Friday, May 30, 2008

In the News

Sylvia Moreno, Washington Post, D.C. Official's Brother Pleads Guilty in Tax Scam

Ann Zimmerman, Wall St Jrl, Home Depot Ex-Executive is Charged with Fraud

Glenn R. Simpson & Carrick Mollenkamp, Wall St Jrl, Ex-Banker to Cooperate, Plead Guilty in UBS Probe

Rosalind S. Helderman, John Wagner, & Ovetta Wiggins, Washington Post, FBI Raids Home of Maryland State Senator

David Armstrong & Jesse Drucker, Wall St. Journal, IRS Scrutinizes Rabobank's Dealings with Newell

Judith Burns, Wall St Jrl, Ernst & Young Ex-Partner is Indicted

David Heinzmann, Chicago Tribune, Officers were Encouraged to Lie, Indicted Chicago Cop Tells '60 Minutes'

(esp) (blogging from Firenze, Italy)

May 30, 2008 in News | Permalink | Comments (0) | TrackBack (0)

Government Files Cross Appeal in Wesley Snipes Case

The government filed a Notice of Cross-Appeal in the Wesley Snipes case (see below).  How far this will get, however, remains to be seen.  Certainly there are several questions that one has to ask here -

  • What could they possibly be appealing?  Snipes received the prison sentence the government asked for  (see here)- three years. (see here) They can't appeal the jury's failure to convict on the counts he was acquitted on.  Thus, the only remaining basis could possibly be the court's failure to impose any fine, or to make "restitution" (payment of delinquent taxes) a special condition of supervised release.  Would they really make this a basis for a cross-appeal?
  • Has this cross-appeal been through the approval process of the Solicitor General's office? And if so who approved it? (Paul Clements announced he was stepping down - see here)

Notice of Government Cross-Appeal -  Download Snipes.pdf

(esp - from Firenze, Italy)

May 30, 2008 in Celebrities, Tax | Permalink | Comments (2) | TrackBack (0)

Defense Contractor Pleads Guilty

A Department of Justice Press Release reports that "[a] former manager of a West Sayville, N.Y., company pleaded guilty and has agreed to serve a jail sentence and pay a criminal fine for his role in two separate conspiracies, one to rig bids on U.S. Navy contracts for metal sling hoist assemblies and another to accept kickbacks from vendors and subcontractors."  The agreement calls for a year and a day in prison, payment of a $10,000 fine and cooperation in the government's investigation.

(esp)(blogging from Firenze, Italy)

May 30, 2008 in Antitrust | Permalink | Comments (0) | TrackBack (0)

Thursday, May 29, 2008

In the News

Amy Shipley, Washington Post, Track Coach Convicted on 1 of 3 Steroid-Related Charges (Balco Related)

International Herald (Bloomberg, AP) - Prosecutors open inquiry into possible spying by Deutsche Telekom (German Prosecutors)

Ha'aretz,  Olmert: Not every person under probe must resign (discussing the investigation involving Israeli Prime Minister Ehud Olmert)

DOJ, Toray Industries to Pay U.S. for Price Fixing on Carbon Fiber Materials ($15.25 Million - civil settlement)

DOJ, FBI Agent Arrested for Attempting to Influence Criminal Case of Man Married to His Mistress

DOJ, Third Defendant Pleads Guilty in China Espionage Case

(esp) (limited posting this week as I am blogging from Firenze, Italy)

May 29, 2008 in News | Permalink | Comments (0) | TrackBack (0)

Tuesday, May 27, 2008

In the News

Monday, May 26, 2008

Top 10 SSRN White Collar Crime Papers from January 1997 - May 2008

ALL TIME HITS (for all papers in SSRN eLibrary)

TOP 10 Papers for Journal of White Collar Crime
January 2, 1997 to May 26, 2008

1

Train Wreck at the Justice Department: An Eyewitness Account
John McKay,
Seattle University - School of Law,
Date posted to database: November 12, 2007
Last Revised: March 13, 2008

