United States District Court, E.D. Kentucky, Central Division, Lexington
B. Atkins, United States Magistrate Judge.
defendant, Charles E. Johnson, Jr., stands convicted of
Securities Fraud, in violation of Title 15 U.S.C.
§§ 78j(b) and 78ff, 17 CFR § 240.10b-5, and 18
U.S.C. § 2; Tampering with a Witness, in violation of 18
U.S.C. § 1512(b)(3); Obstruction of an Official
Proceeding, in violation of 18 U.S.C. § 1512(c)(2); and
Conspiracy, in violation of Title 18 U.S.C. § 371. On
November 14, 2008, he was sentenced by the Honorable Liam
O'Grady, United States District Judge for the Eastern
District of Virginia, to a term of 108 months of imprisonment
to be followed by three years of supervised release. In
addition, Johnson was ordered to pay a $400 special
assessment fee and restitution in the amount of $9, 700, 000.
Although his special assessment has been paid, he has paid
only $10, 729.38 toward his restitution obligation. His
supervision was transferred to Honorable Danny Reeves, United
States District Judge for the Eastern District of Kentucky,
on May 16, 2016. [R. 1].
a report from Johnson's supervising officer dated March
29, 2019 and an addendum of April 4, 2019, allege that
Johnson is in violation of his terms of supervision. The
report and addendum allege that on September 13, 2018, $100,
000 was transferred into his personal bank account and then
to an account at the Wynn Casino in Las Vegas, Nevada. In
addition, on December 17, 2018, a payment of $200, 000 from
Dr. Harry Lockstadt was posted into the defendant's
personal account at Central Bank, and the report alleges that
forensic analysis of the relevant transactions shows that
$25, 000 of the payment was ultimately transferred to the
defendant's gaming account at the Wynn Casino on December
to the records from the Wynn Casino in Las Vegas, the
defendant's personal gaming account shows a loss of $442,
190 in 2018, and $34, 675 in 2019. Johnson failed to disclose
the casino account or substantial gambling losses in his
disclosures to his supervising probation officer. As a result
of this conduct, it is charged that the defendant has
committed four violations of the conditions of his
supervision due to making false and fraudulent statements to
his supervising officer regarding his assets and
April 12, 2019, Johnson appeared before the undersigned for
an initial appearance on the alleged violations. [R. 19]. At
that time, Johnson's counsel raised the issue of a
potential conflict which might lead the presiding judge to
recuse from further duties in this matter. Counsel was
directed to file a memorandum outlining the basis of any
conflict affecting the presiding judge or any other judge
within the Eastern District of Kentucky. [R. 19]. In
response, defendant tendered a “Notice of
Filing”, which did not specifically seek recusal of the
presiding judge, and maintained that no fact or circumstance
exists actually requiring recusal. [R. 22]. Subsequently, the
matter was scheduled for a hearing before the undersigned,
with the direction that counsel for Johnson be prepared to
“state clearly, completely and for the record any issue
that he believes creates a conflict requiring the presiding
judge's recusal, with supporting factual and legal
authority.” [R. 26]. At the hearing, counsel for both
the defendant and the United States were present, and the
parties presented arguments on the issue. The salient facts
for consideration can be summarized as follows:
1. Between the dates of October 13, 2017 and December 15,
2017, the defendant, through an associated company, Curare
Medical, LLC, consulted with the firm of Stoll Keenon Ogden,
PLLC, [Stoll] in Lexington, Kentucky regarding various issues
that are admittedly unrelated to the facts forming the basis
of the current alleged violations. [R. 22-1]. Of the 148
total hours billed by the firm, 17.7 were billed by Adam C.
Reeves, Judge Reeves' son, and 1.00 was billed by S.
Reeves, his daughter-in-law.
2. Between the dates of October 9, 2017 and November 15,
2017, the defendant, individually, consulted with the Stoll
firm regarding issues related to his restitution obligation
imposed at sentencing in the Eastern District of Virginia.
Although billing records reveal that Adam Reeves, Judge
Reeves' son, was consulted on one occasion for .40 hours,
there is no indication that he billed for his time.
Johnson's counsel contends that the issues on which
Johnson, individually, sought the advice of counsel are
unrelated to the facts forming the basis of the various
alleged violations now before the court.
3. There is no further evidence of continued consultation
with or representation by attorneys at Stoll and the record
shows that any services concluded on December 15, 2017.
4. Counsel stated affirmatively that neither Adam Reeves nor
S. Reeves will be witnesses at the final revocation hearing
in this matter, regardless of which judge in the Eastern
District might preside.
