Saturday, June 18, 2005

Bayly Seeks Reconsideration of the 5th Circuit's Bail Denial

Former Merrill Lynch investment banker Daniel Bayly, convicted in the Enron Nigerian Barge Trial, has sought reconsideration by the Fifth Circuit of its earlier decision to deny him bail pending appeal of his conviction, for which he received a 30-month term of imprisonment.  Tom Kirkendall's Houston's Clear Thinker blog has a post about Bayly's request for reconsideration (here) that Tom finds compelling, along with a link to the defense brief, which argues:

The fundamental errors in this case begin with the government's novel and unduly creative use of an "honest services" theory in connection with the wire fraud statute. See 18 U.S.C. §§ 1343, 1346. As Bayly's motion for release shows, the honest services charge in this case permitted a criminal conviction for conduct -- the accelerated booking of gain -- that was undertaken primarily on behalf of the alleged victim (Enron), which knew every aspect of the transaction, and not for the self-interest of the alleged conspirators (see Bayly motion at 16-20). No court ever has sanctioned such a broad application of the honest services statute -- especially where, as here, no bribe or gratuity was provided to, nor were there any undisclosed conflicts of interest as to, the employees of the putative victim (Id. at 19-20). As in Andersen, the Enron Task Force in this case secured a conviction through application of an entirely unprecedented theory in a hotly-contested area of the law. . . The government does not dispute that, if our view of the limits of Section 1346 prevails, all three counts of conviction must be set aside. (footnote omitted).

After the Supreme Court's reversal in Arthur Andersen, which was a stinging rebuke of the Fifth Circuit, that court may be more amenable to appeals in white collar cases when the government seeks to push the envelope.  Unfortunately, whether the same solicitousness will spill over to a bail decision, particularly a motion to reconsider an earlier denial of the request for bail, is a much closer question, and I suspect the court will not view Andersen as changing the analysis of the availability of bail after a conviction. (ph)

http://lawprofessors.typepad.com/whitecollarcrime_blog/2005/06/bayly_seeks_rec.html

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