Court Denies Rule 33 Motion Based on Alleged (But Unproven) Potential and Actual Conflicts from Benefactor Payments (1/12/26)

In United States v. Lemay (S.D. N.Y. No. 1:21-cr-00573 Opinion & Order dated 1/2/26), CL here, GS here, TN here, the Court denied the convicted defendant’s Rule 33 motion based on alleged ineffective assistance of counsel. Lemay and another defendant had been convicted  in SDNY of conspiracy to defraud the U.S. under 18 USC 371. Lemay was originally indicted for tax evasion as well, but the evasion counts were severed and moved to New Jersey based on his residence. At the end of the SDNY trial, the Court denied a Rule 29 motion for judgment of acquittal. Shortly prior to sentencing, Lemay filed his Rule 33 motion. The Court then held an evidentiary hearing on the motion; this Opinion & Order is the result of the hearing.

The gravamen of the motion is that a person allegedly agreeing to pay Lemay’s costs of defense in the investigation and prosecution caused Lemay to have ineffective assistance of counsel because of conflicts created by that arrangement and the relationship of Lemay’s counsel (2 different attorneys, one in the investigation prior to the indictment and the other in the criminal trial) to other counsel for other targets or defendants with allegedly competing interests under an alleged joint defense agreement ("JDA"). The facts are more detailed and well worth reading by students and practitioners to see the types of problems that might arise when a defendant is represented by counsel being paid by someone else. The Court calls those arrangements “benefactor payments.” Lemay’s counsel (2 of them) targeted in Lemay’s claims denied Lemay’s claims. After holding an evidentiary hearing in which the Court observed and assessed the credibility of Lemay and other witnesses (including the 2 counsel), the Court rejected Lemay’s claims and denied the Rule 33 motion.

Some points:

1. Perhaps the major point is that, for some reason, Lemay’s counsel (2 of them) allegedly failed to meet the requirement of “The Court’s Individual Rule” that stated "[w]henever defense counsel has received, or will receive, a benefactor payment that subjects counsel to a conflict of interest, he or she must immediately inform the Court and request a Curcio hearing." (See Slip Op. 8.) The Curcio hearing is named for United States v. Curcio, 680 F.2d 881 (2d Cir. 1982), here. At a Curcio hearing, the court can consider the nature of any conflicts the attorney may have and advise a defendant of the risks of the conflict, determine that the defendant understands those risks through questioning, and "give the defendant time to digest and contemplate the risks after encouraging him or her to seek advice from independent counsel. For a good discussion of the Curcio hearing in the Second Circuit, see United States v. Arrington, 941 F. 3d 24,  (2d Cir. 2019), here.

2. This case should impress upon students and practitioners the requirement to be thoroughly familiar with a particular court’s (judge’s) specialized rule, here called Individual Rules.

3. The arrangement that the 2 attorneys allegedly entered into with the other attorney with a client having allegedly competing interests was a “joint defense arrangement” or “joint defense agreement.” (Slip Op. 7, 11-12, 30, 31-32.) The opinion does not say whether JDAs were in writing. I think best practices are to have the agreement in writing to avoid the types of claims Lemay made. In any event, the written bills that Lemay should have read did refer to “joint defense” communications. (Slip Op. 12.)

4. The credibility determinations are at Slip Op. 29-30, 35. (The Court also noted that, for credibility reasons, at the hearing and at the preceding criminal trial, it assessed credibility to support the jury verdict. (Slip Op. 36-37.)

5. Lemay’s counsel on the Rule 29 motion apparently made some filings without leave of court. Bad form. (Slip Op. 4 & 5.)