White Collar Crime Prof Blog

In the News & Around the Blogosphere

Amanda Bronstad, NLJ, law.com, Judge Tosses Remaining Broadcom Charges, Finds 'Serious Problems' in SEC Complaint

John Pacenti, Daily Business Review, Law.com, Rothstein Pleads Guilty to All Counts in $1.2 Billion Ponzi Scheme; Paul Brinkmann & Susan R. Miller, South Florida Business Jrl, Rothstein pleads guilty (hat tip to Brandi Palmer)

Jay Weaver & Amy Sherman, Miami Herald, Ponzi scheme kept up to end

Benda Sapino Jeffreys, Texas Lawyer, law.com, Judge Puts 2 Insurers on the Hook for Defense Costs for Stanford, 3 Executives

PR Newswire,Former Willbros International Executives Sentenced to Prison for Their Roles in $6 Million Foreign Bribery Scheme; DOJ Press Release, Former Willbros International Executives Sentenced to Prison for Their Roles in $6 Million Foreign Bribery Scheme

DOJ Press Release, Texas Attorney Convicted for Role in Pump-and-dump Stock Manipulation Schemes

Gary Fields, WSJ, Plan Would Soften White-Collar Fines

David S. Hilzenrath, Wash Post, Swiss halt deal with U.S. that IDs Americans with secret UBS bank accounts; Ashby Jones, WSJ, In UBS Case, a Swiss Diss?

Del Quentin Wilber, Wash Post, U.S. appeals ruling in Blackwater case; Mike Scarcella, BLT Blog, DOJ, Defense Lawyers Want Court Papers Sealed in Blackwater Case

Peter Hadekel, The Gazette, Frustrations mount despite progress Quebec has made battling white-collar crime

Eleanor Hall, The World Today, Govt to raise fines, jail time for corporate crooks (Pertaining to Australia)

DOJ Press Release, Texas Company Pleads Guilty and Is Sentenced for Environmental Crime - First Conviction Under the Plant Protection Act

Lucian Kim, Business Week, Russia Must Soften Law on White-Collar Crime, Prosecutor Says

Charleston Gazette, Tax time means higher potential for online fraud

Amanda Bronstad, NLJ, law.com, Former Attorney, Business Partners Charged in Loan Modification Scam

Brian Baxter, American Lawyer, law.com, Former McGuireWoods Partner Charged in Corruption Probe

Amanda Bronstad, NLJ, law.com, Government Decries 'Fishing Expedition' for Misconduct in KB Home Prosecution

DOJ Press Release, Former Army Staff Sergeant Pleads Guilty to Money Laundering

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Upcoming Conferences

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

19th Annual National Seminar on the Federal Sentencing Guidelines Conference, May 12-14, 2010, St Petersburg, Florida here

Symposium, Brooklyn Law School, February 5, 2010, Brooklyn, N.Y., Sharing the Blame: The Law and Morality of Punishing Collective Entities here

ABA, Ethics for Prosecutors and Defense Counsel in Investigations and Trials: An International Comparison, Feb. 29, 2010, teleconference and live webcast, here

Charleston Law Review & Riley Institute at Furman, Crime and Punishment - 2nd Annual Law & Society Symposium, Feb. 18,   Charleston, South Carolina - Download CLR Symposium 2010 Mailer FINAL The program includes a panel on the Effects of the Financial Crisis on White Collar Crime with Mark S. Radke (Dewey & LeBoeuf), Daniel V. Dooley (former -Pricewaterhouse Coopers LLP), M. Rhett Dehart (AUSA - S. Carolina).   One of my colleagues Professor Robert Batey (Stetson) will be speaking on a panel discussing the Functions of Criminal Punishment in Society.

