The conviction of former Security Aviation owner Mark Avery on wire fraud charges is no longer valid, according to an opinion issued Tuesday by a federal appeals court.
According to the opinion, a 2010 decision by the U.S. Supreme Court narrowed the definition of the kind of wire fraud to which Avery pleaded guilty. The type of "crime" Avery admitted is now not a crime, a three-judge panel of the Ninth U.S. Circuit Court of Appeals said.
Avery, a former city and state prosecutor, pleaded guilty in 2007 to stealing $52 million from a wealthy widow's trust fund, which Avery oversaw as a trustee. By siphoning money from the fund and obtaining loans, Avery was able to buy fighter jets, vintage warplanes, and other luxury items and property for himself, prosecutors alleged.
A jury acquitted Avery and an associate on separate federal weapons charges that they possessed rocket launchers. A judge sentenced Avery in 2008 to 8 1/2 years after he pleaded guilty to five counts of wire fraud and 10 counts of money laundering.
Now 54, Avery has been serving his sentence at La Tuna, a federal prison in Anthony, Texas, according to the Federal Bureau of Prisons.
According to the Ninth Circuit judges' opinion issued Tuesday, the Supreme Court more tightly defined the type of fraud to which Avery pleaded guilty: honest services fraud. As trustee of the fund, Avery failed in his duty to properly manage it. But the Supreme Court decision said only honest services fraud that involved bribery or kickbacks was illegal, the Ninth Circuit opinion says.
Avery argued in a 2011 appeal that he had pleaded guilty to wire fraud under the honest services theory, something that is not a crime anymore. The three-judge panel of circuit judges agreed and sent the case back to federal court in Alaska for further proceedings.
"While there may be language in the (plea) information that broadly references money-or-property based fraud, the government failed to incorporate those specific allegations into the plea agreement and did not elicit from Avery anything but a plea of guilty to honest services fraud," the Ninth Circuit opinion says.
The opinion Tuesday did not overturn Avery's conviction outright. But that is the likely outcome, said Krista Hart, a California attorney who argued Avery's case before the appellate court.
"Of course we are pleased with the Ninth Circuit's decision," Hart said. "I expect that the district court will set aside the conviction, but what happens after that, I don't know. That's up to the government."
Federal prosecutors are weighing their options, Assistant U.S. Attorney Kyle French said. The prosecutors might ask the Ninth Circuit Court to look at the case again, this time with more judges on the panel, French said. And information in the original charges that was not included in the plea agreement might still apply to other theories of wire fraud, he said.
"The big thing is that Avery's not a person who did wire fraud to help a friend get a contract or something like that," French said. "This is a guy who took millions of dollars, paid off mortgages, then bought a yacht, bought properties, paid off credit card debt. So this is not a person who the honest services clause squarely applies to. He's more of the traditional fraud person. The honest services aspect came in because of his method of doing it involved being a trustee."
French said he could not comment on whether prosecutors erred by not including information supporting other types of wire fraud in their plea deal with Avery.
Reach Casey Grove at email@example.com or 257-4589.
By CASEY GROVE