White Collar Crime Prof Blog

In the News & Around the Blogosphere

Sentencing Commission Press Release, United States Sentencing Commission to Conduct Regional Public Hearings on Federal Sentencing Policy, Series of Hearings Coincide with 25th Anniversary of Sentencing Reform Act here

John Leland, NYTimes, Swindlers Find Growing Market in Foreclosures

Amir Efrati & Chad Bray, Wall St Jrl, Cuomo Subpoenas Madoff Investor - Case Focuses on Whether Merkin Funds Defrauded Nonprofit Groups

Nathan Koppel, Wall Street Jrl, Corruption Cases Renew Debate on Campaign-Finance Laws

Nathan Koppel, Wall Street Jrl, A Look at Marc Dreier’s Worldly Possessions

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Holder's Hearing

One thing was certain in listening to Eric Holder's testimony - there will no longer be politicized hiring at the justice department. And that's good.

See also Joe Palazzolo, BLT Blog, Holder Lays Out His Priorities; Carrie Johnson, Washington Post,  Waterboarding Is Torture, Holder Tells Senators -- Justice Dept. Nominee Rejects Bush-Era Policies but Stresses Bipartisanship

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In the News and Around the Blogosphere

DOJ Press Release,  Alabama-Based Hospice Company Pays U.S. $24.7 Million to Settle Health Care Fraud Claims

DOJ Press Release, Medical Clinic Executives and Worker Plead Guilty to $5.3 Medicare Fraud Scheme

DOJ Press Release, Eli Lilly and Company Agrees to Pay $1.415 Billion to Resolve Allegations of Off-label Promotion of Zyprexa -- $515 Million Criminal Fine Is Largest Individual Corporate Criminal Fine in History; Civil Settlement up to $800 Million

"American pharmaceutical giant Eli Lilly and Company today agreed to plead guilty and pay $1.415 billion for promoting its drug Zyprexa for uses not approved by the Food and Drug Administration (FDA), the Department of Justice announced today. This resolution includes a criminal fine of $515 million, the largest ever in a health care case, and the largest criminal fine for an individual corporation ever imposed in a United States criminal prosecution of any kind. Eli Lilly will also pay up to $800 million in a civil settlement with the federal government and the states." . . .

"Eli Lilly's guilty plea and sentence is not final until accepted by the U.S. District Court."

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In the News and Around the Blogosphere

Law.com has a new site called Madoff Watch

Maxwell S Kennerly, Litigation & Trial Blog, Fumo Trial Post 8: Fumo is One of the First Prosecutions Under a New Obstruction of Justice Statute

TBO.com (AP), Indiana Money Manager Charged in Florida Plane Crash

Roger Parloff, CNN.com, Wall Street: It's payback time

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Upcoming Conferences & Webcasts

Holtz, Rubenstein, & Reminick, LLP, Town Hall Meeting - Implications and Consequences of the Alleged Fraud of Bernard Madoff, January 21, 2009, NYC, here

Financial Accounting Standards Board - Proposed Improvements to Financial Statement Presentation, January 27, 2009, here

ABA Business Law Section, The Uncertainty Surrounding Honest Services Fraud, February 11, 2009 (teleconference and live audio webcast) - here

ABA 23rd National Institute on White Collar Crime, March 4-9, 2009, San Francisco,  here

ABA Criminal Justice Section & Alabama State Bar, Ethics - Politics - and Public Corruption, April 3, 2009, Alabama here

ABA Internal Corporate Investigations and In-House Counsel, May 7-8. 2009, Washington, D.C.,  here

If your firm, company, or organization is having a white collar related seminar, feel free to forward the details this way.

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Mukasey - Before You Hit the Road

Before he returns to the private sector, Attorney General Mukasay is being asked to answer questions related to the Ted Stevens case.

Mike Scarcella, in the BLT Blog, has an article titled, Federal Judge Orders Mukasey to Respond to Inquiry in Stevens Case One aspect of the matter pertains to a Motion to Dismiss filed by the defense in the Stevens case claiming that evidence may have been withheld by the prosecution. But a second tangential issue is also involved here, and that involves whether the prosecution properly apprised the court of information related to the witness who came forward with that evidence.  According to this blog post, the court is asking AG Mukasey to provide information here. It is interesting to see a judge making the head of the entire office answer a specific question on a particular case.  It kind of reminds one of the government asking the CEO of a major company to supply information about a specific employee within the company.  It's hard to complain about being asked to do something that they ask of others.  See also Erika Bolstad, Whistle-blower agent ID'd in Stevens case.

