Stonewashed

A rash of local lawyers get caught laundering their client's drug money.

Robert V. Kesling was the narcotics kingpin and Ultimate Fighter. James L. White, A. Mark Vanderveen, and Joel Manalang were the wise attorneys and ultimate losers. Their cash-fueled joyride careened over the legal edge and into prison, and while Kesling sensed it coming and didn't care, the attorneys knew better and didn't react. They were "intelligent, educated, and sophisticated" legal minds, as a federal judge called them; two also wore the robes of lower-court judges themselves. Yet they willingly helped Kesling, a loose cannon and one of the Northwest's biggest drug dealers, stash and launder some of his tempting millions. The bundled money would arrive in containers—a backpack, duffel bags, shoeboxes, and paper sacks. Noooo checks, thank you! Instead of handing out receipts or filing proper currency forms, the legal eagles stuck the cash in safes or hid it in their homes. No transaction was too big or too bold. Take that day in 2005, up in Jim White's Denny Building penthouse law office above Sixth Avenue in Seattle. In walked his new client, Rob Kesling, 27, a former Seattle car salesman and a martial arts expert who was training for an Ultimate Fighting–style submission-wrestling championship in California, a combat form of jujitsu involving grappling, sparring, and kicking. The muscular 220-pounder had been a high-school wrestler in Alaska, where he grew up and worked on fishing boats. In recent years—though he'd cracked an elbow in training—he'd become obsessed with winning a title in Brazilian jujitsu, taking steroids to bulk up and working out three days a week in a Seattle gym.His heavy lifting at the moment, however, involved a backpack filled with $100,000 cash, which he unabashedly lugged into White's office. At the time, Kesling was the target of one of the largest drug probes ever mounted in the Northwest. The feds had been on his tail for two years and had already busted several couriers from his drug ring, which transported cocaine imported from Mexico into British Columbia, then returned with loads of B.C. marijuana to distribute in the United States. White, who'd been running for a seat on the state Supreme Court only a few months before this meeting, later referred to Kesling's $100,000 payment as a "nonrefundable retainer." Besides proposing that the attorney also wash thousands more in other dirty money he'd supply, Kesling asked White to use some of the cash to hire an attorney for one of his busted drug couriers. It wasn't exactly a humanitarian act. Kesling suspected the courier might be helping the feds in their investigation. Kesling wanted White to find a defense lawyer who was willing to breach the attorney-client relationship and fill them in on anything the courier said. A friend and legal protégée of White, Mark Vanderveen, later accepted the assignment.As it turned out, Kesling had a good nose for betrayal. The courier had indeed been turned by the feds and had even begun recording Kesling and others on a wire. But while Kesling was their target, prosecutors say they were stunned to ultimately discover, through the recordings and other evidence, no less than three attorneys joining the conspiracy. All ultimately pleaded guilty to helping Kesling launder his drug money or failing to report the drug-related income. Kesling pleaded guilty to drug-sales conspiracy. It was the first felony conviction for all four men, but the sentences weren't exactly comparable: Two of the attorneys got 18 months and one got six, while Kesling was sent away for 17 years, an imbalance that didn't sit well with his attorney, Sheryl McCloud.At Kesling's sentencing hearing last month in U.S. District Court, she noted that the attorneys "had had the benefit of graduate schooling and advanced degrees, and hence they had a variety of professional choices and opportunities in front of them." Her client, by contrast, was "a much younger man with far less education, from a small town in Alaska, with no advanced schooling, no professional degree, and no similar ability to give the legal profession and the criminal justice system such a black eye."U.S. District Court Judge Ricardo Martinez, who handled sentencing in all the Kesling drug-ring and attorney cases in the past 13 months, was unmoved. Not a lot of people have come before him who shipped the amount of drugs Kesling had, Martinez said. One runner alone got caught with a load of Canada-bound Colombian cocaine with an estimated street value of more than $30 million. But even more rare was the attorneys' roles. Federal prosecutors say they can't think of another time when three Seattle lawyers were locked up for drug-money laundering in one short stretch or in one related case. Judy Berrett, spokesperson for the Washington State Bar Association, says in the past 10 years only three attorneys were convicted of money laundering, all separate cases. (A fourth local attorney was also convicted recently in another laundering case, this one involving, yes, a Laundromat: See sidebar)It's not illegal for an attorney to take cash from a client, drug defendants included. But if the amount exceeds $10,000, it has to be reported on an IRS Form 8300, detailing the amount, source, and other details. That's a federal requirement for anyone in any business or trade, a procedure specifically passed by Congress to track crime money. Additionally, if that unrecorded money is used by the recipient in any way—as income, to buy goods, pay bills, and so on—it is then considered to be illegally laundered. White and Vanderveen