memo in support

7/28/2019 Memo in Support

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Marcus R. Mumford (12737)Bret W. Rawson (11083)MUMFORD &RAWSON LLC15 West South Temple, Suite 1000Salt Lake City, UT 84101Telephone: (801) 428-2000Email: [email protected]

[email protected]

Helen H. Redd (6020)P.O. Box 171435

Holladay, UT 84117Telephone: (801) 598-5547Email: [email protected]

Attorneys for Defendant

IN THE THIRD JUDICIAL DISTRICT COURT FOR

THE STATE OF UTAH, SALT LAKE CITY DIVISION

STATE OF UTAH,

Plaintiff,

v.

MARC SESSIONS JENSON,

Defendant.

MEMORANDUM IN SUPPORT OF

DEFENDANTS MOTION TO RECUSE

AND DISQUALIFY THE UTAHATTORNEY GENERALS OFFICE

REDACTED VERSION(UNREDACTED VERSION FILED UNDER

SEAL AND IN CAMERA)

Case No. 111906135

Honorable Judge Elizabeth A. Hruby-Mills

INTRODUCTION

The prosecution of Marc Sessions Jenson (Jenson) in this matter rests in a pattern of

wrongdoing on the part of the Utah Attorney Generals office, spanning the administrations and

personal involvement of past-Utah Attorney General Mark Shurtleff and the current Utah

Attorney General John Swallow. The actions of Shurtleff, Swallow, and others have created a


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severe conflict of interest for the Attorney Generals office where they are now more interested

in defending themselves against the disclosures and investigations of the offices misconduct

than they are in seeking justice on behalf of the people of the State of Utah.

Shurtleff and Swallow have used the prosecution of Jenson spanning at least 8 years to

benefit themselves and their friends at his expense. They set Jenson up beginning in 2005 by

initiating a prosecution on false charges originating from a political donor whose payments to

Shurtleffs campaign coincided with the timing of the case. In this respect, the States lead

investigator admitted that this case was unusual in that it began with the AG himself instead of

the usual channels of prosecution.

Shurtleff and Swallow and their associates then shook Jenson down, enriching

themselves and their friends with over $200,000 in payments and other benefits from Jenson

between 2007 and 2010. They also took advantage of what they described as the weird

relationship they had with Jenson: by having Jenson enter into a plea in abeyance on the 2005

charges, even though he was admittedly not guilty of wrongdoing, Shurtleff and Swallow

motivat[ed] Jenson to comply with requests for money and favors. Having designated Jenson

a felon, even if only for selling unregistered securities, he would have to comply with their

increasingly problematic demands: that Jenson raise $2 million for a stranger in violation of the

terms of his plea, that Jenson buy a large volume of Shurtleffs books without even accepting

delivery as a way to pay Shurtleff money, that Jenson ask one of his employees to get U.S.

Attorney Tolman to back off his investigation of Shurtleff.

When Jenson finally balked at Shurtleffs and Swallows increasingly onerous demands,

Shurtleff and Swallow lived up to the threats made to put Jenson away if he did not cooperate.


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The Attorney Generals office took advantage of Jensons precarious position. He had been

trying to meet their demands instead of making restitution payments in this time period. Even

though the Attorney Generals office had previously certified that Jenson did not really owe any

restitution to any of the alleged victims, they incarcerated him for failing to live up to the terms

of the plea, and they filed this case to make it appear that Jenson was a serial law breaker. As

Shurtleff said when talking about the possibility that his office could be charged: you dont

even have to be guilty of wrongdoing, the allegations alone could ruin a career and reputation.1

Along the way, Shurtleff and Swallow created a situation where the interests of the

Office of Utah Attorney General diverge from those of the people of the State of Utah, calling

into question the publics faith in the impartiality and integrity of the justice system and

mandating the disqualification of the Utah Attorney Generals office in this matter. State v.

McClellan, 2009 UT 50, 216 P.3d 956. In fact, the current Attorney General John Swallow was

personally involved, albeit intermittently, as a member of Jensons legal team from

approximately 2007 through 2008, including certain strategic decisions concerning the Mount

Holly development that lies at the heart of this matter. While the time spent appears to have

been minimal, Swallow told Jenson that he was going to be the next Attorney General and that

Jenson would need Swallow in that position to work through issues that may arise with respect to

the Mount Holly development. As a quid pro quo, Swallow secured Jensons agreement at the

time to give him a piece of Mount Holly, referring to a million dollar lot in the Mount Holly

development.

1 Ex. C 15.


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The conflicts extend beyond Swallow and Shurtleff. Swallows personal attorney was

Mr. Jensons counsel in 2005 when charges were first brought against him and he is now acting

as one of Swallows spokespeople and disparaging Mr. Jenson in the press to suggest, among

other things, that Mr. Jenson has been convicted of fraud notwithstanding that Jensons plea in

2005 was merely for selling unregistered securities. And, as Swallows current counsel

described the case against Jenson in 2005, when he was representing Jenson: it was a totally

bull shit case. The current prosecutors on this case, Assistants Attorney General Scott Reed and

Che Arguello, have been observed staking out Jensons wife and family in a suspicious manner,

and telling witnesses they were going to try to get that skinny bitch, referring to Jensons wife.

Assistant Attorney General Kirk Torgensen is also involved in a manner that presents a

disqualifying conflict.

Recently, Jenson has been interviewed by reporters, and the contents of those interviews

have been reported in news stories. Since those accounts started to appear, Jensons situation in

the Utah prison system has become precarious, and recently Jenson, a 53-old inmate, had to be

extracted by authorities in Davis County to ensure his life and safety. He is currently in

protective custody.

Courts have observed that a motion to disqualify is not necessarily the only way to

address misconduct on the part of a prosecutors office. But it is a first step. What Mr. Jenson is

seeking here is simply a ruling that the conflicts of the Utah Attorney Generals office presented

in this case are so pervasive or severe that the only prudent course of action is to disqualify the

entire office and appoint other counsel. Utah State Bar Ethics Advisory Comm., Formal Op. 142

(1994) (1994 WL 579850).


