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Judicial Battle Erupts Over Suspect's Release

A U.S. judge in L.A. is unable to block a magistrate's release of an accused swindler.

March 11, 2004|Paul Lieberman and David Rosenzweig | Times Staff Writers

A routine legal fight over whether an accused swindler should be released from custody quickly escalated into a frenzied jurisdictional tug of war between a federal magistrate in Las Vegas and a Los Angeles judge, culminating this week in the judge's removal from the case by an appellate court based in San Francisco.

In Las Vegas on Wednesday, for the third time in six days, U.S. Magistrate Peggy A. Leen ordered the release, with electronic monitoring, of Daniel Nicherie, 44, who had been arrested there last week on charges that he had defrauded a Beverly Hills couple of millions of dollars and a Los Angeles doctor and the doctor's father of $275,000.

But the short-term future of Nicherie was overshadowed by days of fast-paced judicial interplay that spanned three cities, surprised attorneys on both sides of the case and saw a veteran federal judge rebuked for "an appearance of bias" after he had twice agreed with prosecutors that the alleged con man should remain locked up.

The legal infighting began last Friday, the day after the arrest of Nicherie on seven counts of wire fraud, bankruptcy fraud and pension fraud, according to legal papers submitted to the appellate judges.

Prosecutors from the major fraud section of the U.S. attorney's office in Los Angeles, who had brought the charges after a three-year investigation, wanted Nicherie held without bond on the grounds that he was a flight risk and a danger to the community.

Nicherie recently had lived in Belgium and had used "at least 11 aliases" and 40 shell companies, the government said, while cheating the Beverly Hills couple, Ami and Sarit Shafrir, of more than $40 million in cash, real estate and businesses. Nicherie fled the country once before, when facing bank fraud charges in Texas in the 1990s, prosecutors said, though he returned to accept a plea bargain carrying a one-year prison sentence.

Defense lawyers argued for Nicherie's release. They said he lived in Las Vegas, had five children to care for and had volunteered repeatedly to surrender after learning that a grand jury was investigating him. Nicherie's lawyers also said that he would agree to limits on his freedom, such as surrender of his passport and the electronic monitoring.

Those substantive issues, however, were quickly overwhelmed by the tug of war between U.S. District Judge Manuel A. Real in Los Angeles and Magistrate Leen in Las Vegas over who should rule on Nicherie's freedom, pending a full detention hearing.

When Nicherie was first taken into court in Las Vegas on Friday afternoon, Leen said he could go free, with monitoring, until the hearing could be held.

Frustrated prosecutors sought immediately to have her ruling overturned by one of the four "duty judges" in Los Angeles, where the charges against Nicherie had been brought. One of those judges was Real, who gave the prosecutors what they wanted, an order blocking Nicherie's release.

That set the stage for a tense Friday night in Nevada.

At 7 p.m., Nicherie's lawyers showed Real's order to a district judge in Las Vegas, who decided that it was "ambiguous at best," according to court papers later filed by the defense. Soon afterward, the magistrate, Leen, called the City of Las Vegas Detention Center to ensure that her earlier ruling was being obeyed and Nicherie freed. But she received a phone call at home, from Judge Real, reiterating that he "did not want Mr. Nicherie released," and wanted the defendant shipped to Los Angeles for a hearing "in his courtroom," the defense documents state.

Nicherie's lawyers turned to the 9th Circuit Court of Appeals, seeking to have Real's intervention set aside. Late Monday, a three-judge panel of the appellate court sided 2 to 1 with Leen.

By then, however, Nicherie was on his way to Los Angeles for a Tuesday morning hearing before Real. That proceeding was a brief one, with the defendant's attorney arguing over a speaker phone and Real agreeing that Nicherie would have to be returned to Nevada.

The events that followed later Tuesday seemed like a replay:

Leen again ordered Nicherie released. Then, at the request of prosecutors, Real signed yet another order overturning her decision. And, once again, the Ninth Circuit panel promptly overturned him, saying he had no jurisdiction.

This time, however, the appellate panel ruled, again 2 to 1, that "because of the appearance of bias," the chief federal judge in Los Angeles should appoint "a judge other than Judge Real" to handle the case when it eventually returned to Los Angeles.

This is not the first time that Real has sparred with the 9th Circuit. He is facing possible disciplinary action by the circuit's chief judge for allegedly abusing his authority. In a 6-4 ruling last December, the circuit's judicial council, made up of fellow judges, found that Real had acted improperly in seizing control of a bankruptcy case to protect a woman whose probation he was overseeing.

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