violated both those standards—they did not report the money as income and also used it for personal needs, including travel and paying off loans. Manalang, involved in a separate real estate transaction with Kesling, failed to report he received the cash, but hadn't yet used it illegally. Investigations into attorney money sources are rare here, compared to other parts of the country, says Amanda Lee, president of the Washington Association of Criminal Defense Lawyers. "There's not that kind of animosity and mistrust" between defense lawyers and prosecutors that is seen in other areas, she says. Of course, there's the possibility a client could pay an attorney with ill-gotten gains, especially in drug cases, she allows. But "a responsible attorney would exercise some form of due diligence—such as asking the client where the money comes from." Personally, she says of a cash payment, "I'd never accept it." Compared to a check, cash "opens a can of worms." State bar officials won't speculate on how often illegal payments and money laundering might actually occur without anyone being caught. Lee thinks "we have an incredibly ethical defense bar" and that kind of thing is rare. Assistant U.S. Attorney Ron Friedman, who handled the Kesling cases, generally agrees, adding: "Attorneys never know when their clients are going to turn on them. . . . So the word to the wise is, assume that anything you say to your client could come back at you."That was painfully true in this case. Seeking a lighter sentence after he was busted for conspiring to distribute Kesling's dope and coke, the courier agreed to inform on his boss and to record conversations through a body microphone. Though attorney-client chatter is protected, Friedman says, "If the nature of the conversation is criminal, or the client [in this case, the courier] is consenting [to the taping], the conversation is no longer privileged." Authorities will not reveal exact details of how and where the crucial conversations were recorded. But court records indicate that, in a double double cross, the courier not only got Kesling live on tape but also recorded Vanderveen, the attorney that Kesling had hired to spy on the courier. The conviction was an especially hard fall for Vanderveen, 46, a Boy Scout and small-town cop who rose to become a deputy Seattle city attorney, assistant Snohomish County prosecutor, and then a pro-tem (or fill-in) judge at the Edmonds courthouse. That's where Vanderveen picked up one of his payments from attorney Jim White—$10,000 in a paper bag, which White had almost mockingly left sitting on a judge's chair.At Kesling and White's insistence, Vanderveen leaned on the courier to take a polygraph test to prove he wasn't an informer. The courier adamantly refused. (Officials later said that, had the attorneys been successful in determining the courier's informant status, he might have been murdered by the drug ring.) That and other intelligence was relayed to authorities either through the tapes or by the courier. (Seattle Weekly is not naming the courier at the request of prosecutors, who say the courier's family is under death threat.)Officials indicate they had other informants as well, further helping to widen the Kesling drug-ring investigation to snare others, including the third attorney, Joel Manalang, 37, a real estate broker. He ultimately admitted to accepting $176,000 of Kesling's money—most of it stuffed in a shoebox—as a down payment on a $720,000 Woodinville home, a deal that Manalang was brokering.But friends and family were probably most stunned by the downfall of Judge White. A deeply religious law-and-order advocate who also worked as an Edmonds Municipal Court judge and part time in Snohomish County Superior Court, White had run for the state Supreme Court in 2004. Campaigning on his law and family background—he and his high-school-sweetheart wife have three kids—the bespectacled jurist was endorsed by prosecutors and police officers. White garnered 159,000 votes and finished third in the primary to incumbent Justice Richard Sanders, who was re-elected.During the campaign, White argued against the prohibition on Supreme Court candidates discussing how they might rule on potential cases, suggesting the public never really knows what it's getting in a judge: "I think the voters would be much better served if judicial candidates could say who they are and what they believe . . . ," he said in response to a Judicial Forum questionnaire. Only a few months later, there was the ex-candidate accepting that backpack stuffed with cash from Kesling. Shortly, he would also launder $150,000 of Kesling's drug revenues through a Merrill Lynch stock account. And he personally conducted surveillance on the courier that Kesling suspected, at one point tailing him several blocks from Vanderveen's office to see if he was meeting with federal authorities. He wasn't—not that time—but the phone conversations that day between White and Vanderveen were caught on tape by the feds. What was the force compelling a successful attorney such as Jim White, who otherwise ethically represented the law for 22 years, and who said in 2004 that he would be taking a pay cut if elected to the Supreme Court, to participate in Kesling's scheme? "To this day," prosecutor Ron Friedman said at White's sentencing, "the government has difficulty understanding why Mr. White did these things." He had used some of the drug money to pay bills and take trips to India and Fiji. White, tears in his eyes, couldn't bring himself to say why, either. "I don't have any explanation to offer for what's gone on," he said