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Federal Judge Derrick K. Watson is expected to issue a decision soon on whether attorney Thomas Otake will be permanently disqualified from representing accused racketeering boss Michael J. Miske Jr. 

Watson’s ruling will cap an intense two-month legal battle between prosecutors and Miske’s defense team over government attempts to disqualify both lead attorneys because of alleged conflicts of interest, all being played out as the trial looms just six months ahead.

Otake, an experienced top-tier defense lawyer, was at least temporarily terminated as Miske’s lead trial attorney on Feb. 9 by order of Magistrate Judge Kenneth Mansfield.

Mansfield determined Otake “has a conflict of interest based on his prior representation” of two clients expected to be witnesses in Miske’s trial. The two former clients are not named, and are identified in court filings only as Client 1 and Client 2.

Mansfield’s decision came as he reconsidered an earlier ruling declining to dismiss Otake, but the judge’s latest order said he had been unaware of the conflicts created by these two witnesses at the time of his initial ruling.

Miske’s remaining attorneys, Lynn Panagakos and Reno, Nevada-based Michael Kennedy, quickly appealed Mansfield’s decision to Watson, who is in overall control of court proceedings in the case of Miske and his co-defendants.

Defense: Cases Not ‘Substantially Related’ To Miske

They maintain neither of the prior cases cited by the government had much, if anything, to do with Miske, and those cases were not “substantially related” to the Miske case.

“Mr. Otake confirmed his understanding “that ‘Client 1’ did not know Mr. Miske, did not associate with Mr. Miske, and had no direct and personal information about Mr. Miske,” according to the appeal.

Similarly, they argue, there is nothing in the record to support the government’s claim that Client 2’s case was substantially related to Miske.

Despite these protestations, publicly available information suggests Otake’s two former clients were indeed part of, or associated with, the larger group of criminal conspirators that prosecutors refer to as the Miske Enterprise. 

However, whether those associations are enough to create insurmountable legal conflicts of interest for Otake is something Watson will have to determine.

Even if there are grounds for the government’s conflict claims, Otake’s removal from the case would cause a substantial hardship on Miske’s defense, according to the appeal by Panagakos and Kennedy.

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Otake has represented Miske in other matters at least since the beginning of 2013 and was retained in the present case in August 2017, well before the federal indictment. Otake also represents Miske in a pending felony assault case in state court, with trial scheduled to begin in June.

The long-standing and ongoing relationship between attorney and client, and the trust it reflects, means Otake’s permanent removal from the defense team would necessarily impinge on Miske’s constitutional right to a counsel of his choosing, the appeal asserts. 

And in a proper balancing of competing interests, the constitutional right to counsel of choice under the Sixth Amendment should carry more weight than the court rule on conflicts, it argues.

The Panagakos/Kennedy appeal is also highly critical of the government for raising the conflict of interest issue at this late date, more than two and a half years after Miske’s indictment and arrest. 

Panagakos accused prosecutors of deliberately concealing information about the conflict of interest issues, which the attorneys maintain only came to their attention recently.

The fact that this dispute has emerged as an issue this late in the proceedings appears more likely another indication of how extensive and complex this case, and the underlying evidence, has turned out to be. 

A Complicated Case

Miske and 10 co-defendants were indicted and arrested in mid-July 2020. The original 22-count indictment contained charges including conspiracy, violations of federal racketeering laws, a murder-for-hire conspiracy, kidnapping, assault, armed robbery, drug trafficking and bank fraud. A third superseding indictment added two obstruction of justice charges against Miske in December 2022.

Six of the original co-defendants have pleaded guilty as part of plea agreements with prosecutors.

At least seven others who were charged separately also pleaded guilty.

Watson will have to determine whether any of the circumstances described by prosecutors create actual conflicts of interest for Otake, whether they are substantial enough to outweigh Miske’s right to his own attorney of choice and, if so, whether they can be sufficiently mitigated by procedures short of Otake’s permanent removal from the case.

Just last month, Watson denied another government motion seeking to disqualify both Panagakos and Otake from the Miske case on other grounds, stemming from their involvement in soliciting and handling character reference letters collected in support of Miske’s unsuccessful bid for release on bond, including two determined to have been fraudulent. 

