Thursday, July 31, 2008
With a few modifications to its opinion, the Ninth Circuit entered an order in United States v. Stringer denying the defendant's petition for rehearing and suggestion for rehearing en banc.
This means that the Ninth Circuit reversal of the district court dismissal of the indictments in the Stringer case remains the court's ruling. The district court had dismissed the indictments concluding "that the government had engaged in deceitful conduct, in violation of defendants' due process rights, by simultaneously pursuing civil and criminal investigations of defendants' alleged falsification of the financial records of their high-tech camera sales company." The lower court had also stated that "should there be a criminal trial, all evidence provided by the individual defendants in response to Securities and Exchange (SEC) subpoenas should be suppressed." For discussion of the 9th circuit reversal of the district court opinion, see here.
(esp)(blogging from SEALS '08 in Palm Beach, Florida)
Dan Slater, WSJ Blog, Tenth Cir. Grants Review of Nacchio’s Insider Trading Case
Larry Neumeister, Yahoo News (AP), Court overturns convictions of NYSE specialists
Guest Bloggers, Sentencing Law & Policy, Former Newark, NJ Mayor Sentenced to 27 Months
Adam Lynch, Jackson Free Press, More Judicial Horseplay? (discussing Paul Minor Case)
Janet Novak & William P. Barrett, Forbes.com, Feds Hound Bodog
Del Quentin Wilber, Alaska Senator Stevens Pleads Not Guilty in Corruption Case
DOJ Press Release, Bennett Environmental Inc. Pleads Guilty to Defrauding the U.S. Environmental Protection Agency (Company to pay $1 million criminal fine)
Paul Donsky & Sierra Brown, Atl Jrl Constitution, Telecom chief found guilty of bribing Atlanta school official
Mike Robinson (AP), Yahoo News, Former head of Ill. prisons sentenced to 2 years
(esp)(blogging from SEALS '08 in Palm Beach, Florida)
Wednesday, July 30, 2008
James Rowley & Robert Schmidt, Bloomberg, U.S. House Panel Votes to Hold Karl Rove in Contempt
But one headline that can't go unnoticed is Dublin's RTE News - 'Bush's brain' faces contempt charge
(esp) (blogging from SEALS '08 in Palm Beach, Florida)
Back in November 2007, the blog (here) discussed the BAE investigation. Now, David Leigh, The Guardian has an article titled, "Law Lords: Fraud Office Right to End Bribery Investigation in BAE Case" that tells of a recent ruling that supports the right of the Serious Fraud Office (SFO) to cease an investigation. (see also Francis Gibb, Times Online, "SFO 'Courageous' in Dropping BAE Arms Probe ; Forbes -Thomson Financial,House of Lords clears SFO of 'unlawful' conduct in Saudi arms case) It seems the Serious Fraud Office made a decision to stop an investigation involving BAE. The media notes that the reason for terminating the investigation was based on considerations of public interest, but that many were not happy with this decision.
In the United States, prosecutors have enormous discretion in deciding who will be investigated and for what, if any, possible crimes. In considering these discretionary decisions, the DOJ gives deference to executive power. Thus, it is possible that conduct might not be fully investigated if the result would hurt international relations. The public has little recourse in the U.S. to contest the prosecutorial decision-making when an investigation ends.
Stopping an investigation can sometimes be detrimental to the person or entity being investigated. Never having the chance to prove innocence can hurt the person or entity. On the other hand, if the person or entity had possible criminal exposure, ceasing an investigation would likely be very welcomed.
(esp) (blogging from SEALS '08 in Palm Beach, Florida)
NYTimes, Dealbook, Japanese Court Upholds Conviction of Ex-Livedoor Chief
Canadian Press, Japan Court Upholds Guilty Verdict for Former Internet Mogul
David Fiderer, Huffington Post, A Smoking Gun Incriminates the Judge Who Ruled Against Don Siegelman
Marcy Gordon, Houston Chronicle, Former Enron exec paying $31.5M in SEC settlement
Editorial, NYTimes, There Was Smoke - And Fire (discussing politicization in DOJ)
DOJ Press Release, Founders and Principals of Global Prosperity Sentenced for Tax Crimes
David Teather, Guardian UK, FSA Swoops on Suspected Insider Dealing Ring (London)
Tuesday, July 29, 2008
The Indictment of Alaska Senator Ted Stevens can be found here. It is a seven count indictment that charges violations of the false statement statute, 18 U.S.C. 1001. In a statement to the press, Acting Assistant Attorney General Matthew Friedrich first described the Indictment. His statement included the following:
"The indictment charges that, while he was sitting as a United States Senator between 1999 and 2006, Senator Stevens accepted gifts from a privately held company known as VECO, its Chief Executive Officer, and others. VECO was an oil field services company and operated on an international basis. VECO was one of the largest private employers in the State of Alaska.