Strafford, Foreign Corrupt Practices Act in Brazil, webinar, Feb. 4, 2010 here

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In the News & Around the Blogosphere

Mark Fass, NYLJ, law.com,  In Securities Dealer's Sentencing, Judge Blasts 'Corrupt' Wall Street Culture

Christopher M. Matthews, Main Justice, Biden Says U.S. Will Appeal Dismissal of Case Involving Blackwater Guards; Mike Scarcella, BLT Blog, Defense Lawyers in Blackwater Case Dismayed Over DOJ Appeal

Amanda Bronstad, NLJ, law.com, Ex-GC Describes Lax Governance at Broadcom -Executives who tried to impose order at the fast-growing company were looked upon as the 'fall guys'

Mike Morris, AJC, Three men indicted for trying to steal from Glock

Kristi E. Swartz, AJC, Trial for Marietta investor begins today

Jordan Weissmann, BLT Blog, Kevin Ring's Lawyers Ask to Delay Retrial

Peter Henning, White Collar Watch, Dealbook Blog, Admitting Misconduct While Avoiding Charges

Pat Hewitt, Canadian Press, Following money trail of Ponzi schemers hard if not impossible, say experts

Nathan Gorenstein, Thomas Fitzgerald, & John Shiffman, Phila. lawyer on U.S. attorney short list

USA Today (AP), Swiss Court Rules Government Can't Give Some Tax Files to U.S.

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Jack Litman - One of a Kind - 1943-2010

  Jack Litman, a former and long-time member of the National Association of Criminal Defense Lawyers  (NACDL) board of directors and a past president of the NYSACDL passed away Saturday. Ted Simon, Secretary of NACDL and dear friend of Jack, described him as "an incomparable lawyer, father, and friend." As a member of the law firm of Litman, Asche & Gioiella, LLP, he handled major felony cases in New York, like the defense of Robert E. Chambers Jr.  He also represented individuals charged with  white collar related crimes.  Past NACDL President Barry Scheck, described him as a man with a

"first rate intellect, a love of art, history, and all things Fench. But perhaps most impressive of all, sometimes with gestures of kindness and loyalty unknown to many, he delivered when it counted for his friends, his clients, and the cause of liberty.  Jack never buckled trying one of the most notorious murder cases in the history of New York City."

Jack was special to so many.  For me he was the extraordinary lawyer with whom I could discuss arcane legal issues, talk about the art museum in Vegas or just talk about life.  He was a crucial part of my NACDL family.   He was one of the nicest most caring individuals one could come across in life.  He will be missed, and my tears are for him. He was one of a kind. 

(esp) With a special thank you to his dear friend, Ted Simon, for the photographs. See also Anemona Hartocollis, NYTimes, Jack T. Litman, Lawyer for ‘Preppy Killer’ and Others, Is Dead at 66; Talkleft here; Professor Ellen Yaroshefsky reminded me of the Ethics in America, Vol. 2: To Defend a Killer program that includes Jack Litman, Justice Scalia and others as panelists.

Upcoming Conferences

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

19th Annual National Seminar on the Federal Sentencing Guidelines Conference, May 12-14, 2010, St Petersburg, Florida here

Symposium, Brooklyn Law School, February 5, 2010, Brooklyn, N.Y., Sharing the Blame: The Law and Morality of Punishing Collective Entities -Download Invite FINAL

2d Annual Law & Society Symposium, Crime and Punishment, Charleston, South Carolina, Feb. 18-19, 2010 - Download CLR Symposium 2010 Mailer FINAL  The program includes a panel on the Effects of the Financial Crisis on White Collar Crime with Mark S. Radke (Dewey & LeBoeuf), Daniel V. Dooley (former -Pricewaterhouse Coopers LLP), M. Rhett Dehart (AUSA - S. Carolina).   One of my colleagues Professor Robert Batey (Stetson) will be speaking on a panel discussing the Functions of Criminal Punishment in Society.

