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Man convicted of fraud wins appeal

Posted: June 20, 2013 - 12:15am

ANCHORAGE — The conviction of a former Alaska prosecutor on wire fraud charges is no longer valid, a federal appeals court has determined.

A 2010 decision by the U.S. Supreme Court narrowed the definition of the kind of wire fraud to which Avery pleaded guilty in 2007, according to an opinion issued Tuesday by a three-judge panel of the 9th U.S. Circuit Court of Appeals. The appeals court said the type of “crime” former Security Aviation owner Mark Avery admitted is no longer a crime. Avery is a former Anchorage prosecutor.

Avery, now 54, had pleaded guilty to stealing $52 million from a wealthy widow’s trust fund, which Avery oversaw as a trustee, the Anchorage Daily News reported. According to prosecutors, Avery was able to buy fighter jets, vintage warplanes, and other luxury items and property for himself by siphoning money from the fund and obtaining loans.

Avery and an associate were acquitted by a jury on separate federal weapons charges that they possessed rocket launchers.

After Avery pleaded guilty to five counts of wire fraud and 10 counts of money laundering, he was sentenced to 8 1/2 years in prison. He has been serving his term at La Tuna, a federal prison in Anthony, Texas.

Assistant U.S. Attorney Kyle French said prosecutors are weighing their options.

According to the opinion issued Tuesday, the Supreme Court tightened the type of fraud — called honest services fraud — to which Avery pleaded guilty. Avery failed in his duty as trustee to properly manage the fund, but the Supreme Court decision said only honest services fraud that involved bribery or kickbacks was illegal, according to the 9th Circuit opinion.

In a 2011 appeal, Avery argued that he had pleaded guilty to wire fraud under the honest services theory, something that is no longer a crime. The circuit judges agreed and returned the case to federal court in Alaska for further proceedings.

Avery’s conviction was not overturned outright by the opinion. But a California attorney who argued the case before the appellate court said that is the likely outcome.

“I expect that the district court will set aside the conviction, but what happens after that, I don’t know,” Krista Hart said. “That’s up to the government.”

Prosecutors might ask the appeals court to revisit the case, with more judges on the panel, French said. Information in the original charges that was excluded in the plea agreement might apply to other wire-fraud theories, he said.

“This is a guy who took millions of dollars, paid off mortgages, then bought a yacht, bought properties, paid off credit card debt,” French said. “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.”

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