2

The Cost to Firms of Cooking the Books
Jonathan M. Karpoff, D. Scott Lee, Gerald S. Martin,
University of Washington - Michael G. Foster School of Business, Texas A&M University - Department of Finance, American University,
Date posted to database: February 2, 2005
Last Revised: May 12, 2007

3

The European Commission's 2006 Guidelines on Antitrust Fines: A Legal and Economic Analysis
Wouter P.J. Wils,
European Commission - Directorate General for Legal Service,
Date posted to database: February 14, 2007
Last Revised: February 14, 2007

4

The Legal Penalties for Financial Misrepresentation
Jonathan M. Karpoff, D. Scott Lee, Gerald S. Martin,
University of Washington - Michael G. Foster School of Business, Texas A&M University - Department of Finance, American University,
Date posted to database: September 29, 2006
Last Revised: July 7, 2007

5

Identity Theft: Making the Known Unknowns Known
Chris Jay Hoofnagle,
University of California, Berkeley - School of Law - Berkeley Center for Law & Technology,
Date posted to database: March 13, 2007
Last Revised: May 9, 2008

6

Internal Control vs External Manipulation: A Model of Corporate Income Tax Evasion
Kong-Pin Chen, C. Y. Cyrus Chu,
Academia Sinica - Research Center for Humanities and Social Sciences, Academia Sinica - Institute of Economics,
Date posted to database: December 17, 2002 Last Revised: May 6, 2004

7

Leniency in Antitrust Enforcement: Theory and Practice
Wouter P.J. Wils,
European Commission - Directorate General for Legal Service,
Date posted to database: October 24, 2006
Last Revised: January 30, 2007

8

The Consequences to Managers for Financial Misrepresentation
Jonathan M. Karpoff, D. Scott Lee, Gerald S. Martin,
University of Washington - Michael G. Foster School of Business, Texas A&M University - Department of Finance, American University,
Date posted to database: March 22, 2007
Last Revised: May 21, 2007

9

A Forensic Study of Daewoo's Corporate Governance: Does Responsibility Solely Lie With the Chaebol and Korea?
Joongi Kim,
Yonsei University, Graduate School of Int'l Studies,
Date posted to database: July 28, 2005
Last Revised: May 22, 2007

10

The Challenge of White Collar Sentencing
Ellen S. Podgor,
Stetson University College of Law,
Date posted to database: November 23, 2007
Last Revised: January 24, 2008

May 26, 2008 in Scholarship | Permalink | Comments (0) | TrackBack (0)

Top 10 SSRN Recent White Collar Crime Papers 3/27/08-4/26/08

RECENT HITS (for all papers announced in the last 60 days)

TOP 10 Papers for Journal of White Collar Crime
March 27, 2008 to May 26, 2008

The Changing Atmospherics of Corporate Crime Sentencing in the Post Sarbanes-Oxley Act Era
Peter J. Henning,
Wayne State University Law School,
Date posted to database: April 9, 2008
Last Revised: May 9, 2008

Department of Justice Guidelines: Balancing 'Discretionary Justice'
Ellen S. Podgor,
Stetson University College of Law,
Date posted to database: April 15, 2008
Last Revised: April 15, 2008

The Food-Chain Issue for Corporate Punishment: What Criminal Law and Punitive Damages Can Learn from Each Other
Christopher R. Green,
University of Mississippi - School of Law,
Date posted to database: March 6, 2008
Last Revised: March 22, 2008

Supreme Court Podcast: Boulware v. United States
Andy Grewal,
Georgetown University - Law Center,
Date posted to database: March 27, 2008
Last Revised: April 1, 2008

An Eliot Effect? Prosecutorial Discretion in Mutual Fund Settlement Negotiations, 2003-7
Eric Zitzewitz,
Dartmouth College,
Date posted to database: April 21, 2008
Last Revised: April 21, 2008

