Monday, October 24, 2005

New Memo on Attorney-Client Privilege

Robert D. McCallum, Jr., Acting Deputy AG, issued a "Memorandum" to "Heads of Department Components and United States Attorneys" concerning the statement in the Thompson Memo that speaks to the waiver of the attorney-client privilege. The Memorandum notes that "[o]ne of the nine factors [listed in the Thompson Memo] is 'the corporation's timely and voluntary disclosure or wrongdoing and its willingness to cooperate in the investigation of its agents, including, if necessary, the waiver of corporate attorney-client and work product protection.'" McCallum's memo does not find this practice improper, nor does it reject a prosecutor's asking for the waiver of the attorney-client privilege when dealing with a corporation or business.  This new memo merely directs that "consistent with" the practice used by some US Attorneys' Offices, each individual office should "establish a written waiver review process for [their] district or component." 

Ironically, in contrast to the position taken by DOJ with respect to sentencing matters, this memo states that "[s]uch waiver review processes may vary from district to district (or component to component), so that each United States Attorney or component head retains the prosecutorial discretion necessary, consistent with their circumstances, to seek timely, complete, and accurate information from business organizations."

Is this supposed to placate those who have been criticizing the government's requests for a waiver of attorney-client privilege in dealing with corporations and businesses?

The Memo is here - Download AttorneyClientWaiverMemo.pdf

(esp)

October 24, 2005 in Legal Ethics | Permalink | TrackBack (0)

The Story of "Scooter" Libby

In an in-depth report in the Washington Post here, is a discussion of the life and times of I. "Scooter" Libby.  It includes everything from his prior representation of Marc Rich, an individual who received one of the controversial pardons from former President Bill Clinton to him being well educated - prep school at Phillips Andover and law at Yale. But the opening line of the article is almost a challenge to Patrick Fitzgerald - did Libby really quip "to an aide that he planned to stay as Vice President Cheney's top adviser until 'I get indicted or something.'"?

(esp)

October 24, 2005 in Investigations | Permalink | TrackBack (0)

Is Perjury a "Technicality"?

On Meet the Press, in the context of discussing possible charges from the grand jury investigation of the leak of the status of Valerie Plame, Senator Kay Bailey Hutchison stated that a perjury charge would be a "technicality" and any such charge would be an attempt by Special Counsel Patrick Fitzgerald to justify a two-year investigation -- see the Reuters story here. As an earlier post (here) notes, this may well be the week in which Fitzgerald decides whether to seek a grand jury indictment.  The Reuters article also notes that Fitzgerald may inform one or more officials in the administration that they are targets of the investigation, a final step toward seeking an indictment.

If a perjury (or Section 1001 or obstruction of justice) charge were to be returned by the grand jury, is that just a technicality, particularly if the underlying subject matter of the investigation -- whether there was a violation of federal law from the disclosure of Plame's position as a cover intelligence agent -- is not also charged?  Lying is hardly a technical violation of the law, particularly when a person has sworn an oath to testify truthfully before a federal grand jury, and trying to diminish perjury as a "collateral" violation or otherwise unimportant denigrates the integrity of the investigative process.  As the Eighth Circuit noted in U.S. v. Lasater, 535 F.2d 1041, 1049 (8th Cir. 1976): "The grand jury performs an important function in our judicial system, as the device by which criminal investigations are conducted and criminal proceedings instituted . . . Any false testimony before a grand jury, which tends to impede its investigation, should be diligently prosecuted."  Interestingly, a claim of perjury was the basis for the first article of impeachment (here) against President Clinton, which stated:

[I]n violation of his constitutional duty to take care that the laws be faithfully executed, has willfully corrupted and manipulated the judicial process of the United States for his personal gain and exoneration, impeding the administration of justice, in that: On August 17, 1998, William Jefferson Clinton swore to tell the truth, the whole truth, and nothing but the truth before a Federal grand jury of the United States. Contrary to that oath, William Jefferson Clinton willfully provided perjurious, false and misleading testimony to the grand jury . . . .

  That does not sound like a "technicality" to me. (ph)

October 24, 2005 in Grand Jury, Investigations, Media, Perjury | Permalink | TrackBack (1)

McNulty to Be Nominated as #2 At the Department of Justice

Paul McNulty, the United States Attorney for the Eastern District of Virginia, will be nominated to the vacant position as Deputy Attorney General, to succeed James Comey, who left in August.  Timothy Flanigan, who worked in the White House Counsel's office, was originally tapped for the position, but withdrew over problems related to his lack of criminal law experience and ties for lobbyist Jack Abramoff, who is under indictment for bank fraud.  McNulty has served as United States Attorney since 2001 (biography here), and his office handled high-profile terror prosecutions (e.g., Zacarias Moussaoui) and procurement fraud cases related to the Pentagon (e.g., Darleen Druyan). An AP story (here) discusses the nomination. (ph)

October 24, 2005 in Prosecutors | Permalink | TrackBack (0)

Hurricane Katrina Fraud Task Force Update

The Department of Justice's Hurricane Katrina Fraud Task Force issued a press release (here -- through the U.S. Attorney's Office for the Southern District of Texas) outlining the focus of the investigatory and prosecutorial effort to address frauds related to disaster relief from Hurricanes Katrina and Rita -- and no doubt Hurricane Wilma will be added to the list if it causes significant damage.  The Task Force has brought forty cases since early September, not only in districts directly affected by the hurricanes but also as far away as California and Oregon.  The types of cases the Task Force is concentrating on are :

