnist who has been blogging daily for more than 20 years. He has also worked as a newsletter publisher, public interest advocate and lobbyist for Common Cause in Hawaii, peace educator, and legislative staffer. Lind is a lifelong resident of the islands. Read his blog here. Opinions are the author's own and do not necessarily reflect Civil Beat's views.