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In the News & Around the Blogosphere

Tiffany M. Joslyn, Research Counsel -White Collar Crime Project, National Association of Criminal Defense Lawyers, In the Wake of its Loss in US v. Stolt-Nielsen SA, the DOJ Antitrust Division Releases New Guidelines for its Leniency Program

Joe Palazzolo and David Ingram, Legal Times (law.com), What to Watch for at Attorney General Nominee's Hearing -Holder enjoys much support, but it's not all friendly faces in the Senate

DOJ Press Release, Rite Aid Corporation and Subsidiaries Agree to Pay $5 Million in Civil Penalties to Resolve Violations in Eight States of the Controlled Substances Act

Scott Horton, American Lawyer, Legal Times.com, The Blanket Option: Who Pardons Next?

Evening Sun (AP), Fed judge in Pa. to hear Wecht motions on Jan. 29

Dan Levine, The Recorder, law.com, Calif. Defense Attorney Accused of Money Laundering

Amanda Bronstad, National Law Journal, Two Milberg kickback defendants set to report to jail

Stephen Gandel, Time Magazine, Why is Bernie Madoff Still Free?

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Madoff - Bail Holds

Chad Brey, WSJ has an article online titled - Madoff to Remain Free. (see also Diana B. Henriques, NYTimes, Judge Rules Madoff Can Remain Free on Bail.   

This is not a surprising result as Madoff has not been convicted of any crimes and has not been indicted. Although the courts have been providing varying results in cases post-conviction (Bernie Ebbers remained free; Jeff Skilling to prison; Martha Stewart free until she decided to go; Former Atlanta Mayor Bill Campbell to prison; Conrad Black to prison; Wesley Snipes bail, etc.), one seldom sees a white collar offender in prison prior to trial.  The test applied by judges is found in 18 U.S.C. s 3142, which provides in part:

"upon motion of the attorney for the Government or upon the judicial officer’s own motion in a case, that involves—

(A) a serious risk that such person will flee; or

(B) a serious risk that such person will obstruct or attempt to obstruct justice, or threaten, injure, or intimidate, or attempt to threaten, injure, or intimidate, a prospective witness or juror."

Thus, when a court is able to find measures to assure that there is no flight and when there is little likelihood of an obstruction, placing the individual in jail pre-trial is unlikely. So seeing a court ruling that Madoff remain free and adding measures to make certain that assets are not dissipated, is not surprising.

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Addendum - Mark Hamblett, NYLJ, law.com, Madoff Ruled Not a 'Danger to Community' Remains on House Arrest

In the News and Around the Blogosphere

Angela Valdez, New Republic, Hot Under the Collar

Diana B. Henriques, NYTimes, New Description of Timing on Madoff’s Confession (raises the question of when was there was a duty to report Madoff's alleged fraud to authorities)

DOJ Press Release, Department of Justice Seeks to Recover Approximately $3 Million in Illegal Proceeds from Foreign Bribe Payments (The forfeiture complaints "relates primarily to alleged bribes paid" "in connection with public works projects awarded by the government of Bangladesh to Siemens AG and China Harbor Engineering Company.")

Tom Fowler, Houston Chronicle, The Skilling resentencing: Jamie Olis redux?

DOJ Press Release, Retired Army Major Pleads Guilty in Bribery Scheme Involving Department of Defense Contracts in Bribery Scheme in Kuwait

Vesna Jaksic, National Law Jrl, Law.com, Lawyer appointed to probe $38.5M debt owed Seattle company by defunct Dreier firm

Julie Kay, National Law Jrl, law.com, Kuehne trial postponed until April due to pending appeal, depositions — and Obama

Joann Loviglio, law.com (AP), SEC Charges Pa. Investment Manager in $50 Million Ponzi Scheme

Ben Levisohn, Business Week, Experts Say Fraud Likely to Rise

Mitch Lipka, Boston Globe, Mysterious credit card charge may have hit millions of users

(esp) (blogging from Atlanta plane change)

Deferred Prosecution Agreement in Lloyds TSB Bank

Federal prosecutors are not the only ones using deferred prosecution agreements in white collar cases.  In a press release, "Manhattan District Attorney Robert M. Morgenthau announced . . . a Deferred Prosecution Agreement with the British bank, Lloyds TSB Bank plc ('LLOYDS') in settlement of a 'stripping' scheme in which the Bank caused the falsification of the records of New York financial institutions and enabled its Iranian and Sudanese banking clients to access the U.S. banking system in violation of federal sanctions prohibiting such conduct. As a result, LLOYDS will pay fines and forfeiture totaling $350,000,000." The release stated that:

"Mr. Morgenthau said that today’s settlement was the result of a joint investigation undertaken by the District Attorney’s Office and the Asset Forfeiture and Money Laundering Section of the United States Department of Justice ('DOJ'). As a result of the settlement and Deferred Prosecution Agreement with both the District Attorney’s Office and DOJ, LLOYDS has agreed to adhere to best practices for international banking transparency, to cooperate with ongoing law enforcement investigations, to conduct an internal review of past transactions, and to pay the fines and forfeiture."

(esp) (blogging from San Diego) (w/ a hat tip to Karen Freifeld, Bloomberg, Lloyds TSB to Pay $350 Million to Settle Probe (Update1) )