By Edward Snook
US~Observer Investigative Reporter

You read the Moran’s story, “64 Federal Felonies Beaten” in the US~Observer about the innocent minister and his wife who were exonerated in their second trial in December of 2007. Then, you read the story, “The Lawyer Who Represented Himself” in 2010 on Scott Engelhard, who assisted the government in 2008, with affidavits against his own client Dr. Erik Dehlinger, when Dr. Dehlinger tried to get the unjust conviction against him set aside following the charade of a trial wherein Engelhard represented him and “sold him down the river.” What you didn’t hear about, until now, were collateral stories and what has happened in three years since that 2010 article.

A Bit of AAA History

Scott Engelhard (G+ image)

The lawyer, Scott Engelhard, had been paid to represent several of the experts (planners and enrolled agents) from Anderson’s Ark and Associates (AAA) who the Morans’ relied on. AAA had hired Scott Engelhard to represent their “Planners,” CPA Tara LaGrand, CPA Gary Kuzel, as well as their enrolled agent Collis Redd. This was done in secret because until the trial of Tara LaGrand in 2004, no one told Redd or Kuzel, and much later on in 2007, Dr. Dehlinger, that they all had shared the same lawyer hired by AAA.

For Collis Redd, this was a huge problem. Although he still believed the AAA plans were legal, when the IRS disavowed them, Redd counseled his clients that he would not allow them to use AAA plans – even though they might be legal - because the risk was too high. LaGrand disagreed. She preached that all the investors should carry on. She told them the IRS was wrong and there was no risk. Thus she and Redd butted heads over the issue.

AAA stole money from Dr. Dehlinger, telling him it had been “invested” – it had actually simply been put in an offshore account under AAA’s control. And AAA never paid a penny for Dr. Dehlinger’s legal fees, just the fees for the experts he relied on.

Since “The Lawyer Who Represented Himself” was written in 2010, you didn’t learn that in December of 2011, four years after the Moran trial in Seattle, Washington, and four years after Engelhard represented Dr. Dehlinger in October 2007 in South Carolina, Scott Engelhard would again assist the federal government in its efforts to keep Dr. Dehlinger in prison – and actually testified against his own former client in open court.

We discovered that Tara LaGrand had written, what reads like a Romance novel, a story about a character modeled after herself, and a character modeled after her lawyer, Scott Engelhard, which would lead someone to believe Engelhard might have put her interest above that of Dr. Dehlinger’s. The book in fact would become part of the evidence in the hearing in 2011.

The US~Observer also secured an exclusive interview with counsel, Rob Steintjes, who shared his complaints about Engelhard with this reporter. This information was turned over to the Dehlinger defense team.

US~Observer reporters discovered that AAA was a pyramid scheme, so right or wrong on taxes, the US~Observer would advise everyone to steer clear of AAA. But on the issue of risk - it’s clear. Redd’s argument made more sense than LaGrand’s. Redd was certainly an excellent witness in the Moran trial. His goal was to protect his clients. A tax preparer is supposed to lower their client’s risk; not raise them.

There is an ancient principle in the Bible adopted by American jurisprudence, “No man can serve two masters”. Engelhard could not continue to represent LaGrand, Kuzel and Redd - all three AAA experts, two of whom were diametrically opposed to each other. And, he certainly had no business going a step further and representing LaGrand’s client, Dr. Dehlinger. But he did, and he had no problem whatsoever spending all the money he was raking in from his multiple, conflicted clients.

The government told Engelhard in 2004, that one of his three clients was less culpable than the other two. In other words, one was likely innocent, two were likely guilty. They just wouldn’t tell him which one until he picked one. He had obvious conflicts and they would not address him any longer as the lawyer for all three. Did he share this with his clients? Collis Redd testified under oath: “No.”

Engelhard had a duty to immediately give full disclosure to all three. His duty required him first, to let them know he had three AAA accountant clients; and second to let all three know the government was only going after two of them. When he added Dr. Dehlinger as a client, that extended his duty to all four.

He picked LaGrand to champion at every turn. Engelhard was paid as a court appointed lawyer for LaGrand, personally by LaGrand for LaGrand, and by AAA for LaGrand. Were there any other motives? You would have to ask Mr. Engelhard.