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STATEMENT OF FACTS

A. The Set Up

1. The history of this case begins in the 2004-2005 time period when the alleged victimRicke White used his political influence with then-Attorney General Mark Shurtleff to initiate

criminal proceedings against Marc Sessions Jenson as part of a legal strategy to pursue Jenson

for an allegedly unpaid debt.

2. White had business dealings with Jenson, beginning in approximately August 2001, whenWhite loaned $5,000,000 to Jenson.2 Over time, Jenson repaid the loan in full.

3. As of January 2004, White had received over $5,525,000 in repayment from Jenson, anda dispute developed concerning how much more White was owed, White taking the position that

Jenson still owed unpaid interest.3

4. In this time period, White threatened Jenson that if Jenson did not pay him additionalmoney, White would use his political connections with Shurtleff to have him thrown in jail.4

5. White eventually followed through on his threat. On January 8, 2004, White filed a civilcomplaint against Defendant based on an alleged breach of contract, seeking the remaining

unpaid interest.5

That same day, White donated, in the name of his wife, Amy White, using their

home address, $5,000 to then-Attorney General Mark Shurtleffs campaign fund.6

6. The civil matter was eventually reduced to a judgment of $600,000. Jenson satisfied that

2 Ex. A.13 Ex. A.2.4 Ex. B 2; Ex. C 2, 13.5 Ex. A.3 (12/13/2006 Tr. 388:23-389:2).6 Id.; Ex. A.4.


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judgment by making two payments to White payment of $100,000 on July 7, 2005, and a

payment of $500,000 on August 5, 2005, representing payment in full, with interest.7

7. But not until White had mobilized other forces against Jenson.8. As stated above, White filed his civil complaint against Jenson concurrent with a $5,000donation to Shurtleffs campaign fund. On April 22, 2005, White made another political

donation to Shurtleff.8 That donation corresponded with a meeting between White and officials

at the Utah Division of Securities.9 An internal memo reveals that White, his wife, and their

attorney met with Division of Securities analyst Michael Hines, attorney Jennifer Korb, and

analyst Angela Kinser on or about April 21, 2005, to discuss Rick Whites complaint against

Marc Jenson.10

9. A later email exchange between Hines and Mr. Jensons attorney at the time, Rod Snow,confirms the suspicious coincidence of Whites donation to Shurtleff and the initiation of the

States prosecution. In an email dated August 11, 2005, Hines explained to Snow that the 2005

case filed against Mr. Jenson was unusual in that it began with the AG himself, referring to

then-Attorney General Mark Shurtleff.11 This was a departure from the normal course of an

investigation and prosecution, where Hines would have investigated the case and then when

appropriate, [referred them] to a prosecutor.12 In other words, Shurtleff personally initiated the

case against Mr. Jenson after receiving donations from White.

7 Ex. A.2.8 Ex. A.4.9 Ex. A.6.10 Id.11 Ex. A.5.12 Id.


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10. The internal memo from the April 21, 2005 meeting reveals false statements on the partof White in his meeting with the Division of Securities. For example, White told Hines that he

had not received any interest on his loan to Jenson.13 But at the time of the meeting, it is

undisputed that White had received over $250,000 in interest.14 Moreover, White admitted that

the transactions at issue were handshake deals, as opposed to securities transactions,

acknowledging that there was no paperwork.15

11. The date of Whites second political donation to Shurtleff in this time period alsocorresponds with Shurtleffs first contact with Jenson. On or about April 30, 2005, a few weeks

after Whites donation to Shurtleff, Jenson attended a Law Day event with his counsel.16 At that

event, Shurtleff confronted Jenson to say: my office is taking a close look at you.17 Mr.

Jensons lawyer offered to meet with Shurtleff at any time to discuss Mr. Jensons business.18

12. Shortly after that encounter, Hines showed up unannounced at Mr. Jensons business toquestion him without Jensons counsel present.19

13. Thereafter, Mr. Jensons business began to receive suspicious phone calls with personsinquiring whether they could invest millions of dollars in Mr. Jensons business.20 These calls

were unusual in that they seemed scripted and canned.21

Mr. Jensons business did not

13 Ex. A.6.14 Ex. A.1.15 Ex. A.6.16 Ex. B 4; Ex. C 4.17 Ex. B 4; Ex. C 4.18 Ex. B 4.19 Ex. C 5.20 Id.21 Id.


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solicit investment.22

He conducted his business with a line of credit from institutional lenders

and a small pool of associates with whom he had worked over time in asset-based lending,

making bridge loans primarily in the areas of real estate development.23 The timing of the

suspicious phone calls caused Jensons employees to conclude that someone was trying to set

him up.24

14. In the mean time, Jenson came to understand that White was recruiting others to initiatecomplaints against him.25 Among other things, an individual named Joseph L. Bishop informed

Jensons lawyer that he had received a call from White where White admitted that he was

making arrangements through his friendship with the Attorney General to have [Jenson]

investigated, and recruit[ing] other people to file complaints.26

15. On August 10, 2005, the State filed Case No. 051905391 against Mr. Jenson basedlargely on the Ricke White allegations. The case also included allegations involving Michael

Bodell and Morty Ebeling. Bodell had settled a civil matter with Jenson prior to the case for

approximately $3,500,000, which Jenson had paid, and as part of that settlement had released

any claims against Jenson; as Assistant Attorney General Scott Reed eventually admitted, Bodell

was not owed any more money.27

Ebeling had been attempting to extort Jenson and his family

for a long time, including at least one instance where he had made physical threats against

22 Ex. B 6; Ex. C 5.23 Ex. B 6.24 Ex. C 5.25 Ex. C 6.26 Ex. A.18.27 Ex. A.17.


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Jenson and his family, leading to a police report.28

Jenson did not owe Ebeling any money.29

White had simply recruited Bodell and Ebeling to participate in the case against Jenson. 30

16. Prior to the case being filed, Defendants attorney at the time, Rod Snow, attempted tocontact the government.31 The government did not return those calls but went to Jensons gym

and arrested him in a public show of force in front of his neighbors and friends.32

