Most Charges Dismissed in Capital Consultants Case

July 15, 2003 ( - Prosecutors on a case against executives of a now defunct Portland money management firm were dealt a setback when a federal judge tossed most charges against former salesman Dean Kirkland and all charges against two other officials.

US District Judge Anna Brown threw out 42 of the 54 counts against Kirkland and the other two defendants, saying the case lacked enough specifics to allow the indictment to stand, according to the Portland Oregonian.

Federal prosecutors had alleged that Kirkland had given illegal gratuities to union pension trust officials and that Gary Kirkland and Robert Legino, both former union trust leaders, had accepted those gifts. The Kirklands, who are father and son, and Legino are three of nine people associated with the case against Capital Consultants to be indicted or plead guilty to criminal charges. Brown did not dismiss wire fraud and obstruction of justice charges against Dean Kirkland.

The judge’s decision is the latest twist in the unraveling of Capital Consultants, which collapsed in September 2000 under allegations that investors – including many union pension funds – lost an estimated $400 million in failed and fraudulent investments before the firm was seized by federal regulators.

Brown wrote in her ruling that federal prosecutors failed to show that a series of hunting and fishing trips and other favors given by Dean Kirkland to certain Capital Consultants clients resulted in decisions or actions favorable to Kirkland and the defunct investment firm. Without that clear link between gift and favorable action, the gratuity charges cannot stand, the judge ruled.

The government will try again, said Neil Evans, assistant US attorney who led the government’s case. “We intend to present a new indictment to a grand jury that contains the specifics Judge Brown wants,” Evans said, according to the newspaper.

Prosecutors allege that Kirkland bilked Capital Consultants by filing false expense records. They also claim that he destroyed company records that he kept at his Vancouver home when he knew that a criminal investigation was under way.   A trial on those charges is scheduled to begin November 14.

Dean Kirkland, a former National Football League lineman with close connections to organized labor, was the firm’s star salesman. During his years at Capital Consultants, he took some of his favored pension trustee clients on eleven hunting trips and five fishing trips to Alaska, Mexico, Africa and elsewhere, according to the Oregonian.

Among those union trustees were Gary Kirkland, a trustee of the 401(k) retirement fund of the Office and Professional Employees International Union, Local 11, and Legino, trustee of three plans affiliated with the International Brotherhood of Electric Workers in Colorado.