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Sunday, July 21, 2019

Appeal by former college professor turned meth producer, then legal assistant for Clayborne firm, rejected at 7th Circuit

Lawsuits

By Record News | Jun 18, 2019


Conley and Wood

CHICAGO – Former methamphetamine producer Paul Whinnery worked for James Clayborne’s firm in Belleville while Clayborne led the Illinois Senate, according to a letter from the firm on record at the U.S. Seventh Circuit Court of Appeals. 

Whinnery filed the letter in U.S. district court at Madison, Wisc., in support of a motion to terminate court supervision that followed 11 years in prison. 

Clayborne partner John Sabo sent the letter to Whinnery last July, telling him their employment relationship would end if he couldn’t travel. 

“The inconsistencies and unpredictable nature of your permission to travel seriously compromises your value to the firm,” Sabo wrote. “Unless you can get this travel restriction lifted within the next 30 days I will have no choice but to terminate your employment.” 

District Judge William Conley denied termination in October, and Seventh Circuit judges affirmed him on June 6. 

Whinnery, age 66, taught computer science at North Texas State University in Denton under the name of Paul Schlieve. 

He led a double life as data whiz and meth maker. 

His young partner in crime introduced him to associates as “Daddy.” 

Agents swept him up with 21 other suspects in 2003, and grand jurors indicted the group in U.S. district court at Sherman, Texas. 

Schlieve pleaded guilty in 2004. 

At sentencing before district judge Richard Schell, prosecutor Maureen Smith said Schlieve was financially responsible for several cooks at his ranch. 

She said he provided funds for batteries and pills. 

Schell told Schlieve that as a condition of supervision following release, he would provide his probation officer with access to financial information. 

The Bureau of Prisons released him to District Judge Marcia Crone in 2015. 

She transferred his jurisdiction to Wisconsin last April. 

A probation officer asked him to verify his employment and he said he worked for Katunigan Company, a business he founded. Katunigan contracted with a Cayman Islands company to provide litigation support and identification of business opportunities. He also said the island company paid Katunigan a monthly draw, and that he lived in company housing and drove a company car. 

He said he couldn’t provide details of his work but could provide a tax return for 2016 and bank statements. 

In July, attorney Bill Jones of Madison appeared for Schlieve in district court and moved for early termination of supervision. 

Jones wrote that at the time of Schlieve’s arrest, he received royalties from intellectual property for tests of mathematics. 

He wrote that Schlieve operated under Katunigan Company, a Texas corporation, and that Katunigan continued to employ him through February 2018. 

“The employment relationship was terminated in March of 2018, in an effort to conform with the requirements of the U.S. probation office,” Jones wrote. 

He wrote that Katunigan continued to license the tests but the protocols needed major revisions. Because travel was cumbersome, Katunigan subcontracted many tasks to an Austin company at great expense. 

“As a result, Dr. Schlieve is experiencing minimal financial benefit at a time when he could, through his intellectual property, be making a decent living,” Jones wrote. 

He objected to an inquiry into Katunigan by the probation and parole department, writing that there are limits to access into a corporate entity’s documents. 

He wrote that the department took a position that it was entitled to documents so it could confirm that Schlieve was lawfully employed. 

Jones prepared another pitch for free travel, writing that Schlieve took up legal research in prison. 

“After his release from prison, through a stroke of good fortune and networking, Dr. Schlieve has been introduced to over a dozen lawyers and legal scholars throughout the country who have taken notice of his work ethic, affinity to identify legal issues and memorize legal precedent, and advocacy skills,” Jones wrote. 

He wrote that six months earlier, Schlieve landed a job as a legal assistant for Clayborne, Sabo and Wagner. 

“His tasks include reviewing massive amounts of discovery, researching legal issues, and drafting legal memoranda or outlines for supervising attorneys,” Jones wrote. 

He wrote that travel restrictions hindered Schlieve’s ability to perform because of the fast pace of a litigation firm. 

He attached Sabo’s letter, carrying a July 12 date. 

Schlieve received it in Janesville, under the name of Whinnery. 

Sabo wrote that ability to travel was an important requirement, particularly when he needed Schlieve in Belleville on document intensive matters. 

“It’s also important that you be able to travel to meet with those lawyers and law firms handling litigation in various states that I either oversee or work with in the related litigation matters,” Sabo wrote. 

“While I appreciate all of your good work and dedication in helping me wrestle with the hundreds of thousands of documents related to the more than ten years of multiple litigation that grew out of our client’s several investments, it will not be possible to continue this relationship if you are unable to travel.” 

Judge Conley heard the motion in October and found he couldn’t consider it until Whinnery complied with reasonable requests for information. 

Whinnery appealed, to no avail. 

Seventh Circuit Chief Judge Diane Wood found Conley didn’t abuse his discretion, and judges Frank Easterbrook and Ilana Rovner agreed. 

In an interview on June 17, Whinnery said he doesn’t work for Clayborne’s firm and Clayborne had no involvement in the termination motion. 

Asked if Sabo had any involvement, he ended the interview. 

Sabo’s description of the investor client fits Thane Ritchie of Chicago, currently in the 13th year of litigation against another investor. 

Clayborne’s firm sued Ritchie in St. Clair County circuit court in April, claiming he owed more than $500,000 in fees.

Ritchie hadn’t answered as of June 14.

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