Saturday, March 21, 2009

Supremes to Hear White Collar Case from Enron Broadband

The U.S. Supreme Court is set to hear oral argument tomorrow on the case of Yeager v. United States, (see here) a case that reexamines the collateral estoppel rule in a white collar context.  The question before the Court is:

"Whether, when a jury acquits a defendant on multiple counts but fails to reach a verdict on other counts that share a common element, and, after a complete review of the record, the court of appeals determines that the only rational basis for the acquittals is that an essential element of the hung counts was determined in the defendant's favor, collateral estoppel bars a retrial on the hung counts."

The defendants in the case "were tried on various counts for their actions while employed at Enron Broadband Services ("EBS"). The jury acquitted Defendants on some of these counts but hung on others, after which the United States ("Government") again indicted Defendants on some of the mistried counts." The issue is now whether collateral estoppel can apply to hung counts.

There is no question that the circuits are split on this issue and that Supreme Court guidance is needed. But a lot is at stake here in that the collateral estoppel rule, an important component of the constitutional protection against double-jeopardy,  is being tested.  Some of the questions here are: Should prosecutors be rewarded for "overcharging their cases and then failing to prove the superfluous charges?" Should courts provide legal oversight when it is clear that the law can only be interpreted one way? If the acquitted counts estop the hung counts, can a court chalk this up to jury irrationality and just permit the jury a second bite at the apple?

(esp)

Addendum - Briefs can be found on this ABA site here. (w/ a hat tip to Jack Townsend)

March 21, 2009 in Enron, Judicial Opinions, Prosecutions | Permalink | Comments (0) | TrackBack (0)

New Books

Hank J. Brightman has a book titled Today's White Collar Crime: Legal, Investigative, and Theoretical Perspectives.  It is a text for undergrad courses.  For information see here.

Patricia E. Salkin has a book titled Ethical Standards in the Public Sector, Second Edition, a book published by the ABA.

(esp)

March 21, 2009 in Books, Scholarship | Permalink | Comments (0) | TrackBack (0)

Friday, March 20, 2009

Madoff - Stay in Jail - Age Matters

The Second Circuit Court of Appeals issued a Summary Order finding that Bernie Madoff should remain in jail during the pending of his case before the court. The court notes that the "burden is on a defendant to demonstrate by clear and convincing evidence that he is not likely to flee or pose a danger to the safety of others or the community."  The district court had found "that in light of the defendant's age (70) and the length of a potential sentence (150) years, he has an incentive to flee, and that because he has the means to do so, he presents a risk of flight, and therefore should not be released." (emphasis added)  The appellate court found that "[t]he defendant's age and his exposure to imprisonment are undisputed, and the court did not err in inferring an incentive to flee from these facts." (emphasis added) The Second Circuit upheld the district court's decision finding that the court did not err in "its assessment that the defendant has failed to show by clear and convincing evidence that he is not likely to flee."

Madoff is not a sympathetic character right now, and the applause he received from the courtroom audience, when ordered to jail, sent that message clearly (see here).  But all that said, it is interesting to see a court consider the age of the accused in a bail decision? If we said it was based on race or gender it would be subject to scrutiny.  And age, according to the Sentencing Guidelines "is not ordinarily relevant in determining whether a departure is warranted." It can be used if the accused "is elderly and infirm and where a form of punishment such as home confinement might be equally efficient as and less costly than incarceration." (5H1.1).  Is using age as a factor in a bail decision different?

See also Ashby Jones, WSJ Blog, Madoff to Stay Behind Bars Pending Sentencing

(esp)

March 20, 2009 in Fraud, Judicial Opinions | Permalink | Comments (0) | TrackBack (0)

Nacchio Files Petition for Cert

Joseph P. Nacchio, former CEO of Qwest Communications filed a Petition for Certiorari in the U.S. Supreme Court.  He argues that the Tenth Circuit decision (en banc) conflicts with other circuits.  The decision in the 10th Circuit was split 5-4 (see here and here).  The issues presented in this Cert Petition are:

"1. Whether the defendant is entitled to acquittal or a new trial because the Tenth Circuit, in conflict with the standards applied in other circuits, erred by upholding the jury instructions bearing on the materiality of the type of information at issue, and by holding that there was sufficient evidence that the defendant failed to disclose material information and knew it.

2. Whether the judgment must be reversed and remanded for a new trial because the Tenth Circuit approved the use of impermissible procedures for the exclusion of expert testimony under Rule 702 that conflict with decisions of other circuits.

3. Whether the Tenth Circuit’s decision should be summarily reversed because it misapplied decisions of this Court, mischaracterized the district court’s reasoning, failed to resolve all the issues presented, and held that Nacchio failed to address an issue that was a principal focus of his brief."

There are several important issues in this case, such as whether a charge of insider trading is proper when "the allegedly material 'inside' information consisted of internal corporate risk assessments about financial results for future quarters." Another key issue in this case is the failure to admit the testimony of a defense witness.  With Daubert and rules related issues to consider, the importance of a defendant to present his or her defense is considered here.

