White Collar Crime Prof Blog

What's Coming this 2010?

The New Year delivers a variety of interesting cases and issues in the white collar crime field, and many unresolved issues from last year. What can we expect to see (in no particular order):   

• A decision regarding the status of "honest services" in the fraud statutes
• The aftermath of a decision on "honest services" may bring cases using habeas corpus and coram nobis (assuming the Court alters the government's use/misuse of this statute) - and some perhaps new sentences/non-sentences for individuals like Conrad Black, Jeff Skilling, George Ryan, Bruce Weyhrauch, and others - but a realization that all DOJ cases will not crumble (see here)
• The government finally thinking twice about using section 1346 - honest services and proceeding instead with classic bribery/extortion/gratuities charges
• Seeing whether the SEC is capable of redesigning itself to provide greater ability to detect Ponzi schemes
• More TARP related indictments
• More financial fraud indictments
• More defense procurement scrutiny
• UBS related cases
• An initial ruling on the use of a wiretap in the Rajaratnam case
• Scrutiny of discovery violations by the past DOJ in the aftermath of cases like Stevens (see also here)  
• Many new U.S. Attorneys
• Some deferred prosecution agreements reaching the termination points of living with government scrutiny

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Recent Scholarship

Dan Hurson, Memo to Middle Management - Download MEMO TO MIDDLE MANAGEMENT

Kevin E. Davis, Does the Globalization of Anti-Corruption Law Help Developing Countries?  (SSRN - NYU Law and Economics Research Paper No. 09-52)

Elizabeth R. Sheyn, Anything But a Racket: Why Professor Richard Epstein's Attack on the Nature and Function of Deferred and Non-Prosecution Agreements Misses the Mark

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Upcoming Conferences

Texas Public Policy - 8th Annual Policy Orientation for the Texas Legislature, U of Texas (Austin), Jan. 14-15 -  here

ABA, 24th Annual National Institute on White Collar Crime, February 24-26, 2010, Miami Beach, Fl.- here

ABA, Enforcement Trends in Securities and Commodities Actions 2010, Jan. 13, 2010, Washington, D.C.- here

Securities Regulation & Enforcement, March 22-23, 2010, NYC - here 

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Blackwater Case Tossed - Commentary

On the last day of 2009, Hon. Ricardo M. Urbina issued a 90 page order that grants the defendants' Motion to Dismiss. The decision and a wonderful discussion of the case can be found in Del Quentin Wilber's, Washington Post article titled, Judge Dismisses All Charges in Blackwater Shooting. Although the alleged crime charged here was not white collar related, the opinion provides a discussion of important issues that can arise in federal white collar decisions - issues related to Kastigar.  The defendants had argued that the "government violated their constitutional rights by utilizing statements they made to Department of State investigators, which were compelled under a threat of job loss."  The government admitted that these statements cannot be used. (Garrity v. New Jersey)  So the government was left trying to bring the case without using any of the statements. (Kastigar v. United States).

The court noted that "[t]he explanations offered by the prosecutors and investigators in an attempt to justify their actions and persuade the court that they did not use the defendants' compelled testimony were all too often contradictory, unbelievable and lacking in credibility."  The bottom line, according to the court, was that the government "utterly failed to prove that it made no impermissible use of the defendants' statements or that such use was harmless beyond a reasonable doubt."

Some highlights and my commentary:

• This one is perhaps a minor point in the decision, but one that should be noted by white collar prosecutors and defense attorneys. DOJ had presented evidence to a second grand jury in this case, but they failed to present some evidence that the defense claimed was exculpatory. Although in the case U.S. v. Williams the Supreme Court did not mandate that prosecutors present exculpatory material to a grand jury, DOJ guidelines tell prosecutors to do otherwise.  This court noted, that "DOJ guidelines require prosecutors to present exculpatory evidence to the grand jury" and the court cited to the US Attorneys' Manual s 9-11.233.  The reference to the US Attorneys' Manual, even though it is an internal document, is good to see as it is important for DOJ to stick with their internal guidelines. (My article on this issue is here).
• The court stated - "The Circuit's analysis in North I suggests that although no Kastigar violation occurs when a prosecutor's fleeting exposure to immunized testimony has a merely tangential influence on his or her thoughts about a case, a Kastigar violation may result when a prosecutor has had significant exposure to immunized testimony and makes significant nonevidentiary use of that testimony" p. 29-30. The government has faced this issue before.
• In discussing "harmless error" the court stated - "the defendants' compelled statements pervaded nearly every aspect of the government's investigation and prosecution, and the government's use of those statements appears to have played a critical role in the indictment against each of the defendants."
• Publicity surrounding a case can make it difficult for the government to get around Kastigar.
• Government agencies need to work closely with DOJ in cases that could involve criminal charges.

See also NYTimes, (AP) All Charges in Blackwater Case Are Dismissed

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2009 White Collar Crime Awards

2009 White Collar Crime Awards

Each year this blog has honored individuals and organizations for their work in the white collar crime arena by bestowing "The Collar" on those who deserve praise, scorn, acknowledgment, blessing, curse, or whatever else might be appropriate. I welcome comments from readers who would like to suggest additional categories or winners (or losers?).

With the appropriate fanfare, and without further ado,

The Collars for 2009:

The Collar for Causing the Most Dominoes to Fall - To Bernie Madoff for causing more Ponzi schemes to come to light

The Collar for Missing the Boat -To the past SEC that failed to notice Madoff and other schemes

The Collar for Best U-Turn - To the new DOJ for dismissing Ben Kuehne's case and exposing discovery violations, like seen in the Stevens case

The Collar for the Most Needing a Hearing Aid - For whoever decided to use a wiretap for alleged securities violations in the Rajaratnam case

The Collar for the Latest Fashion - To the DOJ for changing the name of the corporate crime task force to, what else - the financial fraud task force

The Collar for the Hottest Freezer - To William Jefferson, convicted after a search found cash in his freezer

The Collar for Adhering to Terry MacCarthy's Rule of Threes - To the Supreme Court for accepting three mail fraud cases, all pertaining to the honest services statute's 28 words

The Collar for Least Likely to Survive -  A backdating prosecution 

The Collar for Most in Need of a Geography Lesson- Tied - 1) To the prosecutors who brought the eventually dismissed Lori Drew case in California when all the alleged cyberbullying had occurred in "nearby" Missouri; 2) And the prosecutors who brought Wesley Snipes case in Florida where he went to high school

The Collar for the Most Likely to Have its Theme Song "I Won't Back Down" - W.R. Grace

The Collar for the Best Avis - To Rod Blagojevich, for trying to be the most recognized name with a white collar charge - he'll have to try harder to beat Bernie Madoff

The Collar for US News WannaBe- To the ABA for its method of selecting best blogs

The Collar for Least Likely to be Teaching Professional Responsibility at a Law School- Marc Dreier

The Collar for Least Likely to Appear Together in "Dancing With the Stars" - AG Eric Holder and former AG Alberto Gonzalez

The Collar for Least Likely to Appear on the T.V. Show "I've Got a Secret" - UBS

The Collar for the Best Parent - retired years ago and renamed the Bill Olis Best Parent Award - unawarded this year since no one comes even close to Bill Olis.

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Holiday Plea

White Collar investigations can last for years, often with continued pressure upon the person being investigated. So seeing a holiday plea is no surprise - after all it brings a finality. See DOJ Press Release,

Ohio Attorney Charged with Tax Fraud, Obstruction of Justice for Scheme to Hide Income and Assets Through Trusts and in Foreign Bank Account - Second Ohio Attorney Agrees to Plead Guilty to Making False Statement 

 

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Upcoming Conferences

ABA, 24th Annual National Institute on White Collar Crime, February 24-26, 2010, Miami Beach, Fl.- here

ABA, Enforcement Trends in Securities and Commodities Actions 2010, Jan. 13, 2010, Washington, D.C.- here

Securities Regulation & Enforcement, March 22-23, 2010, NYC - here 

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