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In the News & Around the Blogosphere

GT (Greenberg Traurig) Alert - SEC Announces New Enforcement Initiatives - Download GTAlert_SEC New Enforcement Initiatives_Jan2010

Greg Gordon, McClatchy,Justice Department eyes possible fraud on Wall Street (hat tip to Ted Gest)

Paul Egan, Detroit News,Rash of health care fraud hits Metro area, In latest arrest, federal agents charge 2 doctors, 11 others with bilking Medicare out of $14.5M (hat tip Ted Gest)

Peter Henning, NYTimes - Dealbook, Punishing Lawyers in Corporate Frauds

DOJ Press Release, Conman Found Guilty of Operating $62 Million Ponzi Scheme that Targeted Spanish-Speaking Investors

DOJ Press Release, Man Sentenced to Over 13 Years in $21 Million Ponzi Scheme that Costs Dozens of Victim[s] Their Life Savings

Steve Kanigher, Las Vegas Sun, FBI arrests 21 in Las Vegas in foreign bribery case; Diana B. Henriques, NYTimes, F.B.I. Charges Arms Sellers With Foreign Bribes

Washington Post, AP, Daniel Freed, Yale law professor, dies

Press Release, Intelligence Note, Internet Crime Complaint Center, New Twist on Counterfeit Check Scheme Targeting U.S. Law Firms

FBI Press Release, National Center for Disaster Fraud to Coordinate Haitian Fraud Complaints

Corporate Crime Reporter, Epstein Becker's Stuart Gerson on the Stevens Case and Wayward Justice

Tom Caprood, The Record, Bruno’s lawyers appeal conviction

Herbe Gouraige, National LJ, Honest services law must go -The Supreme Court should declare it unconstitutional rather than try to rewrite it.

Kris Hundley, Tampabay.com, Former Medical Manager Corp. executives head to trial next week

Tom Kirkendall, Houston Clear Thinkers, One step forward, a big step back

Juan A. Lozano, SFExaminer,Judge Moves Retrial for Merrill Lynch Exec in Enron Case While Dismissing Case Against Another

Dwyer & Collora Names Bill Lovett Partner - Download Bill Lovett Release

Jordan Weissmann, BLT Blog, Saudi Bank Asks Court to Stop Patriot Act Subpoena

DOJ Press Release, CEO of Seafood Importer Pleads Guilty to Importing and Selling Falsely Labeled Fish from Vietnam

DOJ Press Release, General Manager of Houston Medical Supply Company Pleads Guilty to Conspiracy to Commit Health Care Fraud

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General Re Non-Prosecution Agreement - Commentary

DOJ and General Re have entered into a non-prosecution agreement that provides for a monetary payment of $19,500,000 to the US Postal Inspection Service Consumer Fraud Fund, as well as other payments. The agreement and details of it can be found in Andrew Longstreth's article in AMLAW Litigation titled, General Re Resolves DOJ and SEC Claims Based on Fraudulent AIG Transactions. Background on the situation can be found in Amir Efrati's article in the, WSJ, GenRe Reaches Deal With Justice Department in AIG Case.   The agreement itself has some of the typical provisions we have seen in deferred and non-prosecution agreements, but also has some that are not found in all of the agreements of the past.

• Like the typical non-prosecution agreement, the agreement is provided by a letter between the parties and is not part of a court document.
• Like the typical deferred and non-prosecution agreement, the DOJ has the "sole discretion" to determine if there is a failure to comply.  I should note here that in a recent co-authored article on deferred prosecutions, written with Professor Candace Zierdt , we note the contractual problems with one party having the sole discretion to determine if there is a breach of the terms in the agreement.  See Corporate Deferred Prosecutions Through the Looking Glass of Contract Policing A court does not get to review the validity of whether there has in fact been a breach of the agreement.
• In the cooperation section of the agreement, there is a provision providing that this cooperation section does not apply if it's a prosecution because of a breach of the agreement.  It is good to see DOJ recognizing that they can't ask a party to be their own prosecutors.
• The agreement includes an "internal corporate remediation measures" section.  Although corporate monitors have often been seen in past agreements, this agreement has some peculiar aspects. For one the agreement has some very specific remediation statements. For example, the Berkshire Hathaway CFO and Director of Internal Audit will be attending the General Re Corporation's Audit Committee meetings.  Additionally a Complex Transaction Committee "will maintain the power to reject any proposed transaction from being written by General Re or any of its insurance or reinsurance company affiliates within the Gen Re Group."  The specifics here make one wonder to what extent the government is inserting itself within private corporate matters.  They aren't just saying you have to comply with the law, they are providing an infrastructure to make them accountable.
• The agreement prohibits the company from making certain statements -

"General Re agrees that neither it nor its directors and executive officers, nor any person authorized to speak for them, will make, cause others to make, or acknowledge as true any factual statement inconsistent with the factual descriptions of the Agreed Statement of Facts in Attachment A. Any such public statement inconsistent with the Agreed Statement of Facts shall, subject to the cure rights below, constitute a breach of this Agreement."