17. Following the arrest, Mr. Snow, who currently serves as counsel for Attorney GeneralJohn Swallow, wrote Michael Hines to complain about the States actions: Rick White has been

paid back more than he loaned. Whatever was said or not said, when the alleged victim

recovers more than the amount at issue and then you file charges, you have a totally bull shit

case and you know it!33

18. In response, Hines stated that the law allows for prosecutions in circumstances in whichnobody lost money.

34

While that may be technically true in certain instances, the fact that

Hines would justify the case in those terms from the outset casts a shadow on all of the events

that follow the idea that the State would prosecute Jenson for financial crimes even though

nobody lost money. But, in fact, there were those who stood to gain from the situation.35

28 Ex. C 3.

29 Ex. A.1.30 Ex. C 6.31 Ex. B 7.32 Id.33 Ex. A.5.34 Ex. A.5.35 Significantly to the counts of selling an unregistered security asserted in the States case,Hines asserted in an email to Jensons counsel: I found a Supreme Court case which concludedthat Everything, regardless of the circumstances, is a security. Ex. A.7. Hines does not


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B. The Shakedown

19. While the 2005 case was pending, Jenson began receiving visits from persons associatedwith Shurtleff, offering to help in the matter.

20. In February 2007, Shurtleff donor Rob Stahura approached Mr. Jenson at a Jazz gameand suggested they meet to speak about Jensons problems.36

21. In April 2007, Stahura introduced Jenson to Tim Lawson, a friend of Shurtleff andSwallow.37 Stahura and Lawson explained that the key to resolving matters with the Attorney

Generals office was to donate to Shurtleffs campaign.38 As an example, Stahura explained how

he donated to Shurtleff and the Attorney Generals office had largely stayed away from his call

center business.39 Stahura also arranged a visit with other Shurtleff fundraisers who promised

that Jenson could resolve his legal problems with the State by donating to Shurtleff.40

In this

time period, one of Jensons employees asked Shurtleff what would happen to the funds raised in

excess of what Shurtleff needed to run for office: Shurtleff explained that there was no problem

keeping and spending the money on personal needs as long as he paid taxes on it.41

22. In May 2007, Lawson and Jenson met at Jensons offices. Lawson was talking on thephone to Shurtleff.

42Lawson indicated that Shurtleff wanted to speak with Jenson and handed

provide the cite, but that is a breathtakingly false position to take as it concerns securities law asapplied to self-described handshake deals inviting the kind of abuse present in this case.36 Ex. B 8.37 Ex. B 9; Ex. C 8; Ex. D 2.38 Ex. B 9; Ex. C 8.39 Ex. C 8.40 Ex. C 9.41 Ex. C 11.42 Ex. B 10.


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the phone to Jenson.43

In that conversation, Shurtleff described Lawson as his conduit and

asked that Jenson pay Lawson for consulting services whenever he asked.44 Lawson walked

away from that meeting with his first payment of approximately $5,000.45

23. From that time forward, Jenson understood that, by paying Mr. Lawson and others, hewas purchasing the ability to communicate directly with Shurtleff and obtain his assistance in the

resolution of his case.46 Lawson referred to himself in this time period as a corporate

facilitator or fixer, for Shurtleff, referring to the movie Michael Clayton that came out in

2007.47 Lawson told employees of Mr. Jenson that even Shurtleff would refer to Lawson as

Timothy Michael Clayton Lawson.48

24. After these meetings, Jenson was able to arrange a meeting, through Stahura and Lawson,between Shurtleff and Jensons attorneys at the Grand America Hotel in Salt Lake City.

49

During that meeting, Jenson and his counsel demonstrated how the States case was build on

false statements: among other things, the fact that Jenson did not owe the victims any money.50

25. At that meeting, Shurtleff promised to meet with his staff to check the facts. He said thatJenson made a believable witness, which caused Shurtleff some concern about the case.51

26. In fact, Jenson had attempted to raise concerns about the suspicious nature of the States

43 Id.44 Id.45 Id.; Ex. C 10.46 Ex. C 8-11; Ex. D 2.47 Ex. C 10; Ex. D 3.48 Ex. D 3.49 Ex. B 12.50 Id.; see also Ex. A.1.51 Ex. B 12.


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case prior to that time. In December 2006, at the preliminary hearing, Mr. Jensons attorneys

attempted to establish the unfair nature of the prosecution. The Attorney Generals office

objected to questions raised by Jensons counsel concerning the timing of Whites political

contributions to Shurtleff and questions concerning misstatements made by White to State

investigators, among other things.52

27. Between the spring of 2007 and 2009, Jenson paid Lawson a total of over $200,000: over$122,000 to Lawson in the form of a check or money transfer; and more in the form of cash

payment to Lawson or expenses incurred by Lawson and paid via Jensons credit card; Jenson

also paid a significant amount of expenses incurred by Shurtleff and Swallow and charged to

Jenson.53

28. One of Mr. Jensons employees recalls confronting Shurtleff on two occasions in 2007about the payments to Lawson.

54

In response, Shurtleff assured him: yea Lawson is my man

and Jenson should continue to pay him.55

29. This employee also asked Shurtleff why he needed to raise so much money for hiscampaign, and what would happen to the money if he did not spend it on his campaign.56

Shurtleff explained that he could keep any money he raised and use it for personal expenses as

long as he paid taxes on it.57

52 Ex. A.3 (12/13/2006 Tr. 389:1-400:22.)53 Ex. B 13; Ex. D 4-9; Ex. A.19.54 Ex. C 11-12.55 Id.56 Id.57 Id.


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30. Also in this time period, Stahura and Lawson introduced Jenson to John Swallow.58 Inthat meeting, Swallow explained that he was almost elected to the U.S. House of

Representatives, that he was helping Shurtleff with his fundraising, and that he planned to go to

work for the Attorney Generals office to enable him to run eventually for Attorney General as

