Thursday, August 21, 2008
Tom Fowler, Houston Chronicle, Former natural gas traders draw prison time for fraud (discussion of the jury rejecting a following orders argument by the defense)
Anita Lee, Sun Herald.com, Minor denied release pending appeal
Rob Olmstead, Chicago's Daily Herald, Judge wants Des Plaines firm's president in person (prior to accepting deferred prosecution agreement)
Julie Kay, National Law Journal, Rising Miami Legal Star Agrees to Plea Bargain Involving Mail Fraud, Laundering Charges
Neil Lewis, NYTimes, Senator Fails in Effort to Move His Corruption Trial to Alaska
Wednesday, August 20, 2008
Professor Brandon L. Garrett and Jon Ashley of University of Virginia School of Law, have created a wonderful website of deferred prosecution agreements. It is here. These agreements have not always been easy to find, and having this new database will certainly assist in this process. The database also allows one the ability to sort by company, jurisdiction, and date.
Monday, August 18, 2008
Some mayors across the United States seem to be tangling with local, state, or federal prosecutors. Check these out -
Knox County Mayor - Who should be handling an investigation of the Knox County Mayor? Local white collar crime unit recuses itself because they receive county funds. Editorial, KnoxNews.com, Probe of county mayor where it needs to be
Detroit - Looks like Jim Parkman, from Scrushy's first trial (see here) is no longer on Mayor Kilpatrick's team. See Ben Schmitt, Detroit Free Press, Parkman no longer on Kilpatrick's legal team. Also see Ben Schmitt and Joe Swickard, Detroit Free Press, Judge: Council can't proceed with hearing to oust Kilpatrick
Jackson, Mississippi - WAPT.com, Mayor's Trial Set for November - Melton, Bodyguards Charged in Civil Rights Case
Newark, New Jersey - John Martin & Jeff Whelan, New Jersey Star Ledger, Ex-Newark Mayor Sharpe James sentenced to 27 months
ClarionLedger.com (AP), Former state agency worker faces embezzlement charge
Julie Triedman, The AmLaw Daily, UBS Banker Held by U.S. Government Returns to Switzerland
Aaron Wilmot, American Chronicle, Seattle Contractor Charged With Defrauding Investors
Saturday, August 16, 2008
Previously discussed here and here, the case against Senator Ted Stevens of Alaska is moving forward quickly. He is under indictment for seven counts of false statements under 18 U.S.C. section 1001. Del Quentin Wilber at the Washington Post has an article titled, "Court Filings Reveal Evidence Against Stevens - Prosecutors Possess Recordings of Senator Promising to Help Oil Company"
Tapes have destroyed many a criminal defendant's case. Often the criminal activity is not the most devastating aspect of the tape. It can be that the accused comes across as someone who just is not a likeable person. In some cases the defendant is forced to hear tapes played in court that may be filled with profanities and other statements that can taint him or her with the jurors. But just because there may be tapes, does not mean that they will automatically be admitted into evidence, and if they are, that they will prove damaging to the defense.
Tapes can also be a problem for the government in that it can confirm the accused's explanation of what might have really happened. In this case it sounds like the defense may have some forceful arguments. The first problem for the government is that the allegations appear to have the company executive coming to the Senator for assistance, as opposed to the reverse. Second is the very fact that this is a Senator, and everyone knows that Senators serve their constituents. Third is that the individual having the conversation with the Senator has obtained a plea deal from the government and this bargain will likely be scrutinized by the defense. So much of what really exists in the evidence related to this case, and what may not exist, has not been seen or discussed. That will happen when the Senator has his day in court.
Friday, August 15, 2008
Two law offices, in different parts of the United States, were recently searched. At Cleveland.com, John Caniglia in an article titled, "FBI raid on lawyer's office was first here in 15 years" writes about a Cleveland law office that was searched. Molly McDonough, ABA Law Journal News, 50 Lawyers Pack Court to Support Solo Whose Office Was Searched, writes about a search of a law office in Texas.
It is surprising to see law offices searched. Prosecutors could easily issue a subpoena for any documents wanted from a law firm. Using a subpoena allows the law firm the opportunity to go to court and contest whether the release of the items would be an violation of attorney-client privilege or work product. It also allows the court to monitor what will be given to the government and what they will be precluded from seeing.
The rationale sometimes provided for using a search over a subpoena is that searches offer surprise and therefore preclude the destruction of documents. The downside for prosecutors using a search is that it requires probable cause and if there are many documents in a place, law enforcement may have to review numerous items to find what they are looking for. This latter point is also a rationale not to allow law office searches. Having the government review documents that serve as the basis for criminal defense cases places the defense at an enormous disadvantage. There is a chilling effect on our system of justice when the government is entering into law offices and removing defense items from that office.
