I-Team: Doctor-Lawyer Fraud Case Re-Trial Bombshell - 8 News NOW

George Knapp, Chief Investigative Reporter

I-Team: Doctor-Lawyer Fraud Case Re-Trial Bombshell

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Federal prosecutors are ready to drop a bombshell on Las Vegas attorney Noel Gage when the lawyer is re-tried on conspiracy charges next month. Gage is accused of conspiring with local doctors and a middleman to rip off his own clients for huge sums. His first trial ended in a hung jury. But that jury didn't get to hear the evidence that could be introduced the second time around.

Anyone who's read the warm and fuzzy newspaper interviews that lawyer Noel Gage has given might remember that Gage says he moved to Las Vegas from El Paso Texas, essentially to retire.

Federal lawmen have uncovered evidence suggesting Gage left El Paso after being caught doing the same thing he is accused of doing here, namely, cutting side deals behind the backs of his own clients and fattening his own pocket in the process. The I-Team obtained the court documents which outline what happened back in Texas.

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In his TV ads and his courtroom defense, Noel Gage has portrayed himself as a victim, a target of the powerful insurance industry. When Gage represented paralyzed injury victim Melodie Simon and other clients, he used good faith he says.

That defense is what might allow federal prosecutors to drop this bombshell during the next trial in May -- documents from a 1995 civil trial in El Paso Texas in which Gage and two other lawyers were found guilty of essentially the same things he's accused of in Nevada.

In the Nevada case, Gage is accused of conspiring with alleged middleman Howard Awand to rip off severely injured clients like Melodie Simon by cutting backroom deals with various doctors who were part of Awand's network. Gage promised Melodie Simon a settlement of $8-10 million but she received just over $2 million after he allegedly cut a side deal to let two doctors off the hook.

The case in Texas is similar in many ways. Court documents show Gage was hired to represent a group of chiropractors who were suing the insurance industry. But the jury found that he cut a side deal with two of the chiropractors, behind the backs of the other clients.

Gage failed to tell his other clients that he had a special relationship with two of the plaintiffs and had represented them in a dozen or more cases. The jury found that Gage misled most of the clients, withheld settlement money without telling them about it, directed too much money to his two longtime clients, and charged nearly $100,000 for expenses he could never document. The jury verdict was unanimous.

The lawyer who sued Gage and his co-defendants in Texas said Gage manipulated his clients for his own benefit and predicted Gage would express indignance and outrage at being accused, something now familiar in Las Vegas.

"My integrity is not for sale. I'm Noel Gage, continuing to fight for the rights of Las Vegans," he says in one of his TV ads.

One of the chiropractors who sued Gage, Dr. David Bailey of El Paso, told the I-Team he can't talk about the case since Gage had the case sealed before he left town, but Bailey called Gage a quote 'very slick character who can convince most anybody of anything.' He added after Gage kept 60-percent of the settlement, he charged his clients for unproven expenses, even filing cabinets.

The information about the Texas verdict was not introduced during Gage's first trial here. Sources familiar with the case believe this was because prosecutors may have planned to use it when they cross-examined him, but he never took the stand. Now it's been filed as part of the record for the second trial and might be one reason prosecutors expressed such confidence immediately after the hung jury.

"We feel really confident about our case against this defendant," said U.S. Attorney Greg Brower.

The question is -- will the judge in the re-trial allow this to be introduced? He previously excluded quite a bit of the government's case against Gage but prosecutors say that since Gage's defense depends on his good faith, evidence of bad faith in previous trials would certainly seem relevant.

Read the documents for yourself: Awand Inf. 4-15-08, Exhibit A Limine Fraud, Exhibit B Limine Fraud, Limine Fraud Conviction

Email your comments to Chief Investigative Reporter George Knapp.
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