Saturday, November 8, 2008

Sentencing Gen Re Execs

Previously noted here, both the government and defense filed their sentencing memos in a case with arguments far apart on what should be the appropriate sentence for the defendants found guilty following a reinsurance contract between AIG and General Re. 

Douglas McLeod, over at Business Insurance, has been providing comprehensive coverage on the case here, the most recent entry being the judge's Ruling on Loss Calculation, Victim Enhancement, and Restitution here. The judge concludes that "30 levels will be added to the defendants’ guidelines for loss of more than $400 million, 6 levels will be added for more than 250 victims, and no restitution will be ordered."

But the actual sentence remains to be seen.  Courts now have the ability to look beyond mere mathematical calculations and sentence the individual. 

See also Doug Berman's Sentencing Law & Policy here.

(esp)

November 8, 2008 in Sentencing | Permalink | Comments (0) | TrackBack (0)

Friday, November 7, 2008

Terrierist Attack at the White House

Everyone has pardons on their mind.  Who will receive the last minute pardons from the President as he leaves the white house?  (see here)

But there is one, the white house terrier canine, who is hoping for some immediate relief.  Facing eviction from the white house, Barney took his frustrations out on a member of the press. (see here) Clearly the circumstances warrant a decrease by at least two levels under the sentencing guidelines. But what Barney really wants right now is a pardon.  Will the President give him this bone?

(esp) (w/ a hat tip to Professor Pete Fitzgerald for the headline)

November 7, 2008 in News | Permalink | Comments (0) | TrackBack (0)

In the News and Around the Blogosphere

Head of DOJ's Antitrust Division to Leave

A DOJ Press Statement issued by Attorney General Mukasey speaks to the resignation of Assistant Attorney General Thomas Barnett of the Antitrust Division. AG Mukasey states:

"Tom Barnett has been an effective enforcer of the antitrust laws and a strong advocate for consumers. Under his leadership, the Antitrust Division has increased cartel enforcement to record levels with unprecedented fines and prison sentences, improved the efficiency and efficacy of its merger enforcement, and enhanced cooperation with our foreign counterparts."

The Press Release also notes that:

"Under Barnett’s leadership, the Division obtained $1.8 billion in criminal fines against 50 corporations and 91 individuals. The average prison sentence for incarcerated defendants charged by the Division reached an all-time high of 31 months in FY 2007 with an overall average of 23 months during Barnett’s 3 ½ years as head of the Division. Foreign executives in international cartel cases also faced longer jail sentences, averaging 12 months in FY 2007."

What others are saying:

Joe Palazzola, BLT Law Blog, Barnett to Resign as Antitrust Chief

Trade Regulation Talk Blog, Barnett Resigns as Justice Department Antitrust Chief

(esp)

November 7, 2008 in Antitrust, Prosecutors | Permalink | Comments (0) | TrackBack (0)

Thursday, November 6, 2008

In the News & Around the Blogosphere

In the News and Around the Blogosphere

Wednesday, November 5, 2008

Congratulations to President-Elect Barack Obama

Congratulations to President-Elect Barack Obama and Vice-President-Elect Joe Biden.

(esp)

November 5, 2008 | Permalink | Comments (19) | TrackBack (0)

Tuesday, November 4, 2008

In the News & Around the Blogosphere

Tony Batt, Las Vegas Review-Journal.com, Corruption Investigation: Federal Probe Clears Gibbons

Amanda Bronstad, National Law Journal, Last of Milberg conspirators sentenced

Michael Braga, Herald Tribune, Guilty plea wins fraud deal

Nathan Koppel, WSJ Blog, The Milberg Case is Over. Finally.

(esp)

November 4, 2008 in News | Permalink | Comments (0) | TrackBack (0)

Operation Board Games - Another Indictment in Illinois

A Press Release of the United States Attorney for the Northern District of Illinois reports that "[a] longtime political insider in Springfield was indicted . . .  on federal corruption charges for allegedly conspiring with two Chicago businessmen and others to obtain political contributions for a certain public official by shaking down an investment firm that was seeking a $220 million allocation from the state Teachers Retirement System (TRS.).  The four count indictment was for one counts each of "conspiracy to commit mail fraud, extortion conspiracy, attempted extortion and soliciting a bribe."  This is the "13th defendant charged as part of Operation Board Games, an on-going federal public corruption investigation of insider-dealing, influence-peddling and kickbacks involving private interests and public duties related to various state boards and non-profit organizations."