• General Re also agreed to run press releases or other prepared public statement in connection with this agreement by the DOJ, and they need to receive the seal of approval from DOJ prior to its release. Can the government include an agreement that infringes on first amendment rights? It isn't the first time that we have seen such a provision.

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Government Response to Discovery Violations

A DOJ Press Release reports on the appointment of Andrew Goldsmith as the new national coordinator for its criminal discovery initiatives.  It states that -

"As the national coordinator, Goldsmith will oversee the implementation of a number of initiatives designed to provide prosecutors with the training and resources they need to meet discovery obligations in criminal cases. These efforts include:

• Creating an online directory of resources on discovery issues available to all prosecutors at their desktop;
• Producing a Handbook on Discovery and Case Management similar to the Grand Jury Manual so that prosecutors will have an accessible and comprehensive resource on discovery obligations;
• Implementing a training curriculum and a mandatory training program for paralegals and law enforcement agents;
• Revitalizing the Computer Forensics Working Group to ensure the proper cataloguing of electronically stored information recovered as part of federal investigations; and
• Creating a pilot case management project to fully explore the available case management software and possible new practices to better catalogue law enforcement investigative files and to ensure that all the information is transmitted in the most useful way to federal prosecutors. "

See here (background and commentary)

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In the News & Around the Blogosphere

Mike Scarcella, BLT Blog, Former DOJ Fraud Section Chief Goes to Weil Gotshal

Amir Efrati, WSJ Blog, Squawk Box’ Convicts Given Bail Pending Appeal; Brady Violation?

Jeff Jeffrey, BLT Blog, Former TARP COO Joins Cozen O’Connor

DOJ Press Release, Attorney General Eric Holder at a Press Conference Announcing the Credit Suisse Resolution

DOJ Press Release, Attorney General Eric Holder Testifies Before the Financial Crisis Inquiry Commission

Ashby Jones, WSJ Blog, Joseph Collins, Former Refco Lawyer, Gets Seven Years in Prison

Mark Parry, Chronicle of Higher Education, Online Scheme Highlights Fears About Distance-Education Fraud

Rachelle Younglai, Reuters, US SEC bolsters enforcement division with new tools

Sue Reisinger, law.com, Corporate Counsel, Geithner's AIG E-Mails, Phone Logs Subpoenaed by House Panel

Richard Renner, Whistleblowers Protection Blog, Birkenfeld tells WSJ about high level cover-up

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New Report on DPAs

GAO issued a third report on Deferred Prosecution Agreements (DPA) and Non-Prosecution Agreements (NPA), this time titled - DOJ Has Taken Steps to Better Track Its Use of Deferred and Non-Prosecution Agreements, but Should Evaluate Effectiveness.  The report recommends that:

"To assess its progress toward meeting its strategic objective of combating public and corporate corruption, the Attorney General should develop performance measures to evaluate the contribution of DPAs and NPAs towards achieving this objective."

There were 12 U.S. District and magistrate judges who provided comments that assisted in the report. A highlight sheet on the report states that  "prosecutors, company representatives, monitors, and judges with whom GAO spoke more frequently cited disadvantages to greater judicial involvement - such as the lack of time and resources available to judges and concerns about the separation of powers and constitutionality of increased judicial involvement -than advantages to such involvement-such as the court's ability to act as an independent arbiter of disputes, increased transparency in the DPA process, and decreased perceptions of favoritism in selecting the monitor."  

I wonder what defense attorneys would have said if they had been consulted on this question.

