Sunday, March 14, 2010
Guest Blogger - Brooklyn White
It’s becoming more rampant now than it ever was, largely because of the advances being made in technology and communications. White collar crime is now the main tool for those who want take the easy road to riches and wealth – yes, there is hard work involved, but it is all directed to the immoral and unethical practices of fraud, forgery, embezzlement and trickery. We’re all aware that white collar criminals are punished differently from those who commit blue collar crimes like murder, rape, arson, burglary and assault, and there is considerable debate on why this discrimination exists. With federal sentencing guidelines for these crimes being advisory rather than mandatory, it is up to the presiding judge to use their discretion in deciding how to punish the criminal.
In general, white collar crimes are punished by a large monetary fine and/or some time in prison. Some criminals may even be let off after being set to perform social service while others may be confined to their home as punishment. No matter how you look at it, white collar crime seems to be higher up on the ladder than the blue collar variety. The criminals are mostly rich enough to be able to fork out the fines (without it affecting their financial standing significantly) and/or bribe people to get their sentences reduced.
There are two schools of thought on imposing punishment for white collar crime:
The Kantian Method: takes a stand that white collar crime is as bad as the blue collar kind and so, must be punished on similar levels. According to the Kantian perspective, white collar criminals must be punished to the full letter of the law. By Kant’s argument, the people who perpetrate the crime are acting rationally, and this means that they should suffer the consequences of their actions.
The Utilitarian Method: follows the idea that if the crime is for the "greater good", then it is not punishable or punishable by lenient methods. Those who believe in this perspective tend to take the view that it is acceptable to accept plea bargains if some criminals turn state’s witnesses and turn their partners in crime in. Here, punishment is doled out according to the final utility value created.
Both perspectives have their pros and cons – with the Kantian method, we can justify that every white collar criminal knows what they are doing and are completely rational in their thoughts and actions. Also, they fail to consider the effect that their actions have on the people they defraud or cheat – lives are ruined and some victims are even driven to commit suicide. Also, if burglary is a blue collar felony, then why are large scale frauds and embezzlements treated under the more fanciful umbrella of white collar crime?
The Utilitarian method begs the question – who decides what the greater good is? What’s good for you may not be as good for me, so under what conditions is the overall utility value of the crime judged?
Punishment in white collar crimes must be severe enough to prevent the perpetrator from repeating their ways and also a definite deterrent to others who want to tread the same path. And with most white collar criminals being rich with deep pockets, the only thing they’re probably afraid of is time in a maximum security prison.
Friday, March 12, 2010
Mike Scarcella, BLT Blog, DOJ's Public Integrity Section Gets New Leadership
Michael Winter, USAToday, House impeaches U.S. judge in New Orleans for alleged corruption
Alistair Dawber, The Independent (UK), Former Cazenove banker found guilty of insider dealing
John Monk, The Sun News, Medicaid fraud case swallows millions
Erik Ombok, Business Week, Kenya Suspends Officials Over Alleged Corruption
Karen Gullo, Business Week, Ex-McKesson Chairman McCall Gets 10-Year Prison Term for Fraud
Jay Weaver, Miami Herald, Accountant pleads guilty to $2.6 million fraud (w/ a hat tip to Ivan Dominguez)
Glenn Thrush, Politico,Conyers' wife sentenced to three years in prison (w/ a hat tip to Ivan Dominguez)
Monday, March 8, 2010
Jon Burstein, Sun Sentinel, Wives of Ponzi schemers: Can they be charged with crimes too?
Amanda Bronstad, NLJ, law.com, Prosecution in KB Home Backdating Case Takes a New Tack: Personal Gain
Christopher M. Matthews, Main Justice, Superseding Indictment Clarifies Alleged FCPA Conspiracy
Joe Ryan, Star Ledger, NJ.com,Former aide to Newark Mayor Cory Booker pleads not guilty to corruption charges
Jacob Gershman & Michael Howard Saul, WSJ, An Epic Spree of Mischief -New York Politicians Extend Era of Malfeasance With a Fresh Wave of Scandals
Dan Margolies, Reuters, Defendant to plead guilty in US arms sting case
Friday, March 5, 2010
David Hechler, law.com,DOJ Unit That Prosecutes FCPA to Bulk Up 'Substantially'
David B. Caruso, law.com (AP), Former Madoff Aide Charged With Conspiracy, Securities Fraud
Katten Continues Growth of Washington Litigation Practice with Addition of Three High-Profile Partners (including white collar litigators Joshua G. Berman & Glen Donath and health care and appellate attorney Howard R. Rubin)
George Hunter, Detroit News, Prosecutors seeking new charges against Kilpatrick
Don Margolies, Reuters, US top cop says Justice Department using new tools
Doug Berman, Sentencing Law & Policy, "'Midwest Madoff' sentenced to 9 years"
Darrell A. Hughes, Wall St Jrl, BAE Systems Pleads Guilty To Corruption Charges
Mike Scarcella, BLT Blog, DOJ: Fraudsters Targeted Ticket Vendors in $25 million Scheme
Wayne Tompkins, Daily Business Review, law.com, Miami Couple Accused of $135 Million Ponzi Scheme
Monday, March 1, 2010
I'll pass on the jury prejudice issue and leave it to crimprof to handle this one. But the honest services exchange was fascinating. You have several justices asking where to find this pre-McNally law. (see here). Do you need lawyers, do you have to carry around treatises - but then Justice Alito hits the homerun. He asks the important question of whether we would find this scenario in the pre-McNally cases. Mr. Dreeben says "not to my knowledge." A "logical extension" is what he offers. I call that - stretching.
Addendum -See Lyle Denniston, Scotus Blog here ; Tom Kirkendall, Houston Clearthinkers here; Mary Flood, Houston Chronicle, Justices worried about fair trial for Skilling; Robert Barnes, Wash Post, Skilling case latest to test 'honest services'
Second Addendum - The more I keep reading, the more I keep thinking about the Court's words in the Carpenter case, where they found the "right to intangible property" covered under the mail fraud statute, but noted that the Wall Street Journal "was defrauded of much more than its contractual right to his honest and faithful service, an interest too ethereal in itself to fall within the protection of the mail fraud statute..." Clearly this was pre-1346, but it is telling.
The transcript can be found here. The defense focused on the jury prejudice issue, and rightfully so - a victory on this issue goes to all charges. But there was ample discussion of honest services. Some highlights:
Justice Scalia - questioning Mr. Dreeben - states: "And there were cases that -- that -- some of which included bribery, but others of which included a variety of -- of other actions, some of which were allowed by some courts, and some of which were disallowed by some courts. There was no solid content to what McNally covered."
Chief Justice Roberts - questioning Mr. Dreeben - states: "you need lawyers and research before you get an idea of what the pre-McNally state of the law was with respect to intangible..."
Justice Kennedy - questioning Mr. Dreeben - asks: "What authority do I look to, to see that some employees are fiduciaries and others are not?"
Best question goes to Justice Alito- questioning Mr. Dreeben - "Were there any pre-McNally cases that involved a situation like this, where the benefit to the employee was in the form of the employee's disclosed compensation? Mr. Dreeben responded: There were not to my knowledge, Justice Alito, and I would frankly acknowledge that this case is a logical extension of the basic principle that we have urged the Court to adopt in the nondisclosure cases, and the Court can evaluate whether it believes that that is legitimately within the scope of an honest services violation or not..."
Justice Breyer - questioning Mr. Dreeben - "Then if you're not saying that, then what the person has to carry around with them is an agency treatise."