5. Counsel contends that the evidence of prior consultation
is relevant to “show the full picture” of
Johnson's character. The evidence will not be used to
form the factual basis of a defense to the alleged violations
now before the Court, as the issues on which he consulted
were factually unrelated to the alleged violations. For
example, Johnson is not maintaining that his conduct at the
Winn Casino in Las Vegas was somehow based on the advice of
counsel received from the attorneys with Stoll. Rather,
counsel contends that evidence of this consultation will be
admitted to establish that Johnson's conduct before the
alleged violations was inconsistent with any alleged intent
to deceive any government agent or officer, including his
supervising probation officer.
hearing of April 19, 2019, counsel maintained that no
condition exists that requires Judge Reeves to recuse under
28 U.S.C. § 455(b). For instance: 1) Judge Reeves does
not hold a personal bias or prejudice concerning a party, or
any personal knowledge of disputed factual issues; 2) he did
not serve as a lawyer for any of the parties on the current
issues while in private practice before becoming a judge; 3)
neither he nor any family member has a financial interest in
the outcome of this proceeding, and 4) neither he nor any
member of his family is anticipated to be called as a
witness, or is a party to the proceeding, or has an interest
in the outcome of the present action. See 28 U.S.C.
§ 455(b). Therefore, there is no existing condition that
requires his recusal. Counsel further clarified that he is
not moving for Judge Reeves' recusal but believes recusal
would be appropriate. Counsel contends that due to Judge
Reeves' son and daughter-in-law's prior involvement
in consulting with Johnson and Curare Medical, LLC, between
October and December, 2017, his impartiality might reasonably
be questioned and, as a result, he should recuse, under the
provisions of Title 28, United States Code § 455(a).
However, should Judge Reeves decline to recuse, counsel
asserts that Johnson will not argue that it was somehow an
abuse of discretion. Thus, for purposes of the current issue,
the undersigned construes Johnson's pleadings and
statements at the hearing as a motion to recuse. However, for
the reasons that follow, the undersigned will recommend that
the motion be denied.
justice, judge, or magistrate judge of the United States
shall disqualify himself in any proceeding in which his
impartiality might reasonably be questioned.” 28 U.S.C.
§ 455(a). “The very purpose of § 455(a) is to
promote confidence in the judiciary by avoiding even the
appearance of impropriety whenever possible.”
Liljeberg v. Health Services Acquisition Corp., 486
U.S. 847, 865 (1988). The test of whether a judge should
recuse is one of objective reasonableness, that is, whether
the judicial officer's impartiality might reasonably be
questioned under the circumstances. Lunde v. Helms,
29 F.3d 367, 370 (8th Cir. 1994), cert. denied, 513 U.S. 1155
(1995). A judge faced with a potential ground for
disqualification ought to consider how his participation in a
given case looks to the average person on the street;
and use of the word “might” in this
section was intended to indicate that disqualification should
follow if a reasonable man, were he to know all the
circumstances, would harbor doubts about the judge's
impartiality. Potashnick v. Port City Const. Co.,
609 F.2d 1101, 1111 (5th Cir. 1980), cert. denied, 449 U.S.
820 (1980). The requirement that a judge recuse from any
proceeding in which his impartiality might reasonably be
questioned does not require bias in fact and, instead, may
require a judge to order that the case be transferred to
another judge because of a mere appearance of bias.
Mandel v. Town of Orleans, 233 F.Supp.2d 147, 149
(D. Mass. 2002).
judges are not to recuse themselves lightly under §
455(a). U.S. v. Snyder, 235 F.3d 42, 45 (1st Cir.
2000) (citing H.R.Rep. No. 93-1453, at 5 (1974),
reprinted in 1974 U.S.C.C.A.N. 6351, 6355
(“[Section 455(a) ] should not be used by judges to
avoid sitting on difficult or controversial cases.”).
The unnecessary transfer of a case from one judge to another
is inherently inefficient and delays the administration of
justice. See Camacho v. Autoridad de Telefonos de Puerto
Rico, 868 F.2d 482, 491 (1st Cir. 1989) (noting that the
judicial system would be “paralyzed” were
standards for recusal too low). Therefore, “[a] trial
judge must hear cases unless [there is] some reasonable
factual basis to doubt the impartiality or fairness of the
tribunal.” Snyder, 235 F.3d at 46 (citing
Blizard v. Frechette, 601 F.2d 1217, 1221 (1st
Cir.1979)). Thus, under § 455(a) a judge has a duty to
recuse himself if his impartiality can reasonably be
questioned; but otherwise, he has a duty to sit. Id.
case Johnson maintains that Judge Reeves should recuse under
§ 455(a) in order to avoid even the appearance of
impropriety. Johnson attempts to clarify this statement
further by representing that should Judge Reeves decline to
recuse, Johnson and his counsel will not argue that action to
be an abuse of the judge's discretion. The United States,
being fully advised of the basis for Johnson's position
and having heard all arguments on the matter, affirmatively
stated that ...