"The gifts Senator Stevens is alleged to have received include substantial amounts of material and labor used in the renovation of a private residence, which Senator Stevens and his wife own, located in the town of Girdwood, Alaska. These renovations are alleged to have included the addition of a new first floor with multiple bedrooms and a bathroom, as well as a finished, full basement.
"VECO contractors and employees performed a significant portion of these renovations. For example, VECO and its employees and contractors are alleged to have provided architectural designs for the renovation; assisted in lifting up the residence and installing a new first floor; installed electric, plumbing, framing, heating and flooring materials; installed a first-floor, wrap-around deck; installed a plastic roof between the first- and second-floor decks; installed a heat tape system on the roof; and performed gutter repair and electrical work.
"The indictment also alleges that Senator Stevens received other gifts from VECO and its CEO, including household goods, furniture, a new Viking gas range, a tool-storage cabinet, and an automobile exchange in which Senator Stevens received a new vehicle worth far more than what he provided in exchange.
"According to the indictment, the total amount of gifts that Senator Stevens is alleged to have received over the duration of the offense is greater than $250,000.
"Also, according to the indictment, these items were not disclosed on Senator Stevens's financial disclosure forms, which he filed under penalties of perjury, either as gifts or as liabilities; and, further, that Senator Stevens did not reimburse or repay VECO or its chief executive officer for these items."
The Acting Assistant Attorney General was asked questions such as why this particular charge was selected as opposed to other statutes. He made it clear in his response that there were no charges of bribery here.
The false statement statute used in this indictment is a common one used by prosecutors.
In answers to questions, the Acting Assistant Attorney General did state that he thought the Senator "will be allowed to turn himself in. He will not be arrested." It is good to see that the Senator is going to be given a pass on being subjected to a "perp walk." But perhaps this courtesy should be applied more often to others facing white collar charges.
The investigation has been for at least a year, an amount of time that is not unusual in white collar cases. Prior indications of an investigation included the raid of Uncle Ted's home back in July 2007 (see here).
But the indictment of a Republican Senator at the same time as the release of a report on politicization of the department is interesting timing. Is this indictment being issued today to show the public that the present DOJ will not play politics? Is the timing of this Indictment to minimize the sting of the report that was just issued (see here)? Or is it just happenstance that these two events occurred around the same time? And in the blogosphere it means that the indictment will be the top item and the report underneath.
More on the indictment to come.....
Addendum - Press Release of DOJ here.
Following the Report titled an Investigation of Allegations of Politicized Hiring in the Department of Justice Honors Program and Summer Law Intern Program, that presented a scenario of appalling conduct occurring with respect to DOJ hiring practices, I blogged about the failure of the DOJ Compliance Structure (here). In addition to needing an effective compliance program, I stated that:
Kudos go to the Office of the Inspector General and OPR for issuing this Report. But it is not enough. It is clear that DOJ did not have a proper compliance program in place, and still has insufficient measures to assure that conduct such as this will not happen again. It is also clear that an independent body needs to examine what has happened here and make recommendations as to how best to proceed.
We now have an additional report, as a result of an internal investigation, that speaks to improprieties extending beyond the Honors Program hiring practices. Carrie Johnson of the Washington Post, writes in an article titled, Internal Justice Dept. Report Cites Illegal Hiring Practices, detailing happenings in the immigration sector. (See also Eric Lightblau's piece in the N.Y.Times titled - Report Faults Aides in Hiring at Justice Dept). This new report focuses significantly on a single employee - with her name in the title of the Report. One has to wonder if DOJ is now saying, sorry we had a rogue employee and we are changing our ways. The Statement by Attorney General Michael B. Mukasey on Report Issued by the Office of Professional Responsibility and Inspector General on the Investigation of Allegations of Politicized Hiring by Monica Goodling and Other Staff in the Office of the Attorney General, includes his statement that "[t]he report includes one new recommendation for institutional change, and I have directed the prompt implementation of that recommendation."
But that line doesn't and hasn't worked with DOJ for others in the corporate sphere. The whole company is held liable, fines are imposed, and often we see a deferred prosecution agreement. Three things need to be considered here:
1. It is very clear that a special prosecutor needs to be appointed to do an investigation that extends beyond the internal investigations, despite the fact that the internal investigations exposed improprieties in the office. Isn't that what DOJ would say to a company that exposes problems and even reports them to the DOJ?
2. DOJ should join the growing number of people that advocate for adoption of a "good faith defense" in the corporate criminal area. After all, it is sometimes hard to control each and every employee.
3. There are long term ramifications of these findings and it can extend to specific cases. If the people who secured the positions were political, then is it possible the decionmaking was also political? And will future decision-making on election fraud cases be political in nature. Without an independent investigation, trust cannot be restored.