Prior Reports - Prosecutors Adhered to Guidance in Selecting Monitors for Deferred Prosecution and Non-Prosecution Agreements, but DOJ Could Better Communicate Its Role in Resolving Conflicts;Preliminary Observations on DOJs Use and Oversight of Deferred Prosecution and Non-Prosecution Agreements

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New SEC Rules - Commentary

The SEC has instituted a new initiative to provide for greater cooperation in hopes of encouraging individuals to assist in bringing to light improper activities. (see SEC Press Release)  And cooperators may obtain a benefit of immunity in return for their cooperation (see Marketplace here).  The framework for this cooperation can be found here.  Some concerns  -

• What if you are the last person in the chain and there is no one left to offer cooperation against - is it fair for cooperation to be a race to the SEC office?   Will individuals with more resources be the ones to receive the most benefits, while poorer folks are left to suffer the consequences of others cooperating?
•  It is clear that the SEC gives itself enormous discretion in deciding the value of the individual's cooperation.  The four factors listed as the outline for determining "whether, how much, and in what manner to credit cooperation by individuals" sound wonderful, but the outline is clearly subject to many different interpretations.  For example, will everyone be in agreement as to "[w]hether the individual's cooperation resulted in substantial assistance to the Investigation?" Also, the SEC will be determining if the person acted with scienter.  Will those who could suffer consequences of an SEC action agree with the determination that is made?
• And what if the individual disagrees with the level of cooperation determined by the SEC, is there any place to obtain review?  The rules explicitly state that it does not "create[] or recognize[] any legally enforceable rights for any person."
• Does this really go beyond the powers that the SEC presently has now?  If cooperation is offered, couldn't they now decide not proceed against someone?  Is this new initiative offered for a symbolic purpose?
• If there is a real incentive offered will it result in the possibility of misinformation being relayed to the SEC by those who desire to obtain immunity.  How will the SEC handle cooperators who lie to save themselves from the consequences that they can face for their illegal activities?
• Until such time as a neutral third party enters this picture to evaluate the cooperation, it certainly seems like this "new"  approach is vague and perhaps just more of the same. 
• The real question is not whether the SEC will receive information on improprieties, but rather will they do something about it when the information is received. Would this situation have brought the Madoff case to light sooner, or was Madoff brought to their attention but they failed to follow up.

For more commentary on other aspects of the SEC announcement, like the use of deferred prosecution agreements, see  Mike Koehler, FCPA Blog, Game-Changing" Day at the SEC

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In The News & Around the Blogosphere

Janice Morse, Cincinnati.com, Scrutiny of white-collar crime grows

Mary Flood, Houston Chronicle, U.S. attorney jobs filled at a slow pace - Interim leader in Houston leaves next month with no nominee yet

Geoff Mulvihill, LA Times, Prosecutors-turned-governors' advice for newest in club: Compromise, but not too much

Andrew Ramonas, Main Justice,Holder: Financial Fraud Is ‘Glaring’ Threat

St Louis Business Jrl, St. Louis nursing homes admit fraud, to pay $1.6M

David Voreacos, Business Week (Bloomberg), Birkenfeld to Serve Prison Sentence in Pennsylvania

Mary Moore, Boston Business Jrl, U.S. attorney names key lieutenants

CTV.ca (Canadian Press), Toronto lawyer gets 39 months for insider trading

Joe Whittington & Andrew M. Harris, Bloomberg, Betonsports Ex-CEO Carruthers Gets 33-Month

Roger Parloff, Fortune, CNN Money, The catchall fraud law that catches too much

Zachery Kouwe, NYTimes, Ex-Consultant Pleads Guilty in Galleon Insider Case

 Amanda Bronstad, Nat LJ, law.com,Former KB Home CEO's Lawyers Hunt for Misconduct in Backdating Case

Mark Fass, NYLJ, law.com, Bail Request Denied for Defense Attorney Convicted of 11 Felonies

DOJ Press Release, Ex-CEO of Homestore.com Agrees to Plead Guilty of Scheme That Illegally Inflated Company's Revenue

DOJ Press Release, Unlicensed Orange County Mortgage Broker Sentenced to Nearly Six Years in $40 Million Fraud Scheme

