When Anoka, Minn. criminal defense attorney Rory Durkin got a call from a South Dakota attorney who was being indicted for possession and distribution of child pornography, he jumped at the opportunity to represent a fellow bar member.

“I was shocked and surprised that the federal government was pursuing the prosecution,” Durkin said. “I told him I’d give him a fight because I felt passionate about it. And I did.”

Leo Thomas Flynn, a 61-year-old criminal defense attorney from Sioux Falls, S.D., was accused of possessing and distributing child pornography from his work computer. Flynn admitted he had accessed – but not saved – such images and contended it was client-related research.

Flynn practices regularly in federal court in South Dakota, so to avoid a conflict the case was prosecuted by the Minnesota Office of the U.S. Attorney. The office was assisted by the Department of Justice.

After four days of trial and six hours of deliberation, a federal court jury in Sioux Falls found Flynn not guilty last month.

Some criminal defense attorney see the case as a warning: No matter how tempting it may be to access the images a client or potential client is accused of possessing or distributing, don’t do it.

Frederic Bruno, a criminal defense lawyer from Minneapolis, called pornographic images of children a “forbidden substance,” much like illegal drugs.

“You should never be afraid to take a child pornography case, because there are a lot of defenses,” he said. “But never go poking around on your own.”

Durkin said the case was “a brutal fight.”

“It was incredible,” he said. “Rarely in my career have I seen a prosecution so focused on obtaining a conviction.”

The assistant U.S. Attorney on the case, Richard Newberry, could not be reached for comment.

A lesson on LimeWire

Flynn’s troubles began as he was leaving his office on July 21, 2009. He was approached by law enforcement officials who informed him they had a warrant to search his office for child pornography. Flynn did not deny accessing such images on his work computer, but contended he was doing research for a potential client and investigating the availability or existence of child pornography on the LimeWire network.

“It’s reasonable to conclude that a person would contact a lawyer about inadvertently downloading child pornography because it’s a problem with these peer-to-peer software systems,” said Durkin.

Flynn refused to identify the client, arguing that his identity was protected by the attorney-client privilege. He was then indicted for two counts of distribution of child pornography and one count of possession of child pornography in violation of 18 U.S.C. sec. 2252.

South Dakota and more than 20 other states, including Minnesota, have enacted statutes that immunize attorneys from prosecution for possession of child pornography if it’s possessed in the course of their official duties. (Minnesota’s statute is Minn. Stat. sec. 617.247, subd. 5.) But there is no parallel federal statute.

Durkin said it was clear early on that the federal prosecutor would not honor South Dakota’s immunity statute. He decided to try to get the judge to apply the protections of SDCL 22-24A-19 to a federal prosecution and instruct the jury accordingly.

Eventually, Judge Lawrence L. Piersol determined that an attorney acting in accordance with the state’s immunity statute is not precluded from asserting the operation of the statute as an affirmative defense in a federal child pornography prosecution if the evidence at trial supports such a defense. However, he said the defense would not be available for the distribution counts.

Durkin proceeded on several fronts. First, he needed to prove that Flynn was acting in the course of his official duties during the time periods in which the images were found. He also wanted to show that Flynn had none of the characteristics often associated with individuals accused of these types of offenses.

Durkin’s second goal was to show the jury that Flynn did not knowingly distribute child pornography over the Internet. Flynn, admittedly lacking in Internet savvy, contends he was not aware that LimeWire’s default settings automatically set up a shared folder that others can view and download from. Thus, he had had no idea that people could go onto his computer and download anything that he had previously downloaded from LimeWire.

Durkin requested that an appropriate definition of “distribute” be included in the jury instructions.

Distribute is an action word meaning to give or deliver, Durkin said, but Flynn took no action. “They – law enforcement – took it from him. He did nothing.”

On Dec. 17, the 12-person jury found Flynn not guilty on all counts.

Chilling effect

Even though Flynn was cleared of the charges, some criminal defense attorneys fear the case could stifle the availability of representation for people confronting child pornography charges.

“If the defense attorneys and/or their computer experts are going to be charged in federal court for the possession of child porn when it is in relation to the defense of a case, despite the state immunity statute, this will cause a chilling effect,” said Carolyn Agin Schmidt, a criminal defense attorney in Minneapolis. “It is imperative to the defense to properly analyze the evidence, and to prohibit the lawyer from doing so is denying the defendant the due process he is entitled to under the state and U.S. constitutions.”

Durkin agreed that the case could have a dramatic and chilling effect on lawyers wanting to take child pornography cases.

“If somebody is acting in good faith under state statute, they can still be prosecuted by the federal government,” he said.

Earl Gray, a criminal defense attorney in St. Paul, said the best way to avoid the situation is have clients describe what’s on their computer and what they are accused of viewing. Absolutely avoid looking at the stuff yourself, he said.

If an issue arises and you need to access images in an active federal child pornography case, Gray suggested contacting the FBI, which is generally helpful in assisting defense lawyers in this regard.

Anoka criminal defense attorney Michael Brandt noted that it’s also important to be up to date on Internet capabilities.

“Any attorney handling these types of cases should be, in my opinion, tech savvy enough to know how this stuff gets on their computer,” Brandt said.

Michelle Lore can be reached at michelle.lore@minnlawyer.com.