See also Chicago Tribune, Feds indict insider in Blagojevich probe.

(esp)

November 4, 2008 in Prosecutions | Permalink | Comments (0) | TrackBack (0)

Monday, November 3, 2008

Monitoring Elections and Voter Fraud

DOJ has geared up for election day.  A press release talks of a July 2008 training symposium, and also told of the work of the civil rights division to minimize voter fraud. It states that "[o]n Nov. 4, 2008, under the programs implemented by the Civil Rights and Criminal Divisions, the Department will be working hard to ensure fair access for the nation’s voters and to uphold the integrity of the nation’s democratic electoral process." This release is more important than ever, as perceptions of neutrality are important, especially in the aftermath of a politicized DOJ Honors Program and job hiring.

The Civil Rights Division has selected to monitor 23 states, but their release does not state which ones other than to say that "[i]n identifying locations where federal monitors may be needed, the Civil Rights Division has already sought out the views of many organizations, including non-governmental organizations as well as state and local officials."  Additionally, the 94 U.S. Attorneys' Offices are monitoring voting on this election day.  The press release notes that "[v]oter fraud complaints may be directed to any of the local U.S. Attorneys’ Offices, the local FBI offices or the Public Integrity Section (202-514-1412)."    

Here is a sampling of what some of the individual U.S. Attorney Office are doing:

DOJ Press Release, Justice Department to Monitor Primary Elections in Louisiana

DOJ Press Release, Justice Department to Monitor Elections in Alabama

DOJ Press Release, Justice Department Files Suit Against Vermont, Secretary of State Markowitz for Noncompliance with Uniformed and Overseas Citizens Absentee Voting Act

DOJ Press Release, Justice Department Announces Agreement with Waller County, Texas, to Remedy Alleged Violations of Voting Rights Statutes 

(esp)

November 3, 2008 in Fraud | Permalink | Comments (0) | TrackBack (0)

The Story of the Lawyer Connected to Refco

This is a must-read article detailing the story of a senior partner from Mayer Brown facing criminal charges related to his representation of Refco.  See Susan Beck, The American Lawyer, Mayer Brown and Weil, Gotshal had close ties to Refco, a brokerage firm that imploded in 2005. But only Mayer Brown is on the hook for $2 billion, with a senior partner facing criminal charges. Why?

(esp)(w/ a hat tip to Associate Dean Clark Furlow)

November 3, 2008 in Prosecutors | Permalink | Comments (0) | TrackBack (0)

Former CEO National Century Financial Enterprises Convicted Again

A DOJ Press Release reports that "Lance K. Poulsen, former president, owner and chief executive officer of National Century Financial Enterprises (NCFE)" was convicted "of conspiracy, fraud and money laundering." Poulsen had been convicted of "conspiracy, witness tampering and obstruction on March 26, 2008, and [he] was sentenced to ten years in prison on those charges." (see here) The DOJ Press Release states that "[t]he charges stemmed from a scheme to deceive investors about the financial health of NCFE that cost investors more than $2 billion. The company, which was based in Dublin, Ohio, was one of the largest healthcare finance companies in the United States until it filed for bankruptcy in November 2002."

(esp)

November 3, 2008 in Verdict | Permalink | Comments (1) | TrackBack (0)

In the News and Around the Blogosphere

Serge F. Kovalski, N.Y. Times, Independent Counsel Clears Palin of Ethics Violations

Mike Scarcella, BLT Blog, Juror in Stevens Case: My Father is not Dead

Houston Chronicle (AP), Former El Paso Corp. trader gets 10 months prison (w/ a hat tip to Bill Olis)

Daniel J. Morrissey, National Law Journal, Tighten up regulation

(esp)

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

Is It Civil Or Is It Limited to Criminal - Beyond RICO and FCPA

A interesting issue is presented in the Chronicle of Higher Education, Harvard Law Professor Takes New Tack Against RIAA (citing Jaikumar Vijayan, Computer World, Harvard professor offers new challenge to RIAA antipiracy campaign -Nesson claims Digital Theft Act, on which RIAA lawsuits are based, is unconstitutional) on whether the Digital Theft Act as used in a civil lawsuit is improper because the statute is limited to criminal matters.