Julie Bykowicz, Baltimore Sun, Dixon resigns -Mayor pleads guilty, will receive probation and keep $83,000 pension after resignation Feb. 4; many city leaders express sadness, support Dixon  (hat tip to Ted Gest)

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In the News & Around the Blogosphere

John Pacenti, Daily Business Review, law.com, Judge Denies UBS Whistleblower's Bid to Reduce Sentence 

Chronicle of Higher Education,Former Louisville Dean Reportedly Will Plead Guilty to Federal Crimes (subscription)

Tampa Bay Business Jrl, Kevin J. Napper of Carlton Fields Named FBA President (Tampa Bay Chapter)

Andrew Longstreth, The American Lawyer, law.com, Rakoff Rejects BofA's 'Media Reports' Defense in SEC Case

Amir Efrati, WSJ Blog, DOJ Offers Guidance to Prevent Prosecutor Errors: But Will it Work?; Mike Scarcella, BLT Blog, DOJ Issues Discovery Guidance for Federal Prosecutors;

Susan Pulliam, WSJ, Galleon's Rajaratnam Paid Tipster, Filing Says

Peter J. Henning, NYTimes Dealbook Blog, In Galleon Cases, Timing Could Be Everything

Jenna Greene, BLT Blog, New Compliance Chief at SEC

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New DOJ Discovery Policies Fall Short

In the wake of recent events that demonstrate discovery violations (see here), DOJ has issued three new policies here.  It is wonderful to see that DOJ is beefing up its discovery practices and taking a hard look at what should happen in the future.  It also sounds like a better management system is being considered.  But that said, looking at the actual guidance memo, here are a few preliminary comments -

• After telling prosecutors that they need to familiarize themselves with Brady, Giglio and other discovery rules and statutes, the paragraph ends with a statement that this new memo "provides prospective guidance only and is not intended to have the force of law or to create or confer any rights, privileges, or benefits." Yes, this is the standard language one finds throughout the DOJ manual.  But wait a minute -- although DOJ guidelines can be guidelines, these mandates are constitutional, statutory, and rules - they often do have the force of law. This fact should be emphasized to prosecutors.
• The memo states - "Prosecutors should never describe the discovery being provided as 'open file.'"  The memo explains the fears of missing something.  It seems odd that the DOJ doesn't want prosecutors to accept credit when they do the right thing and provide all discovery. Saying not to call it "open," for fear of missing something, implies that this is not a policy that recognizes the value of an "open file" system that can work well and provide efficiency. And taking this one step further -- if it is not acknowledged as an "open discovery" practice, and something is missed - will it sound any better to the accused who failed to receive their discovery material?
• The memo gives no real guidance as to when a prosecutor has to turn over Jencks material, and leaves it to the individual offices to create their individual rules.  It is ironic that DOJ wants sentencing consistency, but doesn't want discovery consistency. Should a defendant in Wyoming have different rights to witness statements than the defendant in New York?  
• It is good to see memorialization of witness statements is important.  But only turning over "material variances in a witness's statements?"  Shouldn't all variances be turned over?
• It is interesting how the memo provides an extensive review process of discovery material - will this hold up getting the materials to defense counsel?  Also will defense counsel be given an equal amount of time to review these materials and time to conduct additional investigation that may be warranted as a result of the materials provided?
• And yes, it is important to protect witnesses and national security - but should DOJ be the one deciding when they think they can withhold evidence?  Shouldn't that be for neutral parties like the judiciary?

It is good to see DOJ trying to do a better job than past administrations, but what really needs to be done is setting forth clearer rules and statutes by independent parties, as opposed to a working group made up of "senior prosecutors from throughout the Department and from United States’ Attorney Offices, law enforcement representatives, and information technology professionals," so that our system does "do justice" as desired by AG Holder.

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The Passing of Bill Olis

I could not have said it better than Tom Kirkendall at Houston Clear Thinkers here.   I, for one, will certainly miss the wonderful emails that Bill sent to me.  I never met him, but he clearly was the winner and now named for him - Collar for the Bill Olis Best Parent Award.  To Jamie and his family - my condolences. 

