Saturday, February 28, 2009
Karen Gullo, Bloomberg, Bonds Steroids Trial Postponed as U.S. Appeals Evidence Ruling
DOJ Press Release, Stanford Financial Group Chief Investment Officer Charged with Obstruction
William Bender, Philly.com, Another Delco exec accused in swindle
Sanjay Bhatt, Seattle Times, Mortgage-fraud defendant sentenced to seven years in prison
Mike Anton, LATimes, About to do time? Meet your best pal
The message is loud and clear - the DOJ has a growing number of alleged fraud cases dropping in its lap. The cases in some instances show an unraveling of a house of cards. And in many ways, the initial recent case - Madoff - can be seen as the impetus for people to start asking questions about their investments. (see discussion of Madoff here and here), It is no longer acceptable to just invest and be secure that the investment is safe. But the asking of questions, results in new cases (e.g., Arthur Nadell here), as people begin to find that there are no acceptable answers. See also Tom Hays & Larry Neumeister, AP, 2 major fraud cases in NY federal court; Julie Creswell & Clifford Krauss, NYTimes, Stanford Accused of a Long-Running Scheme
Former Chicago Alderman Edward Vrdolyak received a sentence of five years probation. See Chicago Tribune, No jail for Vrdolyak; Carol Marin, Chicago Sun Times, Fast Eddie and justice -- hard to reconcile. Vrdolyak plead guilty to a conspiracy to commit mail/wire fraud. See Martha Nell, ABA Jrl Law News Now, Chicago Attorney and Ex-Alderman Ed Vrdolyak Pleads in Kickback Case; Huffington Post (AP), Vrdolyak to Plead Guilty: Judge. He was represented by Attorney Michael Monico.
Wednesday, February 25, 2009
The Tenth Circuit en banc reinstated the convictions of former CEO of Qwest Communications International, Inc. (See opinion) A prior panel had found it improper to exclude defense expert testimony. In a 104 page decision (52 page majority), 5 judges on the Tenth Circuit held that "the district court's exclusion of the testimony was not arbitrary, capricious, whimsical, or manifestly unreasonable: nor are we convinced that the district court made a clear error of judgment or exceeded the bounds of permissible choice in the circumstances."
Four members of the court dissented. The dissent states, "[t]he flaw in the government's argument is that the rules of criminal procedure, unlike the rules of civil procedure, do not require a criminal defendant to establish the foundation for expert testimony through advance written submissions." Circuit Judge Kelly, writing an additional dissent has a classic opening line - "[i]t is indeed unfortunate that the court chooses expediency over due process."
The real question may be whether the Supreme Court grants a request to review, and whether they find that due process requires the defense be given the opportunity to present
their its case. I can't help but remember these words from the case of Washington v. Texas, 388 U.S. 14, 19 (1967):
"The right to offer the testimony of witnesses, and to compel their attendance, if necessary, is in plain terms the right to present a defense, the right to present the defendant’s version of the facts as well as the prosecution’s to the jury so it may decide where the truth lies. Just as an accused has the right to confront the prosecution’s witnesses for the purpose of challenging their testimony, he has the right to present his own witnesses to establish a defense. This right is a fundamental element of due process of law."
See also Dionne Searcey, WSJ Blog, Tenth Circuit Upholds Nacchio's Conviction; Prison Time Likely Awaits ; Andy Vuong, Denver Post, Full Court Upholds Nacchio Insider Trading Conviction
(esp)(w/ a hat tip to Peter Henning)
Monday, February 23, 2009
This blog has previously noted the problems with section 1346 of the mail fraud statute (see here). The "intangible rights" doctrine has been the subject of much concern.
