Sunday, February 28, 2010
Today is Jeff Skilling's chance to convince the Supreme Court that either section 1346 (intangible rights to honest services) is vague or should only apply to bribery cases, or that his trial was tainted and that there should have been a change for venue. The Skilling case is one of three cases before the Court this term examining section 1346, the honest services fraud provision of the fraud statutes. One thing I continue to maintain is that the government can survive without section 1346 (see here). My preview for the Black and Weyrauch case are here, and much of this applies to this case. Unlike the past two cases, the Skilling decision is a frontal attack on the statute, although Skilling also has a fallback position as noted above.
Below is a listing of prior posts that lead up to today's oral argument:
Guest Blogger - Stephen Richer
Stephen Richer is the Director of Outreach at Washington Legal Foundation
"Show me the man, and I will show you the crime," said Lavrenti Beria, Stalin’s Chief of Police.
Such is the sentiment that Noel J. Francisco of Jones Day evoked when describing the Honest Services Fraud Statute at a recent Washington Legal Foundation Media Nosh.
The Honest Services Fraud refers to the 28 word addition to the mail and wire fraud statute: "For the purposes of this chapter, the term, scheme or artifice to defraud includes a scheme or artifice to deprive another of the intangible right of honest services."
In so few words lies enormous prosecutorial power, and, as such, the statute has been the subject of two recent Supreme Court arguments: Weyhrauch v. United States and Black v. United States, and is the focus of the upcoming hearing of Skilling v. United States.
According to Mr. Francisco, such cases arise out of the government’s desire to respond to public outrage, and the Honest Services Fraud statute is a perfect tool for doing so. "This is a typical executive response of we've gotta’ find scalps," said Mr. Francisco.
Only later—many years after the fact—does the judiciary have the chance to review such governmental actions. Mr. Francisco predicts that after hearing this third case on the issue, the Supreme Court will "either strike down this intangible right to honest services or reign it in significantly."
To hear Mr. Francisco’s full remarks, as well as the remarks from The Honorable Dick Thornburgh, The Honorable Gregory G. Garre, and Patricia A. Millett, visit Washington Legal Foundation’s website for the archived version of the seminar.
Available here (the webcast must be accessed through Internet Explorer)
Thursday, February 25, 2010
Larry Ribstein, Ideoblog, Businesses as movie good guys
Martha Neil, ABA Jrl, Law News Now, Attorney in Federal Wire Fraud Case Allegedly Didn’t ID Buyers at Closings; Tim McGlone, The Virginian-Pilot, Lawyer charged in $1M mortgage fraud scheme (w/ a hat tip to Ivan Dominguez)
The Record, Bruno's sentence delayed until May
An opinion issued by the Third Circuit Court of Appeals here affirmed the convictions of an individual who worked for the Rite Aid Corporation, on convictions for "conspiracy to commit accounting fraud, filing false statements with the SEC, conspiracy to obstruct justice, obstruction of grand jury proceedings, obstruction of government agency proceedings, and witness tampering." Brown, age 76, received a sentence of ten years, but the sentencing was prior to Booker. The court stated, "[l]acking this clairvoyance the Court failed to explain, in the manner now required, how it considered the factors listed in section 3553(a) in imposing Brown’s sentence."
See also Shannon P. Duffy, Legal Intelligencer, law.com, 3rd Circuit Upholds Conviction of Former Rite Aid General Counsel
John Hielscher & Michael Pollick, Sarasota Herald Tribune, Arthur Nadel pleads guilty to Ponzi scheme
Philadelphia Inquirer, AP, Lawyers fear deadline in Veon corruption trial
Mark Hamblett, NYLJ, law.com, 2nd Circuit Denies En Banc Review of Lynne Stewart's Sentence
Mike Scarcella, BLT Blog, In Miami, Fraud Task Force Examines Mortgage Schemes
Mike Scarcella, BLT Blog, Mistrial Declared in DOJ's Corruption Case Against American Samoa Officials
Star-Ledger, NJ.com, Former aide to Newark Mayor Cory Booker is indicted on extortion, corruption charges
Dan Eggen, Washington Post, Alleged Stanford fraud victims want money that was given to campaign committees
Wednesday, February 24, 2010
Monday, February 22, 2010
Andy Owens, Charleston Regional Business Journal, Law school panelists: White collar crime hard to deter
Ken Thomas & Dan Stumpf, Huffington Post. Toyota Recall: Feds Open Criminal Investigation, Issue Grand Jury Subpoena for Documents
Sunday, February 21, 2010
We have seen some high sentences in white collar cases in federal court. But it now looks like a high sentence is being given in a white collar state case. Check out, press release, Texas State Securities Board,Jury Hands Down 99-Year Sentence for Architect of Multistate Securities Fraud.
Johanna Decorse, AP, law.com, 12 Convicted in Pinot Noir Fraud Scheme
Tonya Alanez, Sun Sentinel, Is Broward's state attorney soft on corruption?
Jordana Mishory, Daily Business Review, law.com, Judge Dismisses 2 Counts Against Rothstein Firm's Former Accountants
AP, Washington Post, Federal prosecutors consider charges in probe of Hilton Hotels
Amir Efrati, WSJ Blog,Possible Madoff Effect: Triple-Digit White-Collar Prison Sentences
Paul Egan, Detroit News, Federal case builds against Kilpatrick, father
Thursday, February 18, 2010
(esp) (w/ disclosure that she is a B.S. graduate of Syracuse U.- home of the Trac Reports).
