United States v. Beasley (27 F. Supp. 3d 793, 2014)

OPINION AND ORDER DENYING (D DEFENDANT STEWART’S MOTION TO DISMISS, FOR A KASTI-GAR HEARING, AND TO SUPPRESS EVIDENCE BASED ON THE CONFLICT OF INTEREST OF HIS ATTORNEYS [102], AND (2) DEFENDANT ZAJAC’S MOTION TO DISMISS THE FIFTH SUPERSEDING INDICTMENT AND TO SUPPRESS EVIDENCE BASED UPON A CONFLICT OF INTEREST OF HIS ATTORNEYS [151]

NANCY G. EDMUNDS, District Judge.

At hearings held on April 29 and May 15, 2014 and an evidentiary hearing held on June 3, 2014, this criminal matter came before the Court on (1) Defendant Stewart’s motion to dismiss, for a Kastigar hearing, and to suppress evidence based on the alleged conflict of interest of his attorneys [102]; and (2) Defendant Zajac’s motion to dismiss the Fifth Superseding Indictment and to suppress evidence based upon an alleged conflict of interest of his attorneys [151]. Defendants’ motions raise substantially the same arguments. For the reasons discussed below, Defendants Stewart’s and Zajac’s motions to dismiss, to suppress evidence, and for a Kast-igar hearing are DENIED.

I. Background

As the government explains, this criminal matter arises out of an extended criminal investigation into corruption, bribery, fraud, and related activities involving the City of Detroit’s General Retirement System (“GRS”)- and Police and Fire Retirement System (“PFRS”). The investigation that led to the Indictments in this case began with concerns about two suspicious investments by the City of Detroit Pension Boards. As the investigation continued, investigators and the Grand Jury became aware of additional suspicious conduct on the part of investment sponsors, Pension Board staff, Trustees, and others involving many more investments and activities of the Pension Boards. Over approximately three years, more than 120 witnesses testified before the Grand Jury, some did so multiple times. Federal agents conducted many more interviews and obtained and reviewed thousands of documents.

In April 2009, official minutes of the PFRS Board reveal that it voted to retain Attorney Martin Crandall, an experienced criminal attorney with the Clark Hill firm, to act as “Special Counsel regarding grand jury,” and to provide legal representation for the PFRS Trustees and staff in connection with the government’s ongoing investigation. Attorney Crandall subsequently provided the same Special Counsel services to GRS Trustees and staff.

As revealed from Martin Crandall’s and Joseph Turner’s testimony at the June 3, 2014 evidentiary hearing, based on Defendant Zajac’s recommendation, the PFRS Board passed a resolution to have the Clark Hill law firm represent Board members and staff as fact witnesses before the Grand Jury. Clark Hill attorney Martin Crandall was designated as lead counsel because he had criminal experience, having been an Assistant United States Attorney from 1979 through 1985. Clark Hill attorney Joseph Turner was to assist Crandall and provide background on Pension Board and investment issues. Attorney Turner had been “Special Counsel” for the PFRS since 1994 and was currently serving in that role.

In 2009 and 2010, Attorney Crandall accompanied a number of Pension Board Trustees and staff members to interviews and/or Grand Jury appearances. Clark Hill attorney Joseph Turner frequently accompanied Crandall to those same interviews and Grand Jury appearances. Attorney Crandall estimates that he and Turner represented more than 20 witnesses. (Turner estimates it was more than 30), including Trustees Stewart, Bandemer, Best, Alberta Tinsley-Talabi, Pension Board staff, Pension Board General Counsel Zajac, other policemen and firemen, and vendors. Turner testified that Defendants never objected to Crandall’s or Turner’s multiple representations.

A. Defendant Zajac

Defendant Ronald Zajac served as General Counsel to both the GRS and PFRS for more than 25 years. Zajac was initially interviewed by investigators as a person who could provide truthful information to the Grand Jury concerning the two Pension Boards’ standard procedures for receiving, reviewing, and approving investment proposals.

In September 2010, Zajac was subpoenaed to appear before the Grand Jury.

On September 3, 2010, several days before his Grand Jury appearance and at Attorney Crandall’s request, a proffer letter agreement covering the terms of Za-jac’s testimony was executed by Attorney Crandall, Zajac, and AUSAs Robert Cares and Kathryn McCarthy. (Gov’t Zajac Resp., Ex. C, Zajac 9/3/10 proffer letter agreement.) That proffer letter agreement expressly provides that “if [Zajac’s] statements lead the government to develop additional evidence against [him], the government may use this derivative evidence in any manner.” (Id. at 1, ¶ 4.)

On September 8 and September 15, 2010, Zajac testified before the Grand Jury. (Gov’t Zajac Resp., Ex. A, Grand Jury Tr., Ronald Zajac testimony, 9/8/10; Ex. B, Grand Jury Tr., Robert Zajac testimony, 9/15/10.) At the June 3, 2014 evidentiary hearing, Attorney Turner testified that, prior to Zajac’s testimony, neither Turner nor Crandall advised Za-jac to lie or to be conveniently “forgetful” in his testimony before the Grand Jury.

During his Grand Jury appearances, Defendant Zajac testified about the general procedures followed by the two Pension Boards (id., Ex. A, 9/8/10 Grand Jury Tr. at 6-10) and the function of third party marketers in Pension Board activities (id. at 11-21). Zajac was also questioned at length about a specific $20 million investment proposal referred to as the “CROCI deal” and about related travel to the United Kingdom, purportedly for the purpose of conducting a due diligence review of the proposal. (Id., Ex. A, 9/8/10 Grand Jury Tr. at 27-71; Ex. B, 9/15/10 Grand Jury Tr. at 13-69.)

In connection with the CROCI deal, Za-jac was asked about an allegation that one or more Pension Board Trustees expected or demanded free travel to London in return for supporting the CROCI deal. (Id., Ex. A, 9/8/10 Grand Jury Tr. at 69.) Zajac testified that he had not heard such an allegation and responded that, “As a matter of fact, I’m offended. If anybody suggested that, I’m offended by it.” (Id.)

Subsequently, investigators developed evidence that Zajac himself had acted as a conduit for tens of thousands of dollars in cash and other things of value that were provided to individual Pension Board Trustees on behalf of investment sponsors and the third party marketers who promoted their investment proposals. The government states that this evidence showed that Zajac’s activities included the following: Zajac solicited some $10,000 in cash from various investment sponsors and associates who attended (or were required to attend) a party in 2007 for Trustees Paul Stewart and Martin Bandemer. Zajac divided the cash into two envelopes of $5,000 each and delivered the so-called “birthday gifts” to Trustees Stewart and Bandemer. Later in 2007, Zajac counseled an investment sponsor to make cash gifts to Trustees Stewart and Bandemer to ensure their support for an investment proposal pending before the PFRS Board. None of this was addressed by either the government or Zajac during his September 8th and 15th, 2010 appearances before the Grand Jury.