(esp) (blogging from SEALS '08 Palm Beach, Florida)
Monday, July 28, 2008
Alyson M. Palmer and Andy Peters, Fulton County Daily Report (subscription required) - Feds Make It Official, Indict Former Judge and Four Others
Scott Horton, Harper's Magazine, New Allegations of Prosecutorial Misconduct in the Siegelman Case
Joel Stashenko, National L J., law.com, Commission Head Defends Integrity of Spitzer Investigation
Washington Post, Former Lobbyist Pleads Guilty to Trying to Destroy Evidence
Sunday, July 27, 2008
Professor Camilla Watson of University of Georgia School of Law, speaking on a panel at the Southeast Association of Law Schools Conference (SEALS), discussed tax shelters and some of the recent criminal indictments related to tax shelters. She noted that they are "only as good as the ethics of those who put it together." In looking at what academics could do to assist to insure an ethical environment she suggested putting the course of professional responsibility in the first year and moving aspects of professional responsibility into other courses, particularly business courses.
(esp)(blogging from SEALS '08 in Palm Beach, Florida)
Over at the BlueOregon, Rep. Chip Shields, a state rep. from Oregon raises the issue of whether a jury should be given information about the possible sentence facing the accused. He provides some pretty telling non-white collar examples of extraordinary sentences. Professor Doug Berman here, looks at these questions asking "is justice best served by keeping that information from them and having juries only decide guilt or innocence?"
The question is interesting in the white collar sphere. What would have been the reaction of the jury if they knew that Jeffrey Skilling was going to get a sentence of 24 years, and how would the juries have reacted to the lengthy sentences given to Bernie Ebbers and the Rigases. Would the jury have convicted if they knew the initial sentence, eventually modified, that the court imposed on Jamie Olis?
(esp) (blogging from SEALS '08 in Palm Beach, Florida)
Thursday, July 24, 2008
Noted here were articles reporting on some of the latest happenings in former Governor Siegelman's case. But it looks like there is even more to discuss. The Chief of the Appellate Section Criminal Division sent a letter earlier in July informing Siegelman's attorneys that there had been an investigation of emails received by some jurors and that the judge had been informed by the U.S. Marshals Service "that the Postal Inspectors were investigating the receipt of purported emails by co-workers of the two jurors and had concluded that the purported emails were not authentic..." One has to give high marks to the Chief of the Appellate Section of DOJ's Criminal Division for disclosing this information to defense counsel.
But one also has to wonder why it was not disclosed prior to this time by those affiliated with the case in the trial court. In a letter to the Office of Professional Responsibility of DOJ, questions are raised concerning this recent disclosure. Was there an ex parte communication by DOJ with the judge presiding on this matter? And if there was, will this make a difference to former Governor Siegelman's case? Having full discovery is important to someone defending an individual, most importantly because it allows defense counsel to scrutinize what occurred and question the individuals on their findings. Having knowledge of a DOJ finding allows defense counsel the ability to investigate further and also allows for the chance to cross-examine those making the findings.
The Letters - Download KilbornOPR.pdf
(esp) (w/ a hat tip to Professor Peter Henning)
Wednesday, July 23, 2008
Keith Coffman, Rocky Mountain News, Enron Prosecutor on Joe Nacchio Team - Sean Berkowitz Has Role Defending Former Qwest CEO
AG Mukasey spoke to the United States House of Representatives Committee on the Judiciary Concerning "Oversight of the U.S. Department of Justice." The written statement is 37 pages, and it includes the following concerning public corruption:
"The investigation and prosecution of public corruption is among the highest obligations of law enforcement, and I consider it to be one of the top priorities of the Department of Justice. The Department’s career prosecutors and criminal investigators are engaged in a renewed effort to pursue corruption at all levels and in all branches of government. The Department’s achievements during the past year in this area show a steady commitment to fighting public corruption wherever it is found and on a non-partisan basis.
"The Department’s recent public corruption investigations have resulted in convictions of federal officials in all branches of government, as well as numerous state and local officials. At the federal level, in February, defense contractor Brent Wilkes was sentenced to 12 years in prison for his involvement in what the Washington Post called "the most brazen bribery conspiracy in modern congressional history." Wilkes funneled cash, mortgage payments, cars, meals, luxury travel, and prostitutes to former Congressman Randall "Duke" Cunningham in return for the Congressman’s assistance in steering contracts to Wilkes’s company.
"In March 2008, the Department obtained the seventh criminal conviction arising out of an ongoing investigation into public corruption among state officials in Alaska. The convictions have included three former elected members of the Alaska State House of Representatives (including a former speaker of the house), a chief of staff to a former governor, and three high-ranking executives with a major Alaska oil-services company. The convicted individuals made or received thousands of dollars in corrupt payments as well as offers of employment in return for official actions—including votes in the legislature—that would benefit the company.
