April 26, 2008
Commentary on the Wesley Snipes Sentence
Wesley Snipes received the maximum sentence for his convictions, a sentence of three years (see here). Co-defendants who were found guilty of conspiracy to defraud the IRS and presenting a false claim to the IRS received 10 years and 4 years and 6 months. A likely question on appeal will be whether Wesley Snipes deserved to receive the maximum penalty as his sentence.
"'Snipes' long prison sentence should send a loud and crystal clear message to all tax defiers that if they engage in similar tax defier conduct, they face joining him and his co-defendants, . . . , as inmates in prison,' said Nathan J. Hochman, Assistant Attorney General of the Justice Department's Tax Division." (see press release). But some may question whether an individual should receive the maximum sentence in order to provide deterrence to others. And should a person's celebrity status, warrant the imposition of a harsher sentence?
See also Doug Berman's Sentencing Law & Policy here.
April 24, 2008
Former AOL Exec Cleared in Civil Case
The government first proceeded with a criminal action against a former AOL executive. (see here and here). After a "not guilty," was returned by the jury, the government tried the civil route. Because the government has the ability to use parallel civil proceedings, they can proceed twice with basically the same evidence and not be precluded by claims of double jeopardy.
Although the government has the right and power to try a second time in a different forum, the results did not change with respect to the former AOL exec. The jury returned another win for the defense, resulting in a finding against the government's civil fraud charges. (see here)
Attorney Hank Asbill, a partner at Dewey & LeBoeuf LLP, and attorney for the AOL exec, will be speaking as the keynote speaker at the forthcoming White Collar Crime Institute at Stetson U. College of Law's Tampa campus in Florida on May 8, 2008. To attend this function, see here. See here for more details.
Wesley Snipes Gets 36 Months
The government asked for 3 years (see here) in a memo that focused on the criminal activity that formed the basis of the convictions against Snipes. It's a memo filled with numbers. In contrast, the defense asked for probation in memo that very much focused on the individual (see here-Download snipes20sentencing20memorandum.pdf) The defense memo was accompanied with letters in support, something that is common in white collar cases. (see here - Download snipes20exhibits.pdf ). As noted by Professor Paul Caron on the Tax Prof Blog, there are an array of letters including the celebrity letters. (see here) One very thoughtful letter caught my eye as it was written by Marc Greenberg, professor of law and director of the intellectual property program at Golden Gate University Law School. Now the decision rests in the hands of the judge. Stay tuned.
(esp)(w/thanks to Whitney Curtis)
April 23, 2008
After Corporate Deferred Prosecution Agreements Come Individual Indictments
Corporations reaching deferred or non-prosecution agreements with the government, often find themselves paying money and offering cooperation in return for an agreement that will allow the company to continue its existence. From this cooperation, which in some cases includes a waiver of attorney-client privilege, comes the indictment of individuals within the company. From the government, and sometimes the corporations perspective, these folks are the employees that failed to adhere to internal memorandum and internal regulation, and instead decide to break the law.
This week we see the aftermath of the Bristol-Myers agreement as the DOJ in a press release states "that the former senior vice president of Bristol-Myers Squibb Company (BMS) [ ] was indicted for his [alleged]role in lying to the federal government about a patent deal involving the popular blood-thinning drug, Plavix, used by heart attack, stroke and other patients." "On June 11, 2007, BMS agreed to plead guilty and pay a $1 million criminal fine for misleading the government about the Plavix patent deal." It is, therefore, not surprising to see an individual as opposed to a company prosecution happening here.
April 22, 2008
The Latest Jack Abramoff Effect
It has been several years since the investigation of Jack Abramoff and over two years since he plead guilty and received a seventy month sentence (see here). But the dominoes continue to fall. (see here).