But Justice Scalia, in a dissent to a denial of certiorari, voiced a strong opposition to the progression of the intangible rights doctrine in a direction that needs correction. Although the Court did not accept cert in the Sorich case, a case involving "city employees who engaged in political-patronage hiring for local civil-service jobs," Justice Scalia noted that the "28 words" in the statute 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 stated that "[w]ithout some coherence limiting principle to define what 'the intangible right to honest services" is, whence it derives, and how it is violated, this expansive phrase invites abuse by headline-grabbing prosecutors in pursuit of local officials, state legislators, and corporate CEOs who engage in any manner of unappealing or ethically questionable conduct." Justice Scalia concludes his dissent by stating that "it seems to me quite irresponsible to let the current chaos prevail."
See also Lyle Denniston, Scotus Blog here
(esp)(w/ a hat tip to Peter Goldberger)
An executive business meeting is set for the Senate Judiciary Committee for February 26, 2009. On the agenda are S. 386 - Fraud Enforcement and Recovery Act and S. 49 - Public Corruption Prosecution Improvements Act (see here). The most troublesome aspect of this latter bill is its attempt to provide increased prosecutorial power on mail and wire fraud offenses. Section 3 is titled, "Application of Mail and Wire Fraud Statutes to Licenses and Other Intangible Rights." It looks like an attempt to circumvent the Supreme Court ruling in United States v. Cleveland, where the Court held that licenses were not property for purposes of mail fraud. Imagine this scenario - a person answers a question incorrectly on their mailed application for a fishing license. Assuming other aspects of the statute being met, the government would now be able to prosecute them federally for mail fraud. Adding the words "or any other thing of value" might not include licenses, but the title of this provision sure is an attempt to try to increase prosecutorial power to include them. There needs to be some limits to this already near limitless statute, and this provision is not moving in the correct direction.
(esp)(w/ a hat tip to Tiffany Joslyn of NACDL)
Sunday, February 22, 2009
ABA, 23rd Annual National Institute on White Collar Crime, March 4-6, San Francisco
Strafford, CFIUS Regulations for Foreign Investment in the U.S., March 25, telephone conference
ABA, Internal Corporate Investigations and In-House Counsel, May 7-8, Washington D.C. here
Eighteenth Annual National Seminar on the Federal Sentencing Guidelines, May 21-22, Clearwater Beach, Florida (details down the road)
ABA, 19th Annual National Institute on Health Care Fraud, May 13-15, Phoenix, Arizona
Bob Mook, Denver Business Jrl, Dryer Sentenced to 132 years ("one of the harshest given for a white-collar crime in Denver District Court")
Henri E. Cauvin, Washington Post, More Muscle Against Mortgage Fraud - U.S., State, Local Agencies Form Task Force
Clifford Krauss, Julie Creswell & Charlie Savage, Fraud Case Shakes a Billionaire’s Caribbean Realm
Michael Braga, HeraldTribune.com, Lawyer passes buck in real estate fraud trial
R. Robin McDonald, Fulton County Daily Report, law.com, Ex-Prosecutor Sued Over Suicide of Defendant's Wife (w/ a hat tip to Bill Olis)
Adrian Walker, Boston Globe, Witness stops cooperating in sting case -Says FBI used him to topple Turner and Wilkerson
Matthew Goldstein, Business Week, Stanford: Signs That Should Have Worried Investors - The Stanford scandal also raises questions as to whether the SEC, which had been investigating the firm for three years, should have acted sooner
Simon Kennedy, WSJ- Marketwatch, UBS slumps after U.S. seeks data on 52,000 clients - U.S. lawsuit seen as challenge to Swiss private banking model;
Karen Gallo, Bloomberg.com, Judge Orders Bonds’s Former Trainer to Appear for Hearing
Ieva M. Augustums & Stephen Bernard, law.com (ap), Bank of America CEO Subpoenaed Over Bonuses
Shannon P. Duffy, The legal Intelligencer, law.com, Fumo: Bush Justice Dept. Was Out to Get Me
Mike Scarcella, BLT Blog, Energy Company, Former Employee & DOJ Spar on Appeal (this is definitely a case to follow as it is the DOJ saying they shouldn't have to turn over the attorney-client material they received from a company as part of a deferred prosecution agreement) (w/ a hat tip to Tiffany Joslyn)