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JUICE VS. JUSTICE | A Times Investigation

For This Judge and His Friends, One Good Turn Led to Another

James Mahan got his jobs on the state and federal benches through the connections of old pal George Swarts. Things turned out well for Swarts too.

June 09, 2006|Michael J. Goodman and William C. Rempel | Times Staff Writers

LAS VEGAS — Without help from a friend, James Mahan might never have become a Las Vegas state judge. Certainly he wouldn't have gotten one of the top judicial jobs in town: a lifetime appointment to the federal bench.

Then again, without Mahan, his friend George Swarts would never have gotten to run an Internet porn business, a hotel-casino hair salon or a Southern California software company. Indeed, the careers of Judge James C. Mahan, 62, and his friend George C. Swarts, also 62, whom he appointed again and again as a receiver to manage troubled businesses, might be the ultimate example of how juice replaces justice in Las Vegas courtrooms.

In this town, people speak reverently of having juice, or an "in," and Mahan -- bearded, likable but sometimes caustic -- has made it a striking feature in his courtroom. First as a state judge and now as a federal judge, he has approved more than $4.8 million in judgments and fees during more than a dozen cases in which a recent search of court records found no statement that he disclosed his relationships with those who benefited from his decisions.

On the state bench for three years, and since his appointment as a U.S. District Court judge four years ago by President Bush, Mahan has approved many of these fees for Swarts, a certified public accountant who had served as his judicial campaign treasurer and whose political connections got him appointed. Mahan approved additional fees for Frank A. Ellis III, 51, a former law partner with whom the judge still owned property and participated in a profit-sharing plan. Ellis also provided free legal services for Mahan's family and for his executive judicial assistant.

Mahan, like a number of Las Vegas judges, has taken on cases despite state and federal prohibitions against such apparent conflicts. Some Las Vegas judges have ruled in cases involving their friends, even those to whom they owe money.

The practice harms visitors and business people alike, especially Californians, who come here in large numbers to work and play. They fall victim to an untamed style of justice, blatantly tangled in clashing local interests.

Las Vegas is a town of instant millionaires, 60-second weddings, six-week divorces and a sly wink at conflicts of interest, to say nothing of the abuses that go with them. Some California lawyers view Las Vegas justice as just another crapshoot. When they are pressed about it, some Nevada lawyers openly condemn the system. The excuse, says Las Vegas attorney Charles W. Bennion, "is that this is the way it's always been done -- fast and loose."

Even in Las Vegas, however, Judge James Cameron Mahan stands out.

When owners fight over a business, judges often appoint someone independent as either a special master, to investigate the dispute, or as a receiver, to run the business until the differences are settled.

On 13 occasions in state and federal court, Mahan has installed Swarts, a large man in a business suit who tells people how to spell his name -- "think of 'wart' with an 's' on each end" -- or his son, Curtis, 41, taller and more often casually dressed, at up to $250 an hour, to be a special master or receiver in cases that come before him.

Mahan has then given his approval when George Swarts hired Ellis, low-key and quiet-spoken, or his firm, at up to $250 an hour, to represent Swarts in nine of these cases. In all, Mahan ordered plaintiffs and defendants to pay Swarts and Ellis more than $700,000, the records show.

U.S. and Nevada judicial canons say judges should withdraw from cases where their impartiality might reasonably be questioned. Nevada canons also say: "A judge should disclose on the record information that the judge believes the parties [in a case] or their lawyers might reasonably consider relevant to the question of disqualification, even if the judge believes there is no real basis for disqualification."

A recent search of court records in the 13 cases involving Swarts or Ellis, as well as interviews with litigants and their attorneys, found no disclosure of Mahan's relationship with either of the two men. Complaints of excessive fees and inaction occasionally united opposing sides to implore him to remove Swarts. In case after case, he refused.

Mahan's judicial power and soaring reputation silenced many of those who suspected or knew of his undisclosed ties, according to lawyers. He was southern Nevada's top-rated state judge in 2000 and 2002 in a biennial survey of attorneys by the state's largest newspaper, the Las Vegas Review-Journal.

In an interview with The Times, Mahan acknowledged that he routinely did not disclose personal relationships. He dismissed them as insignificant and bristled at being questioned.

Face flushed and jabbing a forefinger in anger, Mahan said he appointed receivers in lawsuits based upon their ability and experience. He said he had named Swarts as a receiver for those two reasons and not because of any favoritism.

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