Earlier this year, Claire Rauscher, a partner at Womble Bond Dickinson LLP, achieved a rare success for her client – a Rule 29 acquittal.
Rauscher’s client, Shannon Drake, a former account executive of GrandSouth Bank (“GrandSouth”), stood accused of 27 counts of bank fraud. She was accused of participating in a “straw lending” scheme connected to a multimillion-dollar payroll tax fraud, along with Ronald Earnest, the founder and former president of GrandSouth, and Robert Taylor, a former vice president and loan officer of the bank. Following Drake’s acquittal at the close of the government’s evidence by the Court, her former co-defendants were acquitted by the jury the following week.
The charges against Drake, Earnest and Taylor spun out of an earlier case against Bruce Gregory Harrison, who was convicted in 2011 of committing a multimillion-dollar payroll tax fraud through his North Carolina based staffing companies. Federal prosecutors claimed that Drake, Earnest and Taylor conspired with Harrison, beginning in 2008, to overreach the bank’s legal lending limits and obtain funding for Harrison’s staffing company.
On the 15th day of trial, after the close of the government’s evidence, Rauscher filed a Rule 29 motion, thereby moving for a judgment of acquittal on her client’s behalf. She argued that the government had not shown that Drake had the level of knowledge and intent needed to commit the alleged offenses. Specifically, they had not demonstrated that Drake knew the lending limits or had knowledge of any scheme. Rauscher argued that her client was simply performing her job as requested by her employer.
“She and her fellow account executives shared a narrow but busy job to process the factoring lines of credit for a subset of these loans as approved by their supervisor and the bank,” Rauscher and her co-counsel, Allen O’Rourke, wrote in a written brief filed with the court. “There is plenty of evidence that [the client] and the other account executives performed this work as required and in good faith – not to falsify records or deceive the bank.”
U.S. District Court Judge William L. Osteen Jr. agreed and granted Rauscher’s Rule 29 motion. By granting the Rule 29 motion he found that there was insufficient evidence and entered a verdict of acquittal as a matter of law before the case was sent to a jury. He found that there was no evidence of intent with respect to Drake.
“It’s highly unusual for a judge to take an entire 27-count case away from a jury after a three week trial,” Rauscher told Law 360, adding that she’s only seen a Rule 29 acquittal on all counts once before in her 30-year career.
Following Drake’s acquittal, Rauscher filed a Motion for Attorney Fees pursuant to the Hyde Amendment1 on behalf of her client, seeking to recoup attorneys’ fees from the government and arguing that the prosecution was frivolous and in bad faith. The government’s response to Rauscher’s motion is due on May 8, 2019.
This was no doubt a huge win for Rauscher and her client, who will now finally begin to restart her life after two-and-a-half years of battling the charges against her.
Claire Rauscher is a fierce life-long defender whose tenacity and dedication we should all seek to emulate. Before joining Womble Bond Dickinson, she led the Federal Public Defender’s office for Western North Carolina. Rauscher was also recently named the 2019 winner of the Wade M. Smith Award by the North Carolina Bar Association Criminal Justice Section. The Wade M. Smith Award honors a criminal defense attorney who exemplifies the highest ideals of the profession and Rauscher is the first woman to win the award in its 11-year history.
The case is USA v. Corriher et al., case number 1:16-cr-00205, in the U.S. District Court for the Middle District of North Carolina.
1 The Hyde Amendment is codified at 18 U.S.C. § 3006A.