Years back the issue would not have arisen as the overlap between criminal and third-party civil statutes did not exist.  With the Racketeer Influenced & Corrupt Organization Act (RICO) in 1970 we have seen statutes that allow for both criminal and civil enforcement, with the civil enforcement being extended beyond a government agency.  The rationale for these civil actions being allowed is that DOJ can't do it alone and allowing third -party civil actions can assist with enforcement. This was appealing with RICO because its initial focus was organized crime.  But RICO was interpreted broadly and went well beyond its roots and with it went the third-party civil actions. DOJ had and continues to have guidelines that restrict application of the statutes by providing oversight on prosecutorial discretion.  There are, however, no guidelines on the civil side.  This caused Congress to place additional limits on the civil side of RICO as seen in 18 U.S.C. 1964(c).

Other criminal statutes have seen attempts to be used in civil matters, such as the Foreign Corrupt Practices Act.  In Lamb v. Phillip Morris, Inc., 915 F.2d 1024 (6th Cir. 1024), the court did not allow the civil action. (See also Lewis v. Spock, 612 F. Supp. 1316 (N.D. Cal. 1985)).  Interestingly, one finds civil RICO actions that use the FCPA.

(esp)

November 3, 2008 in Civil Litigation, Computer Crime | Permalink | Comments (0) | TrackBack (0)

KPMG Study Shows the Difficulties Faced By Companies in FCPA Matters

A KPMG study released today demonstrates the difficulties faced by companies trying to comply with the Foreign Corrupt Practices Act (FCPA). A Press Release accompanying the study notes that "[m]ost multinational U.S.companies have programs to meet Foreign Corrupt Practices Act (FCPA) guidelines, but many executives surveyed by the audit, tax and advisory firm KPMG LLP acknowledge they still may not know enough about those with whom they do business in other countries." For example, "78 percent said they had trouble identifying and assessing FCPA risk."  The report can be found here - Download postable_pdf.pdf

(esp)

November 3, 2008 in FCPA | Permalink | Comments (0) | TrackBack (0)

Sunday, November 2, 2008

Will Tax Be A New "In" Crime & What Are the International Implications

The Washington Post article by David S. Hilzenrath titled, IRS, Justice Target Undisclosed Assets in Swiss Accounts raises the question of whether the veil will be further lifted over bank accounts held in Switzerland, and will there be prosecutions in the U.S. for individuals who placed funds abroad in efforts to evade U.S. taxation?  This remains to be seen, although Mr. Hilzenrath provides information on current happenings.

An interesting question can arise when DOJ tries to secure information that might result in a violation of foreign law if the information is provided to DOJ. In the past courts have been split on whether the production of documents should be permitted when there is a possible violation of the secrecy laws of another country. The Restatement (Third) of Foreign Relations Law of the United States section 442(1)(c) provides:

"In deciding whether to issue an order directing production of information located abroad, and in framing such an order, a court or agency in the United States should take into account the importance to the investigation or litigation of the documents or other information requested; the degree of specificity of the request; whether the information originated in the United States; the availability of alternative means of securing the information; and the extent to which noncompliance with the request would undermine important interests of the United States, or compliance with the request would undermine important interests of the state where the information is located. (emphasis added).

One Fifth Amendment case DOJ is likely to cite to is United States v. Balsys, 524 U.S. 666 (1998).  There may also be questions as to whether operations in the U.S. make a difference. The Permanent Subcommittee on Investigations Report on Tax Haven Banks Hiding Billions From IRS can be found here. UBS continues to be in the news. (See previously from June 08, Linnley Browning, NYTimes, Wealthy Americans Under Scrutiny in UBS Case ). 