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Three Strikes for DOJ

Here is an interesting interview that Amy Goodman (Democracy Now) has with Scott Horton concerning the dismissal of the charges related to Blackwater (and the killing of individuals in Baghdad's Nisoor Square in 2007). 

It is difficult to proceed on a case when there's Garrity/Kastigar issues, especially a high profile one that has been openly discussed in the media.  And certainly there are unanswered questions here - like should DOJ have planned for possible problems with evidence and established a clear taint team to make certain that Kastigar issues could be avoided - it is easy to Monday morning quarterback with these questions.  But Hon. Urbina does make a few statements in the Order that are disturbing as to DOJ.  He notes the failure to abide by DOJ internal policy (see here).  He also states that:

"In their zeal to bring charges against the defendant in this case, the prosecutors and investigators aggressively sought out statements that defendants had been compelled to make to government investigators in the immediate aftermath of the shooting and in the subsequent investigation.  In so doing, the government's trial team repeatedly disregarded warnings of experienced, senior prosecutors, assigned to the case specifically to advise the trial team on Garrity and Kastigar issues, that this course of action threatened the viability of the prosecution."

One looks at this case, and then at the dismissal of the Stevens case by DOJ - In the latter the new DOJ does the right thing - it dismisses the case when discovery violations come to light.  Couple this with the recent dismissal of the Ruehle case, also involving government misconduct (see here).  That's three strikes for DOJ.   

But all three of these are high profile cases.  One has to wonder if prosecutorial misconduct may have occurred in the cases that do not get noticed.  Could there be discovery or other violations in other cases that may not receive media attention? AG Holder has made significant steps to turn around the DOJ ( see here), but perhaps an independent body needs to examine some of the past practices of DOJ.  

(esp)(w/ a hat tip to Linda Friedman Ramirez)

In the News & Around the Blogosphere

Matthew L. Wald, NYTimes, U.S. Lawyers Knew About Legal Pitfalls in Blackwater Case

Michael Van Sickler, Tampabay.com, As mortgage fraud runs rampant, meaningful prosecutions in short supply

DOJ Press Release, Major International Hacker Pleads Guilty for Massive Attack on U.S. Retail and Banking Networks

Joe Palazzolo, Main Justice, Obama Nominates Seven More U.S. Attorneys

Andrew Ramonas, Main Justice, Senate Confirms Seven U.S. Attorneys

NYTimes (AP), T.S.A. Drops Bloggers’ Subpoenas

Katie Allen, Guardian (UK), Recession pushes white-collar crime to new highs

Steven Greenhouse, NYTimes, Shoplifters? Studies Say Keep an Eye on Workers

DOJ Press Release, Colorado-based Spectranetics Corporation to Pay $5 Million to Resolve Allegations Relating to Its Medical Devices

DNAInfo, Manhattan District Attorney Robert Morgenthau Bids Farewell After 35 Years; Noeleen G. Walder, NYLJ, law.com,New Faces to Fill Posts at Manhattan D.A.'s Office

WSJ, NYC, NY State To Split Half Of Credit Suisse's $536M Fine

Jesse Westbrook, Business Week, Schapiro Whipsawed By Wall Street, Lawmakers, Defers SEC Rules

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End of Year Deal - UTStarcom on FCPA

DOJ Press Release, UTstarcom Inc. Agrees to Pay $1.5 Million Penalty for Acts of Foreign Bribery in China states:

"UTStarcom Inc. (UTSI) has entered into an agreement with the Department of Justice, agreeing to pay a $1.5 million fine for violations of the Foreign Corrupt Practices Act (FCPA) by providing travel and other things of value to foreign officials, specifically employees at state-owned telecommunications firms in the People’s Republic of China."

...

"In a related matter, UTSI reached a settlement today with the U.S. Securities and Exchange Commission under which it agreed to pay an additional $1.5 million penalty and satisfy additional obligations for a period of four years."

See also David Barboza, NYTimes, Telecom Company to Pay $3 Million in China Bribe Case

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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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