Saturday, January 24, 2009
The nominee to lead DOJ's Criminal Division is Lanny A. Breuer.
A man who clearly knows the white collar area of law, Breuer presently serves as co-chair of Covington and Burling's White Collar Defense and Investigations practice group. As described on his webpage - "Mr. Breuer represents corporations and individuals across a broad array of subject matters including corporate accountability, fraud and abuse, securities investigations and litigation, food and drug regulation, medical device health and safety, antitrust, conflicts of interest, environmental crimes, foreign corrupt practices, national security, and export controls." A Columbia grad (undergrad and law school), his resume includes serving as special counsel to President Clinton, not to mention his representation of Roger Clemens (see here).
It is good to see someone with enormous experience willing to serve the country in this important position. His expertise in the corporate and political world make him a good match in the fight against white collar crime.
Friday, January 23, 2009
The former Senate Majority Leader for New York, Joseph L. Bruno, was charged with mail and wire fraud in an eight count Indictment. Findlaw has the Indictment here. The Indictment includes alleged violations of mail fraud as defined under section 1346, the honest services statute. This statute was added to the fraud statutes following a Supreme Court decision in United States v. McNally, that held that "money or property" was a requirement for a mail fraud charge. The legislature immediately responded with a statute that allowed for prosecutions premised upon the "intangible right to honest services."
One interesting aspect of this Indictment is that the honest services allegation is premised in part on the New York Public Officer's Code of Ethics. It includes reference to written advisory opinions of the Legislative Ethics Committee. The alleged scheme or artifice to defraud as claimed in the Indictment was that he "would contact persons or entities who had business before the Legislature or State agencies, including union officials, exploiting his official position for personal compensation and enrichment, knowing and believing that his reasonably perceived ability to influence official action would, at last in part, motivate those he contacted to enter into financial relationships beneficial to his personal financial interest."
Several issues are likely to arise here, although some of these have rulings in prior cases. Is the honest services provision vague, should violation of a state ethics provision be sufficient to prosecute for a federal crime, and should federal courts be handling alleged state corruption charges? Again, many of these issues are not new, but prior to McNally there were many cases that allowed prosecutions based on intangible rights. One never knows when government will be found to have overstepped its boundaries in its use of the mail and wire fraud statutes.
See also Mike McIntire & Jeremy W. Peters, NYTimes, Ex-Senate Leader Bruno Is Indicted for Corruption
(esp)(w/ a thanks to Peter Henning for sending the Indictment)
Thursday, January 22, 2009
Jeremy Saland, NYCriminal Lawyer Blog, Bribery Plea: Former Bellevue Director Avoids Jail on Felony Plea
Bloomberg News, AP, Chicago Sun Times, Chicagoan named to investigate Lehman's failure
Scott Glover, LA Times, Woman gets more than 12 years in prison in Ponzi scheme
Mark McDonald, NYTimes, Two Death Sentences in Chinese Milk Cases
Yukari Iwatani Kane & Kara Scannell, WSJ, Apple Bests Downturn, But Faces SEC Probe,
Elaine Silvestrini, TBO.com, SEC Sues Missing Fund Manager; Dealbook, NYTimes, S.E.C. Charges Missing Fund Manager With Fraud; Darrell A. Hughs, WSJ, Fund Chief Is Charged With Fraud (note- SEC charges)
Nathan Koppel, WSJ Blog, No Bailout for Marc Dreier, Argue Feds; Noeleen G. Walder, NYLJ, law.com, Feds Urge Judge to Reject Dreier's Second Bid for Bail
Daniel Wise, NYLJ, law.com, N.Y. Attorney General Probes Placement of Investments With Madoff
AP, National Law Journal (law.com), Supreme Court to review power to probe national banks
Tuesday, January 20, 2009
Not surprisingly, Jeffrey Skilling is asking the Fifth Circuit for an en banc hearing. He focuses on three issues, with the lead one being premised on "honest services" fraud. The petition argues that the panel's decision is in conflict with other Fifth Circuit decisions, including U.S. v. Brown. It also raises the issue of vagueness as to section 1346. After all - what is "honest services"?
