Wednesday, May 18, 2016

US v. Medlock, No. 15-501 (unpublished): The Tenth affirms the district court's grant of a new trial for the defendant based on his trial counsel's ineffective assistance. Mr. Medlock was charged with 18 counts of bank fraud and money laundering; he was convicted of 10 counts of bank fraud and 3 counts of money laundering, and acquitted of 5 counts of bank fraud. He moved for a new trial, arguiing his trial counsel was ineffective for failing to investigate. Mr. Medlock bought Klutts Equipment. In the course of business, he obtained loans from a bank, ONB, and granted ONB a security interest in Klutts assets, including accounts receivable. He was required to make payments into a lockbox account at the bank. Klutts became delinquent, and ONB sent a demand letter. Worried that ONB might freeze the account, Mr. Medlock consulted with attorney Bedford, who advised Medlock to open another account so Klutts could continue to operate. Medlock did so, and ONB did freeze the lockbox account a month later. After Klutts' default, ONB sued and obtained a $2.5 million judgment against Medlock personally and a receiver was appointed for the business. ONB then met with federal investigators, and the government indicted Mr. Medlock, alleging he had defrauded ONB by divering 15 payments made on accounts receivable away from the lockbox account and into other accounts. Mr. Medlock asserted that 1) the payments were not accounts receivable by Klutts but were commission for his personal work as a broker and 2) he created the other accounts based on advice of counsel. Although he provided detailed information regarding the commissions, his attorneys did not investigate in any way or even elicit information from Medlock and other witnesses at trial. As to the second defense, Bedford unexpectedly entered an appearance the night before trial, and on the morning of trial, the attorneys told Mr. Medlock they would not present the advice of counsel defense. The Tenth Circuit agreed with Mr. Medlock's new counsel and the district court that Mr. Medlock's trial counsel were constitutionally ineffective and he was prejudiced. Moreover, the Court rejected the government's claim that Mr. Medlock had to prove prejudice regarding each of the 13 counts of conviction because there was a reasonable probability that trial counsel's errors altered the evidentiary landscape.