The Paradox of Expected Punishment: Legal and Economic Factors Determining Success and Failure in the Fight Against Organized Crime
Edgardo Buscaglia,
International Law and Economic Development Center,
Date posted to database: April 17, 2008
Last Revised: April 28, 2008

A New Corporate World Mandates a Good Faith Affirmative Defense
Ellen S. Podgor,
Stetson University College of Law,
Date posted to database: March 4, 2008
Last Revised: March 6, 2008

Hunting, Shooting and Phishing: New Cybercrime Challenges for Cybercanadians In the 21st Century
David S. Wall,
University of Leeds,
Date posted to database: April 3, 2008
Last Revised: April 19, 2008

Cybercrime, Media and Insecurity: The Shaping of Public Perceptions of Cybercrime
David S. Wall,
University of Leeds,
Date posted to database: April 24, 2008
Last Revised: April 24, 2008

Corruption as a Violation of Human Rights
Julio Bacio-Terracino,
The Graduate Institute of International and Development Studies,
Date posted to database: March 19, 2008
Last Revised: March 19, 2008

May 26, 2008 in Scholarship | Permalink | Comments (0) | TrackBack (0)

Saturday, May 24, 2008

In the News

Thursday, May 22, 2008

Former Alabama Governor Siegelman's Brief & the DOJ Investigation

Former Governor Don Siegelman's brief (see below) was filed in the 11th Circuit Court of Appeals, and it raises some important issues. Also of importance to this case is that the DOJ's Office of Professional Responsibility (OPR) currently has a pending investigation concerning allegations of selective prosecution relating to the prosecution of Don Siegelman. (See AJC - Alabama Governor's Conviction Gets Justice Department Scrutiny - be sure and read the Letter to Chairman Conyers in this article).  One has to ask whether the DOJ should be the one doing this investigation, even if it is OPR, or whether this is an appropriate task for an independent outsider.   

The first argument in the brief is powerful and unique.  It takes the quid pro quo requirement used in the Supreme Court's McCormick case, a Hobbs Act case involving campaign contributions, and applies it to the "honest services" aspect of the mail fraud, conspiracy to commit, and bribery portions of the charges here. And it makes sense that it should apply as the charges are "based on an alleged connection between official action and a campaign contribution."  In McCormick, the Court recognized that campaign contributions operate differently and one can't assume criminality for a contribution unless there is a showing of a quid pro quo demonstrated that is tied to that contribution. With a "honest services" statute, that has been criticized by many as allowing for enormous prosecutorial discretion in the charging process, it seems important that a quid pro quo should be mandated so that politicians know what is legal and what is illegal for purposes of violating the "honest services" statute.  It's especially important in this case as Siegelman personally received nothing of value. The brief ties in the First and Fifth Amendments here and reminds the court of the importance of the Rule of Lenity in criminal cases.

Equally noteworthy is the next to the last argument in the brief that argues whether it was, "permissible to increase Governor Siegelman's sentence because of out-of-court statements on matters of public concern, i.e., statements criticizing and questioning the actions and motives of prosecutors - particularly without any evidence of factual specificity as to the content of such  statements?" It will be interesting to see how the appellate court deals with an increase of a sentence by someone exercising a First Amendment right to speak - especially when the speaking is criticism of the prosecution being politically motivated.  In light of recent revelations in the department and the fact that OPR is now investigating this case for possible selective prosecution, this sentence increase is something that an appellate court may want to seriously examine.

There are, of course, other arguments in this brief.  Even without seeing the Scrushy Brief and the DOJ response, this brief sends the message that this case will certainly provide for an interesting oral argument.