This time it is someone who was with the DOJ. The LA Times in an article titled, "Ex-Justice official is charged in corruption inquiry in connection with Jack Abramoff" tells the background of this former DOJ attorney and tells of the alleged favors received. The DOJ proceeding against a DOJ person is highlighted in the headline over at the ABA Jrl Law News - DOJs Abramoff Probe Ensares One of its Own.
The press anticipates a plea here, which raises questions of who will this new defendant be a witness against. As there are clear benefits to cooperation, and the more cooperation provided the better the deal, it serves an accused well to offer testimony against others in order to receive a lower sentence. The continual fear in these cases is that with such a strong motivation to provide testimony, one has to question the credibility of the testimony that is received.
In the News
Phillyburbs.com - News orgs appeal judge's decision to shield jurors' names (Wecht Case)
Pittsburgh Post-Gazette - Wecht lawyers seek dismissal (3rd time)
In the Literature
Daniel R. Alonso (Kaye Scholer LLP) Obtaining Testimony and Evidence from Overseas Witnesses
Busted by the Feds 8th Edition (Manual for Defendants Facing Federal Prosecution)
Dr. Cyril H. Wecht's Case - The Latest
It is without doubt that this case has been enormously controversial. First there were questions about whether this case warranted a federal prosecution, and more importantly one with this many charges. Then there was a seven week trial with a long deliberation, but that ended with a hung jury. (see here) The post trial conduct by the FBI in questioning jurors certainly raised some eyebrows. (see here) There were even questions about how the jurors names were obtained. (see here) There have also been claims that the FBI fabricated a 2005 affidavit (see here). And there are claims that an excused juror did not want to leave the deliberations (see here). And the prosecution is arguing that they need "outsiders" to get a fair jury in the retrial (see here and here). And the judge responding to claims of bias, says he is not stepping aside. (see here and here) And you have the house committee asking for documents related to this case (see here). And there have been claims of this being a political prosecution (see here). And you have prominent players asking AG Mukasey to step in here. (see here)
Wouldn't this be a perfect case for a Frank Quattrone style deferred prosecution agreement (see here)?
Former IRS "Revenue Agent" Sentenced to a Year
A press release of the U.S. Attorney's Office for the Southern District of New York reports that "a former Internal Revenue Service (“IRS”) Revenue Agent -- was sentenced [ ] in Manhattan federal court to a year in jail for carrying out a scheme to obstruct the IRS by fraudulently attempting to sell to other taxpayers, and fraudulently using on his own personal income tax returns, tax losses belonging to a separate company he controlled."
Press Release - Download willner20sentencing20pr.pdf
April 21, 2008
Former IRS Agent Pleads
A Press Release of the US Attorneys Office for the Middle District of California reports on the charging of a former IRS Agent "in relation to a securities fraud scheme that took more than $10 million from hundreds of victims across the country." The release also notes that there was a plea to "a two-count information that accuse[d] him of conspiracy to commit securities fraud and subscribing to a false tax return." The plea agreement provides for a guilty plea to these two felony counts.
In the News - From the DOJ - Antitrust
WASHINGTON — A former employee of a Long Island, N.Y., defense contractor pleaded guilty to participating in a conspiracy to rig bids on military contracts for Navy straps that are used to secure munitions and other supplies, the Department of Justice announced today. Navy straps are a type of tiedown equipment used by the U.S. Navy to secure munitions and other supplies for transportation on ships and airplanes....
DOJ Press Release -
Former Executive Agrees to Serve Jail Time
WASHINGTON — A former U.S. executive of Manuli Rubber Industries SpA, a Milan, Italy-based marine hose manufacturer, has agreed to plead guilty and serve jail time for participating in a conspiracy to rig bids, fix prices and allocate market shares of marine hose in the United States and elsewhere, . . .
DOJ Press Release -
WASHINGTON — Tokyo-based Japan Airlines International Co. Ltd. (JAL) has agreed to plead guilty and pay a $110 million criminal fine for its role in a conspiracy to fix rates for international cargo shipments, the Department of Justice announced today. . .