Friday, October 16, 2009

Safavian Gets One Year

A DOJ Press Release reports that "Former General Services Administration (GSA) Chief of Staff David H. Safavian was sentenced today to one year in prison on charges of obstruction of justice and making false statements in connection with the investigation into the activities of former Washington lobbyist Jack Abramoff." He also received two years of supervised release.


October 16, 2009 in Corruption, Sentencing | Permalink | Comments (0) | TrackBack (0)

Fourth Annual National Institute on Securities Fraud - Day Two

The opening session of the second day of the ABA's Securities Fraud Conference is a plenary session pertaining to the Foreign Corrupt Practices Act (FCPA) - clearly a "hot" topic these days.  A panel moderated by Phillip H. Hilder, started with Mark F. Mendelsohn, deputy chief of DOJ's fraud section -criminal division, answering a question regarding how many individuals he has working on FCPA cases and which areas are most vulnerable to FCPA matters.  I didn't quite catch the final count of individuals handling these cases but it was clear that there were  at least three folks exclusively handling FCPA cases and a good few many more working on them.  Although he listed some areas that have seen prosecutions--  it was expressed more as "targeting is the wrong word."   He said that its more like "following up on leads from existing cases." Peter Clark and CE Rhodes, Jr.(US Operations & Compliance Counsel - Baker Huges, Incorporated) spoke to the representation of individuals and both talked about the use of independent/separate counsel to represent individuals. 

As my panel was next, I did not get to hear the remainder of the FCPA panel, which clearly was an important one. My panel on blogging was moderated by David Z. Seide and included Bruce Carton (Securities Docket), Thomas O. Gorman, ( and myself.  It was wonderful to see and hear about the wonderful blogs and sites by my fellow panelists and to hear about what Bruce Carton was doing with Twitter and Thomas Gorman's thoughts on making resources accessible to attorneys. 

One of the final breakouts of the day pertained to sentencing. The panel, moderated by Professor Steve Chanenson, (Villinova) had panelists Hon. Amy St. Eve, Christine Ewell (AUSA, Chief, Criminal Division - USAttorneys Office Central District of California), James Mutchnik, Gil Soffer, and Brian Sun. The hot topic here was a discussion about the disparity in sentencing. And as Brian Sun brought out - it is not just disparity between cases, it is also the disparity within the same case - such as disparity between those who are cooperating and your client.  The Hon. Amy St. Eve noted that it's the obligation of the attorneys to bring the issues of disparity to the attention of the judge.

Risk can be a key factor in sentencing, as noted by James Mutchnik. The uncertainly and not knowing is difficult for the client, and reaching a deal with the prosecutor provides some certainty to the situation. But this won't always work, as Christine Ewell, noted the "limited circumstances when they do binding pleas." In some cases they do a range of sentence, such as in corporate "fines" cases. Hon. Amy St. Eve reminded attorneys that they need to think about pleas that might be out of line with later defendants within the same case.  Atorney Mutchnik noted that so much rests on the "risk" that your client can take.

Christine Ewell noted how the guidelines can be "off the charts" in some cases.  But the guidelines shouldn't be discarded in these circumstances, she said.  It is more that this should be an indicator that the offense is so egregious that it merits a longer sentence. She spoke about "message sentences"  when a sentence comes in at an amount that exceeds the person's life (Madoff, and a sentence in her district that was 100 years were used as examples).

Mutchnik noted that we should move away from "loss" by looking at what  the client gained. Gil Soffer said that its appropriate to recognize the policy behind the guidelines, but the guidelines are just one factor. And Brian Sun reminded listeners of the sentences in cases years back (e.g., Boesky). He also noted how sentencing today can differ - it can be like doing a "murder case versus a DUI" because of the high sentences that white collar offenders are subject to. One example offered by Gil Soffer to bring to life your defendant's cause is to use a video, for example using video to show a day in the life of a doctor who was about to be sentenced.

An interesting question examined was whether "the 20 years in the middle of a person's life is more valuable than the the 20 years at the end of [his or her] life?" This was clearly a thoughtful panel that presented material to those present for the last set of breakouts.


October 16, 2009 in Conferences, SEC, Securities, Sentencing | Permalink | Comments (0) | TrackBack (0)

Thursday, October 15, 2009

In the News & Around the Blogosphere

Joe Palazzolo, Main Justice, Mistrial in Ring Case

Mark Fass, NYLJ, Trial of Former Hedge Fund Managers Begins in Federal Court

(esp)(blogging from DC)

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

Three Cases to Discuss 28 words - The Year of the Mail Fraud Case

In a dissent on a Petition for Certiorari in the Sorich case, Justice Scalia expressed his view that section 1346 - the honest services definition used in mail/wire fraud statutes had "been invoked to impose criminal penalties upon a staggeringly broad swath of behavior, including misconduct not only by public officials and employees but also by private employees and corporate fiduciaries."  He concluded his dissent by stating -  "it seems to me quite irresponsible to let the current chaos prevail."  It looks like Justice Scalia will have his way this term - at least in getting the other Justices to engage in the conversation - as there are now three cases before the court with questions related to the intangible rights to honest services. So will we be telling students that the cases on mail fraud in the casebook are history and they need to look somewhere else to really find out what is the law today.  Or will the court provide blanket statements allowing the use of 1346 in these contexts with little change to the status quo. What is remarkable here is that 28 words will be taking up a good bit of Court time.

See - Weyhrauch  here; Conrad Black here; Skilling here.


October 15, 2009 in Fraud | Permalink | Comments (0) | TrackBack (0)

Tuesday, October 13, 2009

Questions Presented for Review in Skilling Case

Two Questions are Presented for Review in the Jeffrey Skilling case that has been accepted on Certiorari in the U.S. Supreme Court.  They are:

1. Whether the federal "honest services" fraud statute, 18 U.S.C. § 1346, requires the government to prove that the defendant's conduct was intended to achieve "private gain" rather than to advance the employer's interests, and, if not, whether § 1346 is unconstitutionally vague.

2. When a presumption of jury prejudice arises because of the widespread community impact of the defendant's alleged conduct and massive, inflammatory pretrial publicity, whether the government may rebut the presumption of prejudice, and, if so, whether the government must prove beyond a reasonable doubt that no juror was actually prejudiced.


October 13, 2009 | Permalink | Comments (0) | TrackBack (0)

Supremes Accept Cert in Skilling Case



See here


October 13, 2009 in Fraud, Judicial Opinions | Permalink | Comments (0) | TrackBack (0)