in court, representing himself. Maybe it was sufficient to say, as the line goes, that he had a fool for a client. In White's case, prosecutor Friedman said the extensive money laundering was compounded by attorney misconduct for orchestrating the surveillance and polygraph and giving Vanderveen funds to go along with the scheme. The illegal acts "were wholly at odds with his professional responsibilities, and having nothing to do with the meaningful representation of a client—any client."In his mind, White had simply made a mistake, which is what Vanderveen and Manalang also indicated in court. They screwed up and were sorry that Kesling had corrupted them. He was the bad guy; that's why he got the stiff term and the three of them, collectively, got three and a half years. They also suffered career-ending blows: Manalang is currently suspended from practice and is set to be disbarred; White, a onetime state bar examiner who graded budding attorneys, has already been disbarred. Vanderveen is suspended and faces disbarment.Still, based on interviews and court records, the three attorneys had more in common with their client than with the law. Like Kesling, they weren't as smart as they thought they were, thinking the feds were concentrating on everyone but them. And like Kesling, they felt immune from detection, protected in part by the attorney-client privilege: How would anyone outside their circle ever know they were passing around all that cash, unless one of them talked? The government felt Vanderveen was guilty of gross professional misconduct in addition to failing to report the drug money he received, but supported giving him a relatively modest term because he was "contrite and genuinely remorseful," said Friedman. White is likely to be released from prison this year, and Manalang next year—they started their 18-month sentences at different times. Vanderveen has done his time and has given notice he is challenging his likely disbarment, seeking a less-punitive outcome. Could they someday return to the courtroom as attorneys? Possibly. A disbarred lawyer can, after five years, petition the state Supreme Court for reinstatement. But "those who have been disbarred seldom file for reinstatement," says Berrett, the state bar spokesperson, "and it is rarely granted."The feds had recorded Rob Kesling on audiotape as far back as 2003, talking up his delivery services and bragging about the hundreds of kilos of marijuana and cocaine he shipped, "quantities," Friedman would later say, that "are extraordinary for this district." When finally taken down for conspir-acy in the summer of 2005, Kesling pleaded out in U.S. District Court in Seattle, surrendering more than $250,000 in cash and goods. He refused to give information about the larger drug ring, but authorities still managed to crack it last June in what local and federal officials called Operation Frozen Timber. The two-year international probe uncovered a network of smugglers using airplanes and choppers to ferry tons of drugs back and forth across the Canadian border. Authorities seized 8,000 pounds of marijuana, 800 pounds of cocaine, three aircraft, and $1.5 million in U.S. currency. They made 50 arrests, with kingpin Kesling and the attorneys retroactively included.After serving a year in prison, Kesling was back in court last month. There had been confusion in the wording of his 2005 sentence, and both sides agreed it should be cleared up with a resentencing. Kesling tried to use the opportunity to knock five years off his original term.Kesling told the court he regretted his acts, and that a year in prison, where he studies Spanish and teaches physical fitness to other inmates, had already changed him. He presented the court letters from family and friends, including Ivan Salaverry, a Seattle gym operator who is ranked sixth in the world in mixed martial arts. Salaverry remembered Kesling as likable and easygoing, calling him "a truly good person." Like other letter writers, he felt society would benefit if Kesling got a lesser sentence. But does a good guy peddle millions in illicit drugs, conspire to avoid prosecution, or own 12 guns—the weapons confiscated after his arrest—including a Bushmaster assault rifle? Judge Martinez didn't think so. Sorting through correspondence, Martinez had discovered that Kesling had written angry, threatening letters from prison. "He mocks other people. He mocks lawyers in general," said Martinez. "He mocks his own counsel, indicates that even members of his own family have no clue as to who he is." In one letter, attempting to make a statement about his business acumen, Kesling even "asked that he be given credit for being a successful high-level trafficker of drugs."Well, Martinez said, he would indeed give him that credit, and resentenced Kesling to his original 17 years, from the original starting date.Before Kesling was led from the courtroom, to be taken back to prison in Arizona, Martinez noted that the drug dealer liked to quote American philosophers and poets. In one of his letters, Kesling had cited Henry David Thoreau's thought that "the mass of men lead lives of quiet desperation."Kesling hadn't included the full quote, said Martinez, seemingly inspired as he addressed the courtroom, attorneys included."In that very same book, in that very same paragraph, in fact, [Thoreau] said, 'It is a characteristic of wisdom not to do desperate things.' For the sake of all of those who support you, [and] for your sake, I hope you acquire that wisdom. We'll be at recess."randerson@seattleweekly.com

 
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