Shurtleffs hand picked successor and heir apparent.59

31. Swallow requested that Jenson hire him for his consulting and legal services.60 Swallowtold Jenson that he knew he was innocent of the charges brought in the 2005 case.61 As Swallow

put it at the time, when I get into the office, youre going to need me.62 Jenson understood

Swallow meant that if he took care of Swallow, Swallow would help Jensons ability to conduct

business.63 In exchange, Swallow requested a piece of Mount Holly, referring to Jensons real

estate development project in Beaver, Utah that forms the basis of the States allegations against

Jenson in this matter.64

32. From that point, Swallow assisted Jenson and advised Jensons legal defense team on anintermittent basis regarding certain matters.65 Swallow shared with others how, in exchange for

his help, Jenson had agreed to give Swallow one of the million dollar lots in Mount Holly.66

33. In 2008, Swallow was involved in seeking a resolution of the 2005 case, though it is not

58 Ex. B 14.59 Id.; Ex. C 18.60 Id.61 Ex. B 15; Ex. E.2.62 Ex. B 15.63 Id.64 Id.; Ex. C 17-18.65 Ex. B 16; Ex. E 3-5 & Ex. E.1.66 Ex. C 17-18.


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clear whether he was acting as attorney for Jenson or as a liaison with the Attorney Generals

office.67

34. By May 1, 2008, prosecutors had acknowledged that Jenson owed no money to White,Bodell or Ebeling.68 The sticking point was whether the Attorney Generals office would allow

itself to be used to pay somebody $2.5 million, that somebody being Mark Robbins, a friend of

Shurtleffs and a businessman who owed Jenson over $8 million from prior transactions.69

35. Accordingly, the parties, with the help of Stahura, Lawson and Swallow, negotiated aplea in abeyance whereby Jenson would plead to the reduced charges of sale of unregistered

securities.70 The plea agreement, executed by Assistant Attorney General Scott Reed, certified

that White was made whole, that Bodell had signed an accord and satisfaction in which he

waived all of his claims against Mr. Jenson, and that Ebeling had assigned to Robbins all of his

claims, given that Ebelings money had been loaned to Robbins as part of a $8 million loan from

Jenson, meaning that Ebeling was not owed any money by Jenson.71

36. In announcing the plea, Jensons lawyers thanked Stahura in particular for his incrediblework.72

37. When it came to presenting the plea to the Court, however, the Attorney Generals officedistanced itself, and the court rejected it.73

67 Ex. B 16-18; Ex. E 2.68 Ex. A.1.69 Ex. A.17.70 Ex. A.1.71 Id.72 Ex. A.20.73 Ex. B 19.


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38. That led to further discussions where Swallow participated and assured Jenson that theycould salvage a plea deal, and get the court to approve, if Jenson agreed to pay $4.1 million in

restitution.74 Even though Reed had previously certified that Jenson owed nothing to Bodell or

Robbins, the Attorney Generals office changed his position and had Jenson agree to pay a total

of $4.1 restitution to Bodell and Ebeling. With that modification, the Attorney Generals office

supported the plea deal, and the Court approved.75

39. As Shurtleff would later explain to another individual, the restitution component of themodified plea in abeyance agreement, which was admittedly not owed to Jensons alleged, put

Jenson in a weird relationship with the Attorney Generals office, where Jenson now had

every motivation in the world to continue to help Shurtleff and his friends.76

40. Thereafter, Swallow and other attorneys for Jenson put out a two-page summarydescribing the events leading to the plea in abeyance resolving the 2005 case.

77

In that summary,

they acknowledge and describe how the Attorney Generals office had allowed itself to be

manipulated by the alleged victims in the 2005 case.78 They pointed out that Bodell never filed

a criminal complaint against Mr. Jenson, but rather was contacted by the Attorney Generals

office more than two years after he settled with Mr. Jenson, at the urging of White.79

They

pointed out that White had admitted that he made false statements to state investigators, and that

he was paid in full both before he sued Mr. Jenson and long before criminal charges were

74 Ex. B 20.75 Ex. A.9.76 Ex. A.16.77 Ex. E.2.78 Id.79 Id.


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filed.80

Finally, they explained that Ebelings litigation had been initiated [a]fter attempts to

extort Mr. Jenson, and that White recruited Ebeling to complain against Mr. Jenson to the

State.81 Finally, the document put out by Swallow and other attorneys for Jenson explains that

Jenson did not in fact sell unregistered securities nor owe Bodell or Ebeling any restitution but

merely accepted the result to avoid the ongoing and significant expenses, business disruptions

and uncertainties associated with the court process.82

41. A few days after the plea in abeyance had been entered, Lawson arranged a lunchbetween Jenson and Shurtleff at Red Rock restaurant in Salt Lake City.83 Shurtleff asked for

Jensons forgiveness and told him that, if Jenson had contributed to his campaign, Shurtleff

would have known who he was and the case would never had been brought against him.84

Shurtleff instructed Jenson to continue to pay Lawson as directed, and to stay close to Lawson,

Stahura and Swallow to guide him through the process associated with the abeyance period.85

42. Shurtleff also told Jenson how impressed he was in Jensons friends and supporters.86Shurtleff wanted to stay in contact with Jenson so that Jenson could introduce him to his

network.87 When Jenson explained that he was going to move to California to rebuild his

business, Shurtleff suggested that they visit Jenson in California.88

80 Id.81 Id.82 Id.83 Ex. B 21.84 Id.85 Id.86 Ex. B 22.87 Id.88 Id.


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43. In that same time period, Swallow advised Jensons legal team on the Mount Hollyproject, among other things.89 Swallow told others how he had secured Jensons agreement to

give him one of the million dollar properties Jenson set aside in the Mount Holly development.90

44. Email correspondence shows that Swallow began receiving certain privilegedcorrespondence regarding Mount Holly in this time period.91 In July 2008, for example, counsel

forwarded an email chain regarding an arbitration between Mount Holly and another party,

referencing Swallows consultation with Jenson.92 Swallow responded with advice concerning

Jensons legal strategy from the John E. Swallow Law Office.93 The relationship continued

through 2009 and included other matters, albeit on what appears to be a limited basis. 94