(esp)(w/ a hat tip to Mark Johnson)

November 2, 2008 in Tax | Permalink | Comments (0) | TrackBack (0)

Timothy and John Rigas File Brief in Second Circuit

The brief for John and Timothy Rigas, former Adelphia CEO and CFO was recently filed.  The initial second circuit decision upheld convictions on twenty-two counts, reversing one bank fraud conviction. (see here) Cert was denied on this. (see here). The elder Rigas, 82 years old, began serving a 15-year sentence, and Timothy started his 20 year sentence, but these were reduced by three years each to 12 and 17 years (see here). 

But the case is now back before the Second Circuit and new issues present important considerations for the court. The issues presented include:

  • Whether the district court erred in failing to conduct resentencing de novo after this Court's reversal of a bank-fraud conviction?
  • Whether the district court's treatment of resentencing was procedurally and substantively unreasonable?
  • Whether the district court erred in denying the Motion for a New Trial pursuant to Rule 33 based on new evidence that the government's star had lied?
  • Whether the district court erred in denying the Motion to Compel interview notes from potential witnesses?

The 165 page redacted brief can be found here - Download 083485crl_united_states_v. Rigas, Redacted Joint Brief for Defendants-Appellants, Submitted 10-14-08.pdf

It is interesting to see these new issues before the court and remember what John Rigas initially said about the case against him in an interview with Charlie Rose - here.

(esp)

November 2, 2008 in Prosecutions | Permalink | Comments (0) | TrackBack (0)

In the News and Blogosphere

KARE11 (Minneapolis) - Judge Denies Bail for Tom Petters

DOJ Press Release, El Paso Businessman Agrees to Plead Guilty to Conspiracy to Rig Bids and Allocate Customers for Door and Hardware Contracts

Cyril Wecht Trial - new judge appointed - see here, here, and here

William Yardley, NYTimes, Unrepentant Stevens Finds a Welcome at Home

Matt Viser & Eric Moskowitz, Boston Globe,  Wilkerson ends campaign -But bribery defendant doesn't resign; governor pushes for reforms; Laurel J. Sweet & Hilliary Chabot, Boston Herald, Experts say officials could flip Dianne Wilkerson -Probe’s scope may widen

Carrie  Johnson, Washington Post, Legislators Using Law As Shield In Probes -Clause Complicates Congressional Cases (speaking of the speech and debate clause)

Paul Shukovsky & Daniel Lathrop, Seattle Post Intelligencer, Bush administration denies funding for FBI probe of mortgage mess - Many more agents needed, official says

Julia Preston, New York Times, Federal Charges for Ex-C.E.O. at Meatpacker

Van Smith, Baltimore City Paper, Bodog Internet Gambling Investigation Leads to Money-Laundering Charges 

Chronicle of Higher Education, Former Director of Alabama Fire College Gets 10 Years in Prison

Tom Hays, Law.com (AP), N.Y. Attorney General Asks Banks for Bonus Information - Chairman of House Oversight Committee sends similar information request to nine banks getting a $125 billion infusion

Law.com (AP), Businessman Sentenced for $107 Million Bank Fraud

(esp)

November 2, 2008 in News | Permalink | Comments (1) | TrackBack (0)

New Scholarship

Professor Miriam Baer of Brooklyn Law School has a new piece on SSRN that will be published in the Virginia Law Review. Titled, Linkage and the Deterrence of Corporate Fraud, she says that the Article "focuses on the difficulties of deterring perpetrators of fraud who are in the midst of their crimes, as opposd to potential perpetrators who are merely considering committing such crimes."  She argues "that when law enforcement policies change (ie, harsher sanctions or promises of more stringent monitoring), mid-fraud perpetrators behave differently from potential perpetrators and, perversely, may perpetrate greater harm in response to traditional increases in sanctions and monitoring resources."  She suggests policy changes.  The Article can be found here.

(esp)

November 2, 2008 in Scholarship | Permalink | Comments (0) | TrackBack (1)