Securities: Prosecutors Appeal Dismissal of Las Vegas Securities Fraud Case

Government prosecutors are asking an appeals court for another opportunity to try three men for securities fraud. A U.S. District Court judge dismissed the trial in February. Daniel Chapman, Sean Flanagan, and Herbert Jacobi had charges filed against them for forming shell corporations and selling securities while not disclosing that they controlled all the shares of stock. The scheme is also known as a "box job."

Prosecutors appeal dismissal of Las Vegas securities fraud case

U.S. District Judge James Mahan declared a mistrial because there was "flagrant, willful and bad faith" misconduct by prosecutors who defense lawyers accused of having withheld more than 600 pages of case documents. The appeal says that Mahan should have addressed government explanations, examined evidence and made findings supporting a dismissal of charges before declaring a mistrial.