"The Department, through its National Procurement Fraud Task Force, continues to devote significant attention to procurement and other corruption within the Iraq and Afghanistan war theaters and related support efforts. For example, in April 2008, an indictment by a federal grand jury in San Francisco was unsealed against a Canadian night vision goggles manufacturing firm and two of its executives for their participation in a scheme to defraud the U.S. military in the supply of equipment for the Iraqi army. In June 2008, a U.S. Army officer and his wife pleaded guilty for their participation in a conspiracy, bribery, and money laundering scheme involving contracts awarded in support of the Iraq war. Additionally, a retired U.S. Army colonel pleaded guilty in June for her role in a scheme designed to secure a U.S. Department of Defense contract at Camp Victory, Iraq, in 2004 and 2005. Also in June 2008, a defense contractor, Raman International, pleaded guilty for its role in a bribery scheme designed to influence the award of U.S. Department of Defense contracts at Camp Victory, Iraq. "
Courant.com (AP) - Torrington lawyer given prison for client theft
Liam Pleven & Amir Efrati, Wall Street Journal, Deal Possible for Greenberg in AIG Case
Ashby Jones, WSJ Blog, Scruggs to Stay Grounded in Bluegrass State
Dan Slater, WSJ Blog, Lori Drew Moves to Dismiss Indictment in MySpace Suicide Case
DOJ Press Release - Company that Managed Cosco Busan Indicted on New Charges
Tuesday, July 22, 2008
Martha Neil, ABA Law Jrl News Now, Prosecuting Official for Funds Misuse Led to Texas DA’s Downfall; Elizabeth Langton, Dallas Morning News, Rockwall County DA Ray Sumrow's fall a shock to those close to him
Yahoo Sports, President Asked Not to Commute Jones' sentence
Press Release, U.S. Attorney's Office Western District of Missouri, Cox Medical Center Signs $60 Million Settlement Agreement - Resolves Allegations of Fraudulent Medicare Payments
Robert Patrick, St Louis Post-Dispatch, Michael Shanahan Sr. takes plea deal (discussing a plea related to backdating company options - defendant will be paying $7.9 million restitution)
Martha Neil, ABA Law Jrl News Now, 1000s of Criminals Worked in Florida Mortgage Industry
(esp) w/ hat tips to John Wesley Hall, Peter Henning)
A recent conference of the International Society for the Reform of Criminal Law focused on Codifying the Criminal Law: Modern Initiatives. One of the panels, and an excellent one at that, focused on Criminal Liability of Organizations. The panel was moderated by James Hamilton, the Director of Public Prosecutions in Dublin, Ireland.
The discussion included comments on corporate criminal liability in Australia, noting that it was mainly in the regulatory arena. John Thorton, First Deputy Director, Commonwealth D.P.P., Canberra, ACT, Australia provided examples that included the Export Control Act, the Ozone Protection Act, and the Meat Inspection Act. Joanne Klineberg, Counsel, Criminal Law Policy Section, Department of Justice Ottawa, ON., Canada, provided a review of criminal liability of organizations in Canada. Sara Sun Beale, the Charles L.B. Lowndes Professor at Duke Law School, then looked at the development of corporate criminal liability in western Europe. The western countries initially rejected corporate criminal liability, but in 1992 France adopted it. It was interesting to see what countries use the Model Penal Code standard, and only apply corporate criminal liability when there is an act by a high managerial agent.
Just a thanks to everyone who has been clicking this way. In the recent rankings of Paul Caron over at Tax Prof Blog, the white collar crime prof blog came in as 16th in the "Top 35 blogs edited by law professors with publicly available SiteMeters for the most recent 12-month period (July 2007 - June 2008)." (see here)
Geraldine Szott Moohr ,Of Bad Apples and Bad Trees: Considering Fault-Based Criminal Liability for Complicit Corporations, 44 American Criminal Law Review, Vol 44, 2007 - available on SSRN here
Miriam Baer, Corporate Policing and Corporate Governance: What Can We Learn from Hewlett-Packard's Pre-testing Scandal?, University of Cincinnati Law Review - Corporate Law Symposium, 2008 - available on SSRN here
James B. Johnston, Prosecuting Government Fraud Despite the 'CSI Effect': Getting the Jury to Follow the Money, New England Law Review, Vol. 41, 2007 - available on SSRN here
Paul Rothstein, 'Anything You Say May Be Used Against You': A Proposed Seminar ton the Lawyer's Duty to Warn of Confidentiality's Limits in Today's Post-Enron World, Fordham Law Review, Vol. 76, 2007 - available on SSRN here