Friday, April 4, 2008

Ninth Circuit Reverses Stringer

The defense suffered a major loss today as a result of a reversal by the Ninth Circuit Court of Appeals. In United States v. Stringer, the district court had dismissed 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." 

In a short 22 pages the Ninth Circuit penned an opinion that completely reverses this position. Circuit Judge Schroeder stated:

"We vacate the dismissal of the indictments because in a standard form it sent to the defendants, the government fully disclosed the possibility that information received in the course of the civil investigation could be used for criminal proceedings. There was no deceit; rather, at most, there was a government decision not to conduct the criminal investigation openly, a decision we hold the government was free to make. There is nothing improper about the government undertaking simultaneous criminal and civil investigations, and nothing in the government’s actual conduct of those investigations amounted to deceit or an affirmative misrepresentation justifying the rare sanction of dismissal of criminal charges or suppression of evidence received in the course of the investigations.

We also reverse the order excluding evidence received from the conflicted attorney. We do so because the government advised the attorney of the existence of a potential conflict and did not interfere with the attorney-client relationship."

The Decision - Download Stringer.pdf

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April 4, 2008 in Civil Enforcement, Judicial Opinions, Securities | Permalink | Comments (0) | TrackBack (0)

Thursday, April 3, 2008

Mourning Robert Hooker

Robert_hooker With sadness it is reported that Robert J. Hooker, a public defender and member of the Board of Directors of the National Association of Criminal Defense Lawyers (NACDL), was killed as a result of an automobile accident. Bob's career included service as a Superior Court judge and as a criminal defense lawyer in private practice.  But most recently, Bob had chosen to devote this career to being a public defender. And those who knew him agree that when it came to professionalism, Bob was a leader. 

See articles and blogposts here, here, here, here. For details on the memorial service, see here.

(esp)

April 3, 2008 in News | Permalink | Comments (1) | TrackBack (0)

Government Files Answer to 2255 Motion in Olis

The Government filed its Answer to the Motion to Vacate Pursuant to 28 U.S.C. s 2255, Motion for Summary Denial, and Supporting Memorandum of Law in the case of Jamie Olis. Olis, who was associated with Dynegy, was convicted for his alleged role related to "Project Alpha."  He was initially sentenced to 292 months and that sentence was reduced 72 months. One of the key issues here is whether the government interfered with the accused's right to fund his defense.This is a crucial issue as white collar cases carry with them enormous legal bills.

Government  Answer & Motion - Download 346GovtAnswer.pdf

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April 3, 2008 in Attorney Fees | Permalink | Comments (0) | TrackBack (0)

U.N. Procurement Official Gets 8 Years

A press release of the U.S. Attorney's Office of the Southern District of New York, states that "the former Chief of the Commodity Procurement Section within the Procurement Division of the United Nations ("UN"), was sentenced ... in Manhattan federal court to 97 months in prison on his convictions for accepting hundreds of thousands of dollars’ worth of benefits from a UN vendor in exchange for his assistance in awarding tens of millions of dollars’ worth of UN contracts to the vendor."

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April 3, 2008 in Sentencing | Permalink | Comments (0) | TrackBack (0)

Skilling Hearing - Sounds Like it Wasn't a Hot Bench

Reading the reports from those who were there, it sounds like the Skilling bench was a quiet one. But then again - a lot of the argument dealt with "honest services" under the mail fraud statute. 

The mail fraud statute is an 1872 statute that was a section in a revision of the Postal Act.  In the 1970's prosecutors extended mail fraud to prosecute cases involving "intangible rights."  In the case of McNally v. United States, the Supreme Court shot this doctrine down finding that "money or property" was required.  Congress came back with a new statute 18 U.S.C. 1346 that allowed prosecutions premised on a right to "honest services."  But the statute has been problematic in both its breadth and in the government's attempt to extend it in new ways.  The courts as seen in the Brown case, have provided limits to what might appear as a limitless statute.  But the bottom line is that this statute has numerous problems, both in its wording and in its application. And because mail fraud is difficult to understand, it is not surprising that a hearing related to this crime might prove dry.

Amit Efrati, U.S. Judges Hint at Little in  Skilling Appeals Session

Loren Steffy - Houston Chronicle Business Blog - Skilling's Appeal Opens With a Bang, Ends With a Whimper

(Houston Chronicle) AP Court Hears Appeal of Enron's Skilling

Nola.com Skilling Hearing Concludes With Smaller Audience Than Expected

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April 3, 2008 in Enron | Permalink | Comments (0) | TrackBack (0)

Wednesday, April 2, 2008

Attorney General Firings - Not Merely Politics?

Ari Shapiro at NPR's All Things Considered has a story "Justice Probes Lawyer's Dismissal Amid Gay Rumor." Discrimination is appalling, but discrimination by the DOJ is frightening.  After all this is the office that administers the Civil Rights Division.

