Convicted Former ArthoCare CEO’s “Seating” Appeal Denied

Michael Baker, the convicted and sentenced former CEO of ArthroCare Corp. told a Texas federal judge that he should have a new trial because of seating arrangements at his trial. Earlier this summer he was sentenced to 20 years in prison for committing securities fraud.

Baker’s lawyers clearly understood the famous law school lesson that when the law is against you, argue the facts. If the facts are against you, argue the law.

According to court documents, Baker and fellow convictee Michael Gluk, the company’s former CFO who was sentenced to 10 years in prison, say their families and members of the public were wrongly excluded from the courtroom so that attorneys favoring the prosecution could enjoy preferential seating. Government lawyers said their arguments were meritless.

Sixth Amendment Violation Alleged

The judge in Austin, Texas, agreed with the government lawyers and wrote on December 5, 2014, “To the extent the Baker and Gluk families were temporarily unable to find seating in the courtroom because the room was filled to capacity, no constitutional violation occurred; the Sixth Amendment requires that trials be open to the public, not that seats must be available for every person who wishes to attend.”

Law360 reported on December 8, that the defendants’ lawyers didn’t know about the family’s inability to attend jury selection during the trial. It wasn’t until Baker’s wife, Jan, realized she should have been permitted to attend the process in July. She had reportedly read an article about a New York case were a murder conviction was overturned because the defendants’ mother had been excluded from the courtroom.

The judge had wondered why the defense lawyers waited so long to complain. The judge also said that had he been aware of the family’s inability to find seats, he would have likely considered an accommodation for them.

Almost $1 Billion Losses

Baker and Gluk weren’t convicted of murder, but of conspiracy to commit wire and securities fraud for participating in a $400 million scheme to inflate ArthroCare’s earnings. The government says the losses to investors were in the $756 million to $958 million range. Baker was also found guilty of making false statements to the U.S. Securities and Exchange Commission. The court also ordered the two men to forfeit about $22.2 million, representing their profits from the scheme.

Another pair of former ArthroCare senior vice presidents, John Raffle and David Applegate, who pled guilty to charges related to the scheme and served as cooperating government witnesses, were sentenced to 80 months and 5 years in prison, respectively.