Brief - Download seigelman_final_brief.pdf

(esp)

Addendum - Corrected Brief of Government -

Download govt_brief.pdf

May 22, 2008 in Corruption | Permalink | Comments (1) | TrackBack (0)

Wesley Snipes Gets Bond on Appeal

The court has given Wesley Snipes bond pending his appeal. (see here)  This is not surprising as the case is a tax case of someone who would not be considered a flight risk. 

But it is always interesting to see, in white collar cases, who gets bond on appeal and who gets it denied -

Denied

Former Atlanta Mayor Bill Campbell - no bail pending appeal on a tax case (see here)

Jamie Olis (Dynegy)

Former Tyco Executives Dennis Kozlowski and Mark Swartz (see post here -but they were in the state system)

I. Lewis "Scooter" Libby (but sentence was commuted by the President)

Granted

Former Adelphia Communications executives John and Timothy Rigas (but now in prison - see here)

Bernie Ebbers (Worldcom) (now in prison - see here)

Martha Stewart (but she elected to go into the prison system sooner and finshed her sentence)

Governor George Ryan (but denied on cert petition)

(esp)

Addendum - Order - Download snipes_order.pdf

May 22, 2008 in Tax | Permalink | Comments (0) | TrackBack (0)

Lou Pearlman - 25 years but...

Lou Pearlman, founder of the Backstreet Boys, received a a 25 year sentence (see here). But as Professor Doug Berman over at Sentencing Law & Policy describes here - it's a creative sentence as he can receive a month off for each one million he gives back to victims. Pearlman plead guilty to "two counts of conspiracy to commit an offense against the United States (Counts one and two), one count of money laundering (Count three), and one count of presenting or using a false claim in a bankruptcy proceeding (Count four)." (see here)

(esp)

May 22, 2008 in Sentencing | Permalink | Comments (0) | TrackBack (0)

Siegelman - Former Governor of Alabama & Karl Rove

All in one day -

Al.com (AP) Siegelman asks appeals court to throw out conviction

Al.com (AP) House Subpoenas Karl Rove

(More to come)

(esp)

May 22, 2008 in News | Permalink | Comments (0) | TrackBack (0)

What's Happening Right Now: Chicago Indictments & Rigas

Indictments are coming down in Chicago - Chicago Tribune here

Rigas father and son being resentenced- Yahoo News here

Details to follow -

(esp) (w/ a hat tip to Kathy Fox)

May 22, 2008 in News | Permalink | Comments (0) | TrackBack (0)

Wednesday, May 21, 2008

DOJ Modifies Guidelines on Deferred Prosecution Agreements

It doesn't look like the DOJ will be suggesting to a company that a law professor receive an endowed chair as part of a deferred prosecution agreement. The change comes as a result of a recent DOJ Memo issued. (See Reisinger, Corporate Counsel, Law.com - New DOJ Policy: Just Call it the Christopher Christie Amendment).  But it doesn't preclude a company from going ahead and giving the chair to the law school professor and then using that as a basis for arguing leniency at sentencing. The new guideline issued by DOJ is as follows: 

9-16.325 Plea Agreements, Deferred Prosecution Agreements, Non-Prosecution Agreements and "Extraordinary Restitution"

Plea agreements, deferred prosecution agreements and non-prosecution agreements should not include terms requiring the defendant to pay funds to a charitable, educational, community, or other organization or individual that is not a victim of the criminal activity or is not providing services to redress the harm caused by the defendant's criminal conduct.

Such payments have sometimes been referred to as "extraordinary restitution." This is a misnomer, however, as restitution is intended to restore the victim's losses caused by the criminal conduct, not to provide funds to an unrelated third party.

Apart from the limited circumstances described below, this practice is restricted because it can create actual or perceived conflicts of interest and/or other ethical issues.

This section does not, of course, restrict a defendant's own decision, outside the context of a plea agreement, deferred prosecution agreement or a non-prosecution agreement, to unilaterally pay monies to a charitable, educational, community, or other organization or individual, and then to request leniency from the judge at sentencing based upon such action.

