Belize Real Estate Scam Defendant Denied Joint Defense Privilege

A defendant in an overseas real estate scam case who is representing himself has ten days to hand over documents to the Federal Trade Commission after a federal district court ruled that none of his communications with two other defendants are privileged.

Andris Pukke’s arguments in favor of privilege are “novel” but “doubtful,” Judge Peter J. Messitte of the U.S. District Court for the District of Maryland wrote in a Dec. 10 opinion.

Defendants Pukke, Peter Baker, and Michael Santos are all representing themselves in a case brought by the FTC, which dubs it “the largest overseas real estate investment scam,” it’s ever targeted.

The FTC alleges that the defendants, which also include real estate developers and a bank, used more than $100 million from consumer investors “to fund their own high-end lifestyles instead of investing the money” in a development in Belize.

Pukke argued that the information the FTC is seeking is protected by the joint defense privilege as an extension of the attorney-client privilege or the work-product privilege.

The joint defense privilege, also known as the common interest rule, “protects communications between parties who share a common interest in litigation,” the court explained.

The privilege extends to civil co-defendants, “and not just with respect to communications between their lawyers,” it added. But a common interest has to relate to a legal matter, which the court said doesn’t exist here, as Pukke and his fellow defendants have been “pointing their fingers at one another,” not working together.

The attorney-client privilege only applies to communications in representations with a member of a bar, the court said. And since the joint defense privilege assumes that there’s attorney-client privilege, absent this privilege, there can be no joint defense privilege, it said.

Though the question of whether the work-product privilege applies to pro se defendants hasn’t been “conclusively answered by courts,” the Maryland court said, that issue doesn’t exist here because defendants have not proved a common interest.

The case is In re Sanctuary Belize Litig., 2019 BL 471889, D. Md., No. PJM 18-3309, 12/10/19.