What is stated on the job announcements for DOJ? Looking through job description notices at DOJ today, one finds the following on some notices:

" The U.S. Department of Justice is an Equal Opportunity/Reasonable Accommodation Employer Except where otherwise provided by law, there will be no discrimination based on sex, sexual orientation, color, race, religion, national origin, politics, marital status, disability, age, status as a parent, membership or nonmembership in an employee organization, or personal favoritism."

Did DOJ include "sexual orientation" under the AG Gonzalez regime, and if they did was this violated? And what happened to President Clinton's Executive Order 13087 that prohibited discrimination based upon sexual orientation?  And is AG Mukasey doing any training in his department now to make certain that discrimination of all types does not exist?

(esp)

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April 2, 2008 in Prosecutors | Permalink | Comments (1) | TrackBack (0)

Tuesday, April 1, 2008

They're Expecting A Crowd for Skilling

The Fifth Circuit Court of Appeals has special instructions on its website about the Skilling oral argument set for today. For example, it states "[n]o one will be allowed to enter any of the courtrooms prior to 1:00 p.m., April 2, 2008, to allow court staff to set up additional chairs in the East Court room, and prepare other courtrooms for overflow spectators."

The case will be heard by three judges: Hon. Jerry E. Smith (Yale law grad, Reagan appointee), Edward C. Prado (Texas law grad, George W. Bush appointee), and Alia Moses Ludlum (Texas law grad, George W. Bush appointee) (see Times Picayune here).   

Some of the key issues before the court are:

  • Whether there was a Brady violation in the failure of the prosecution to provide the Fastow Notes and full discovery pre-trial.
  • Whether there is any reason not to follow the court's precedent in the Brown case with the prosecution's use of  the "honest services" theory.
  • Whether there was error in instructions given to the jury with respect to deliberate ignorance.
  • Whether it was improper to refuse instructions on materiality, reliance, and "oral side deals."
  • Whether the accused was deprived of a fair trial as a result of the venue of this trial.
  • Whether the accused was provided sufficient voir dire.
  • Whether errors with respect to the honest services doctrine spillover to other aspects of the case.
  • Whether there were sentencing errors.

(esp)

April 1, 2008 in Enron | Permalink | Comments (0) | TrackBack (0)

Monday, March 31, 2008

Wednesday Is Jeffrey Skilling Day

This Wednesday is the day that the Fifth Circuit will listen to arguments in the case of United States v. Skilling.  Although the briefs are filled with many arguments, the ones focused upon in the oral argument will likely be fewer in number.  That's typical, as you can't hit everything in a time-tight oral argument. 

As one looks at all of the original legal arguments and the new issues from the release of the Fastow notes, it is clear that the court will have a good bit to consider. And perhaps one item that might be lingering in some minds, is the continuing question as to  why the government didn't object to Fastow's argument for a sentence below the agreed upon terms of the plea agreement. Tom Kirkendall at Houston ClearThinkers (see here) pointed out one segment from the Skilling trial when Fastow was on redirect examination and he answered questions as follows:

Q. And what is the minimum amount of time that that plea agreement calls for?

A. It calls for a 10-year sentence.

Q. So after January 14th, can your cooperation lower that 10 years?

A. My understanding is that I will be sentenced to 10 years. The Judge ultimately has a discretion; but in my plea agreement, I agreed to the 10-year sentence."

Andy Fastow, however, received a sentence of six (6) years. This was despite a provision in the plea agreement that stated:

"The parties agree that Defendant's sentence under the Sentencing Guidelines shall include 120 months in the custody of the Bureau of Prisons.  Defendant agrees that he will not move for a downward departure from the offense level or the guideline range calculated by the Court and that no grounds for a downward departure exist."

And the government did not object.  Why?

The following are links to key posts from this blog that relate to the forthcoming argument, and the briefs that have been filed.

Government Responds to Skilling Supplemental Brief

The Skilling Discovery Problem - Part II of Commentary

The Falling of the Enron Case House of Cards

Skilling and the Fastow Notes

The Skilling Case - Stay Tuned

The Fastow Notes

Commentary on Skillings Reply Brief

Skilling's Reply Brief Arrives, Just in Time for the Holidays

The Government Weighs in on Skilling

Skilling's Fifth Circuit Brief Arrives

Also check out Larry Ribstein's Ideoblog here

(esp)

March 31, 2008 in Enron | Permalink | Comments (0) | TrackBack (0)

Congressperson's Office Covered By "Speech & Debate Clause"

The Supreme Court refused to re-examine a D.C. Circuit court opinion regarding an issue that arose following a search of Louisiana Representative William Jefferson's office. The D.C. Circuit had ruled that the search was improper as it violated the U.S. Constitution's Speech or Debate Clause.  The Court of Appeals held that "[t]he search of Congressman Jefferson’s office must have resulted in the disclosure of legislative materials to agents of the Executive. Indeed, the application accompanying the warrant contemplated it." (see decision)  In letting stand the D.C. Circuit Court opinion, despite a government appeal (see here and here), the Supreme Court was not willing to wrestle with the contours of what is included within the Constitution's Speech and Debate Clause. 