In early January 2011, the government alerted Attorneys Crandall and Turner that Zajac had become a target in the investigation. At the same time, the government alerted Crandall and Turner that Stewart and Bandemer had also become targets. At the June 3, 2014 evidentiary hearing, Crandall and Turner testified that they immediately ceased their representation of Zajac, Stewart, and Bandemer once they learned that they had become targets of the government’s investigation. Later in January 2011, Zajac retained Christopher Andreoff to represent him. Andreoff continued his representation of Zajac until May 2014 when current counsel was' substituted in for Andreoff. Defendant Zajac was indicted on March 20, 2013 in the Fifth Superseding Indictment.

B. Paul Stewart

As the investigation evolved, the activities of the various individuals involved in the Pension Boards’ activities came into sharper focus. Some individuals who initially did not appear to be culpable became targets as the investigation progressed and more evidence was provided. Defendant Stewart, like Zajac, was one of those people who ultimately became a target even though he was initially considered a person who could provide truthful and complete information to the agents and the Grand Jury so as to shed more light on the activities of the PFRS for which he was an elected Trustee. Defendant Stewart is a 25-year veteran of the Detroit Police Department.

One of the Pension Board deals that triggered the criminal investigation was known as the ICG Leaseback or ICG deal. Because Defendant Stewart initially voted against the ICG deal (Robert Shumake was the investment sponsor on that deal), Stewart was not a target of the investigation during its early stages. As described below, Stewart’s status from witness (during interviews and Grand Jury testimony on September 29, 2010) to target (on January 5, 2014) did not change until several months after his September 29, 2010 testimony. Once the government determined that Stewart had provided false testimony about receiving cash payments, i.e., from Shumake, it cancelled his scheduled January 5, 2011 appearance before the Grand Jury. That same date, the government also informed Crandall and Turner about Stewart’s change in status and told them that Stewart should no longer be represented by either Mr. Crandall or his law firm partner Joseph Turner. At the same time, the government also informed Crandall and Turner that Zajac and Bandemer had also become targets and would need new, separate, independent counsel. At the June 3, 2014 evidentiary hearing, Crandall and Turner both testified that they immediately ceased representation of Stewart, Zajac, and Bandemer at that instant.

A more detailed description of Stewart’s change in status from “witness” to “target” is set out below.

According to Turner’s and Crandall’s testimony at the June 3, 2014 evidentiary hearing, Crandall had arranged for the government to notify him when it was ready to subpoena a PFRS witness to testify before the Grand Jury. Generally, Crandall and/or Turner would interview the witness, accompany the witness to government interviews and to the Grand Jury where Crandall and/or Turner would be available for questions from the witness during testimony, and then would debrief the witness after his or her Grand Jury testimony.

Stewart was not the first witness to testify before the Grand Jury. Several other Trustees and Pension Board staff members had previously testified before the Grand Jury or had been interviewed with the assistance of Clark Hill attorneys Crandall and Turner.

On June 16, 2010, Defendant Stewart was interviewed about his knowledge of the ICG Leaseback deal. At the time, Stewart was represented by Crandall and Turner.

Stewart was then scheduled to appear before the Grand Jury on September 29, 2010. Crandall and Stewart met with Stewart about one week before his Grand Jury testimony. Crandall was lead counsel. He discussed with Stewart his rights before the Grand Jury. Based on that interview, Stewart’s counsel had no reason to believe that Stewart would give incriminating testimony against Zajac, Bandemer, or other PFRS witnesses. There was, however, one matter that caused Crandall to go to the U.S. Attorney’s office and seek a proffer letter agreement to protect Stewart. It was Crandall’s decision, not Turner’s. (See Gov’t Ex. 1, 6/3/14 Evid. Hrg., 9/22/10 ltr. from Crandall.) Crandall’s concerns about Stewart’s anticipated Grand Jury testimony arose out of Stewart’s statement that he had received something that he should not have in light of his position on the PFRS Board. Crandall did not think that this constituted a bribe or a quid pro quo, but he thought Stewart needed the protection he would get from a proffer letter agreement. So, Crandall sought and obtained one. The proffer letter agreement was signed by Crandall, Stewart, and Assistant United States Attorneys Kathryn McCarthy and Robert Cares. At that time, Stewart was not yet identified as a “subject” or “target” of the government’s investigation.

At the evidentiary hearing, Crandall testified that, as a defense attorney, he has represented hundreds of grand jury witnesses. If he determines that there is sensitive, incriminating evidence at issue, his goal is to offer cooperation for the exchange of some protection from prosecution. To obtain that protection, the witness must tell the government all he knows. Crandall thus seeks a proffer letter agreement as a prelude to a cooperation agreement.

On September 28, 2010, the government, at Attorney Crandall’s request, provided Defendant Stewart with a proffer letter agreement covering the terms of his anticipated testimony before the Grand Jury. At the June 3, 2014 evidentiary hearing, Crandall testified that he went over the terms of the proffer letter agreement with Stewart. Crandall explained to Stewart that he must be truthful when testifying before the Grand Jury. Crandall also testified that he found Stewart to be articulate, knowledgeable, and strong-willed. Cran-dall did not recall that Stewart had any questions about the proffer letter agreement.

Under the terms of that letter agreement, Stewart agreed “to make a complete and truthful statement of his knowledge of (and role in) the matters under investigation.” (Gov’t Stewart Resp., Ex. A, 9/28/10 proffer letter agree., ¶ 1.) Stewart also agreed “to fully and truthfully answer all questions” before the Grand Jury. (Id.) In return, the government agreed that his statements would not be offered in its case-in-chief in any related criminal prosecution. The parties expressly agreed that, in the event Stewart failed “to provide truthful and complete information,” there would be “no restrictions on the government’s use” of any statements or any information that Stewart provided. (Id. at ¶ 8.)

At the June 3, 2014 evidentiary hearing, Crandall stated that, before Stewart testified before the Grand Jury, he emphasized to Stewart the need to be totally truthful and explained the negative consequences if he did not — it could lead to felony indictments for perjury, obstruction of justice, or other charges, i.e., under 18 U.S.C. §§ 1001, 1623. He emphasized that the benchmark of protection, as stated in the proffer letter agreement, is truth; that if Stewart told the truth, he would be protected. Turner, like Crandall, described Stewart as a bright, strong-willed individual. He understood what Crandall told him.