In a Feb. 21 order, Watson rejected the government’s motion. The judge repeatedly characterized the government’s allegations of conflicts of interest as “speculative” at best and ruled the government “has not come close” to establishing the existence of a disqualifying conflict of interest created by the fraudulent letters.

Although the hearing technically only dealt with Panagakos’ status, since Otake at that point had already been terminated from the case, Watson said his order finding no conflict created by the letters, or by a conversation at the office of one of Miske’s lawyers, applies to Otake as well as Panagakos.

Whatever Watson decides on Otake’s alleged conflicts and continued participation in the Miske case, the legal clash already has had the effect of putting new information about the government’s case against Miske and his co-defendants into the public record as prosecutors have tried to bolster their evidence of legal issues stemming from the new roles of Otake’s former clients as witnesses against Miske, his current client.

Connecting The Dots: Client 1

According to information cited by prosecutors, Client 1 was arrested and charged in a 2018 drug case along with two co-defendants they identified only as J.S. and T.T.

Based on documents previously filed in court, including dozens of previously sealed search warrants and related documents as well as previous indictments and plea agreements, J.S. and T.T. can be identified as Jacob “Jake” Smith and Timothy Taboada. Client 1 appears to be Catherine Nicole Zapata, who was Taboada’s girlfriend at the time of their arrest in 2018.

All three were named in the same 2018 criminal complaint that alleged Taboada sold methamphetamine from his residence in Kaneohe. The drugs were supplied by Smith and several others associated with Miske. Zapata assisted Taboada by packaging drugs for resale, and “driving Taboada to meetings where the defendant knew that Taboada would be buying or selling methamphetamine,” according to admissions in her 2019 plea deal with prosecutors.

Prosecutors also disclosed they had moved for a downward departure from sentencing guidelines for Client 1 because of her assistance in providing information used in obtaining an indictment against Hunter Wilson, one of Miske’s original 10 co-defendants.

According to the government, the motion regarding Client 1 was filed the day after Miske was arraigned in July 2020.

Court records appear to further confirm the identity of Client 1 as Zapata. Miske appeared in court for arraignment and plea on July 16, 2020. The following day, the government filed a sealed motion in Zapata’s case. The transcript of her subsequent sentencing hearing confirms the sealed motion requested a downward adjustment in her sentence.

In court filings, prosecutors say Zapata will be presented as a witness during Miske’s trial “to prove, inter alia, that: members of the Miske Enterprise (including but not limited to Miske) participated in a racketeering enterprise; one of the objectives of the Miske Enterprise was to distribute illegal drugs; Miske, as the leader of the Miske Enterprise, knew of and benefited from those criminal pursuits; and other members of the Miske Enterprise (e.g., Dae Han Moon and Hunter Wilson, with whom Client 1 was involved) could operate more efficiently as criminals in Hawaii by virtue of being associated with the Miske Enterprise.”

Prosecutors say it is immaterial whether Zapata can provide testimony directly implicating Miske because of the conspiracy charges he faces.

It is “a basic principle of federal criminal conspiracy law, and the federal racketeering statutes, that Miske, as the leader of the Miske Enterprise, is liable for foreseeable criminal acts of his co-conspirators, and vice versa,” according to the government’s memo in opposition to the latest appeal. “Client 1’s illegal drug trafficking activities relate directly to, and are proof of, the illegal drug trafficking activities of the Miske Enterprise, which Miske created and led.”

As a result, according to prosecutors, her testimony will incriminate Miske, directly or indirectly, which means their respective interests are at odds, creating the conflict between Zapata, his former client, and Miske, his current client.

Connecting The Dots: Client 2

In several court filings, prosecutors have provided new public information regarding the second client they plan on calling as a witness.

Otake represented Client 2 in an assault case in 2012, and again two years later when Client 2 was again charged with assault in a family court case, according to prosecutors’ court filings. 

A review of cases in which Otake was the attorney of record in state court found just a single client who fit this profile.

A person by the same name appeared in the contact list of a white iPhone 4 used by Wayne Miller, who pleaded guilty in December 2020 of being a key member of Miske’s racketeering conspiracy and, for some period, his top lieutenant. 

Miller gave investigators the name of the person, whose phone number appeared under the name “Drew,” according to a copy of an FBI report on a 2019 interview of Miller. The FBI Form 302 report became public when it was filed in court as an exhibit by an attorney for Delia Fabro-Miske, a co-defendant in the case who had been married to Miske’s son, Caleb.