In one case the search is being done by a government agency outside the jurisdiction. This is equally chilling as the government is again making the decision of what is looked at, and what is removed from the premises. The probable cause hearing was ex parte and the defense attorney did not have an opportunity to respond to the government's claims. Having a judge hear about the removal of client documents prior to their removal is important and should be the norm. It is for this reason that the government should use the subpoena process if items from a law firm are needed.
(esp) (w/ a hat tip to Jack King)
United States District Judge Frederic Block issued a sentencing opinion in the case of United States v. Parris that recognizes the importance of not using what he calls a "one-shoe-fits-all" (or should it be "one-size-fits-all") approach when sentencing individuals. As noted by Judge Block, the case involved "a rather typical 'pump and dump' scheme in the world of the high-risk penny-stock investor." Unfortunately, the U.S. Sentencing Guidelines that operates with a system that uses mere mathematical computations assesses the guideline sentence to be a "range of 360 to life." Judge Block aptly notes that "[t]his case represents another example where the guidelines in a securities-fraud prosecution 'have so run amok that they are patently absurd on their face' United States v. Adelson, ... due to the 'kind of "piling-on" points for which the guidelines have frequently been criticized." Instead of issuing the guideline sentence of 360 months to life, he enters a sentence of 60 months.
Judge Block notes that the "defendants have no prior criminal record." Most white collar offenders, like these defendants, fall within Category I. The judge provides an Exhibit that compares the sentences of individuals such as the Rigases, Skilling, Ebbers, and Bennett to those such as Adelson and others whose names are certainly less known by the public. Judge Block states, "although the Parrises' criminal conduct was reprehensible, they were simply not in the same league as the likes of the Enron, WorldCom and Computer Associates defendants."
This decision is important in that like the Adelson decision issued by Judge Rakoff (see discussion here), we are seeing a judge who is sentencing the individual defendant as opposed to merely applying a mathematical formula that has no relevance to the specific circumstances. (see also Podgor, The Challenge of White Collar Sentencing)
(esp) (w/ a special thanks to Whitney Curtis)
The decision - Download Parris.pdf
see also, Mark Fess, NYLaw Journal, Law.com, Criticizing Guidelines, Judge Gives Sentences 25 Years Less Than Recommended Minimum; New York Federal Practice Blog, EDNY Judge Block Imposes 60-month Sentences in Securities Fraud Case Instead of Guideline Sentences of 360 months to Life; Dan Slater, WSJ Blog, Judge Frederic Block: A Good Draw For Cioffi and Tannin?; Doug Berman's Sentencing law & Policy Blog, Important new white-collar opinion justifying below-guideline sentence
Wednesday, August 13, 2008
DOJ Press Release, Oregon Corporation Sentenced for Ocean Pollution Violation - Kinder Morgan Bulk Terminals Incorporated (KMBT) was sentenced to pay a total penalty of $240,000.
Law.com (AP), Two North Texas Men Accused of Securities Fraud
Mike Robinson, Chicago Tribune (AP), Lawson to Pay $30 Million in Kickback Case
John Council, Texas Lawyer, Controversy Over the Police Search of a Collin County Law Practice
Douglas R. Jensen, Law.com, Parallel Investigations Continue to Pose Challenges
The Fifth Circuit Court of Appeals in United States v. Rabhan issued a reversal and remand of the district court's Order dismissing a count of a white collar indictment and found that "aiding and abetting is a form of derivative liability and should be treated the same as the substantive or underlying offense." The court held "that the ten-year statute of limitations for 18 U.S.C. s 1014 as contained in 18 U.S.C. s 3293 applies to a charge through 18 U.S.C. s 2 of aiding and abetting a violation of section 1014."
The accused was charged with an 11 count indictment alleging conspiracy under 18 USC 371 and making false statements in violation of 18 USC 1014.The government had filed an "interlocutory appeal challenging the district court's denial of its motion to reconsider dismissal of Count Eight of the indictment." The decision reversing the lower court allows the government an extended time to bring charges when using an aiding and abetting charge. Although the government can proceed with their case, this does not in any way indicate that they will be successful in proving the accused guilty beyond a reasonable doubt. That remains to be seen.