On September 29, 2010, Defendant Stewart appeared and testified under oath before the Grand Jury. At the outset of his appearance, Stewart confirmed that he understood his Fifth Amendment right not to incriminate himself:

Q: You understand that you have a right not to answer any question that you honestly believe may tend to incriminate you or show that you’re guilty of a crime. Do you understand?

A: Yes, sir.

(Grand Jury Tr. at 3, Paul Stewart testimony, Sept. 29, 2010.) Defendant Stewart also confirmed that he understood the terms of his September 28th proffer letter agreement:

Q: ... before you signed that, did you go over the terms of that agreement with your attorneys?

A: I did.

Q: And when you signed it, did you understand all of the terms of the agreement?

A: I did.

(Id. at 3-4.) Defendant Stewart was also informed on September 29, 2010 that he had a right to consult with his attorney outside the Grand Jury room upon request. (Id. at 4.)

During his September 29, 2010 Grand Jury testimony, Defendant Stewart testified about a number of Pension Board investments and events. Among other things, Stewart testified that Defendant Zajac had organized a birthday party for •him and another Pension Board Trustee, that Zajac had received $5,000 in cash from guests to that party as a “gift” for Stewart, and that Zajac gave that $5,000 in cash to Stewart.

Stewart also testified on September 29, 2010 that Clark Hill attorney, Joseph Turner, was a guest at that birthday party and that he could “take a guess” that Turner had contributed some unspecified amount to the “gift” because “[t]hat’s the purpose of people being there.” (Id. at 12-14.) In its Response, the government claims that this Grand Jury testimony was the first time that it learned about this birthday party or a similar one given for Co-Defendant Jeffrey Beasley. (Gov’t Stewart Resp. at 5.)

Crandall was not present when Stewart testified before the Grand Jury, Turner was. At the June 3, 2014 evidentiary hearing, Turner testified that no one instructed Stewart to lie or to hide facts or to avoid mentioning the January 2007 birthday party for Defendant Beasley or the August 2007 birthday party for Stewart and Bandemer. In his testimony before the Grand Jury, Stewart confirmed this:

Q: Did anyone suggest that you should not disclose the existence of this [birthday] party?

A: Never.

Q: What did Mr. Bandemer say about the party?

A: That the party existed and that we . [sic] was going to disclose it if asked.

(Grand Jury Tr. at 20-21, Paul Stewart testimony, Sept. 29, 2010.)

Before being excused from the Grand Jury on September 29, 2010, Defendant Stewart was informed that his “testimony has been given under oath. And if you’ve testified falsely or omitted a material fact, you could avoid a possible prosecution for making a false statement or perjury by changing or amending your testimony at this time.” (Grand Jury Tr. at 119, Paul Stewart testimony, Sept. 29, 2010.) Stewart was then asked, “Is there any of your testimony that you need to change or amend?” (Id.) And, he replied, “No.” (Id.)

After Stewart was finished with his Grand Jury testimony, he met with Attorney Turner. Crandall testified at the evi-dentiary hearing that, after Stewart testified, Crandall learned that there was a problem. Crandall returned from Ann Arbor. Crandall and Turner met with Stewart to discuss Crandall’s concerns about variances in Stewart’s testimony about monies he had received that Stewart had not previously revealed to Crandall and/or Turner. Immediately after talking with Stewart, Crandall contacted the U.S. Attorney’s office about possible conflicts of interests, and the U.S. Attorney’s office assured Crandall that Stewart was not a “target” at that time. Crandall relayed that information to Turner.

Crandall and Turner continued to represent Zajac, Stewart, and Bandemer in October, November, and December 2010. During that time period, the government never indicated that Crandall’s and/or Turner’s concurrent representation of multiple PFRS witnesses was a problem.

In November 2010, PFRS Trustee Ban-demer had a pre-Grand Jury interview with the government. Crandall and Turner represented Bandemer at that time. Turner and Crandall testified at the evi-dentiary hearing that, at that time, Cran-dall and the government discussed whether there were conflicts of interest that precluded their representation of Ban-demer and concluded there were not. Crandall and Turner continued their representation of Bandemer, who was not yet identified as a target.

Turner testified at the evidentiary hearing that, as a general practice, he and Crandall dealt with each PFRS witness individually and explored possible conflicts with them and relied on the government to notify them if a conflict arose, and that had not occurred until early January 2011. Specifically, Turner and Crandall testified that they discussed with each other and spoke with the U.S. Attorney’s Office about possible conflicts of interest that could arise from their joint representation of Stewart, Bandemer, and Zajac, but no one brought the matter before the Court. Crandall testified that he raised conflict issues with Stewart, Bandemer, and Zajac from time to time.

Up until early January 2011, Crandall and Turner were told that there was no actual conflict. No PFRS witness that they represented was identified as a target until January 5, 2011. The only individual they knew was a target before that time was Defendant Beasley. For that reason, neither Crandall nor Turner ever represented Beasley.

Defendant Stewart was scheduled to testify before the Grand Jury again on January 5, 2011, and Attorney Crandall was notified that Stewart would be questioned about two additional investments.

Turner testified at the evidentiary hearing that a few days before Stewart’s scheduled January 5, 2011 continued testimony before the Grand Jury, Stewart and Zajac went with Turner and Crandall to the U.S. Attorney’s Office to review the transcripts of their earlier Grand Jury testimony. Za-jac took a long time reviewing his September 8, 2010 and September 15, 2010 Grand Jury transcripts, and Stewart did not get a chance to review his.

On January 5, 2011, before Stewart testified, another witness testified before the Grand Jury. Based on that witness’s testimony and other information (about Stewart’s relationship with Robert Shumake, the investment sponsor on the ICG deal), the government determined that Stewart had not been completely truthful in his previous Grand Jury testimony and was, in fact, more criminally involved than he had admitted. The government thus informed Attorneys Crandall and Turner that Defendant Stewart’s status had changed from “witness” to “target;” and, consequently, Stewart could not testify before the Grand Jury that day. The government states that it is the general practice of the Department of Justice not to bring “targets” of an investigation in to testify before the Grand Jury. (Gov’t Stewart Resp. at 6.)