The DOJ is not pleased with this decision (see here).  But in many ways this is an important decision.  Although the government may feel it will make their investigations/prosecutions more difficult, it is a crucial position in light of the political happenings seen not too long ago in DOJ hiring and firing.  In order for there to be a proper balancing of power, it is critical that the executive branch cannot be invading the turf of the legislature.   The Supreme Court's decision not to re-examine the lower court ruling does not open the door as a license to do criminal business in legislative offices.  Rather it lifts the possibility of political retaliation in our government.

(esp)

March 31, 2008 in Congress, Investigations, Judicial Opinions, News | Permalink | Comments (0) | TrackBack (0)

In the News

Still No Verdict in the Wecht Case - See Pittsburgh Tribune-Review - 'Hung Jury' Question Suggests Holdouts in Wecht Trial;  Tom Withers, Wecht Trial Jury Deliberations at the Federal Criminal Defense Blog (discussing the deliberation process in this case)

Detroit Mayor - Who Will Judge -Detroit News - Prosecutor to Oppose Judge Picked for Detroit Mayor's Hearing

The Judge & Scruggs - ABA Law Jrl.com - Ethics Committee Recommends Suspension for Miss. Judge Tied to Scruggs

Former Alabama Governor Released on Bond - Washington Post - Ex-Governor Leaves Prison on Bond

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March 31, 2008 in News | Permalink | Comments (0) | TrackBack (0)

Guilty Plea - Defense Department Official

A DOJ Press Release tells of the plea entered by a defense department official in an espionage case related to China.  Pleading to a "one-count criminal information charging him with conspiracy to disclose national defense information to persons not entitled to receive it, in violation of 18 U.S.C., Sections 793(d)," the press release states that "the criminal conduct spanned the time period of March 2007 to February 2008." The individual, "a Weapons Systems Policy Analyst at the Arlington, Va.-based Defense Security Cooperation Agency, an agency within the Department of Defense -- provided national defense information on numerous occasions to [   ] , a New Orleans businessman."

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March 31, 2008 in International | Permalink | Comments (0) | TrackBack (0)

Should Fraudulent Billing By Attorneys Be Mail Fraud

The Wall Street Jrl (here) reports on an attorney from a major U.S. law firm pleading to a one count Information to the crime of mail fraud, 18 U.S.C. s 1341 for engaging "in a fraudulent scheme to charge the Firm and its clients hundreds of thousands of dollars for personal and non-existent business expenses."  Although the Wall Street Journal mentions the name of the firm, the Information they link to does not (see here). Some interesting observations here:

  • The government seems to always mention the innocent affiliations, and clearly this is justified in RICO cases where they need to identify the innocent enterprises. So why in this Information do they call it - "a major United States law firm (the 'Firm')" and omit the law firm's name?  Are they giving special treatment to a law firm as opposed to another form of business when the firm or business name is lumped into the Information or Indictment, even though the firm or business has no criminal culpability and may have been the source of notifying the authorities of wrong-doing?  Mind you, I am not criticizing the removal of the name here as this is a good move by the U.S. Attorney.  My question is - why isn't this done more often?
  • But where was the "The Firm" in this scenario?  The Information filed by the US Attorney's Office says that this "fraudulent scheme" was "[f]rom in or about 1993 through in or about 2005." Why was this not discovered sooner?  Was there no oversight? Did the "the firm" have a corporate compliance program?
  • Should mischaracterizing billing or even fraudulent billing by an attorney constitute mail fraud? This issue came up in the case of United States v. D'Amato, 39 F.3d 1249 (2d Cir. 1994), although that case was different as noted by the Second Circuit in vacating the conviction.  The court stated, "[t]he mail fraud statute does not criminalize the charging of an allegedly excessive fee, where, as here, a corporate agent with at least apparent authority to do so agreed to the fee, received no personal benefit from the fee, and was not deceived by the payee." But then note in United States v.Myerson, 18 F.3d 153 (2d Cir. 1994) the court allowed a conviction to stand were the "fraud was based on ..... submitting a legal fee that overbilled his clients by millions of dollars and by his fraudulent claims that personal charges were legitimate business expenses." (Myerson was not, however, convicted of defrauding the law firm)
  • Clearly overbilling and fraudulent billing by an attorney is unethical conduct and clearly it should be something subject to disciplinary action.  But should the federal government be needing to intervene with criminal actions under the mail fraud statute?