Tuesday, August 12, 2008
Chronicle of Higher Education, Another Diploma-Mill Operator Is Going to Jail
Atlanta Jrl Constitution, Facility Group CEO pleads guilty to conspiracy to corrupt a public official
Amanda Bronstad, National L.J., Lawyer in Milberg case draws two-month prison term
Monday, August 11, 2008
Professor Rory Little (Hastings) moderated the recent ABA Criminal Justice Section Annual Supreme Court Review. Speakers on the panel were: Robert Dean, Katherine P. Failla, Professor Julie O'Sullivan (Georgetown), and Hon. Stephen C. Robinson.
Several white collar decisions were discussed. In describing the discussion of these cases Professor Little states:
"There was a very spirited discussion led by Kate Failla, Chief of Criminal Appeals in the SDNY USAO, about Santos and Cuellar, the two money-laundering decisions, as well as Bridge and Stoneridge, addressing mail-fraud/RICO, and Securities fraud, respectively. Kate noted the odd difference between the later two: no reliance required for mail-fraud/RICO, while Stoneridge required “reliance with a vengeance.” Kate also noted that the Second Circuit may already be extending the Stoneridge case into criminal securities actions, in a decision two weeks ago."
Professor Little's incredible materials from this program are here -
A press release of the U.S. Attorney's Office in the Southern District of Texas reveals that a broker plead guilty earlier this month to conspiracy to commit mail fraud and securities fraud. The release states that the defendant was involved in "the promotion and marketing" as part of a "mortgage investment program." The defendant "admitted he made false representations to investors when he promised 12 percent interest, 1st liens on real estate, 72-hour liquidity and 70 percent loan to value ratio."
Mary Flood of the Houston Chronicle now reports that the government has secured a second plea in this case. In an article titled, "2nd Houston broker in fraud case pleads to conspiracy" she tells of the recent plea entered by this individual to the crime of conspiracy.
(esp) (w/ a hat tip to Bill Olis)
Sunday, August 10, 2008
A Press Release of the U.S. Attorney's Office for the Central District of California states that "the owner of a Los Angeles-area hospital and a man who acted as a recruiter – were arrested this morning on federal charges of defrauding Medicare and Medi-Cal by providing unnecessary health services to homeless people who were recruited from 'Skid Row' with promises of payments."Solomon Moore in a NYTimes article titled, Alleged Scheme Involved Homeless, provides a description of this recent investigation and indictment in California.
There are only allegations to date, and the prosecution will bear the burden to prove the elements of the crime charged beyond a reasonable doubt. And if they fail, the accused individuals will not suffer convictions. But cases of this nature place the accused persons in a different position than those charged with street crimes. If convicted, the accused individuals can be subject not only to criminal penalties of possible prison time, but they may also face civil consequences such as being precluded from receiving medical benefits from the government. Individuals in the medical area who are faced with both the criminal punishment and civil collateral consequences sometimes have to evaluate their case differently in deciding how to proceed. A minor conviction and punishment can be the basis to shut down a businesses if their total revenue is dependent upon payments from the government.
Saturday, August 9, 2008
John Farmer Jr., N.J..com (Star Ledger), The spat over the mayor's sentence (discussing the sentencing of the former Newark Mayor)
DOJ Press Release, Nevada Landfill Operator Agrees to $36 Million Plan to Close Landfill Site
Debra Cassens Weiss, ABA Jrl Law News Now, How Monica Goodling and Kyle Sampson Worked the System
Amanda Bronstad, National L.J., Indictment of Katrina Lawyer is Challenged
Marisa Taylor, McClatchy Washington Bureau, Enron setbacks could hurt other white-collar prosecutions
John Pacenti, Daily Business Review, Law.com, Prosecutors Change Course on Money Laundering Charges Against Prominent Attorney
Friday, August 8, 2008
In an odd set of circumstances, the Detroit Mayor was jailed after leaving the country to do business in Canada. See Holly Watt, Washington Post, Detroit Mayor Jailed for Violating Bail Conditions The mayor has been the subject of a state prosecution, an outgrowth of what has been called a "text message scandal." And according to the Detroit Free Press he may have some new charges. See M.L. Errick, Jim Schaefer, Ben Schmitt & Joe Swickard, Kilpatrick faces felony assault charge after his night behind bars. Some thoughts:
1. A standard provision in most bail orders is that one can't leave the country. And whether one thinks they are guilty or not, once charged and on bail it is necessary to abide by the conditions of bail.
2. Detroit is mere minutes from the Canadian border, and his argument appears to be that he was doing business for the city. Should the need for this kind of activity been accounted for in the bail order?
3. If in fact more charges are added against the mayor, is this an appropriate time to add these additional charges?
Once charged with a crime, one has the reality that even though they have not been found guilty, and may never be, they are being punished and under restraint. In many ways this goes against the system of justice we advocate - one that requires proof beyond a reasonable doubt prior to punishment. But the pre-trial constraints can often hamper a person's activities and this is a clear example of just that.