Turner testified at the evidentiary hearing that when he and Crandall arrived with Stewart on January 5, 2011, Assistant U.S. Attorney Cares told them that, based on testimony from an earlier witness that day, their continued representation of Stewart, Zajac, and Bandemer would present a conflict of interest because these three were now “targets” of the government’s investigation. AUSA Cares told Crandall and Turner that Stewart, Zajac, and Bandemer would need to obtain separate, independent counsel. Crandall testified at the evidentiary hearing that he was surprised when the government told him that Stewart, Zajac, and Bandemer were now targets of their investigation.

Crandall and Turner testified that, once informed that Stewart, Zajac, and Ban-demer were “targets,” they immediately ceased all representation of those individuals. Each retainéd new, separate counsel. Stewart was represented first by Jeffrey Collins and then by his current counsel, Elliott Hall. This change in pre-indictment counsel occurred in January 2011, more than two years before Stewart was indicted. Zajac retained Christopher Andreoff, who was subsequently replaced by Zajac’s current counsel in May 2014. Again, this change in pre-indictment counsel occurred more than two years before Zajac was indicted.

C. Attorney Turner

At the June 3, 2014 evidentiary hearing, Turner testified about the following. In 1994, he began working as a “Special Counsel” for the PFRS, and continues to work for the PFRS to this day. In 2006, his responsibilities with the PFRS were enhanced — he was asked to assist Zajac, then-General Counsel, at Board meetings. He was paid $225 an hour for his services.

In January 2007, Turner attended a birthday party for Defendant Beasley and gave Zajac $500 intended for Beasley. In August 2007, Turner attended a joint birthday party for Stewart and Bandemer and gave Zajac $1,000 intended for distribution of $500 to Stewart and $500 to Bandemer. Turner testified that Zajac asked for the contribution, and he gave it. He also testified that Zajac invited him to the birthday parties, Turner did not host them. Turner considered the birthday parties to be like any other fundraiser. He did not view his attendance at the birthday parties as any type of attempt to obtain a favor and was not promised a favor if he attended. He testified that he had attended lots of fundraisers and parties and did not view his attendance as criminal activity.

In October 2007, Turner got a raise from $225 an hour to $300 an hour. He testified that he thought Beasley either made or seconded the motion, but was not sure. Later, on the same day that Turner got his raise, a motion was made to increase Zajac’s salary. • Turner testified at the evidentiary hearing that he did not believe there was any correlation between his cash contributions at the birthday parties and his salary increase because the cash given at the birthday parties was solicited by and given to Zajac. He perceived the birthday party to be just like another fundraiser, and he was not asking for a raise and was not promised a raise.

In 2009, the PFRS Board, based on Zajac’s recommendation, passed a resolution appointing the Clark Hill law firm to represent Board members and staff as fact witnesses before the Grand Jury in the government’s ongoing investigation. Crandall was designated lead counsel because he had criminal experience, and Turner was to assist Crandall because he was able to provide background on Pension Board and investment issues.

In January 2011, after Zajac was identified as a target in the government’s investigation, Turner continued to work for the PFRS as Special Counsel while Zajac continued to work for the PFRS as General Counsel. This continued until Zajac was indicted in March 2013. In June 2013, Turner became General Counsel for the PFRS and currently serves as General Counsel. His current hourly rate is $300 an hour before a 15% discount.

Clark Hill’s representation of the PFRS includes a wide range of services, including filing civil litigation in state , and federal court on the Board’s behalf, providing investment advice, and other services that involve other Clark Hill attorneys. In 2012, Clark Hill billed around $3 million for its various services to the PFRS, and billed millions of dollars in fees in the years between 2006 and 2011.

D. Turner’s Testimony Before Grand Jury

At the June 3, 2014 evidentiary hearing, Turner and Crandall testified that in early 2011, probably February, Turner was subpoenaed to testify before the Grand Jury. At that time neither Turner nor Crandall was representing Stewart, Zajac, or Ban-demer. Turner was represented by Cran-dall. Turner testified that he was never advised that he was under criminal investigation. Rather, he was first approached to be a fact witness after Crandall and Turner had terminated their representation of Stewart, Zajac, and Bandemer.

Crandall testified that he did not know how it came about that the government wanted Turner to testify before the Grand Jury. Crandall explained that he had an on-going dialogue with the government prosecutors and this probably included Turner’s testimony. Crandall said this sort of conversation was very common, and thus he could not speak to the importance of that discussion. Crandall further testified that, during the entire time he and Turner were representing Zajac and Stewart, neither one said that Turner could not be involved because he might be a witness.

On March 16, 2011, Attorney Turner testified before the Grand Jury. He was not asked about the Stewart and Bandemer or Beasley birthday parties at that time. He was told that he was going to be “asked some questions about the two Detroit pension boards,” and he was. (3/16/2011 Grand Jury Tr. at 3.) Generally, Turner was asked if Board Meetings were recorded and if the matter of recording those meetings had been addressed. (Id. at 4-10.) He was also asked about the Board’s consideration of the ICG Leaseback deal and Robert Shumake (id. at 11-16, 22-26), and the motions to increase his hourly rate (an event that he said came as a surprise to him) and to increase Zajac’s salary (id. at 17-21).

On March 23, 2011, Attorney Turner returned to the Grand Jury and testified. This time, he was asked what he knew about birthday parties for Stewart and other Pension Board Trustees along with many other topics. (3/23/2011 Grand Jury Tr.)

On April 6, 2011, Attorney Turner once again returned to the Grand Jury and testified about the birthday parties for Stewart and other Pension Board Trustees along with many other topics. (4/6/2011 Grand Jury Tr.)

E. Fifth Superseding Indictment

On March 20, 2013, the Grand Jury returned a Fifth Superseding Indictment charging Defendants Zajac and Stewart and others in Count 1 with conspiracy to commit honest services mail and wire fraud in violation of 18 U.S.C. § 1349.

F. Seventh Superseding Indictment

On April 16, 2014, a new Special Grand Jury returned a Seventh Superseding Indictment in this criminal matter. The only changes in the new Indictment are the correction of one typographical error, a change in the font size to conform to a new local rule of this Court, the correction of the bank accounts identified on the chart in Count 13 against Defendant Dixon, and the removal of the phrase “illegal gratuities” from the caption of Counts 7 through 9, as the government indicated that it would do in response to Defendant Beasley’s motion to strike [111].

