May 11, 1999

Portland, Maine

Convicted in March of 78 felony counts ranging from conspiracy to money laundering and mail fraud and awaiting sentencing, Catherine Duffy Petit, the former Old Orchard Beach Pier owner, filed a motion in U.S. District Court Wednesday, asking for an extension of sentencing and a hearing to address alleged prosecutorial misconduct by the U.S. Attorney's Office.

Accompanying the motion was a four-page letter to U.S. District Court Chief Judge D. Brock Hornby in which Petit alleges Assistant U.S. Attorney Donald Clark, the lead prosecutor in the case, intimidated witnesses, potential witnesses and her attorneys, named her 23-year-old son as the target of a federal grand jury, intervened in her bankruptcy case and forwarded false information to the court and U.S. Probation officials.

Petit also wrote Judge Hornby that Clark withheld evidence and information that would have helped exonerate the defendants in the trial and would have impeached some government witnesses.

Petit and co-defendant Paul Richard, convicted of 73 counts, are currently in the Cumberland County Jail in Portland. They are scheduled to be sentenced June 7 at U.S. District Court in Portland.

Co-defendants David Hall and Roland Morin, convicted of lesser counts, are free on personal recognizance and are scheduled to be sentenced the same week.

So too are Thomas Blackburn, James Erskine, Robert Paradis, Donald Shields, Greg O'Halloran and Armand Pelletier. All pleaded guilty to felony counts in exchange for cooperating with prosecutors. Blackburn, Erskine and Paradis testified during the six-week long trial.

ALLEGED INTIMIDATION TACTICS

Writing from her cell at the Cumberland County Jail, Petit says the actions of the prosecutor are the sole basis for her motion and letter.

''This letter is not from a defendant who has been found guilty and is crying 'poor me.' I accept that there will be further outrageous accusations and probable future threats that will be exercised by AUSA Donald Clark upon his receipt of this document,'' Petit wrote.

Laid out in a rough chronological form, Petit accuses Clark of misconduct and intimidation before, during and after her trial. Prior to the trial, she said the prosecutor threatened to indict the attorneys of "targets" of the US Attorney's Office who were not cooperating and threatened to indict various witnesses who would have provided truthful testimony.

Clark, Petit alleges, also said that if Petit testified, she would say she relied upon her attorney's advice in soliciting money to wage her civil suit against Key Bank. Her former attorney was then warned by Clark that if he testified on Petit's behalf the government would attack his testimony using the crime fraud exception law, essentially muzzling the attorney. The attorney was listed by the government as a possible rebuttal witness.

The private investigator who worked for Petit's defense team and relevant matters since 1993 was also threatened with indictment, she claims. Petit also claims that Clark interfered in state proceedings which would have disclosed facts and evidence that would lead to an acquittal in the federal criminal trial.

ALLEGED INTERFERENCE IN BANKRUPTCY PROCEEDINGS

Petit also claims that Clark has injected the U.S. Attorney's Office into her bankruptcy proceedings. Petit was placed into involuntary bankruptcy in 1993 by a lead petitioner who admitted conferring with Key Bank attorneys.

Some of Petit's creditors are currently petitioning the newly-appointed bankruptcy trustee to allow the 14-year-old case against Key Bank go to trial. The trustee controls the estate's assets, which are essentially the Key Bank case and its potential multi-million award. Some estimates of potential jury awards range as high as $66 million - before 94% interest is tacked on.

Petit claims Clark called an attorney representing a creditor and told him that he should accept a settlement offer on the table from Key Bank. That offer is reportedly $1.7 million.

Since the trial, Petit alleges, Clark has attempted "to poison the U.S. Probation Department,'' the agency that compiles a report and makes a sentencing recommendation to Judge Hornby.

Clark wrote a letter to a Probation Office official in April, saying that a Saco man listed as a victim of fraud in the government's indictment said at an April hearing at U.S. Bankruptcy Court that he was owed $1.8 million by Petit's corporations and her personally.

However, Clark wrote, the criminal indictment only listed him as a $10,000 victim. He suggested to the probation official that the $1.8 million should be added on to the "value of the funds used to determine the defendants offense level under the U.S. Government's Sentencing Guidelines."

Clark, however, possessed documents that listed the man's bankruptcy claims. Petit claims this constitutes filing false and misleading claims to the Probation Office.

PETIT'S SON FEDERAL GRAND JURY TARGET

Matthew Petit was informed by Clark that he was the target of a federal grand jury in an April 19th letter. The investigation stemmed from allegations that Matthew Petit had obstructed justice and tried to influence his mother's sentencing, a violation of federal laws.

In a letter to Judge Hornby, Clark said an investigation by the FBI determined that Petit had called up a number of witnesses and asked them to write to the judge asking that Catherine Duffy Petit be allowed to stay in the state and pursue her case against Key Bank.

Clark alleges Petit's son also said that some of the victims would be be repaid when his mother won her case against the bank. All of the Sun Life victims were paid back in a $2.3 million settlement the insurance company reached with the state Attorney General's Office. Sun Life was represented in that settlement by Pierce Atwood, the Portland law firm which represents Key Bank.

Some were compensated only 80%, minus attorney contingency fees of over 30%. One Lewiston attorney who represented 14 Sun Life victims was compensated as much as $220,000 for essentially getting his clients to sign the agreement. He was referred to the Sun Life customers by an official with the Maine Securities Division.

Clark said Petit's defense attorney, David Beneman, then sent out letters to a number of former witnesses who agreed with Matthew Petit asking them to write the support letter to the judge. Petit alleges that Beneman was also threatened by the prosecutor as a result.

ASKS FOR HEARING TO PRESENT EVIDENCE AND TESTIMONY

Petit concludes her letter to Judge Hornby by asking for a hearing to support her allegations against Clark.

''I hope you understand that something has to be done to stop this constant intimidation,'' she writes. ''I have not taken this action to embarrass any of you.''

Under sentencing guidelines, Petit is facing 19-24 years in a federal prison. Richard is facing 17-21 years, David Hall 10-12 and Roland Morin six to eight years. Steven Hall was granted a mistrial when his attorney took ill and was hospitalized. He is expected to go to trial in September.