AP, Washington Post,Bernard Kerik sentenced to four years in prison
Amir Efratt, WSJ Blog,Should Prosecutors Go After Imprisoned Adelphia Fraudsters?
Joseph DiBenedetto, Forbes, White-Collar Defendants Pay For Predecessors' Crimes
Wednesday, February 17, 2010
A Note by Duke law student Derick R. Vollrath presents an important view on white collar sentencing. The Note titled, Losing the Loss Calculation: Toward a More Just Sentencing Regime in White-Collar Criminal Cases, states in the abstract that "[m]oreover, the loss calculation fails to adequately approximate a defendant’s culpability, dwarfing traditionally relevant considerations such as the manner in which the defendant committed the crime and the defendant’s motive for doing so."
Solomon Weisenberg, Letter of Apology, Not Guilty! Leonard Lawson and Bill Nighbert Acquitted in Kentucky Federal Court
Mark Fass, NYLJ, law.com,In Rationale for Acquitting Attorney, Judge Says Proof of Role in Witness Intimidation Fell Short
Grits for Breakfast, Texas State Rep Pleads Guilty here
Mike Robinson, AP, law.com,Blagojevich Pleads Not Guilty to Revised Federal Corruption Charges
Larry Neumeister, AP, law.com, Bail Set at $10 Million for Madoff's Former Finance Chief
Sidhartha Banerjee, Canadian Press, Earl Jones gets 11-year sentence for orchestrating massive fraud scheme
Editorial, NYTimes, A Blue-Ribbon Look at Criminal Justice (endorsing the Webb Commission) (hat tip to Ted Gest)
NYTimes, Dealbook, Tax Evasion Case Draws in Another Bank
Beck Vass, New Zealand Herald, Major frauds hit $98m - but worst is yet to come
Here are some new articles that have recently been posted on SSRN:
William Black, The Disastrous Unexpected Consequences of Private Compensation Reforms - Testimony to the House Committee on Oversight and Government Reform Hearing: 'Executive Compensation: How Much is Too Much?'
Maurice E. Stucke, Am I a Price-Fixer? A Behavioral Economics Analysis of Cartels
Elgie McFayden, Jr., Global Implications of White Collar Crime
Don M. Chance & Ashley Schexnaildre, Consecutive Identical Returns and the Stanford Group Scandal
Tuesday, February 16, 2010
The University of Texas, The Review of Litigation's Symposium this year was devoted to white collar crime. Titled, White Collar Crime and the Changing Corporate Environment, Chief Symposium Editor Heather Mahurin and staff did an incredible job of bringing together top practitioners and a judge to examine the evolution of white collar crime and factors affecting this area. The event was sponsored by the law firm of Vinson & Elkins. I had the pleasure of being the first speaker and providing an evolution of white collar crime.
The first panel of Tim McCormick (Thompson & Knight) and Carl Wessel (DLA Piper) looked at internal investigations and when one should seek outside counsel. It was not surprising to hear them mention the recent FCPA investigations, noting that the pharmaceutical area seems to also be part of the recent DOJ focus. Tim McCormick also talked about the concerns that get raised with Upjohn warnings.
A second panel looked at white collar crime prosecutions and it was appreciated that the Hon. Jennifer Coffman, Chief Judge of the Eastern District - Kentucky offered a judicial perspective. Along with Kent Schaffer (Bires and Schaffer), there was a good bit provided on how emails were affecting the landscape of white collar cases. Mr. Shaffer noted how "people put things in emails that are shocking." Telling "the story" to the jury is important, as is humanizing one's client. The participants on this panel also provided wonderful information on dealing with experts in white collar cases. The expert needs to be "not too academic" and "clear."
A final panel was focusing on parallel proceedings and included top individuals like Solomon Wisenberg (Barnes & Thornburg). It will be good to see the published works from this important symposium.
In a recent speech by AG Holder he recapped this year's health care fraud prosecutions and predicted that more would be coming. (see press release) Holder was speaking at the National Summit on Health Care Fraud. He said that:
"last year brought record levels of achievement in our fight against health care fraud. In 2009, the Justice Department reached an all-time high in the number of health care fraud defendants charged, more than 800. We also obtained more than 580 convictions. And on the civil enforcement front, our health care fraud recoveries last year under the False Claims Act exceeded a stunning $2.2 billion dollars."
He spoke of five things that would be happening to combat health care fraud. One of them was:
"we must strengthen HEAT. We will continue to combine and leverage our agencies’ resources and expertise, including the FBI and the Office of Inspector General at HHS, to prevent and prosecute fraud. HEAT will continue to work closely with local U.S. Attorneys Offices to pursue both civil and criminal cases. And in bringing these fraudsters to justice, we will use the power of the Internet and the media to inform the public and the health care industry about how to prevent future fraud schemes."
And just looking at this past month, one finds the emphasis on health care matters. See DOJ Press Release, Former Los Angeles Medical Center Owners Agree to $10 Million Consent Judgment for Medicare and Medi-Cal Fraud Scheme; DOJ Press Release, Jury Convicts Detroit Area Doctor of Health Care Fraud Conspiracy
Monday, February 15, 2010
DOJ is taking a pro-active approach in fighting intellectual property crimes. AG Holder announced in a press release "the formation of a new Department of Justice Task Force on Intellectual Property as part of a Department-wide initiative to confront the growing number of domestic and international intellectual property (IP) crimes."