II. Analysis

A. Defendants’ Motions to Dismiss Are Denied

In their motions, Defendants Zajac and Stewart argue that, at the time of their September 2010 Grand Jury appearances, their attorneys, Crandall and Turner, suffered from debilitating “conflicts of interest” in violation of their constitutional rights. In their motions and at the June 3, 2014 evidentiary hearing, Defendants sought to establish that: (1) an actual conflict of interest existed because (a) at the time of Attorneys Crandall’s and/or Turner’s pre-indictment representation of Stewart and Zajac in the government’s criminal investigation, Turner (and maybe Crandall) and the government’s attorneys knew that Turner was the subject or target of that same criminal investigation, and (b) that Crandall and Turner were representing Stewart and Zajac and other Pension Board witnesses during the same pre-indictment period; and (2) Crandall’s and/or Turner’s conflicts-of-interest adversely affected their pre-indictment representation of Stewart and Zajac.

Specifically, Defendants sought to establish that the above conflicts of interest caused Crandall and/or Turner to refrain from:

(a) obtaining the same deal for Stewart or Zajac that they got for Bandemer,

(b) informing Stewart and Zajac that they had the right to exercise their Fifth Amendment right not to incriminate themselves in testimony before the Grand Jury and that they should invoke that privilege until offered full Kastigar use and derivative use immunity protections rather than sign the less-protective proffer letter agreements that they did sign,

(c) pursuing negotiations with the government that could have resulted in Stewart and Zajac preserving their right to full Kastigar use and derivative use immunity protections before testifying before the Grand Jury and instead counseled Stewart and Zajac to sign proffer letter agreements, and

(d) pursuing plea negotiations with the government where Stewart or Zajac would offer to cooperate and testify against other Crandall/Turner clients.

Defendants sought to establish that Attorneys Crandall and/or Turner refrained from the above conduct because of their actual conflicts of interest and concern that if Stewart got a better deal with the government he would provide testimony that implicated Turner and/or other Pension Board member/clients in criminal activity.

For the reasons that follow, this Court rejects Defendants arguments that (1) there is a Fifth or Sixth Amendment, and thus constitutional as opposed to ethical, right to conflict-free counsel pre-indictment, and (2) as a result of constitutional violations caused by Crandall’s and/or Turner’s conflicts-of-interest, Defendants are entitled to the following remedies:

(a) an Order from this Court declaring that their September 2010 proffer letter agreements are null and void;

(b) a Court Order affording Stewart and Zajac full Kastigar use and derivative use protections and allowing a Kastigar hearing to confirm the government’s improper derivative use of their Grand Jury testimony;

(c) an Order suppressing Stewart’s and Zajac’s Grand Jury testimony; and

(d) dismissal of the charges against Stewart and Zajac in the (now) Seventh Superseding Indictment because it is tainted by the alleged unconstitutional conflicts of interest.

The Court begins its analysis with Defendants’ arguments that the government had and breached its duty to report any actual or potential conflict of interest to the Court at the pre-indictment stage.

B. Government’s and Court’s Duty At Pre-Indictment Grand Jury Stage

Defendants Stewart and Zajac first argue that they are entitled to the broad relief that they request because the government had and breached its duty to report any actual or potential conflict of interest to the Court at the pre-indictment stage. Defendants further argue that, even if no constitutional violation is found, the Court should exercise its discretion under the facts presented here and grant Defendants the remedies they seek. The Court rejects these arguments.

1. Relevant Case Law

As support for their arguments,. Defendants rely upon decisions where the government had filed a motion to disqualify a grand jury witness’s retained counsel of choice and where that witness raised constitutional arguments opposing disqualification of his retained counsel of choice. For example, the decision cited in the government’s January 2011 memorandum of law and relied upon by Defendant Zajac comes from the Fifth Circuit Court of Appeals. See, e.g., In re Gopman, 531 F.2d 262 (5th Cir.1976). There, the Fifth Circuit granted the government’s motion to have a criminal defendant’s retained counsel of choice disqualified as trial counsel because of a potential conflict of interest arising from multiple representation of witnesses before the grand jury. In In re Gopman, the court held that the disqualification did not affect and thus did not violate the defendant’s Fifth Amendment rights. The Court also rejected the defendant’s arguments that disqualification of his counsel of choice violated his First Amendment right to freedom of association and Sixth Amendment right to counsel of his choice, holding that-“the public interest in a properly functioning judicial system” allowed the court to disqualify counsel. Id. at 267-268.

See also In re Investigation Before February, 1977, Lynchburg Grand Jury, 563 F.2d 652 (4th Cir.1977), another decision Defendants rely upon to support their requested relief. This too is a case arising from a district court order granting the government’s motion to disqualify the counsel of choice of various grand jury witnesses.' It involved an “appeal by ten witnesses from the district court’s order disqualifying Sol Z. Rosen, Esquire, and Joseph M. Whitehead, Esquire, from representing them in a grand jury investigation concerning interstate prostitution, where each witness invoked the Fifth Amendment and where the government pointed to three witnesses and Mr. Whitehead as targets of the investigation.” Id. at 654. As the Fourth Circuit explained:

Messrs. Rosen and Whitehead represented ten of the witnesses subpoenaed to appear before the grand jury. At the opening of the proceedings, the government informed Mr. Whitehead that he was a target of the investigation and asked him to withdraw because some of his clients might be called upon to testify against him. He refused. The court noted the possible .impropriety of Mr. Whitehead’s continued representation but declined to take any action to disqualify him at that time. It then denied [these ten witnesses]’ initial motions to quash the subpoenas and to suppress evidence.

When the. witnesses represented by Messrs. Rosen and Whitehead came before the grand jury to testify, the government told at least three that they were also potential targets of the investigation. Each of the ten refused to testify on Fifth Amendment grounds.

Id.

The government subsequently filed a •motion to disqualify Messrs. Whitehead and Rosen. It sought to disqualify Mr. Whitehead because his “representation of these clients would put him in the position to suppress possible testimony against himself.” Id. It sought to disqualify Mr. Rosen because “he represented witnesses with possible conflicts of interest, that he could not, for example, advise any one of the witnesses to seek immunity in return for testifying against his other clients, that he would be in a position to use information obtained in attorney-client relationships to the detriment of his other clients, and that his clients made legally unwarranted assertions of Fifth Amendment privilege to protect other persons.” Id.

Despite Messrs. Whitehead’s and Ro-sen’s clients’ signed waivers of possible conflicts of interest, the district court granted the government’s motion to disqualify their counsel of choice, concluding that “there was not only a potential but an actual conflict of interest in Mr. Whitehead and Mr. Rosen’s representation of multiple witnesses before the Grand Jury further aggravated because Mr. Whitehead was himself a target of the investigation.” Id. (internal quotes omitted).

