Lawyer Pleads Guilty to Felony Charges on Eve of Trial

February 24, 2010 - LAS VEGAS—Local lawyer Noel Gage pleaded guilty this afternoon to felony obstruction of justice charges and agreed to pay Melodie Simon $702,600, announced Daniel G. Bogden, United States Attorney for the District of Nevada. Co-defendant Howard Awand has also entered into a plea agreement, and is scheduled for a change of plea hearing on March 8, 2010.

“We are very pleased to have resolved this case with a felony guilty plea to obstruction of justice and that Ms. Simon will receive a substantial sum of money,” said U.S. Attorney Bogden. “The Department of Justice will vigorously prosecute those who intentionally conceal information called for by a federal grand jury.”

Gage, 71, of Law Vegas, entered a guilty plea at 2:00 p.m. today to one count of obstruction of justice before Senior U.S. District Judge Justin L. Quackenbush. Gage is scheduled to be sentenced on June 3, 2010, at 9:00 a.m., and faces up to 20 years in prison and a $250,000 fine.

Gage and Awand were originally charged with conspiracy and fraud in 2007 and accused of being part of a network of Las Vegas physicians and lawyers who allegedly defrauded clients by protecting doctors from malpractice lawsuits and sharing kickbacks from legal settlements. Gage was also charged with one count of obstruction of justice for allegedly concealing documents from the grand jury investigating the case. In March 2009, Dr. Mark Kabins was also charged with fraud and conspiracy for his alleged role in the scheme. According to the plea agreement, the conspiracy and fraud counts against Gage will be dismissed after the Court imposes sentence on the obstruction of justice count. In consideration for this agreement, Gage agrees to return to Melodie Simon, his attorney’s fees in the amount of $702,600.

The plea agreement allows Gage to plead guilty under a provision of law that allows him to maintain his innocence while simultaneously pleading guilty to obstruction of justice. The so-called Alford plea is named after the 1970 United States Supreme Court decision of North Carolina v. Alford, which allows a defendant to enter a plea of guilty, and to be found guilty, while maintaining innocence to a criminal charge. The Court may accept an Alford plea only if it is satisfied that there is a sufficient factual basis upon which to find him guilty. If the Court finds a sufficient factual basis, it may then enter a finding of guilty to the charge.

According to the plea agreement, the government maintains that it would prove at trial that a federal Grand Jury issued a subpoena to Gage’s law firm in September 2006 for documents relating to any agreements or fee arrangements between Gage and Howard in connection with a particular case. Gage knew of the subpoena, its content, and the existence of documents called for by the subpoena. Gage knowingly and intentionally, and with a corrupt purpose, concealed from the grand jury three checks Gage had written to co-defendant Howard Awand or Awand’s companies totaling $1,095,320. In the plea agreement, Gage acknowledges that proof of these facts provides a sufficient basis upon which the Court may find him guilty of obstruction of justice.

Co-conspirator Mark Kabins M.D. pleaded guilty on November 23, 2009, to one count of misprision of felony, and was sentenced on January 14, 2010, to five years of probation, six months of home confinement, 250 hours of community work service, and was ordered to pay $3.5 million in restitution.

The case is being investigated by the FBI, IRS Criminal Investigation, and the Nevada Attorney General’s Office, and prosecuted by Assistant United States Attorneys Steven W. Myhre and Daniel R. Schiess.