  • Fraudulent Charities: Cases in which individuals falsely hold themselves out as agents of a legitimate charity, or create a “charity” that is in fact not legitimate;
  • Identity Theft: Cases in which the identities of innocent victims are stolen and assumed by criminals who convert the funds of, or otherwise defraud, the victims;
  • Government-Benefit Fraud: Cases in which individuals file false applications seeking benefits to which they are not entitled;
  • Government-Contract and Procurement Fraud: Cases in which individuals and companies engage in fraud related to federal funds provided for the repair and restoration of infrastructure, businesses, and government agencies in the affected region; and
  • Insurance Fraud: Cases in which false or inflated insurance claims are filed.

(ph)

October 24, 2005 in Fraud, Prosecutions, Prosecutors | Permalink | TrackBack (0)

Former Law Firm Employee Sentenced to Statutory Maximum for Wire Fraud

A former employee of a Houston law firm, Roy Allen, received the maximum five-year sentence for mail fraud for a scheme to use the firm's money to fund a purchase of a house that Allen hoped to flip in a quick sale so that he could repay the money without being noticed.  The scheme took place in 2001, before the statutory maximum was bumped up to 20 years by the Sarbanes-Oxley Act in 2002. According to a press release issued by the U.S. Attorney's Office (here):

While employed with Gallagher, Lewis, Downey & Kim, a Houston law firm, Waters had limited authority to request transfers from the firms accounts to carry out firm business. However, without authority or authorization, Waters requested and secured transfers of substantial sums of the firms funds for his own use. Waters attempted to conceal his theft by transferring more than $2.5 million in the firm's fund to purchase houses in the Royal Oaks Subdivision in Houston with the hope of using anticipated profits from the resale of those houses to secretly pay back the money. This illegal wire transfer took place on May 14, 2001. When his theft was detected, Waters transferred ownership of the houses to the firm.

(ph)

October 24, 2005 in Fraud, Sentencing | Permalink | TrackBack (0)

The Effect of the SEC's Investigation on Senator Frist's Presidential Plans

An AP story (here) notes Senator Bill Frist's acknowledgment that the SEC's investigation of his sale of HCA Inc. stock from so-called blind trusts may affect his decision whether to run for President in 2008.  While the SEC's investigation will not be concluded swiftly, given the volume of stock sales by HCA executives and potential sources of information, it will likely be done long before the primaries in 2008.  The greater problem for Senator Frist is the innuendo that an investigation causes, even if the SEC decides not to pursue a civil fraud action.  The end of an investigation, even one without any public action, never receives the same publicity as reports of its initiation and stories about subpoenas being sent to those involved in the transactions.  The political assessment will follow the legal decision, but will include factors far removed from the federal securities laws. (ph)

October 24, 2005 in Investigations, Securities | Permalink | TrackBack (0)

Sunday, October 23, 2005

Will This Be Patrick Fitzgerald's Big Week?

Patrick Fitzgerald's time with the grand jury is running out.  His options include indicting, not indicting, or asking to continue his investigation.

In the background is "The Miller Mess," discussed here.  Right now Judith Miller must be wondering if she is receiving criticism because of her testimony concerning "Scooter" Libby. Or is it that she spent 85 days in jail and then did not know the source of the information. (see prior posts here, here and here)  And this does not even begin to get to any inconsistencies that might exist regarding these events. (see post here).

Clearly Fitzgerald will be careful in making sure that he has probable cause before issuing any indictments (see here)  But it is also important that action be taken to punish improper conduct.  As repeatedly stated: "[t]he bottom line is that someone leaked the name of a CIA agent.  That's serious and that's a problem."  And if individuals are keeping the prosecutor from getting to the bottom of events because of obstructive conduct, false statements, or perjury, then he needs to consider these charges.  In these circumstances, use of these charges would not be considered a government use of "short-cut" type offenses.

If Patrick Fitzgerald can't make the case now, he should not give up - but continue the investigation until such time as the perpetrators are found.  The leak of a CIA identity is too important to our national security to leave this event as an unsolved mystery. 

(esp)

October 23, 2005 in Investigations | Permalink | TrackBack (0)

Maybe This Could Be A Movie?

The US Attorney for the Central District of California has indicted an individual for an alleged investment scam of claiming to be producing a television series on Homeland Security.  In a press release here "the owner of Steeple Entertainment, was named in a 23-count indictment that accuses him of mail fraud, wire fraud and money laundering in relation to a scheme that raised more than $5.5 million from at least 70 investors."  A second defendant, the CFO, is pleading guilty. (Isn't it interesting how the CFO's tend to get the best deals --could it be because they have the most information to offer the government?)

According to the press release, "As part of the alleged scam, [the indicted individual] falsely claimed that the 'DHS' television series had the endorsement of President George W. Bush and the real Department of Homeland Security, and that Steeple had 26 episodes of 'DHS' in post-production."

(esp)

October 23, 2005 in Fraud, Prosecutions | Permalink | TrackBack (0)