45. In this time period, Lawson visited Jensons office every several weeks to demandpayments of between $2,000-10,000.

95He visited Jensons home and villa at a resort in Pelican

Hill, California, about 10-15 times, where he demanded that Jenson cover his expenses.96

Over

the next year, Shurtleff and Swallow visited Jenson between 2-3 times in California to raise

funds for Shurtleffs campaign, golf, vacation and network.97 Shurtleff used Jensons golf villa

to write his book,Am I Not A Man? The Dred Scott Story.98 On one occasion, Swallow brought

89 Ex. E 4.

90 Ex. B 15; Ex. C 17-18.91 Ex. E 4.92 Ex. E 4 & E.1.93 Id.94 Id.95 Ex. C 10; Ex. D 4.96 Ex. B 23; Ex. D 8.97 Ex. B 23; Ex. C 19; Ex. D 9.98 Ex. B 24.


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his wife and had Jenson pay for expensive spa treatments.99

46. Jenson became uncomfortable about the expectations placed on him during these visitsand felt a great deal of pressure to accommodate the demands of Lawson, Shurtleff and

Swallow.100 Shurtleff and Swallow used this weird relationship with Jenson to set up a

network for Swallows future campaign, and also to benefit their other friends and supporters.101

47. In May 2009, for example, Shurtleff arranged a meeting with Utah businessman DarlMcBride to help Mark Robbins. Shurtleff wanted McBride to back off his pursuit of Robbins.

Shurtleff acknowledged that Robbins was probably running a Ponzi scheme but offered to get

Jenson to raise $2 million for McBride if he would back off Robbins. According to a recording

of that conversation, Shurtleff explained that Jenson would be forced to help raise the $2 million

for McBride: Ive kind of got a weird relationship [with Jenson] because he is still under a plea-

in-abeyance program. We put him on a three-year plea-in-abeyance. Hes got to pay the money

back. If he does that, the charges will be dropped. [Inaudible] Hes got every motivation in the

world.102 He explained that he was going to visit Jenson in California and raise the proposition

with Jenson. Shurtleff was going to shut down my team on him, referring to Jenson.103

48. Shurtleff and Swallow asked Jenson to raise $2 million for McBride during one of theirvisits to Jensons home in Pelican Hill, California in the June-July 2009 time frame.104 Jenson

questioned the propriety of the request. He did not have that kind of money to give to a stranger.

99 Ex. B 23.100 Ex. C 11.101 Ex. A.16; Ex. C 18.102 Ex. A.16.103 Ex. A.16.104 Ex. A.16; Ex. B 25.


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Shurtleff told him to raise it from investors.105

Jenson pointed out that having him raise money

for anything other than Mount Holly may violate conditions of his plea-in-abeyance. 106 Shurtleff

told him not to worry about it, that he would protect Jenson.107

49. Also during these visits, Shurtleff asked Jenson to have his employee Paul Nelson getthen-U.S. Attorney Brett Tolman to back off Tolmans investigation of Shurtleff.108 Nelson is

Tolmans cousin.109 Shurtleff explained how harmful just the fact of the investigation could be:

you dont even have to be guilty of wrongdoing, the allegations alone could ruin a career and

reputation.110 Lawson also spoke separately to Nelson to request directly that he ask Tolman to

drop his investigation of Shurtleff.111 In that conversation, Lawson suggested that if Nelson got

Tolman to drop the investigation, the Attorney Generals office would resolve Jensons case

without having to pay $4 million restitution.112

If Nelson did not comply, Lawson said they

might get worse, including a potential investigation into the Mount Holly development.113

50. During these visits, Shurtleff and Swallow tried to raise money for Shurtleffs senatecampaign.114 They asked Jenson to introduce Shurtleff and Swallow to his network of friends

and associates. They attended church with Jenson and asked him to introduce them to his fellow

church members, where they passed out Shurtleff badges. They asked Jenson to help them set up

105 Id.

106 Ex. B 25.107 Id.108 Ex. B 26; Ex. C 13-14.109 Id.110 Ex. B 26; Ex. C 15.111 Ex. C 13-14.112 Id.113 Id.114 Ex. B 24; Ex. C 18; Ex. D 10.


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fundraisers. Finally, they tried to sell Shurtleffs book, telling potential donors that they could

order $250,000 worth of copies of the book as a way to donate to Shurtleff and they would not

even have to accept delivery.115

C. The Put Away

51. Shortly after visits from Shurtleff and Swallow in the summer of 2009, Jensen relayed tothem his unwillingness to participate in making a bulk purchase of Shurtleffs book.116

52. In the 2009 to 2010 time period, Jenson also ceased making the payments to Lawson thatShurtleff and Swallow had encouraged, though Lawson continued to visit Jensons villa at the

Pelican Hill resort at Jensons expense.117

53. In approximately November 2009, Shurtleff abandoned his campaign for United StatesSenator. In approximately December 2009, John Swallow was appointed as the Chief Deputy

Attorney General of Utah, over the Civil Division.

54. In 2010, Lawson wrote an inappropriate and threatening email to a Mount Holly buyer,prompting Jenson to terminate any relationship with them.118

55. In late May 2010, Jenson received a communication from Lawson where Lawsonaccused Jenson of causing the foreclosure of his home because Jenson did not pay Lawson what

he was owed.119 Lawson threatened to have Jenson put in prison if he failed to meet Lawsons

115 Ex. B 24; Ex. C 18; Ex. D 10-11.116 Ex. B 24.117 Ex. B 27; Ex. C 19; Ex. D 12.118 Ex. A.8; Ex. B 27.119 Ex. B 28.


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demands for money.120

56. After Jenson stopped paying Lawson, as Lawson had promised, the Utah AttorneyGenerals office reinitiated proceedings against Jenson, including an investigation into the Mount

Holly development.