Petition for Certiorari here - Download Nacchio Cert Petition

(esp)

March 20, 2009 in Insider Trading | Permalink | Comments (0) | TrackBack (0)

In the News & Around the Blogosphere

Thursday, March 19, 2009

In the News & Around the Blogosphere

Chronicle of Higher Education,A 4th University Is Missing Money in Alleged $554-Million Swindle (subscription required)

Gary Craig, Democrat and Chronicle.com,Feds join county probe into contractors

Randall Mikkelsen, Reuters,Justice Dept looking at AIG bonuses

Noeleen G. Walden, NYLJ, law.com, Bank of America Ordered to Give Bonus Data to N.Y. Attorney General

(esp)

March 19, 2009 in News | Permalink | Comments (0) | TrackBack (0)

Wednesday, March 18, 2009

Prosecutorial Misconduct?

Curt Anderson, Florida AP, US prosecutors accused of misconduct in case - Did prosecutors authorize two witnesses to record their conversations with defense counsel? And did the prosecutor fail to reveal evidence to the defense?  The more important question is - what would defense counsel have faced if the tables were turned. 

(esp)

March 18, 2009 in Defense Counsel, News, Prosecutions | Permalink | Comments (0) | TrackBack (0)

White Collar Statistics

The numbers for December 2008 have been released by TRAC (see here) and white collar prosecutions were down 17.3 % from five years previous. The jurisdictions with the largest number of prosecutions per capita were the Southern District of Mississippi, the Middle District of Louisiana, and the District of Montana. But again, these statistics need to be examined carefully. (see here and here), especially with regard to how the term "white collar crime" is defined.

The question now will be whether the new administration brings in higher numbers when it comes to white collar prosecutions and convictions.

(esp) (w/ disclosure that she is a B.S. graduate of Syracuse U.- home of the Trac Reports). 

March 18, 2009 in Think Tank Reports | Permalink | Comments (0) | TrackBack (0)

Criminal Complaint Against Madoff Accountant

The DOJ and SEC are both widening the net of individuals being accused of conduct related to the Madoff matter.  The latest complaints (SEC and DOJ) are against his accountant. What is particularly interesting here is the question of what are the responsibilities of an individual who may have access to financial matters of another.  Is there an obligation to audit the information provided by a client?  And will attorneys be required as "gatekeepers" to question information provided to them by their clients? This issue was one discussed at the recent ABA White Collar Crime Conference here.   

The criminal complaint in this case charges securities fraud, investment advisor fraud, and false filings with the SEC.  See Criminal Complaint - Download Madoff Accountant Criminal Complaint and SEC Complaint - Download Madoff Accountant SEC Complaint.  But I keep thinking about Professor Coffee's piece here,  and wondering who is really at fault, and isn't it odd to see the SEC bringing a complaint when their oversight may have fallen short.

(esp)(w/ a hat tip to Peter Henning) 

Addendum -  This is not an indictment, it is filing of a criminal complaint.

March 18, 2009 in Fraud | Permalink | Comments (3) | TrackBack (0)

Monday, March 16, 2009

In the News and Around the Blogosphere

How Could This Have Happened: Professor Coffee Offers An Opinion

Check out Professor John Coffee's superb article, The Lessons of Madoff in the National Law Jrl here.

(esp)

March 16, 2009 in Fraud, News | Permalink | Comments (0) | TrackBack (0)

Sunday, March 15, 2009

Posting on Facebook and Twitter During a Trial

With a fast-growing Internet world with social networks, this was bound to eventually be an issue. See Maryclaire Dale (AP), In York, Fumo: Juror discussing case on Facebook, Twitter;  Emilie Lounsberry, Philly.com, Fumo lawyers target juror, deliberations

(esp)

March 15, 2009 in News | Permalink | Comments (2) | TrackBack (0)

Hitachi Displays Ltd. - The Information

It was mentioned here, that a DOJ Press Release reported that Hitachi Displays Ltd would be entering a guilty plea to "fixing prices for LCD panels sold to Dell, Inc."  The plea would include a 31 million dollar fine. Business Week offers this "snapshot" of the company here. The DOJ posted the Information in the case which states that "[v]arious corporations and individuals, not made defendants in this Information, participated as coconspirators in the offense charged in this Information and performed acts and made statements in furtherance of it." The Information also alleges that "[d]uring the period covered by this Information, the defendant and its coconspirators sold and distributed TFT-LCD in a continuous and uninterrupted flow of interstate and foreign trade and commerce to customers located in states or countries other than the states or countries in which the defendant and its coconspirators produced TFT-LCD."

(esp)

March 15, 2009 in Settlement | Permalink | Comments (0) | TrackBack (0)

United States v. W.R. Grace

Hats off to the School of Law and School of Journalism at University of Montana for the blog they created to follow the Grace case. The case is in the U.S. District Court in Montana.  Check it out here.

(esp)

March 15, 2009 in Prosecutions | Permalink | Comments (0) | TrackBack (0)