Because this person has not previously been associated with the Miske case and has been identified only through circumstantial information, Civil Beat will refer to him only as “Drew.”

Miller told federal investigators that Drew was going to help distribute $300,000 worth of cocaine that Miller, along with Miske co-defendant Michael Buntenbah, were planning to bring back from California in July 2014. Drew also gave Miller the post office box address in Manoa for  “Nick Miles,” which Drew said was “a safe location to send contraband.” Miller told investigators it had then been successfully used to ship marijuana, according to the FBI report.

In addition, a woman identified in the FBI report as Drew’s girlfriend or wife “was attempting to set up a food vending business to sell food items outside of M Nightclub,” according to the report.

Miller, who turns 40 in two months, has emerged as one of the most important witnesses in the Miske prosecution. He has pleaded guilty and has provided extensive information about the Miske Enterprise to investigators. He is apparently being held in protective custody in a federal facility on the mainland and all information about him has been scrubbed from the Bureau of Prison’s online federal inmate locator, apparently for his protection.

Miske once described Miller as a close and true friend in a character reference letter submitted to the court in 2006, when Miller was being sentenced for the 2001 armed robbery of a Windward Oahu credit union. He served a 10-year sentence for the offense and quickly became one of Miske’s most trusted associates after he was released from federal prison in early 2014.

Prosecutors have pointed to other reports containing information on Client 2, now believed to be person identified here as Drew, that have been provided to defense attorneys in the process of discovery.

One report indicated he “committed criminal acts on Miske’s behalf, such as violent assaults.” Another said he “was a fighter” who “collected debts for Miske,” who then arranged for him to be placed in a union job “as a reward for (Client 2’s) services.” 

Another report disclosed “Miske had purchased five stevedore union positions
and gave one of them to Client 2, in part because Client 2 “does some of Miske’s dirty work.”

According to prosecutors, another report discloses that after Miske and others assaulted a victim, Client 2 approached the victim and said, “Shit, Mike (Miske) asked me to come talk to you, he wants to give you $10,000.” This offer of a payoff appears to have followed the December 2012 beating of a rival promoter and another person on a street outside the parking lot for Miske’s M Nightclub. 

Felony assault and criminal property damage charges were filed against Miske and his half-brother, John Stancil. The initial case was dismissed after prosecutors failed to get the case to trial in time, but was refiled. Stancil eventually pleaded no contest to reduced charges. The case against Miske is still active and set for trial. Otake represents Miske in this long-running criminal case.

Prosecutors say Client 2 will be called as a witness to show Miske and other associates “engaged in violent assaults to advance the interests of Miske and the Miske Enterprise.” He is expected to testify about “particular violent assaults that took place in Mike’s presence,” including at Miske’s M Nightclub, as well as about “illegal drug activity” by members of the Miske Enterprise, including Miske himself.

Meeting In A School Parking Lot

In addition to the alleged conflicts involving Otake’s two former clients, the government argues Otake is a key witness to a mid-2014 meeting between Otake, Miske and Miller. 

The meeting, which has been acknowledged by Otake, took place in the parking lot of a Waikiki elementary school soon after Miller returned from California where a planned deal to purchase more than 20 pounds of cocaine from a group with ties to a Mexican cartel had been broken up by drug enforcement agents. The drugs, along with $300,000 in cash put up by Miske, had been seized during the raid.

Prosecutors allege Miske arranged the meeting in order to get Otake’s opinion about whether to believe Miller’s story about the drug bust and to assess whether Miller might have been double-crossing him.

The 2014 drug deal is the basis for Count 15, which charges Miske with a drug trafficking conspiracy for his part in the planned cocaine deal.

“The meeting itself is a critical provable overt act in the charged drug conspiracy, and Mr. Otake not only had a front row seat, he was the lead actor,” prosecutors said in a court filing this week. “In fact, he was literally the reason the meeting occurred.”

As a result, prosecutors argue, “Otake is a critical and necessary witness,” creating an insurmountable conflict.

Both Miller and Buntenbah, who accompanied Miller to California as they attempted to make the drug buy, have pleaded guilty and are expected to testify against Miske and others.

Final written arguments were submitted to Watson on Wednesday. The judge previously indicated he would decide the matter without a further hearing. 

The trial of Miske and his remaining co-defendants is scheduled to begin after Labor Day.