Gustafson was accused of mail fraud in helping Hecker defraud Chrysler Financial and of making a false statement to the FBI and IRS.

Gustafson, who is now 49, began working for Hecker when he was 16 years old. Gustafson’s attorney described him as a loyal employee.

Gustafson declined to speak after the sentencing, but during the hearing said what he did for Hecker was wrong.

In addition to his two years of probation, he was sentenced to serve 120 community service hours and pay a $1,000 fine.

Another former employee, Steven Leach, is scheduled to be sentenced on Tuesday, February 8. Leach, 55, was the president of Rosedale Dodge, Rosedale Leasing and Walden Fleet Services II, owned by Hecker. Leach faces a potential maximum sentence of five years in prison for conspiracy to commit wire fraud.

A sentencing hearing for Denny Hecker has been scheduled for Friday, February 11 in Minneapolis. Hecker pleaded guilty last September to defrauding auto lenders out of hundreds of millions of dollars. Prosecutors want Hecker to serve a maximum sentence of ten years in prison. However, Hecker’s defense attorney filed papers Wednesday asking for an eight year sentence instead.

Stay with 5 EYEWITNESS NEWS and KSTP.com for updates to this story.

By David Hanners
dhanners@pioneerpress.com

Updated: 02/03/2011 09:54:07 PM CST

James Gustafson went to work for car dealer Denny Hecker at age 16, working as a lot boy, washing cars, running errands and cleaning up after others.

Thirty-three years later, he was still cleaning up after Hecker, except this time, prosecutors claimed he was cleaning up after the businessman’s crimes. On Thursday, a federal judge placed him on two years’ probation for his false statements and mail fraud.

U.S. District Judge Joan Ericksen also fined the 49-year-old Gustafson $1,000 and told him he’d have to complete 120 hours of community service over the next couple of years. When she sentenced him, she noted that while he should’ve known better than to lie to federal agents investigating Hecker, his later cooperation earned him probation.

“What I did for Mr. Hecker was wrong,” Gustafson told the judge in a short statement before he was sentenced. “I take full responsibility and will take whatever sentence you give.”

As defense attorney Frederic Bruno pointed out, Gustafson continues to clean up the multimillion-dollar shards of Hecker’s shattered empire. The Maple Grove resident now works for a company that assumed some of the bankrupt business’ assets, and he’s been helping recover the assets — some of which investigators hadn’t known about, including $18 million worth of Harley-Davidson motorcycles.

Hecker was a legendary car salesman with a sprawling kingdom of dealerships. His smiling face, along with the credo “Nobody walks,” looked down from billboards, the sides of buses and anything else that could carry an ad. But his empire rested on house-of-cards financing.

He had personally guaranteed business loans, but when those loans came due and he couldn’t pay, he filed for personal bankruptcy protection, claiming liabilities of more than $767 million.

The IRS and FBI began investigating Hecker’s business interests, and agents came calling on Gustafson in April 2010. By the time Hecker’s auto empire collapsed, his longtime employee had risen to the job of fleet services manager for Hecker’s auto empire, responsible for remarketing vehicles, returning them to manufacturers and handling licenses and titles.

Agents questioned Gustafson about a falsified document Hecker had submitted to one of his lenders, Chrysler Financial. Gustafson told them he had first learned the document was fake in October 2008; in truth, he had known about it in November 2007.

Agents also discovered Gustafson filed falsified paperwork to re-title a 2004 Cadillac Escalade to make it appear as though Hecker didn’t own it. It was an attempt to hide the asset from creditors, including Chrysler Financial.

Hecker, 58, was charged with a multitude of federal crimes — and later dropped the bankruptcy claim — and in September he pleaded guilty to bankruptcy fraud and conspiracy to commit wire fraud. Ericksen will sentence him Feb. 11, and he could face 10 years in federal prison.

Three days before Hecker stands before Ericksen, one of his top lieutenants, Steven Leach, 55, of Burnsville, will be sentenced by the judge on a single count of conspiracy. He admitted to helping Hecker defraud Chrysler Financial and other lenders of millions.

While Gustafson was part of that fraud, his role was small compared with others, prosecutors noted. And yes, while he initially lied to federal agents, “Once he cooperated, he cooperated fully,” Assistant U.S. Attorney Nancy Brasel told Ericksen.

The sentencing guidelines in Gustafson’s plea deal suggested a range of four to 10 months in prison, but prosecutors later asked for probation.

Before sentencing, prosecutors had filed a brief saying that Gustafson “was loyal to Hecker to a fault.”

“It appears Gustafson felt he owed Hecker a debt of gratitude for having received good employment for so many years,” the brief said. But, the brief conceded, Gustafson was not the mastermind of the fraud, “nor does the government believe Gustafson was as critical to Hecker as others, such as Leach. Rather, Gustafson played the role of loyal henchman.”

Gustafson declined comment after sentencing. But Bruno said the man paid a price for his loyalty to Hecker.

“You trust somebody for 33 years and think he’s always going to take care of you,” he said of Gustafson. “Sometimes loyalty becomes blind.”

Asked what his client now thought about Hecker, Bruno paused a moment.

“Conflicted. What can I say?” he finally replied.

David Hanners can be reached at 612-338-6516.