The Fourth Circuit affirmed the district court’s decision, relying on In re Gopman, 531 F.2d 262, 266 (5th Cir.1976), and citing with approval In re Grand Jury Proceedings, 428 F.Supp. 273 (E.D.Mich.1976) (Freeman, J.). Id. at 655. It first observed that cases of this type present conflicting principles: “The first one is the entitlement of the witnesses to representation by an attorney in grand jury proceedings whether as a matter of federal procedural law or constitutional right. The second is the right of the grand jury to pursue its investigative functions, which includes the right of the public to every man’s testimony. And not to be forgotten is the right of the courts to control their own officers, their attorneys.” It then concluded that:

We think when a conflict of interest appears from the record, as it does here, which may affect the grand jury’s investigative function and may deprive the public of the testimony of a witness, that the district court, in its discretion, may take appropriate action to remove the conflict, which is all the district judge did in this case. And we think this may be done although it may deprive a witness of a particular lawyer. It does not deprive him of his right to be represented at all, and so both principles are preserved as well as may be.

Id. (emphasis added). The Fourth Circuit then clarified its holding:

Our opinion should not be read to hold that a witness is not entitled to the assistance of counsel in grand jury proceedings. Neither should it be read to hold that mere multiple representation is of itself disqualifying. We do hold that the district court was within its discretion in disqualifying these attorneys in this case.

Id. See also United States v. Mays, 69 F.3d 116, 121-122 (6th Cir.1995) (“balancing the constitutional right of the defendant to representation by counsel of his choosing with the court’s interest in the integrity of the proceedings and the public’s interest'in the proper administration of justice,” and holding that the district court’s disqualification of one defendant’s attorney in response to the government’s motion was not an abuse of discretion even though the defendant did not have an opportunity to waive conflict-free representation because that defense counsel had “represented seven government witnesses during the grand jury investigation and two of [that defendant’s codefendants” and “[t]his situation posed the threat of conflicts of interest not solely to defendant Mays but to several others involved in the case.”).

2. Application Here

Here, there was no disqualification motion filed by the government. This line of authority would be relevant if there was. Defendants’ arguments stand the holdings in this line of cases on their head. They are not asserting that their constitutional rights would be violated if the government was successful in seeking to disqualify their retained counsel of choice in connection with their Grand Jury testimony. Rather, they are arguing the opposite— that the government should have sought disqualification of their retained pre-indictment counsel of choice and its failure to do so violated their constitutional rights. Neither Stewart nor Zajac cites any authority for their argument — that the government has a pre-indictment duty to inform the court of a potential conflict of interest, and a breach of any such duty would warrant the broad relief that Defendants Stewart and Zajac seek, i.e., nullification of Defendants’ proffer letter agreements, the suppression of their Grand Jury testimony, and dismissal of the Indictment bringing charges against them. Finding no authority supporting Defendants’ claims of a constitutional violation, the Court will not exercise its discretion on these facts to grant the broad relief that Defendants seek.

C. Court’s Duty To Explore Possible Conflict of Interest After Initiation of Adversarial Judicial Proceedings

The Court agrees with Defendants’ argument that the Court has a duty to explore possible conflicts of interest brought to its attention after adversarial judicial proceedings have begun. This is what the Court did at the June 3, 2014 evidentiary hearing, as well as the April 29 and May 15, 2014 hearings. Here, the Court first discusses the relevant case law describing the Court’s task. Next, it applies that controlling precedent to the facts presented here.

1. Relevant Case Law

In Moss v. United States, 323 F.3d 445 (6th Cir.2003), the Sixth Circuit addressed the Court’s duty to explore possible conflicts of interest that were brought to its attention after adversarial proceedings were initiated. The Sixth Circuit’s decision in Moss arose from an appeal of the district court’s denial of petitioners Moss’s and Kohn’s motions to vacate their convictions and sentences, pursuant to 28 U.S.C. § 2255, arising out of their trial counsels’ alleged conflicts of interest. Id. at 449. At petitioners Moss’s and Kohn’s arraignment on a federal indictment, Attorney Murphy entered an appearance on behalf of both Moss and Kohn. Six days later, Attorney Morreale entered an appearance on behalf of Moss. Id. at 450. In connection with the petitioners’ § 2255 motions, the district court concluded that there was no joint representation because, post-arraignment, Attorney Murphy represented petitioner Kohn, Attorney Morreale represented petitioner Moss, and petitioners failed to convince the court otherwise. Id. at 453.

In their appeal, petitioners argued that “their joint representation by defense counsel created an actual conflict of interest which rendered defense counsel’s assistance constitutionally ineffective” because that conflict “precluded defense counsel from obtaining separate plea agreements with the government, particularly plea agreements requiring cooperation.” Id. Petitioner Kohn also argued “that defense counsel labored under a separate conflict of interest arising from an investigation into defense counsel’s alleged interference with a government witness.” Id.

The Sixth Circuit affirmed the district court’s decision despite the fact that it found defense counsel’s performance “fell below the boundary of professional competence,” because “the petitioners failed to demonstrate that the alleged conflicts of interest adversely affected counsel’s per-, formance.” Id. After a thorough analysis of the facts and law, the Moss court held that:

the petitioners have failed to demonstrate that a conflict of interest rendered defense counsel’s performance unconstitutionally inadequáte. Our decision should not be construed, however, as an approval of [defense counsel]’s conduct. His successive representation of the petitioners, as well as his involvement in a suspect fee arrangement with a co-conspirator, strain to their very limits the boundaries of professional conduct. Nevertheless, for the reasons stated in the foregoing opinion, we are unable to conclude that [defense coun-sell’s lack of professional conduct rendered the result of these -proceedings fundamentally unfair.

Id. at 476.

Relevant here is the Moss court’s discussion of the court’s duty when confronted with a potential conflict of interest. First, however, the Court notes that the facts giving rise to the claims in Moss are vastly different than those at issue in this criminal matter. Here, Defendants allege that a conflict of interest arose from their counsels’ joint representation of them (as well as other Pension Board witnesses before the Grand Jury) solely at the pre-indictment grand jury stage of proceedings. Unlike Moss, there is no claim that counsel at the pre-indictment stage (Attorneys Crandall or Turner) also represented Defendant posf-indictment.