(esp)

March 31, 2008 in Fraud | Permalink | Comments (0) | TrackBack (0)

Sunday, March 30, 2008

Mortgage Fraud/Subprime Lending - Will Mukasey Appoint A Task Force

Will AG Mukasey appoint a task force to investigate and prosecute cases related to subprime and mortgage fraud? For right now it looks like Attorney General Mukasey has not made up his mind. (see Bloomberg here)

On one hand you see the practices used by foreclosure mills (NYTimes here) and you also see some mortgage fraud cases being brought throughout the United States. (see, e.g., here, here, and here).  And the Wall Street Jrl has an article today titled, HUD Secretary Expected to Resign. One has to wonder if this change might influence DOJ to create a task force.

Shouldn't there be a Mortgage Fraud Task Force?  After all, when the corporate scandals hit the news, we saw the Corporate Fraud Task Force, and when there was fraud after Hurricane Katrina there was the formation of the Katrina Fraud Task Force, and just this week Mukasey announced the formation of a "Safe Streets Task Force to combat gang violence in communities north of Los Angeles." (see here)  Individual jurisdictions are reacting to the mortgage crisis.(See Cleveland PlainDealer describing mortgage fraud task force in Cleveland here; Miami-Dade Mortgage Fraud Task Force; US Attorneys Office in the Western District of Pennsylvania here).  And the FBI is already in the loop (See FBI Launches Mortgage Fraud Task Force in the Nation's Capital)

So will we be seeing a DOJ Mortgage Fraud Task Force pretty soon?

(esp) 

March 30, 2008 in Mortgage Fraud | Permalink | Comments (7) | TrackBack (0)

Wecht Jury - When Do You Call A Jury Hung? And Who Wins?

It doesn't look like the Wecht jury is to the point of being declared hung. See Jason Cato, Wecht Jurors Won't Be Rushed, Pittsburgh Tribune Review.  A hung jury is not always a plus for either side.  For both the prosecution and defense it can mean a retrial. Each side often believes that they can do better if given a second chance.  But with evidence on the table, there can be fewer surprises in a retrial. Perhaps the most significant drawback for the defense is the cost of retrial.  Having to pay attorneys fees for a new trial can deplete a good bit of assets of the accused. But maybe this will not be an issue in the Wecht trial - maybe this week will bring a verdict.

(esp) 

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

White Collar Offenders in Prison

With the increased sentences being given to non-violent white collar offenders, more and more are finding themselves being housed near or with those who commit violent acts.  Is it really necessary to spend the extra funds of a higher level security facility on those who are non-violent white collar offenders? It is also interesting to note that those who do not risk a trial and take a plea, are not only avoiding the risk of a higher sentence, but also the risk of being placed in a more restrictive environment. A perfect example here is Jamie Olis.  Olis initially went to a very secure facility because of the exhorbitant sentence given to him.  When his sentence was reduced he was sent to a less restrictive facility.  But even then - it is prison.  And as seen this past week, it was the facility near Olis where there was a prison riot and death. (see here)

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March 30, 2008 in Sentencing | Permalink | Comments (1) | TrackBack (0)

Hollywood Producer & Former T.V. Company CEO Indicted

A press release of the Central District of California tells of "[a] Hollywood producer, who founded and was the chief executive officer of a publicly-traded television production and distribution company," being "indicted .... by a federal grand jury for allegedly orchestrating a fraud scam designed to artificially inflate the company's revenue and stock price."  It was a 13 count indictment that charged the founder of Team Communications Group, Inc., "with conspiracy, falsifying Team's books and records, making false statements in Team's annual and quarterly reports filed with the Securities and Exchange Commission, making false statements to Team's outside auditors, and giving false testimony to the SEC in a deposition." 

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March 30, 2008 in Celebrities | Permalink | Comments (0) | TrackBack (0)

Upcoming Conferences

New York City Bar - Criminal Justice Retreat

The New York City Bar will be holding a Criminal Justice Retreat on Saturday, April 12, 2008.  The title is, "A Summit on the Prosecution Function."  For more information see here - Download retreat_invitation.pdf

ABA Section on Litigation Program -

Crossing the Line: Responding to Prosecutorial Misconduct -April 17, 2008 from 10:30 a.m. to 11:45 a.m.; Hyatt Regency Capitol Hill, Washington, DC

Congressional Investigations – Avoiding Pitfalls in This Forum -April 17, 2008 from 1:45 p.m. to 3:15 p.m.; Hyatt Regency Capitol Hill, Washington, DC

For more information see here

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March 30, 2008 in Conferences | Permalink | Comments (0) | TrackBack (0)