This section also does not restrict "community restitution" payments made pursuant to 18 U.S.C. § 3663(c). That section provides guidance for such payments where the defendant is convicted under 21 U.S.C. § 841, § 848(a), § 849, § 856, § 861 or § 863. Among other factors, that section requires the absence of identifiable victims, as well as a nexus between the payment and the offense.

Neither does this section restrict the use of community service as a condition of probation for environmental prosecutions. United States Attorneys' Offices contemplating such community service as a condition of probation in a case involving environmental crimes shall consult with the Environmental Crimes Section of the Environmental and Natural Resources Division, which has issued guidance to ensure that the community service requirements are narrowly tailored to the facts of the case. The guidance also requires that any funds paid by a defendant as part of the community service portion of a sentence be directed to an entity in which the prosecutors have no interest that could give rise to a conflict and that is legally authorized to receive funds.

There is also the continual concern that DOJ guidelines are not enforceable at law.  They are merely internal guidelines.  And in some cases, these guidelines are not adhered to.  (See my 2004 article in the Cornell Jrl of Law and Public Policy, Department of Justice Guidelines: Balancing 'Discretionary Justice,' ).

(esp)(w/ a hat tip to Dick Cassin)

May 21, 2008 in Deferred Prosecution Agreements | Permalink | Comments (0) | TrackBack (0)

In the News & Blogsphere

Kim Christensen, LATimes - Bail Denied for Securities Lawyer in Investment Fraud Case

Betsy McKay, WSJ - Ex-Fund Manager Is Convicted of Fraud

FBI Report - MORTGAGE FRAUD: New Analysis of a Rising Threat

DOJ Press Release - 38 Individuals in U.S. and Romania Charged in Two Related Cases of Computer Fraud Involving International Organized Crime

Amir Efrati & Liam Plevin, WSJ, Greenberg May Face SEC Civil Charges

Dan Slater, WSJ Blog,  Kentucky Heart Charity Takes Center Stage in Fen=Phen Trial

(esp)

May 21, 2008 in News | Permalink | Comments (0) | TrackBack (0)

Emeritus Professor Charged With Violation of Arms Export Control Act

A DOJ Press Release reports that "[a] federal grand jury in the Eastern District of Tennessee returned an 18-count indictment today charging [ ] a Professor Emeritus at The University of Tennessee, and Atmospheric Glow Technologies Inc. (AGT), a Knoxville-based technology company, with conspiring to defraud the U.S. Air Force and disclose restricted U.S. military data about Unmanned Aerial Vehicles (UAVs), or 'drones,' to foreign nationals without first obtaining the required U.S. government license or approval."  It further states that "between January 2004 and May 2006, [the individual and company were alleged to have] engaged in a conspiracy to defraud the U.S. Air Force and transmit export-controlled technical data related to a restricted U.S. Air Force contract to develop plasma actuators for a munitions-type UAV, or 'drone,' to one or more foreign nationals, including a citizen from the People’s Republic of China. The Chinese national was a graduate research assistant at the University of Tennessee."

(esp)

May 21, 2008 in International, Prosecutions | Permalink | Comments (0) | TrackBack (0)

Tuesday, May 20, 2008

In the News and Blogsphere

Kim Christensen, LA Times - Irvine Lawyer Arrested on Wire Fraud Charges (securities lawyer)

John Christoffersen, Newsday (AP) - Lawyer Challenges Government Use of GPS Tracking Device (discussing the government placement of a GPS tracking device on a defendant - an accountant's vehicle)

FCPA Blog - U.S. Prosecutors Detain and Search BAE Leaders

Detroit Free Press - The Detroit City Council’s request that Gov. Jennifer Granholm remove Mayor Kwame Kilpatrick from office because of his conduct in the text message scandal was delivered to Granholm’s office today.