57. By May 23, 2011, the Attorney Generals Office sought to withdraw Marc Jensons Pleain Abeyance. At that hearing, the Court wondered why the State was seeking a review halfway

through the period, and continued the hearing to August 23, 2011.121

58. In the spring of 2011, the Attorney Generals office made calls to potential witnessesseeking information on Jenson. In one call to Tim Hornback, who had loaned money to the

Mount Holly development, Assistant Attorney General Scott Reed sought to have Hornback help

the State in their efforts to put Jenson in prison. When Hornback refused, Reed told him that his

office was going to get Jenson and that skinny bitch, referring to Jensons wife.122

59. On the day of the hearing on Jensons plea in abeyance, August 23, 2011, the AttorneyGenerals office filed the present case against Jenson.

60. The Attorney Generals office used the filing of this case to establish that Jenson was inviolation of the terms of his plea in abeyance and requested that the Court take him into

immediate custody of the Utah Department of Corrections, where he has remained from that

time.

61. In the time period from September to November 2011, one of the prosecutors on this

120 Id.121 Ex. B 29.122 Ex. C 13.


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case, Assistant Attorney General Che Arguello, was observed on repeated occasions either

parked outside the home of Jensons wife or trolling through the neighborhood where she

lived.123

62. The case the State filed against Jenson on August 23, 2011, was based, in part, on falseevidence.

63. In support of the bind over, alleged Mount Holly victim Jeffrey Donner presented a falseaffidavit wherein he states We subsequently learned that in May 2009, the Mt. Holly property

was foreclosed and sold at auction leaving us with nothing for our $1.5 million membership

investment in theMt. HollyClub.124

64. But as of April 5, 2010, Mr. Donner received through his attorney, Carl W. Barton, aSpecial Warranty Deed for a lot in the Mount Holly project insured for a valuation of the lot at

$1,250,000, the other $250,000 represented by the value of the Jack Nicklaus golf club

membership Donner also received.125

65. Another alleged victim, Tracy Fox, presented a false affidavit in support of the bind over,stating that he did not approve the funds that[he]transferred to the American Pension

account to be further transferred to other accounts, nor did[he]know or approve of any use

of[the]funds for purposes other than[his]Mt. Holly Club membership.126

66. But Mr. Jenson has documentation that Mr. Fox did in fact sign a Buy Direction Letterdated March 24, 2008, authorizing a wire transfer and directing funds to American National

123 Ex. C 14.124 Ex. A.10 at 12.125 Ex. A.11.126 Ex. A.12 at 11.


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Bank in Colorado Springs, Colorado, for the purchase of a Mount Holly Club Unspecified Lot

Option.127

67. In opposition to the bind over, State Investigator Steve Sperry was confronted with theBuy Direction Letter Fox had signed. Sperry confirmed how there were misrepresentations in

all three of the alleged victims statements and, regarding Fox, that the Buy Direction Letter was

inconsistent with what Fox had told the State and that Fox had testified falsely at the preliminary

hearing.128

D. The Urgency Of The Situation

68. In February 2013, Jenson was approached by investigators from the United StatesDepartment of Justice and Salt Lake and Davis County District Attorneys and asked to cooperate

with them in their investigations of Mark Shurtleff, John Swallow, and others, including

[REDACTED].129

69. In that time period, Jenson executed immunity agreements and/or proffer letters withDavis County Attorney Troy Rawlings, Salt Lake County District Attorney Sim Gill, and the

United States Attorneys Office for the District of Utah for his assistance in ongoing

investigations.130

70. In May 2013, several news accounts began publishing stories and editorials quotingJensons allegations against Shurtleff and Swallow, among others, as set forth above.131

127 Ex. A.13.128 Ex. A.22.129 Ex. A.14.130 Ex. A.14.131 Ex. A.15 & A.19.


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71. In response, former Attorney General Mark Shurtleff characterized Jenson as aconvicted fraudster, which is false.132 Jenson has not been convicted of any fraud. An

attorney for current Attorney General John Swallow asserted I guess youre all going to take the

word of a man convicted of fraud and treat it as credible.133 These statements and others made

by individuals associated with the current Attorney Generals office are inaccurate, extrajudicial

allegations falsely disparaging Jenson. As the court is aware, Mr. Jenson only pleaded guilty in

the 2005 case to selling unregistered securities, a crime that, according to then-Utah Division of

Securities analyst Michael Hines, any businessman can be accused of because [e]verything,

regardless of the circumstances, is a security.134

72. In this time period, Jensons life and safety was endangered as a result of whereauthorities put him.

73. As the court knows, Mr. Jenson has been imprisoned since August 2011. In that timeperiod, counsel for Jenson has learned that the Attorney Generals office has been monitoring

Jenson on a daily basis.135

74. In April 2013, Jenson was transferred from the Summit County Jail to the Utah StatePrison in Draper, Utah. The reason for the transfer was excessive attorney visits from his new

counsel.136

75. After arriving at the State Prison in Draper, Mr. Jenson and his attorneys attempted to

132 Ex. A.15.133 Ex. A.21.134 Ex. A.7.135 Ex. F 4.136 Ex. F 5.


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obtain a transfer to Davis County Jail where, among other things, it would be more convenient

for his attorneys and others to visit, including those investigators who have identified Mr. Jenson

as a material witness in their ongoing investigations of former Utah Attorney General Mark

Shurtleff, current Utah Attorney General John Swallow, and others.137

76. In response to his requests, the State Prison gave a number of reasons for their denial.They informed Mr. Jenson and his attorneys that he did not qualify for a transfer on account of

excessive attorney visits and/or a pending court action.138 Counsel for Mr. Jenson learned

that there were some prison authorities who were not happy in this time period about the amount

of attention Mr. Jenson was receiving from visitors and the press.139

77. Mr. Jenson was housed in the A-West facility, where all inmates go when they first arriveat the Draper facility.

140On or about May 27, 2013, he learned that he could expect to remain in

A-West for several weeks and then be moved to the Wasatch Baker facility, which houses non-

violent offenders.141

78. Counsel for Mr. Jenson continued to try and work with prison officials to facilitate hismove to the Davis County Jail.142