Wednesday, August 6, 2008
Check out Bob Johnson's article, Al.com (AP) "Siegelman Attorney Asks for Canary Investigation" There are clearly some interesting legal questions here. An attorney with DOJ recuses herself, but the question may be what this attorney did prior to the recusal, and whether there was any involvement after it. Without the documents that are in the hands of the government, defense counsel is at a loss to prove anything. Defense counsel in these type of situations can be placed in a "catch-22" position. They need the evidence to present their claim, but need some showing of the claim to be able to secure the evidence. But more importantly, should DOJ be the one investigating this case, or would it have been better if there was an independent investigation here. And if there is nothing to hide than perhaps an independent investigation would be best for all sides. And why is the name Karl Rove surfacing in this article, yet again.
Tuesday, August 5, 2008
At the upcoming ABA conference, the Criminal Justice Section will be sponsoring a program that reviews the Supreme Court's criminal decisions of this past term. The program is being held on Friday, August 8, 2008 from 3:45 - 5:15 P.M. in Conference Room L, Executive Conference Center, Sheraton, New York. The program chair is Professor Rory Little (Hastings), and the speakers are Robert Dean, Katherine P. Failla, Professor Julie O'Sullivan (Georgetown), and Hon. Stephen C. Robinson. For details, including cost, see here. I'd be willing to bet that the recent money laundering decisions will be something covered by this panel.
Monday, August 4, 2008
The Ninth Circuit Court of Appeals affirmed a one-day sentence here. The case involved a plea to "several counts of health care fraud, embezzlement, and money laundering." The sentence was to be served at a facility that would allow the defendant to "work, pay restitution and visit with his then 11-year-old son." But the corrections center "would not house prisoners" so the court amended the sentence to "one day of imprisonment and three years of supervised release, with the condition that he serve 12 months and one day of his supervised release" at this center. The government unsuccessfully took this modification up on appeal.
Guest Bloggers at Sentencing Law & Policy here have analysis of this decision, including the strong dissent that like the majority interprets the recent Supreme Court decision in Gall. In the dissent, Circuit Judge Gould states:
"To provide for a mere slap on the wrist of those convicted of serious economic crimes, with no or virtually no time imprisoned as punishment, strikes a blow to the integrity of our criminal justice system. In the end, if not corrected, the majority’s approach will be dangerous to respect for our legal system. Can it be seriously maintained that wilful offenders who commit white collar crime, who steal intentionally hundreds of thousands or even millions of dollars, should receive no forced incarceration, while those poor and powerless criminal defendants who commit common larceny or theft often serve extensive hard time?"
The majority, in a footnote, lists the many sentences that have provided a like punishment in a white collar crime case. But more importantly, is it a "mere slap on the wrist" to brand a person for life as a convicted felon? And is this true when the convicted individual is being held up in society as felon who committed crimes such as money laundering? And in the case of a non-violent crime, should innovative sentences such as this be welcomed? Maybe part of the problem for the government is the charging of this conduct using so many different federal statutes.
Jamie Olis' motion to recuse Judge Sim Lake from his case was denied by Judge Sim Lake. The court found the motion untimely and insufficient. Here is one passage from the judge's decision:
"Olis states that when Shelby moved to Phoenix in 1997 the court gave Shelby a gift and told him that the court knew he would be back someday. However, Olis neither describes the gift nor the circumstances under which it was given. Since Olis fails to state facts showing that prior to giving Shelby the gift the court ever met Shelby socially as opposed to professionally in open court, and since the word “gift” covers a wide array of items including items that are given to professional acquaintances merely as souvenirs or symbolic gestures of good will, absent allegations showing that the gift was more than a souvenir or symbolic gesture of good will, Olis’ statement that over ten years ago the court gave Shelby a going-away gift does not support an inference that the court and Shelby shared a close personal friendship."
The appellate argument that Cyril Wecht should not be subject to retrial as a result of double jeopardy was heard by the Third Circuit Court of Appeals. For commentary on the oral argument see-
Howard Bashman, How Appealing here
Harold Hayes, KDKA, Appeals Court to Decide if Cyril Wecht Has Retrial here
Jason Cato, Pittsburgh Tribune Review, Panel criticizes Wecht Judge
Ramesh Santanam, Philadelphia Inquirer (AP), Wecht's lawyer asks appeals court to dismiss case
Paula Reed Ward, Pittsburgh Post-Gazette, Appeals judges hear Wecht's argument against new trial