Bellaire lawyer ordered to federal lockup
Attorney Jeffrey Stern asked an accomplice to use “burner” phones, hid tax documents in storage units under the name of a handyman and told a co-conspirator, “I would do whatever it takes to protect myself,” according to the lead federal investigator on his conspiracy case.
There were dozens of “overt acts” in the rainmaking scheme, and, even after the Bellaire lawyer with a history of criminal arrests learned he was under investigation, he continued to break the law to the extent the Justice Department had to amend his indictment to include new crimes, said Assistant U.S. Attorney Robert Johnson.
For all these reasons, U.S. Magistrate Judge Peter Bray said Thursday there were no conditions under which he could safely release Stern, who was arrested Saturday without incident at a Houston airport after returning from abroad with his family.
Bray said he had no confidence the wealthy personal injury lawyer wouldn’t continue to destroy documents or try to skip town.
“I find by a preponderance of the evidence that now that he is here and he’s in custody and he’s facing a substantial sentence if convicted, he has significant wherewithal to leave,” the judge said. “I don’t think he’s going to follow my rules.”
Stern’s lawyer, David Gerger, pleaded with Bray, asking “before the gavel comes down” that he consider the option of house arrest. He reminded the judge that his client had been released on bond when he was awaiting trial for multiple charges of attempting to hire someone to kill his wife. The Harris County District Attorney dismissed the charges in 2012 for lack of evidence.
The judge snapped back: “And he destroyed documents back then, too. That’s what the agent said.”
Bray ordered him to await trial in federal lockup in the alleged conspiracy scheme to illegally bring in clients, evade tax law and tamper with witnesses as well as hiding evidence to cover his tracks. Stern is charged with conspiring to defraud the government, willfully filing multiple false tax returns and aiding in the preparation of those returns. Prosecutors say he then tampered with witnesses and obstructed justice.
Shackled and handcuffed in olive green jail garb, Stern shuffled past his wife Yvonne — whom he’d previously been charged with trying to kill — and appeared to mouth the words “I’m sorry.”
During a nearly four-hour hearing, Stern, 62, sat blank-faced and nearly motionless at the head of the defense table with his four lawyers.
Stern is set for trial Oct. 21, along with two other lawyers and a clinic owner. One co-defendant has pleaded guilty to being a “case runner” in the scheme and a second alleged runner is facing charges in a separate indictment.
The bulk of the testimony that sealed Stern’s pretrial fate came from Robert Simpson, a special agent with the criminal investigation arm of the Internal Revenue Service.
Simpson testified that reams of evidence show Stern intentionally violated tax code through an illegal kickback scheme. He indirectly paid “case runners” who were not lawyers to find him clients, but paid them through checks to other attorneys, co-defendants told the investigator. Year after year, he then deducted referral fees in his law firm’s tax returns, Simpson testified.
The special agent said he found the Stern law firm’s ledgers revealing details of the scheme stashed in three storage units rented under the name of Fidel Jimenez, whom Simpson identified as “a handyman, a construction worker who is in the U.S. illegally.”
Marcus Esquivel, an accused “case runner” in the scheme, allegedly destroyed a computer and burned records in his chimenea at Stern’s direction.
The primary “case runner,” legal assistant Frederick Morris, admitted in a guilty plea to shredding documents and routinely buying new burner phones at Stern’s direction during the years he did ambulance chasing for the law firm, the special agent said. Morris cashed the checks with forged endorsements at checkcashing locations, Simpson testified. He said Morris took the money from the checks to the lawyers as illegal kickbacks for himself and other case runners.
Morris told investigators he had been working closely with Stern for about 20 years. At his plea hearing, his lawyer told U.S. Magistrate Judge Christina Bryan she “had serious concerns for her client’s physical safety,” according to Johnson, the prosecutor.
Stern’s lawyers argued that the judge should not consider him a risk or threat because he is a U.S. citizen, he has lived Houston over 30 years and he has been with the same woman over 27 years.