In Moss, the Sixth Circuit addressed (1) whether defense counsel jointly represented petitioners post-indictment and thus created a conflict that rendered their counsel’s performance unconstitutionally inadequate (id. at 455-459); (2) whether defense counsel Murphy’s successive representation of petitioner Moss during pre-indictment and arraignment proceedings and his subsequent post-arraignment representation of petitioner Kohn, “coupled with evidence that Moss paid at least some of Kohn’s legal fees” (id. ■ at 463) created a conflict of interest that adversely affected counsel’s post-arraignment performance thus rendering it unconstitutionally inadequate (id. at 459-470); and (3) whether Kohn’s counsel’s fear of a government investigation of his post-indictment conduct gave rise to an actual conflict of interest that adversely affected his performance on Kohn’s behalf (id. at 471^474). The Sixth Circuit’s analysis and conclusions are discussed in § E.2(b) below. Relevant here, however, is the Sixth Circuit’s discussion of the trial court’s duty when a conflict-of-interest issue is raised.

In Moss, the petitioners alleged “that the district court committed reversible error by failing to inquire into Attorney Murphy’s successive representations.” Id. at 470-71. The Sixth Circuit observed that, under the Supreme Court’s decisions in Holloway and Cuyler, “a trial court has the duty to inquire adequately into a trial counsel’s conflict of interest if it knows or reasonably should know that a particular conflict exists.” Id. at 471 (citing Holloway v. Arkansas, 435 U.S. 475, 483-94, 98 S.Ct. 1173, 55 L.Ed.2d 426 (1978), and Cuyler v. Sullivan, 446 U.S. 335, 347, 100 S.Ct. 1708, 64 L.Ed.2d 333 (1980)) (emphasis added). The Moss court further observed that, despite the trial court’s duty to inquire “ ‘absent special circumstances, ... trial courts may assume either that multiple representation entails no conflict or that the lawyer and his clients knowingly accept such risk of conflict as may exist.’ ” Id. (quoting Cuyler, 446 U.S. at 347, 100 S.Ct. 1708). Finally, the Moss court observed that, in Mickens v. Taylor, 535 U.S. 162, 172-74, 122 S.Ct. 1237, 152 L.Ed.2d 291 (2002), “the Supreme Court rejected the approach of several circuits which determined that a trial court’s failure to inquire into a conflict of interest compels automatic reversal of the conviction.” Id. at 471. Indeed, in Mickens, the Supreme Court observed that the “[petitioner’s proposed rule of automatic reversal when there existed a conflict that did not affect counsel’s performance, but the trial judge failed to make the [Cuyler v.] Sullivan-mandated inquiry, makes little sense.” Mickens, 535 U.S. at 172, 122 S.Ct. 1237. “The trial court’s awareness of a potential conflict neither renders it more likely that counsel’s performance was significantly affected nor in any other way renders the verdict unreliable.” Id. at 173, 122 S.Ct. 1237. As Justice Kennedy clarified in his concurring opinion, “[t]he constitutional question must turn on whether trial counsel had a conflict of interest that hampered the representation, not on whether the trial judge should have been more assiduous in taking prophylactic measures.” Id. at 179, 122 S.Ct. 1237 (Kennedy, J. concurring).

2. Application Here

Because the issue of a conflict was raised, the Court held an evidentiary hearing on June 3, 2014. Thus, Defendants cannot claim that, as a result of the Court’s breach of its duty to hold an evi-dentiary hearing, they are entitled to the broad relief they request.

At the June 3, 2014 evidentiary hearing, the Court evaluated Crandall’s and Turner’s testimony and examined whether Stewart or Zajac could establish their claims that Crandall’s and/or Turner’s representation of them at the pre-indictment stage of this criminal matter created a conflict of interest that adversely affected their pre-indictment representation of Defendants and thus violated their constitutional rights, warranting the broad relief they request. This proved to be an impossible task. First, as explained below, there is no Sixth or Fifth Amendment right to conflict-free counsel pre-indictment. Second, even if there were, Defendants failed to demonstrate that an actual conflict of interest adversely affected Attorneys Crandall’s and/or Turner’s pre-in-dictment representation on their behalf.

D. No Constitutional Right to Pre-Indictment Conflict-Free Counsel

Defendants next argue that there is a pre-indictment right to counsel that gives rise to claims of Fifth and Sixth Amendment violations based on an actual conflict of interest that adversely affected Attorneys Crandall’s and/or Turner’s pre-indictment representation. Defendants are mistaken. As discussed below, the Sixth Amendment right to counsel does not attach at the pre-indictment stage, and the Fifth Amendment due process right discussed in Wood does not address pre-in-dictment representation and is also easily distinguishable on the facts, i.e., conflict arising from fact that defendant’s non-party employer hired and paid for defendants’ legal representation thus giving rise to divided loyalties.

1. Sixth Amendment Rights Not Yet Attached Pre-Indictment

In Wood v. Georgia, 450 U.S. 261, 271, 101 S.Ct. 1097, 67 L.Ed.2d 220 (1981), the Supreme Court held that “[w]here a constitutional right to counsel exists, our Sixth Amendment cases hold that there is a correlative right to representation that is free from conflicts of interest.” (citing Cuyler v. Sullivan, 446 U.S. 335, 100 S.Ct. 1708, 64 L.Ed.2d 333 (1980); Holloway, 435 U.S. at 481, 98 S.Ct. 1173).

It is well-established in the Sixth Circuit that there is no Sixth Amendment right to counsel based on pre-indictment grand jury proceedings. See United States v. Myers, 123 F.3d 350, 359 (6th Cir.1997) (concluding that, although the defendant had been “a target when he appeared before the grand jury,” he “had not been formally charged,” and thus “his Sixth Amendment right to counsel had not yet attached.”). See also United States v. Fowler, 535 F.3d 408, 416 (6th Cir.2008) (similarly concluding that there could be no Sixth Amendment violation “because the Sixth Amendment right to counsel attaches only at or after the initiation of adversary judicial proceedings — whether by way of formal charge, preliminary hearing, indictment, information, or arraignment.”) (internal quotation marks and citations omitted).

The right to effective assistance of counsel is “derivative” of the Sixth Amendment right to counsel. Moss, 323 F.3d at 454. If there is no adversarial judicial proceeding, there is no Sixth Amendment right to counsel and thus no derivative right to effective assistance of counsel. Applying Smith, Fowler, and Moss here, Defendants’ counsel’s actions at the grand jury stage, before the right to counsel attaches, cannot form the basis for a claim of ineffective assistance of counsel. Defendants’ claims to the contrary are thus rejected. See also United States v. Latouf, 132 F.3d 320, 330 (6th Cir.1997) (affirming the district court’s denial of the defendant’s motion to suppress her statement to the grand jury based on alleged bad advice from her then-counsel because “she was not yet indicted and, as an uncharged person, did not have a right to effective assistance of counsel”); United States v. Radford, Civil No. 00-70255, Crim. No. 97-81134, 2000 WL 1137712, **2-3 (E.D.Mich. July 7, 2000) (Edmunds, J.).