See Ashby Jones, WSJ Blog, Skilling, Petrocelli Make Two More Pleas to the Fifth Circuit ; Kristen Hays, Houston Chronicle, Enron’s Skilling asks full court to review convictions
KPMG Forensic, Webcast: FCPA Enforcement - The Paradigm Shift of 2008 - January 28, 2009 - here
Holtz, Rubenstein, Reminick, LLP, Implications and Consequences of the Alleged Fraud of Bernard Madoff - January 21, 2009 - here (note change of venue)
The Second Circuit Court of Appeals affirmed the case of U.S. v. Ionia Management rejecting the amici curiae argument regarding vicarious liability (for background see here). The court stated:
"Adding such an element is contrary to the precedent of our Circuit on this issue. See Twentieth Century Fox Film Corp., 882 F. 2d at 660 (holding that a compliance program, "however extensive, does not immunize the corporation from liability when its employees, acting within the scope of their authority, fail to comply with the law"). And this remains so regardless of asserted new Supreme Court cases in other areas of the law. As the District Court instructed the jury here, a corporate compliance program may be relevant to whether an employee was acting in the scope of his employment, but it is not a separate element."
Opinion - here
Monday, January 19, 2009
Check out P.S. Ruckman's PardonPower Blog here for the list of quotes by others who predicted last minute pardons. But it looks like Bush might leave with but an added two sentence commutations to his list (see here; see also Dan Eggen & Carrie Johnson, Washington Post, Bush Commutes Sentences of Ex-Agents) and without anything dramatic. But some might think that if he was going to issue last-minute pardons, the time to do it would have been after the close of the print press so that it comes on the day of other events (like an inauguration). But on the other hand, if you issue one that late, you can't try and take it back if you make a mistake (see here). Bottom line - it looks like this will be a quiet exit from office.
The pardon power is an important power of the President that needs to be used to correct injustices in the system. And it needs to be used without politics in mind. Hopefully, President-Elect Obama will be a President with compassion.
Check out - Christine Armario, AP, No sign of US financier or his clients' millions . The overriding question here, yet again, is do we need more oversight and regulation? And will those with money, especially those who were previously opposed to regulation, now be in favor of it?
Sunday, January 18, 2009
Mike Scarcella, BLT Blog, AG Mukasey Given Reprieve in Stevens Case Inquiry
David Ingram, BLT Blog, Holder Hearing Wraps Up With Confirmation Expected
DOJ Press Release, Four Executives Agree to Plead Guilty in Global LCD Price-Fixing Conspiracy
Chicago Tribune, Chicago Breaking News.com, Governor's lawyers quit impeachment trial
Anthony Lin, American Lawyer (law.com), Is China's White-Collar Death Penalty Fair?
Chicago Tribune, Breaking News, Blagojevich adviser admits misusing funds
Amanda Bronstad, NLJ, law.com, Milberg Kickback Defendant Gets Short Reprieve From Prison
Loren Steffy, Houston Chronicle, The hunt for Wall Street wickedness: who's going to jail? (w/ a hat tip to Bill Olis)
David Lat, Above the Law, Musical Chairs: Kathy Ruemmler from Latham Back to DOJ
Vesselin Mitev, NLJ (Law.com), Lawyer Cannot Be Prosecuted for Giving Advice, Panel Finds -The attorney last year denied encouraging the resignation by the nurses, who had been accused by the DA of abandoning their patients
"We cannot conclude that an attorney who advises a client to take an action that he or she, in good faith, believes to be legal, loses the protection of the First Amendment if his or her advice is later determined to be incorrect. Indeed, it would eviscerate the right to give and receive legal counsel with respect to potential criminal liability if an attorney could be charged with conspiracy and solicitation whenever a District Attorney disagreed with that advice. The potential impact of allowing an attorney to be prosecuted in circumstances such as those presented here are profoundly disturbing. A looming threat of criminal sanctions would deter attorneys from acquainting individuals with matters as vital as the breadth of their legal rights and the limits of those rights. Correspondingly, where counsel is restrained, so is the fundamental right of the citizenry, bound as it is by laws complex and unfamiliar, to receive the advice necessary for measured conduct.
"Moreover, by placing an attorney in the position of being required to defend the advice that he or she has provided, the state compels revelation of, and thus places within its reach, confidential communications between attorney and client. . ."
The opinion is here.
(esp) (w/ a hat tip to Bill Olis)