The trial of alleged racketeering boss Michael J. Miske Jr. and six remaining co-defendants has been delayed again, as newly released details have given fresh impetus to efforts by prosecutors to disqualify Miske’s lead co-counsel, Thomas Otake and Lynn Panagakos.

The trial has now been pushed back another five months, and is scheduled to get underway on Sept. 11, according to court filings on Wednesday afternoon.

A scheduling order laying out the new timeline for various pre-trial matters suggests for the first time that a request may be in the works to move the trial from Honolulu to another as-yet undetermined location. This is usually done in cases where extensive pre-trial publicity makes a fair trial for the defendants difficult or impossible, or where an unbiased jury appears difficult to find.

According to the scheduling order, the deadline for any motion seeking a change of venue is Monday. After all parties have an opportunity to respond, the question of whether to move the trial away from Honolulu will be decided at a hearing scheduled before Judge Derrick Watson on the morning of March 24. 

News of the latest delay in the trial came just a day after prosecutors disclosed an unusual meeting between Miske, one of his top lieutenants and attorney Thomas Otake, sometime in late July 2014.

Miske had set up the meeting in a parking lot next to a Waikiki area elementary school to discuss the implications of a failed cocaine purchase in California a short time before, which had been broken up by federal drug agents. This resulted in the brief detention of two of Miske’s key associates, along with the seizure of 10 kilos (about 22 pounds) of cocaine, as well as $300,000 to $400,000 in cash Miske had put up to finance the deal.

At the time, Otake had been representing Miske in a pair of criminal cases stemming from separate assaults at his M Nightclub in downtown Honolulu.

Federal prosecutors publicly disclosed the parking lot meeting for the first time in a motion filed in Honolulu federal court on Tuesday. They assert the parking lot meeting creates another major conflict of interest which alone should disqualify Otake from continuing to represent Miske in the ongoing racketeering case. Their motion asks federal Magistrate Judge Kenneth Mansfield to reconsider and reverse a Jan. 18 ruling, in which he which denied Otake’s request to pull out of the Miske case due to conflicts of interest that prosecutors had previously flagged.

An earlier government motion which seeks to disqualify both Otake and co-counsel Lynn Panagakos is also pending. It argues the two attorneys are too closely tied to allegations Miske directed the creation of two fraudulent character reference letters that were among a group of letters collected and submitted to the court by Otake and Panagakos, apparently without knowledge that the two letters had been faked. A hearing on that motion to disqualify has been scheduled for Feb. 10.

The parking lot meeting disclosed by prosecutors was held soon after a key Miske associate, who they identify only as “Cooperator 1,” and a second Miske insider returned from California empty-handed after the raid by federal drug agents broke up their purchase of 10 kilos of cocaine from a Southern California group with ties to a Mexican drug cartel.

The deal had been expected to open up a new and profitable supply line for Miske’s alleged drug trafficking network in Hawaii. But instead, Miske’s two representatives were arrested and briefly detained, and both the cocaine and a reported $300,000 to $400,000 in cash put up by Miske to finance the deal were seized by federal agents.

Miske was reportedly worried, and anxious to hear a first-hand account of what had happened. Prosecutors allege he also wanted to get Otake’s opinion as to whether the release of his two representatives was unusual or suspicious, as well as the attorney’s view of what Miske’s personal legal liability might be. 

Federal investigators only learned of the 2014 parking lot meeting during a witness interview in mid-December, according to their court filing this week. After obtaining the FBI’s written documentation of the witness interview, prosecutors said they informed Otake of what they had learned on Jan. 12.

“During the discussions with Mr. Otake on January 12, 2023, he agreed he had a serious and irreconcilable ethical conflict and that he would immediately move to withdraw,” prosecutors said in their motion to reconsider. 

One day later, Otake filed his motion to withdraw from the case.

“After learning of, and analyzing, the newly disclosed information, I do believe this information creates a genuine conflict of interest that obliges me to withdraw from representation of Mr. Miske,” Otake wrote in a declaration supporting his motion.