(esp) (from DC at the American Law Institute Meeting -with hats off to Michael Traynor who gave an incredible speech at the ALI Annual Dinner)

May 20, 2008 in News | Permalink | Comments (0) | TrackBack (0)

In the News & Blogsphere

Scotus Blog reports that the Supreme Court did not accept to hear the case of Forbes v. United States (former board chair of Cendant Corp.) (for sentencing see here) (for 2d Circuit appeal affirmed see here)

DOJ Press Release- Federal Court Enjoins Nationwide Tax Scheme Promoters

NY Attorney General Andrew Cuomo Press Release - "Attorney General Andrew M. Cuomo and Nassau County District Attorney Kathleen M. Rice today announced that the former operator of a Manhattan-based home care agency and his former billing manager pleaded guilty to stealing over $314,000 from the state through false Medicaid billing schemes."

DOJ Press Release - D.C. Metropolitan Police Detective Turned Tax Defier Convicted of Tax Fraud

WSJ - Amir Efrati, Greenberg Role Seen in AIG-Gen Re Case

WSJ Blog, Dan Slater, Miami Defense Bar Turns Out in Droves to Honor Ben Kuehne; Southern District of Florida Blog, David Oscar Markus, Ben Kuehne Receives Award

(esp)

May 20, 2008 in News | Permalink | Comments (0) | TrackBack (0)

Monday, May 19, 2008

"MySpace" Related Indictment

The federal indictment resulting from an incident on MySpace has been reported nationally. (see, e.g., here and here).  A press release of the U.S. Attorneys Office of the Central District of California states that:

"A Missouri woman was indicted today on federal charges for fraudulently using an account on the social networking website MySpace.com to pose as a teenage boy who feigned romantic interest in a 13 year-old girl. That girl later committed suicide after the 'boy' spurned her and told her, among other things, that the world would be a better place without her."

The Indictment charges a conspiracy to commit a violation of the computer fraud statute - 18 U.S.C. s 1030 and also specific substantive offenses under section 1030. Some are critical of the use of the computer fraud statute for this purpose (see here). Clearly, whether this alleged incident should be the subject of an indictment, and whether it should be subject to a federal indictment will likely be issues that will be considered in this case.

But in addition to questions of whether the computer fraud statute was intended for this purpose, there is also a question of whether the U.S. Attorneys Office in the Central District of California ought to be prosecuting this case. According to the indictment (see below), the basis for the jurisdiction is that Fox Interactive Media Inc. is the Beverly Hills Corporation which operates myspace.com ("MySpace").  As the server is located in LA County, the indictment notes that this is within the Central District of California.

This indictment raises a threshold question of where is the appropriate jurisdiction in computer related cases, and specifically in cases charging criminal conduct. Should it be the place of the keystroke, the place of the social harm, or can prosecutors go for jurisdiction, as they have here, to the place of the server?  Is it appropriate to give prosecutors the power to chose jurisdiction this way?  Does this disadvantage the accused in that their evidence may be located in the place where the social harm is alleged to have occurred and not where the server is located?  Does a prosecution such as this make the requirement of venue meaningless?  Interestingly, Missouri has since passed a cyberharrassment law (see here).

The indictment - Download my_space_lori_drew_indictment.pdf

(esp)

May 19, 2008 in Computer Crime | Permalink | Comments (1) | TrackBack (0)

Mourning the passing of Donald B. Feidler

Fiedlerbryan We mourn the passing of criminal defense lawyer Donald B. Fiedler.  His obituary is here (Omaha World Herald).  He will be missed.  He was well known for his wonderful teaching at the National Criminal Defense College. See NACDL here.

In lieu of flowers, Memorials to National Criminal Defense College, c/o Mercer Law School, Macon, GA, 31207.

The photo of Don doing William Jennings Bryan. With a thanks to Korey Reiman; John Wesley Hall, and Norman Reimer. (esp)

May 19, 2008 in Defense Counsel | Permalink | Comments (2) | TrackBack (0)