I called Engelhard on September 4, 2013, and left a message. He returned my call on this same date and I asked him if he had testified against his client Dr. Dehlinger. Engelhard stated, “The government subpoenaed me and I told the truth.” He went on to admit to providing documents regarding his clients to the government and he attempted to come across as very vague about the whole issue. In simple English, minus his twisted, vague and ambiguous lawyer language, Engelhard admitted that he testified against his own client who had paid him a huge retainer!

Redd on the other hand only used Engelhard because AAA was paying for him. So from a purely monetary view, triple dipping must have been very profitable with LaGrand as she was the preferred client.

When Engelhard advised Redd to plead guilty – it got nasty. Redd was outraged. He had always followed the law. He had been told AAA always followed the law. And AAA had promised to cover all necessary legal fees. He wasn’t happy with Engelhard – he asked AAA to assign him another lawyer, or let him pick one, but he had already lost money with AAA and wanted the protection of paid counsel, so with great reluctance, he agreed to let Engelhard continue as his lawyer when AAA refused to provide another. Unknown to Redd, AAA and Engelhard had a secret deal, which perhaps AAA thought would save them money - one lawyer for many people.

Engelhard never told Redd that the government believed that one of his three “expert” clients was innocent or at very least that their evidence against him was too weak to prosecute. Redd had endured a raid on his office, Grand Jury subpoenas, and calls from lawyers in three states. He knew he was innocent and he told his lawyer, Engelhard, as much; but he also knew innocent people can get in trouble. He sure had.

Rather than tell Redd that he might just be the expert that the government wasn’t going to indict, Engelhard advised Redd to plead guilty. It was a good thing Redd told him, “No.” Redd was never even officially accused of criminal conduct. As a client, wouldn’t you want to know you were safe? The information was never shared with Redd.

What was Engelhard’s motive advising Redd, his innocent client, to plead guilty? Why did he hide the triple representation from Redd? Was he trying to sacrifice Redd to help one of his other clients? Did Engelhard have any other understanding with the government?

Ultimately, Engelhard plead Tara LaGrand guilty and she went to Federal prison for two years. He was able to get an agreement whereby LaGrand, unlike the other AAA promoters, would not be required to pay back her “victims.” One of these named victims was Dr. Erik Dehlinger. How could Engelhard defend LaGrand, and actually save her from a court order to pay her victim clients, which included Dr. Dehlinger, and also represent Dr. Dehlinger, supposedly putting his interest first? The oxymoron – he couldn’t but he did.

Move forward now to October of 2007. Engelhard has been hired to represent Dr. Dehlinger in South Carolina. His job is to defend him on a tax return signed by Dr. Dehlinger, as the tax payer, and Tara LaGrand, as the tax expert who also signed the return and prepared it. Which signer does he defend? The taxpayer or the tax preparer? Dr. Dehlinger is innocent. Just like Redd.

Dr. Dehlinger believes his best defense is to put his CPA Tara LaGrand on the stand, who he believes will truthfully testify that she told him the tax return followed the law - it was legal. Why else would she sign it and advise him to sign it? When the time comes Engelhard claims LaGrand is a horrible witness and he refuses to put her on the stand. Dr. Dehlinger asks about other AAA experts he listened to during their lectures, such as Collis Redd, and he is told Redd also is a bad witness.

Dr. Dehlinger is not told by his lawyer Engelhard that Engelhard can’t ethically represent him, and LaGrand and Redd or any two of them, without both full disclosure and written waivers for his obvious conflicts of interest. He does not tell Dr. Dehlinger that he asked Redd for written permission to represent others - and Redd turned him down saying it would be a harmful conflict. Why can’t he put Redd on to save Dr. Dehlinger? He knew Redd would object and he’d have to refund over $100,000 to Dr. Dehlinger and lose the business. So he keeps this secret too!

St. Louis, Missouri Attorney Rob Stientjes, part of Dehlinger’s defense team who answered to Engelhard and who had never tried a jury case before, asked about putting on both LaGrand and Redd simply because the client wanted them on. Stientjes had never met LaGrand or Redd. He did not know Engelhard had been Redd’s lawyer. When Stientjes watched Redd testify during the Moran’s second trial in December of 2007, two months after Dr. Dehlinger’s trial, Stientjes realized Redd was critical in helping the Moran’s win freedom, he began to question Engelhard. He did not get answers that satisfied him.