Mansfield’s original ruling came after a 30-minute closed-door hearing attended only by Miske and his three attorneys, Otake, Lynn Panagakos and Michael Kennedy, during which the judge sought to determine whether there had been a breakdown of communication between Miske and Otake, according to court minutes.

Prosecutors say they can’t tell from the official court record whether the conflicts of interest facing Otake were fully considered and taken into account in Mansfield’s ruling.

“Normally, such discussions are sealed if they involve attorney-client communications concerning a breakdown in the relationship, fees, or other attorney-client communication related matters. These discussions normally are not sealed when they concern information known to all parties and which should be the subject of argument, especially if positions differ,” prosecutors argue.

“In the absence of any open discussion about whether Mr. Otake was in fact conflicted, rather than whether he could voluntarily withdraw, the record does not reflect whether the Court was aware of or assessed how Mr. Otake’s conflicts, including his role as a witness to a critical meeting between two charged racketeering defendants involving the seizure of ten kilograms of Miske Enterprise cocaine, impacted his ability to continue as Miske’s attorney,” according to the government’s motion.

No date had been set to consider the motion as of late Wednesday afternoon.

The Cartel Deal

Prosecutors did not identify Miske’s “top lieutenant” by name, and refer to him only as “Cooperator 1.” However, prior court filings have identified the two men who flew to California for the 2014 deal as Wayne Miller and Michael Buntenbah, also known as Michael Malone.

Miller is most likely the person referred to as “Cooperator 1.” He was close to Miske before pleading guilty in 2005 to the armed robbery of the Windward Community Federal Credit Union. He was released at the beginning of 2014 and went to work for Miske. He was soon described by at least one witness at Miske’s No. 1 in charge of their drug distribution network.

Prosecutors said Cooperator 1 is expected to testify about the meeting with Miske and Otake, presenting information about Otake’s participation in the conversation to the jury.

“Accordingly, it is the United States’ intent to subpoena Mr. Otake as a witness at trial,” prosecutors said in the government’s latest motion.

“The United States also will argue that Miske arranged the parking lot meeting as a means of furthering his racketeering enterprise: a key participant had been arrested, substantial drugs seized, and Mike’s fronted money lost, all of which caused him to seek assistance from Mr. Otake, even if unwitting, in Miske’s assessment of: (1) whether he had been ripped off; (2) whether Cooperator 1 was cooperating against him; and (3) his personal exposure.”

Otake’s testimony is important, prosecutors say, because it could offer direct proof of Miske’s knowledge of and involvement in the attempted drug buy, which appears as Count 15 in the federal indictment. Miske and Buntenbah were originally named in Count 15, but after Buntenbah’s plea deal and guilty plea, Miske is the only defendant still facing charges in the matter.

Prosecutors also disclosed that they will introduce text messages between Miske and another defendant now cooperating with prosecutors, “where Miske disclosed statements made to him by Otake concerning imminent criminal charges.”

In these messages, exchanged via WhatsApp, Miske says he had talked to “TO,” which prosecutors say is a reference to Tom Otake.

The two then discussed “how they are ‘stressing’ over the possible criminal charges and their belief that another member of the Miske Enterprise is ‘ratting.’”

According to prosecutors, Otake is thus a witness to statements he made to Miske, which were then disclosed to other members of the alleged criminal organization, creating yet another conflict of interest when evidence of these matters are presented  during the trial.

Former Clients As Prosecution Witnesses

Finally, prosecutors say that following the hearing on Jan. 18 before Mansfield, Otake raised additional concerns about two former clients who are expected to be witnesses against Miske at trial.

One client is expected to present evidence of the drug trafficking conspiracy charged in Count 16 of the indictment, while Otake represented another likely witness in an assault case. The government expects this witness to testify about “various tactics Miske used to operate the Miske Enterprise.”

“Each prior attorney-client relationship creates the specter of Mr. Otake cross-examining his former clients about matters within the scope of his prior representation and being put in the position of attempting to impeach their testimony with information they may have disclosed to him in private, protected conversations,” prosecutors argue in their motion.