79. On June 4, 2013, Jenson was unexpectedly moved to the Oquirrh 1 unit within the StatePrison, where serious violent offenders are housed.143

137 Ex. F 6.138 Ex. F 7.139 Id.140 Ex. F 8.141 Id.142 Ex. F 9.143 Ex. F 10.


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80. After hearing the details of Mr. Jensons transfer and where he was housed, counsel forMr. Jenson feared for his life.144

81. [REDACTED]82. [REDACTED]83. [REDACTED]84. [REDACTED]85. [REDACTED]86. [REDACTED]87. [REDACTED]88. [REDACTED]89. After speaking with Mr. Jenson, his counsel immediately called his case worker, who hadnot heard about the move but explained that there are many ways a prisoner can be moved within

the prison system.145

90. When counsel for Mr. Jenson informed Davis County authorities, they expressed theirconcern for Mr. Jensons well-being and arranged immediately for Mr. Jenson to be transferred

out of Oquirrh 1 and eventually to Davis County Jail, where he was placed in protective

custody.146

144 Ex. F 11.145 Ex. E 12.146 Ex. E 13.


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ARGUMENT

I. THIS COURT HAS INHERENT AUTHORITY TO DISQUALIFY THE UTAHATTORNEY GENERALS OFFICE

This Court has inherent authority under the Utah constitution and statute to regulate those

practicing before it, including by way of disqualifying counsel from a case as necessary.

Featherstone v. Schaerrer, 34 P.3d 194, 199-200 (Utah 2001) (citing Utah Code Ann. 78-7-5

(1996) (instilling in every court the power to control ... the conduct of all persons before it));

Utah Code Ann. 78A-2-201. The Utah State Bar Ethics Advisory Committee has stated that

the Office of the Attorney General may encounter conflicts so pervasive or severe that the only

prudent course of action is to hire outside counsel. Utah State Bar Ethics Advisory Comm.,

Formal Op. 142 (1994) (1994 WL 579850) (interpreting Rule 1.10 of the Utah Rules Of

Professional Conduct).

What Shurtleff, Swallow, and others in the Attorney Generals office have done to Jenson

is wrong. Jenson may have other remedies, which he will pursue. But sufficient circumstances

are present here to merit the disqualification of the entire Office of the Utah Attorney General

based on conflicts of interest and potential misconduct.

In State v. McClellan, 2009 UT 50, 216 P.3d 956, the Utah Supreme Court upheld the

disqualification of an entire prosecutors office based on a conflict of interest. Though the

conflict was based on different factual circumstances from those presented here, theMcClellan

court highlighted the importance of ensur[ing] public faith in the impartiality and integrity of

the justice system and stated that fairness and impartiality in the adjudication process must be

diligently maintained. Id. 20 (quoting State v. Brown, 853 P.2d 851, 856-58 (Utah 1992)).


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The principles set forth inMcClellan apply to this case. Indeed, under a variety of

different circumstances, courts around the country have exercised their discretion to disqualify

prosecutorial offices. See United States v. Dyess, 231 F.Supp.2d 493 (S.D.W.Va. 2002); State v.

Culbreath, 30 S.W.3d 309 (Tenn. 2000) (disqualification of entire district attorney generals

office from participation in prosecution spearheaded by private lawyer paid on hourly basis by an

anti-pornography group for his services as special prosecutor);People v. Eubanks, 927 P.2d 310

(Cal. 1996) (disqualification of entire prosecutors office after crime victim paid expenses of

prosecution); Turbin v. Superior Court In and For County of Navajo, 797 P.2d 734 (Ariz. Ct.

App. Div. 1 1990) (disqualification of entire prosecutors office to dispel appearance of

impropriety that arose when defense counsel in murder case joined prosecutors office before

trial); State v. Stenger, 790 P.2d 357 (Wash. 1988) (the chief prosecutors prior representation of

defendant disqualifies an entire county prosecutors office).

For example, in Dyess, the court disqualified an entire U.S. Attorneys Office because of

a potential conflict of interest that was created when government agents had allegedly engaged in

improper conduct. Dyess, 231 F.Supp.2d at 496. TheDyess court recited the well-known

summary of Justice Sutherland inBerger v. United States regarding the duty of a prosecutor: a

prosecutor is the representative not of an ordinary party to a controversy, but of a sovereignty

whose obligation to govern impartially and whose interest, therefore, in a criminal

prosecution is not that it shall win a case, but that justice shall be done. Berger v. United States,

295 U.S. 78, 88 (1935);see also Utah Rules of Professional Conduct, Rule 3.8 cmt.1 (A

prosecutor has the responsibility of a minister of justice and not simply that of an advocate.).


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TheDyess court noted that the appearance of impartiality is threatened in at least three

respects where there are facts to suggest improprieties on the part of government agents. First,

the situation involving potential misconduct by agents or prosecutors may create a disincentive

to discloseBrady information to the defense, as the prosecutor is obligated to do. Dyess, 231 F.

Supp. 2d at 496 (To avoidBrady violations, the Government has a duty to learn of unfavorable

evidence known to others acting on its behalf, including the police. In this case, the details of

that duty and the time and place at which it failed (because some degree of failure is now

obvious) seem likely to arise, at least in the context of the credibility and impeachability of

several of the Governments main witnesses. (citation omitted)). Second, it may create a

situation where an attorney is both an advocate and a witness to material underlying factual

matters. Id. at 497. And finally, the potentially greater problem was that the interests of the

prosecutors office and the sovereign government may not be aligned:

Unquestionably, testimony from the police officers and possible testimonyfrom [prosecutors] or office employees is potentially prejudicial both to thereputation of their office and that of the Government. In this regard, the interest ofthe [prosecutors office] and that of the sovereign government may not be alignedbecause revelation of wrongdoing, which may be required in the service of truthand justice to these defendants, cannot help but cause reputational injury to theoffice. This conflict implicates another rule of professional conduct, whichprovides [that] a lawyer shall not represent a client if the representation ofthat client may be materially limited by the lawyer's own responsibilities to

another client or to a third person, or by the lawyer's own interests. Thepotential conflict between protecting the good name of the office and its agentswhile ensuring that the Governments interests in justice are fully and fairlyrepresented is clear and unavoidable. This conflict of interest highlights theCourts final and paramount concern, the potential for the appearance of

impropriety. The Courts ultimate consideration must be public confidence in

the administration of justice, that justice must satisfy the appearance of

justice. As the Supreme Court stated, federal courts have an obligation to ensurethat legal proceedings appear fair to all who observe them.


