Rutledge’s fraud trial
is delayed

Ousted Unity House Inc. President Tony Rutledge will not have to go to trial on federal fraud and tax charges until May 10.

U.S. District Judge David Ezra approved federal prosecutors' motion to continue Rutledge's Jan. 11 criminal trial in wake of last month's seizure of Unity House by the government.

But Ezra said he will not postpone a next Tuesday's hearing on the takeover of Unity House, which the judge described as an "extraordinary" action.

Ezra also granted defense lawyers' motion that prosecutors turn over redacted portions of testimony that supported the seizure of Unity House.

Ezra is the presiding judge in the Rutledge criminal case. Yesterday's hearing was the first in his courtroom since Senior U.S. District Judge Samuel King issued a Dec. 10 temporary restraining order placing Unity House in the custody of a government-appointed receiver.

The seizure order was based on a Dec. 2 superseding indictment by a federal grand jury, which alleged that Rutledge and his son Aaron defrauded Unity House and that the elder Rutledge looked to divert Unity House's assets to offshore banks and investments.

Ezra said that in his years on the bench overseeing criminal and racketeering cases, he has only seen a "handful of cases" in which the government took over assets in a similar way.

He cited the federal government's ongoing prosecution of former Enron Corp. Chief Executive Officer Jeffrey Skilling as a recent parallel.

Patrick Murphy, who is a member of the U.S. Department of Justice legal team in the Rutledge case, also is a member of a task force that is prosecuting Skilling.

Ezra ordered prosecutors to turn over key evidence to defense attorneys, including a redacted declaration by Internal Revenue Service Special Agent Greg Miki, who is spearheading the IRS investigation into the Rutledges. Ezra said he wanted to "ensure a level playing field" and avoid a potential reversal by an appellate court.

Prosecutors previously declined to provide those records due to pending grand jury investigation.