In Radford, this Court rejected the defendant’s ineffective assistance claim in his § 2255 motion that was based on arguments that are substantially similar to those raised here, i.e., the defendant argued that his pre-indictment counsel “failed (1) to obtain an immunity agreement with the Government prior to his testimony before the grand jury and prior to his debriefings with the Government, and (2) to advise [him] to invoke his Fifth Amendment privilege against self-incrimination when testifying before the Grand Jury and when making statements during debriefings with the Government.” Id. at *2. Applying prevailing Supreme Court and Sixth Circuit precedent, this Court concluded that “there is no Sixth Amendment right to counsel pre-indictment and therefore there can be no Sixth Amendment. claim of ineffective assistance of counsel for pre-indictment representation.” Id. at *3. The same analysis and result apply here.

Similarly, Defendants cannot rely on their Fifth Amendment privilege against self-incrimination to support their claims of ineffective assistance of counsel- based on an alleged conflict of interest. This Court’s decision in Radford and the Sixth Circuit’s decision in Myers foreclose Defendants’ argument. As this Court explained in Radford, the Sixth Circuit addressed and rejected the defendant’s argument in Myers that his “ ‘time before the grand jury constituted, or was the equivalent to, custodial interrogation so as to entitle him to a complete rights warning, including a warning advising him of his right to appointed counsel.’” Radford, 2000 WL 1137712 at *4 (quoting Myers, 123 F.3d at 360). In Myers, the Sixth Circuit rejected the defendant’s argument that he had a right to appointed counsel that is derived from his Fifth Amendment privilege against self incrimination. Rather, it held that “[i]n light of the Supreme Court’s opinions ... and the opinions rendered by our sister circuits, we are satisfied that the warnings given to [the defendant] adequately inform him of his'Fifth Amendment privilege against self-incrimination.” Myers, 123 F.3d at 360 (citations omitted).

2. Fifth Amendment Due Process Rights to Conflict-Free Representation

Defendants also argue that, even if there is no Sixth Amendment right to conflict-free counsel pre-indictment, there is a Fifth Amendment due process right. In support, Defendants rely on the Supreme Court’s decision in Wood v. Georgia, 450 U.S. 261, 101 S.Ct. 1097, 67 L.Ed.2d 220 (1981). The most obvious problems with Defendants’ arguments are that: (1) Wood does not address a pre-indictment constitutional right to conflict-free counsel; and (2) the facts and conflict at issue in Wood are readily distinguishable from those presented here.

(a) Wood v. Georgia Does Not Support Defendants’ Argument

In Wood, the Supreme Court observed that “[t]he potential for injustice in this situation is sufficiently serious to require us to consider whether petitioners have been deprived of federal rights under the Due Process Clause of the Fourteenth Amendment.” Wood v. Georgia, 450 U.S. at 271, 101 S.Ct. 1097. There, Petitioners were employees of an adult movie theater and bookstore. Id. at 263, 101 S.Ct. 1097. All three were convicted in state court “of distributing obscene materials and sentenced to periods of probation on the condition that they make regular installments toward the satisfaction of substantial fines.” Id. at 262, 101 S.Ct. 1097. They failed to do so, had their probation revoked, and were “now claiming that these revocations discriminated against them on the basis of wealth in violation of the Equal Protection Clause of the Fourteenth Amendment.” Id. The Supreme Court did not address the petitioners’ argument raising that difficult equal protection issue. Rather, it remanded the case “for further finding concerning a possible due process violation” caused by an apparent risk of conflict that arose from the fact that their employer paid for their legal representation.

It is from this decision that Defendants argue that they have a Fifth Amendment due process right to conflict-free counsel that attached before and during their grand jury testimony. The Court rejects Defendants’ argument. It requires an impermissible leap from the facts, analysis, and holding in Wood.

In Wood, the Court observed that each petitioner was represented by the same counsel “since the time of their arrests,” and their testimony “at the probation revocation hearing makes it clear that none of them ever paid — or was expected to pay— the lawyer for his services.” Id. at 266, 101 S.Ct. 1097. “They understood that this legal assistance was provided to them by their employer.... They were told that their employer also would pay any fines and post any necessary bonds, and these promises were kept for the most part.” Id. But, “[f]or some reason,” the Court observed, “the employer declined to provide money to pay the fines” now at issue. Id. at 267, 101 S.Ct. 1097.

The Court then observed that this situation created the risk of a conflict of interest. “Since it was this decision by the employer that placed petitioners in their present predicament, and since their counsel has acted as the agent of the employer and has been paid by the employer, the risk of conflict of interest in this situation is evident.” Id. It reasoned that the employer’s decision not to pay the fines as promised “suggests the possibility that it was seeking — in its own interest — a resolution of the equal protection claim” that the petitioners had raised. Id. Although the Court could not be sure “that the employer and petitioners’ attorney were seeking to create a test case, it observed that “there is a clear possibility of conflicts of interest on these facts.” ” Id. The Court further observed that “Courts and commentators have recognized the inherent dangers that arise when a criminal defendant is represented by a lawyer hired by a third party, particularly when the third party is the operator of the alleged criminal enterprise.” Id. at 268-69, 101 S.Ct. 1097.

As suggested above, the factual setting of this case requires the Court to take note of the potential unfairness resulting from this particular third-party fee arrangement. Petitioners were mere employees, performing the most routine duties, yet they received heavy fines on the apparent assumption that their employer would pay them. They now face prison terms solely because of the employer’s failure to pay the fines, having been represented throughout by a lawyer hired by that employer. The potential for injustice in this situation is sufficiently serious to require us to consider whether, petitioners have been deprived of federal rights under the Due Process Clause of the Fourteenth Amendment.

Id. at 270-71, 101 S.Ct. 1097 (emphasis added).

The Wood Court acknowledged that, although it was “difficult” for it “to determine whether an actual conflict of interest was present, especially without the benefit of briefing and argument,” nonetheless “the record does demonstrate the possibility of a conflict of interest was sufficiently apparent at the time of the revocation hearing to impose upon the court a duty to inquire further.” Id. at 272, 101 S.Ct. 1097. Moreover, “[a]ny doubt as to whether the court should have been aware of the problem is dispelled by the fact that the State raised the conflict problem explicitly and requested that the court