By Carrie Johnson
Washington Post Staff Writer
Thursday, October 11, 2007

Three weeks into the trial of technology company executives who allegedly engaged in sham advertising deals, prosecutors pulled aside defense lawyer Preston Burton and told him he had a problem.

E-mails produced by his client apparently had been fabricated, the government told Burton last November. Prosecutors and FBI agents said the text and the typeface did not match other evidence they had unearthed.

The incident set off a chain of events that culminated in Burton's resignation -- and a mistrial in his client's case. It marked yet another bizarre episode in the prosecution of former officials at AOL Time Warner and a Las Vegas software maker on charges of using questionable transactions to boost revenues six years ago.

U.S. District Judge Walter D. Kelley Jr. this week lifted a court seal on testimony Burton gave behind closed doors at an evidentiary hearing last week, as a new trial of his former client, Charles E. Johnson Jr., opened in federal court in Alexandria. This time, Kelley, and not a jury, will decide Johnson's fate on the old charges -- plus a new charge of obstructing justice.

Burton's testimony was given under an exception to attorney-client privilege that allows the government to inquire about a person's communication with his lawyer if such exchanges further a crime. Burton's words could be used against Johnson, the founder of software maker PurchasePro.

"I had concerns for Mr. Johnson but I was also upset with Mr. Johnson," Burton testified about the November 2006 bombshell. "It was a very difficult day."

Johnson, a tough-talking former college basketball player nicknamed "Junior," continues to maintain his innocence. His current lawyer, Yale L. Galanter, recently in the news for his representation of O.J. Simpson, did not return calls seeking comment about the e-mails. But in court last week Galanter portrayed the episode as a misunderstanding, casting Johnson as a "hands-on" client who had been trying to test whether his high-priced legal team was up to speed.

The trouble began in July 2006, 18 months after Johnson and other executives from AOL and PurchasePro were indicted on charges of making improper deals to inflate both companies' earnings. Preparing for trial, Burton said, he had a strange conversation with his client. Johnson asked him whether the defense team had "caught" a phony exculpatory e-mail he placed in a batch of electronic material he sent to his lawyers.

Burton said he admonished Johnson, who alternately called the fabrication a joke and a way to challenge the efforts of his legal team. A colleague of Burton detected another odd e-mail two months later, as a deadline loomed to exchange courtroom exhibits, the defense lawyer said.

Burton again chastised his client and said he directed the defense team to authenticate e-mails by checking them against a large company-compiled database and with their government adversaries.

The system appeared to be working until Nov. 7, when a junior member of the defense team could not find two e-mails that Johnson had provided just as a key witness against him was about to take the stand, Burton testified. The junior lawyer checked the computer database and reached out to prosecutors, who pulled Burton aside the next day and warned him that they thought Johnson had tried to tamper with documents and cloak his involvement in the accounting scheme.

Burton said he asked his colleague to consult with legal experts, leading to a frantic effort -- from the courtroom, as the trial proceeded -- to pull up ethics rules on a laptop computer.

Taking the witness stand on his own behalf, Johnson testified at last week's hearing that he had been trying to help attorneys sort through complex financial data. As part of the process, Johnson said, he compiled his e-mail correspondence and relevant business spreadsheets, one of which got attached to an e-mail from April 2001 in error.

"It was a mistake," Johnson said. "I never intended for the document to be used in court."

To support his account, Johnson said that the document did not appear on an outline he had sent Burton to prepare for cross-examination of a critical witness, a fact that Johnson said cast doubt on the government theory that he had produced the material to fool the court.

At the evidentiary hearing last week, Assistant U.S. Attorney Timothy Belevetz walked Johnson through explanations he had offered for the e-mail problems, from technology issues and a misplaced attempt at humor to a desire to challenge his lawyers, who Johnson said were not keeping pace with the flow of documents in the sprawling case. "Mr. Johnson, with all these explanations you've given, what's your excuse today?" Belevetz asked.

The probe began more than five years ago, when the U.S. attorney in the Eastern District of Virginia opened an inquiry into a series of advertising deals AOL struck with business partners. Government lawyers suspected the deals were shams designed to artificially boost both companies' revenue as the dot-com bubble was bursting in 2000 and 2001.

They soon focused their attention on Johnson. The government accused Johnson of threatening employees and ordering them to destroy e-mails and computer hard drives, one of which they destroyed and spread across a backyard, according to trial testimony last year. (Two former AOL employees and a PurchasePro vice president ultimately were acquitted by an Alexandria jury in February.)

Johnson hired several lawyers to defend him, including Galanter and Burton, before returning to Galanter after Burton's withdrawal from the case last year. At the time, Burton said he based his decision on "irreconcilable differences."