JUDGE RULES PROSECUTOR VIOLATED GRAND JURY SECRECY

The Federal Judge Also Ruled That The Prosecutor Would Not Be Punished
Because Keith Neely's Request To Find Her In Contempt Came Too Late.

Former Christiansburg lawyer Keith Neely has demonstrated that the
prosecutor who won drug and money laundering convictions against him in
1993 violated a federal rule while working on the case, a federal judge has
found, but it is too late to sanction her.

In an opinion filed Friday, Senior U.S. District Judge Jackson Kiser found
that Assistant U.S. Attorney Karen Peters broke a federal rule when she
shared documents she got during grand jury proceedings with Neely's former
secretary, Tangie Vest. A grand jury is a panel of people who review
evidence and decide whether to seek indictment. Its deliberations must be
kept secret under federal law.

"At least it's a step forward that he did find misconduct," said Radford
attorney Max Jenkins, who is representing Neely. "But we're waiting for the
biggie."

Neely, who has been fighting his conviction for almost 10 years, is still
awaiting Kiser's ruling on a separate motion to have his convictions
overturned.

Peters said that she found the opinion "flawed."

"The fact that you show somebody a document isn't telling them where it
came from," said Peters, who left the U.S. Attorney's Office in October
after almost 20 years to become an administrative law judge.

Vest recently came forward and swore in an affidavit that Peters had shared
documents with her that the prosecution had subpoenaed from Neely's law
practice to present to the grand jury.

"In preparing for trial, the government used some of these documents to
refresh Vest's memory" about some of Neely's co-conspirators in the case,
including Michael Giacolone, Donald Kimbler and "Butch" Franklin , the
judge wrote in his opinion.

Federal authorities contended at Neely's trial that he used his law office
to help smuggle drugs and launder drug profits. He was sentenced to 10
years in prison after he was convicted in 1993. After losing his appeal, he
entered federal prison in 1996.

Neely requested that Peters be held in criminal and civil contempt for
violating grand jury secrecy. But Kiser found that Neely took longer to
file his request than federal law permits - five years after the offense
allegedly occurred. Neely filed his motion almost eight and a half years
after the disclosures. For the same reasons, Kiser also denied Neely's
requests to seek sanctions or financial penalties against Peters.

Kiser also found that sanctions were not appropriate because the staff has
changed at the United States Attorney's office.