S.D. LAWYER DENIES LAUNDERING MONEY

He Enters Plea In Arizona Court

PHOENIX -- A well-known San Diego defense lawyer pleaded not guilty here
yesterday to charges that include laundering money for what officials say
is a major marijuana trafficking organization.

Sheldon Sherman, 49, was allowed to remain free without bail by Maricopa
County Superior Court Judge Thomas O'Toole, who set a hearing for next week
to consider if bail is warranted.

Arizona officials have accused Sherman of conspiring with a group of
marijuana smugglers they say were led by Mark Branon, 37, who was arrested
several weeks ago in San Diego and is awaiting extradition to Arizona.
Branon has been a client of Sherman's for at least several years.

According to court papers, two houses in the Phoenix area were signed over
to Sherman in the past couple of years by men connected to what authorities
say was a marijuana business run by Branon. Arizona officials say the
houses, with a combined estimated value of $1 million, were placed in
Sherman's name to hide profits from the marijuana operation.

Sherman said nothing in court yesterday. His attorneys, however, ridicule
the charges and insist Sherman has done nothing wrong. They say the houses
were signed over to Sherman as payment for legal representation he gave the
sellers in past years.

James Warner, a lawyer who shares office space with Sherman, said yesterday
the charges are "overbroad and filled with improprieties." He said such
charges would never have been filed in California.

"(Sherman) was out there doing the battle, trying to protect the rights of
the accused," Warner said. "You shouldn't be able to indict anyone for
doing a lawful act."

Last week, Sherman said the charges stem from "a couple of old clients who
have decided to carry out a grudge." He called the charges "ridiculous."

Sherman's downtown law office, his home in Rancho Bernardo, a bank safety
deposit box and a storage facility were searched by investigators last
Thursday.

In an affidavit supporting the searches, investigators claim that several
felons said they paid Sherman large amounts of money that he did not report
to the appropriate agencies.

According to court documents, the investigation into Sherman's activities
began last December and was jointly conducted by Arizona police and several
federal agencies, including the IRS and the Drug Enforcement Administration.

An Arizona grand jury indicted Sherman, Branon and six other men on July
18. Four of the men have not been arrested.

If found guilty of all charges -- which include money laundering,
conspiracy and illegally conducting an enterprise -- Sherman could face a
maximum penalty of 31 years in prison, said Arizona Assistant Attorney
General Billie Rosen.