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Judge in Ravenell trial faces questions over financial conflicts in other cases

Judge Liam O’Grady

An out-of-state federal judge who oversaw the criminal trial against prominent Baltimore defense attorneys Kenneth W. Ravenell and Joshua R. Treem is under scrutiny after a Wall Street Journal investigation found he had dozens of financial conflicts in cases he’d handled in Virginia.

The Wall Street Journal article does not mention the Ravenell case, nor have any lawyers in the case accused Senior U.S. District Judge Liam O’Grady of impropriety or ethical conflicts.

But the Dec. 30 article puts an uncomfortable spotlight on O’Grady, who took over the high-profile Baltimore case to prevent potential conflicts of interest among local judges.

O’Grady did not respond to a message left with his chambers on Monday.

The Wall Street Journal article highlights a civil case in which Amazon accused two employees of receiving kickbacks in exchange for diverting contracts toward a specific real estate developer.

The report found that at the same time O’Grady was handling the case, his wife owned Amazon stock valued at more than $20,000, in violation of a federal law that prohibits judges from handling cases involving companies in which they or their spouses have a financial interest.

O’Grady acknowledged that he should have disqualified himself, according to the Wall Street Journal, and his wife’s investment adviser sold the Amazon shares after the newspaper contacted the judge about the conflict.

The report also goes further: “A Journal review found 65 additional cases Judge O’Grady has heard in the Alexandria, Va., federal courthouse while his wife was invested in plaintiffs or defendants, among them Bank of America Corp., International Business Machines Corp. and Verizon Communications Inc.

“That ranks him third in the list of federal judges with the most recusal failures in the Journal’s investigation of judges who presided in cases involving companies in which they, their spouses or their minor children were invested.”

The findings are part of a major investigation in which the Journal found 131 judges with financial conflicts based on an analysis of federal judges’ annual financial disclosure forms. The Journal has identified more judges with conflicts since the investigation first ran in September. The initial article did not mention O’Grady.

After learning of O’Grady’s conflict, the defendants in the Amazon case asked the judge to recuse himself, according to multiple reports. At a hearing on Thursday, O’Grady harshly criticized the defendants’ suggestion that his impartiality could be questioned because of his wife’s Amazon stocks.

“The idea that I would steer this case in Amazon’s favor because I felt that my wife’s $22,000 investment in Amazon’s stock would be at risk if I didn’t is almost insane,” the judge said, according to a report in the National Law Journal.

O’Grady is typically seated in Alexandria as part of the Eastern District of Virginia but presided over Ravenell’s three-week trial in Baltimore last month.

The case ended with not-guilty verdicts for Treem, who originally represented Ravenell while he was under federal investigation, and for Sean F. Gordon, a private defense investigator who had worked with the two attorneys.

Jurors found Ravenell guilty of a single count of money laundering conspiracy, but they declined to convict him of other charges, including racketeering and narcotics conspiracy.

The government alleged that Ravenell served as an adviser to a major marijuana trafficking operation run by a longtime criminal defense client, Richard Byrd. Byrd testified at the trial that Ravenell was deeply involved in running the organization and that he was paid millions of dollars in drug proceeds over several years in exchange for helping the traffickers evade law enforcement and launder money.

The prosecution accused Ravenell of using his law firm at the time, Murphy, Falcon & Murphy, to launder drug money so that it could be used for legitimate purposes.

As the investigation into Ravenell progressed, Treem and Gordon sought a meeting with Byrd to learn whether he was cooperating with the government and gather other information to prepare a defense. The government claimed the meeting was an attempt to take Byrd “off the board,” or to render him useless to prosecutors by having him sign statements that were exculpatory to Ravenell.

Treem and Gordon were both charged with obstruction of justice, a move that brought outcry from members of the defense bar who said legitimate defense work was being criminalized.

O’Grady has scheduled Ravenell’s sentencing for May. Ravenell’s lawyer, Lucius Outlaw, declined to comment on the Wall Street Journal report.

The U.S. Attorney’s Office in Baltimore also declined to comment, and attorneys for Treem and Gordon did not return a reporter’s calls.

Update: The Wall Street Journal reported Tuesday that O’Grady stepped aside in the Amazon case and another judge has been assigned. O’Grady, according to the report, said he was hesitant to remove himself from the case but wrote that “perception of the fair administration of justice—both by the public and by the parties in the case—is of the highest importance to the Court.”