Sunday, December 9, 2007

Conrad Black - Bail Pending Appeal?

With Conrad Black most certainly facing jail time, there are three possible scenarios here: 1) he could be ordered to go directly to jail; 2) he could be ordered to go to jail but allowed time for the specific placement to be made and then he could be allowed to report to that facility; 3) he could be granted bail pending the appeal.  My co-blogger, Peter Henning lays out the test and some examples here for this last category.  In the mix here also is the fact that he can serve his sentence in Canada under the terms of a prisoner transfer treaty.   Lets look a little closer at this particular issue:

1. Conrad Black's past conduct provides strong evidence that he is not a flight risk.  This speaks well for bail pending appeal.  But, today, this factor seems to play more of a role in holding people who are flight risks than in saying those who are not a risk should be released.

2. There is no evidence that he would pose a danger in society - a typical realization in a white collar case.  The conviction in a white collar case usually strips the person of any power that would allow them to do further damage.

3. So it all comes down to whether he has a substantial question of law or fact that might result in reversal.  In many ways the trial judge being the person to evaluate this issue is somewhat strange as it is the trial judge who ruled throughout the trial on the issues that are likely to be presented on appeal. Most often the issues fall into four categories: jury instruction (whether it is an improper one or an offered one not admitted), insufficiency of the evidence, admissibility or inadmissibility of evidence, and constitutionality.

Although case law exists on what constitutes a "substantial question," much is left to the judge - who often issues very little guidance for future courts, as courts often rule on this issue without explanation.   

Some get the bail -

  • Gov. Ryan - bail for the appellate stage, but not the Supreme Court stage;
  • Bernie Ebbers - bail granted pending the appeal, but once affirmed told to report to prison;
  • Martha Stewart - bail granted pending the appeal by the 2d Cir.- although she then decided not to take it

Some do not get bail -

  • "Scooter" Libby - denied bail pending appeal - but then pardoned; having his sentence commuted;
  • Jeff Skilling - no bail pending appeal;
  • Former Atlanta Mayor Bill Campbell - no bail pending appeal;
  • Jamie Olis -ordered directly to prison;
  • Former Alabama Gov. Siegelman & Richard Scrushy - no bail;
  • Chalana McFarland - no bail 

In an attempt to reach a classless sentencing structure we may be moving the emphasis to this third category - the substantial question.  This poses a problem as it attempts to measure error in a stage before the issues have been raised.  The defense is placed in the position of showing their appellate cards prior to the game beginning.

Additionally, one issue that seems to be overlooked is whether the individual reports to the prison or is taken on the spot.  For the individual already incarcerated, the answer is usually easy - they just stay in prison.  But for the white collar offender who poses no risk of flight, or to society - should they be subject to immediate incarceration that places them in a holding pattern pending their assignment to a facility?  And what standard is being used here to make the decision of who gets to report directly to the prison facility, and who does not?  Shouldn't all white collar and non-white collar offenders who pose no risk of flight or harm to society be given this privilege? And yes, it can be an important privilege to not have to wait in prison for the placement orders and then be transferred by prison authorities to the eventual destination.  Reporting directly to the facility, although it may be at the cost of the defendant, is often a better way to be enter the prison system.

(esp)

December 9, 2007 in Sentencing | Permalink | Comments (1) | TrackBack (0)

An Interesting Twist in the Reyes Case

The prosecution of former Brocade Communications CEO Gregory Reyes has taken a new turn with the defense filing a motion for a new trial (available below) based on newly discovered evidence, specifically a witness who may not have been entirely truthful in her testimony.  Reyes was the first defendant convicted for fraud based on options backdating, and the company's former human resources manager, Stephanie Jensen, was just convicted on conspiracy and false statement charges. 

In preparation for Jensen's trial, the witness, who worked in Brocade's finance department, had been listed as a prosecution witness.  Right before a pretrial interview with prosecutors, her lawyer from Wilson Sonsini informed the prosecutors that she would assert her Fifth Amendment self-incrimination privilege, and the law firm withdrew from her representation.  The witness had been important to the government's case, with the brief noting that her testimony was cited more than twenty times in the prosecution's closing arguments.  Even more, the defense points out that the "Court, in its order denying the Rule 29 and Rule 33 motions, emphasized the importance of the fact that Ms. Moore did not know about the retroactive pricing of options, and articulated its belief that “the human resources department did not pass along information about the scheme to people in the finance department like Elizabeth Moore." 

In support of its motion, the defense filed affidavits from three individuals who assert that the witness believes her testimony was misconstrued by the prosecutors, and that she was not ignorant about the backdating.  It's not clear whether her testimony at Reyes' trial was diametrically opposed to what she is now stating, so she may not have committed perjury.  But the withdrawal of her counsel and assertion of the Fifth Amendment certainly give the defense fodder to seek a new trial. 

The U.S. Attorney's Office disclosed her assertion of the self-incrimination privilege to Reyes and Jensen as soon as they learned of it, sending an e-mail that stated:

Please be informed that we have been notified by George Niespolo, counsel to Elizabeth Moore, that Ms. Moore will assert her Fifth Amendment privilege if called to testify at the Jensen trial. Mr. Niespolo did not share with us the grounds for that assertion, and he declined to tell us whether he considered the information Brady material as to either Mr. Reyes or Ms. Jensen.  We asked Mr. Niespolo for further details, which he declined to provide except to add that the information was somehow related to her prior testimony.

A government witness who testifies in one trial and then decides to assert the Fifth Amendment in a second trial on the same transactions is certainly suspicious.  Whether Moore is truly a "key" witness remains to be seen, because the conviction of Jensen may provide a basis for prosecutors to argue that her testimony was not so important to the Reyes conviction that different, or even contrary, testimony from her would make a material difference. 

Reyes has not been sentenced yet, and the district court will need to straighten this out before getting to that point, if in fact the cases even reaches sentencing.  While "newly discovered evidence" claims can be brought on just about any ground, this one might gain some traction.  (ph)

Download us_v_reyes_new_trial_motion_dec_3_2007.pdf

December 9, 2007 in Prosecutions, Securities | Permalink | Comments (0) | TrackBack (0)