Tuesday, May 12, 2009
A DOJ Press Releasereports on a deferred prosecution agreement entered into by "Novo Nordisk A/S (Novo), a Danish corporation based in Bagsvaerd, Denmark." The agreement calls for the company to pay a penalty of "$9 million penalty for illegal kickbacks paid to the former Iraqi government." This case is part of the DOJ's investigation "into the UN Oil-for-Food program." The DOJ filed "one count of conspiracy to commit wire fraud and to violate the books and records provisions of the Foreign Corrupt Practices Act (FCPA)." The DOJ Press Release states:
"According to the agreement and the information filed today, between 2001 and 2003, Novo paid approximately $1.4 million to the former Iraqi government by inflating the price of contracts by 10 percent before submitting the contracts to the United Nations for approval and concealed from the United Nations the fact that the price contained a kickback to the former Iraqi government. Novo also admitted it inaccurately recorded the kickback payments as "commissions" in its books and records."
Monday, May 11, 2009
Martha Neil, ABA Jrl News Now,Ark. Lawyer in Hot Water Over $9M Settlement-Funds Shortfall
DOJ Press Release, Justice Department Withdraws Report on Antitrust Monopoly Law
Ben Hallman, American Lawyer, law.com, W.R. Grace Acquittal in Asbestos Trial a Victory for Longtime Kirkland Counsel
Brian Baxter, American Lawyer, law.com, Davis Wright, K&L Gates, Thompson & Knight Ensnared in Ponzi Probe
Howard Mintz, Mercury News, Brocade's Reyes hopes to reverse stock options backdating convictions
Noeleen G. Walder, NYLJ, law.com, Madoff Bankruptcy Trustee Seeks $500 Million Clawback
Charlie Savage, NYTimes, Elite Unit’s Problems Pose Test for Attorney General
Jeffrey Skilling filed a Petition for Certiorari to the US Supreme Court and focuses his claim on the honest services aspect of mail fraud and jury prejudice. Clearly these are strong arguments as the Houston home court advantage was extraordinary in a case that was related to Enron and the honest services aspect of mail fraud has been a source of contention in many cases. Justice Scalia, in a recent dissent ona denial of certiorari, voiced strong opposition to the progression of mail fraud's intangible rights doctrine. He noted the breadth in the "28 words" in the statute and concluded by stating that "it seems to me quite irresponsible to let the current chaos prevail." It's a good move for Skilling to focus on this aspect of the statute, but the key will be whether the Court will accept certiorari in this case. Based upon a dissent in another Second Circuit en banc case, Rybicki, there are many circuits split on various aspects of the mail fraud statute.
See also Mary Flood, Houston Chronicle, Skilling asks Supreme Court to review conviction.; Bill Mears, CNN, Former Enron CEO Files High Court Appeal; Ashby Jones, WSJ Blog, Skilling Takes Appeal to High Court
Addendum - Adam Liptak of the NYTimes (here) reminds us, in an unrelated story of today, that "the Senate approved Justice Scalia's nomination ... by a vote of 98-to-0."
Back in October 2007, WellCare Health Plans, Inc. in Tampa was the subject of a search by government agents. (see here and here) Last week, the company entered into a deferred prosecution agreement. (see Bloomberg here). A DOJ Press Release outlines the obligations of WellCare under this agreement. It includes "consent to the civil forfeiture of $40,000,000," "pay an additional $40,000,000 in restitution to the Florida Medicaid and healthy Kids programs," "retain and pay an independent Monitor," and as usual for deferred prosecution agreements, cooperation in investigations, in this case investigations of "Wellcare executives and employees responsible for the alleged fraudulent conduct at issue."
But like so many of the recent deferred prosecution agreements, the DOJ plays a powerful position in the company's future. In this case the U.S. Attorney's Office gets to select the "independent Monitor." And if the "Monitor resigns or is unable to serve the balance of his or her term, a successor Monitor shall be selected by the USAO. . ." Additionally, a breach of the agreement rests in the sole discretion of the prosecution, although they do give the company time to respond to claims of a breach. And "[r]egardless of whether the USAO pursues criminal charges against WellCare upon any breach of the DPA, any monies paid to the USAO at any time by WellCare will not be returned to WellCare and WellCare will make no claim upon such monies." So much for contract law. (see here)
Deferred Prosecution Agreement here.