Dr. Dehlinger is convicted in October 2007, and in 2008, he is sentenced to 42 months in prison and the forfeiture of his medical license. Lawyer Scott Engelhard is absolutely and factually responsible for not using the expert testimony of LaGrand or Redd to prove the innocence of his client Dr. Dehlinger.

Back to December 2007. James and Pamela Moran are in trial facing what could be life in prison. They are innocent. They relied on the AAA experts they listened to.

Collis Redd is subpoenaed in the Moran trial in Seattle in 2007, and he testifies brilliantly, and the Morans’ are found not guilty. Again, just two months earlier the decision had been made by Lawyer Scott Engelhard, lead counsel of the defense team in Dr. Dehlinger's case that Redd would be a bad witness, and should not testify. Mistake in judgment? Certainly not! Redd was not called because he would have refused to waive the conflict, and Engelhard could not ethically call him without that waiver. Steintjes was outraged that Engelhard hid from him the fact that Redd had been a client of Engelhard.

Tara LaGrand is subpoenaed to the Moran trial and Engelhard appears on her behalf in Seattle, paid as court appointed counsel, and as her lawyer. Engelhard advises her to take the Fifth Amendment, which she does. Again, at this point he is lead counsel for both Dr. Dehlinger in South Carolina and Tara LaGrand in Seattle and neither one knows it.

Engelhard then approaches the lawyers for the Morans and tells them he would like to talk personally with the Morans and try to convince these innocent people to plead guilty. Why? What is his motivation? The Moran’s refused to speak with Engelhard and they were acquitted on all 64 federal felony crimes they had been falsely charged with.

On December 19th and 20th, 2011, although still incarcerated, Dr. Dehlinger is allowed to attend the new court-ordered hearing to determine if he received a fair trial in 2007, or whether or not Engelhard's conflicts of interest could have affected his trial.

The great ethics professor John Freeman testified, “Engelhard… Represented four people - count them, four people – Gary Kuzel, Collis Redd, Tara LaGrand, and Dr. Dehlinger in AAA cases. He has only got a waiver from one of these people… Tara LaGrand.”

Collis Redd testified he felt Engelhard had betrayed him and had never let him know the government knew he was innocent.

Tara LaGrand testified she wrote a book praising Engelhard using fictitious names and dedicated it to him and that she did not know Dr. Dehlinger went to prison, but she apologized for getting him in trouble.

Dr. Dehlinger testified he had relied on Engelhard, that he was shocked when no substantial defense was put on. He had paid his life savings - his substantial coin collection to his legal team – ran by Lawyer Scott Engelhard

The testimony looked pretty bad for the government’s position that Dr. Dehlinger had gotten a fair trial. Who were they going to get to back them up - to harm Dr. Dehlinger? The government had only one witness to help them keep Dr. Dehlinger in prison. Without that witness they had no case. That witness fully cooperated with them against Dr. Dehlinger.

The government’s witness was Dr. Dehlinger’s own Lawyer, Scott Engelhard.

Engelhard testified that LaGrand and Redd would both be bad witnesses. He turned over confidential information of LaGrand’s to the government, and a tape recording of a conversation he had had with Mr. Stientjes.

The trial judge ruled in Engelhard’s favor - against Engelhard’s client Dr. Dehlinger, for the government, and Dr. Dehlinger went back to prison.

Dr. Dehlinger appealed this decision to the Fourth Circuit Court of Appeals, which granted his motion for oral argument. The case is now set for October 30, 2013.

The US~Observer will continue to monitor this case as promised, and let you know if justice is eventually served and the conviction of this innocent doctor is set aside.

Is it possible for a good, honest doctor to be sent to prison and kept there and remain a felon for life because his own lawyer testifies against him, after failing to provide an adequate defense him? We shall see. Stay tuned.

Editor’s Note: The following quote has been taken directly from Lawyer Scott Engelhard’s website: “The minute you learn of a criminal investigation or criminal charge, it is critical that you put your life in the hands of a skilled and experienced Seattle criminal attorney who has successfully defended many criminal cases.” Dr. Erik Dehlinger “put his life in the hands” of Scott Engelhard and he is now an unjustly convicted felon!

The US~Observer urges anyone with information on these cases or Seattle, WA Lawyer Scott Engelhard to contact Edward Snook at 541-474-7885 or by email to ed@usobserver.com.

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