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Id. at 497-98 (emphasis added; citations omitted). In other words, the nature of a potential

conflict of interest between the good name of the Office of Attorney General and the interest

of justice are sufficient to require disqualification. TheDyess court was careful to note that it

was basing its decision on the potential appearance of impropriety and not necessarily any

allegations of improprieties or misconduct by the prosecutors Office. Dyess, 231 F. Supp. 2d

at 497 n.4.

Like the aforementioned cases, the facts underlying this motion clearly demonstrate that

the continued prosecution of this case by the Office of the Attorney General would present not

only actual misconduct and conflicts of interest, but at the very least, the appearance of

impropriety.

Ricke White used his connections with the Attorney Generals Office to have Mr. Jenson

prosecuted and thrown in jail, just as he threatened to do. That the Attorney Generals office

allowed itself to be used in such a manner is wrong. At the very least, the timeline of events

creates an appearance of impropriety.

Concurrent with the prosecution of Jenson, Shurtleff and Swallow used the prosecution to

benefit themselves and their associates at Jensons expense. Jenson placed his trust with these

individuals, Swallow in particular, who Jenson retained as counsel or liaison to guide him

through the process that was offered to resolve matters.

This is worse by a degree of magnitude from the Culbreath andEubanks cases where the

court disqualified a special prosecutor after learning that the prosecutor was being paid by an

interested party and an alleged victim had paid a large sum toward the underlying investigation.

In both cases, the respective courts found that the existence of a conflict of interest disqualified


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an entire prosecuting office. Culbreath, 30 S.W.3d 309;Eubanks, 927 P.2d 310. The same

result should hold here. To ensure public faith in the impartiality and integrity of the justice

system, the Office the Attorney General should be disqualified. McClellan, 2009 UT 50, 20.

The Utah Rules of Professional Conduct cover ample ground to support the

disqualification of the Attorney Generals Office from this case. Rule 8.4(a) provides that it is

professional misconduct to violate or attempt to violate the Rules of Professional Conduct.

The facts underlying this case suggest numerous violations of the applicable ethical rules. As

already demonstrated, and in violation of Rules 1.9 and 1.18, Swallow himself, as well as

Swallows current counsel, Rod Snow, had attorney client relationships with Mr. Jenson relevant

to this action. By accepting money from Ricke White, who had an interest in prosecuting Mr.

Jenson, the Attorney Generals Office is in violation of Rule 8.4(d), which provides that it is

professional misconduct to engage in conduct that is prejudicial to the administration of justice.

By encouraging Mr. Jenson to avoid restitution and violate the terms of his probation and

release, Shurtleff and/or Swallow were encouraging Mr. Jenson to avoid restitution and violate

terms of probation or implying, at a minimum, an ability on their part to improperly influence a

government agency or to achieve results. See Rule 8.4(e) (professional misconduct to state or

imply an ability to influence improperly a government agency or official or to achieve results by

means that violate the Rules of Professional Conduct or other law). The facts in the case suggest

that attorneys in the Utah Attorney Generals office either extorted or aided and/or abetted in the

extortion of Mr. Jenson, serial actions of dishonesty. Rule 8.4(c).


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In violation of Rule 3.8(e), the Attorney Generals Office has made false extrajudicial

statements about the case; namely that Mr. Jenson is a fraudster. Rule 8.4(d) (professional

misconduct to engage in conduct that is prejudicial to the administration of justice).

Finally, Jenson is currently in a precarious situation where even his life has been

threatened, and he remains vulnerable. This motion does not make accusations as to who should

bear responsibility for placing him in danger. But this Court must help in unwinding this matter

to determine who bears what fault for what action. That action begins with recusal and

disqualification of the Attorney Generals office. The very public faith in the impartiality and

integrity of the justice system is at stake. McClellan, 2009 UT 50, 20.

II. THE ENTIRE ATTORNEY GENERALS OFFICE SHOULD BE DISQUALIFIEDIn light of the foregoing, the Court has ample grounds upon which to disqualify not only

Swallow but the entire Attorney Generals Office. Inasmuch as the Attorney Generals Office

may contend that it has used proper screening procedures, to wall Swallow off, such a

contention would have no merit in this case. See McClellan, 2009 UT 50, 19 (providing that in

the context of a conflict based on prior representation, prosecutors office will not be disqualified

if it can show that effective screening procedures were in place). This case does not present

mere allegations of prior representation, such that proper screening procedures might solve the

problem. Rather, this case is replete with factually supported allegations of misconduct on the

part of the current and former Attorneys General for the State of Utah. This case is also replete

with factually supported allegations that several Assistant Attorneys General are heavily and

personally vested in not only prosecuting Mr. Jenson, but also going after his family. Given the


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facts presented by this motion, no screening procedures would be sufficient to justify any action

other than disqualifying the entire Attorney Generals Office.

As already demonstrated, it is apparent that the Attorney Generals Office has actual

conflicts of interest and that its continued prosecution of this case presents a real threat to the

public faith in the impartiality and integrity of the justice system. McClellan, 2009 UT 50

20. In other words, this case presents conflicts so pervasive or severe that the only prudent

course of action is to hire outside counsel. Utah State Bar Ethics Advisory Comm., Formal Op.

142. Therefore, the Court should grant Defendants Motion and disqualify the entire Office of

the Attorney General from the prosecution of this case.

Respectfully submitted this 15th day of June, 2013.

/s/ Marcus R. Mumford________________________________________

Marcus R. MumfordBret W. RawsonHelen H. ReddAttorneys for Defendant Marc Sessions Jenson

memo in support

Documents