Saturday, June 12, 2010

Charging Many Counts Can Result in Hearing the Words "Not Guilty" Many Times

Sholom Rubashkin, the manager of a kosher meat plant in Iowa, had been unsuccessful in federal court as he was found guilty of bank fraud and related charges resulting from a raid premised on illegal immigration. He awaits sentencing in that case (see background here).  But the same result is not seen on the state side in charges that came from the federal case, albeit different allegations.  Following a five-week trial (yes - five weeks), he was found not guilty of 67 counts (yes - 67 counts) of child labor.   What is particularly noteworthy here is that he was initially charged with 9,311 counts of child labor violations as the state had charged a separate criminal charge for each day of the 31 minors alleged in the case. Prior to trial they reduced this to 67 counts and the judge granted a directed verdict as to 16 of these counts. This was not an easy case for the defense as the court's instructions included a mistake of fact instruction that stated that any mistaken belief in the age of the workers had to "be because of a good faith reasonable belief" and that the defendant "must inquire or determine what is true when to do so would be reasonable under the circumstances." A change of venue had been granted in this case, but it remained in Iowa where jurors may have been aware of the federal case. Despite these obstacles for the defense, the jury returned not guilty verdicts. The defendant was represented by Mark E. Weinhardt and Holly Logan of Belin McCormick, PC (Des Moines, Iowa) and F. Montgomery Brown of Brown Scott, PLC (West Des Moines, Iowa). 
(esp) (blogging from Marseille, France)

June 12, 2010 in Verdict | Permalink | Comments (0) | TrackBack (0)

In the News & Around the Blogosphere

Friday, June 11, 2010

The Constitution (and its Confrontation Clause): An Inconvenience Pact


The Boston Globe carries this article today by John R. Ellement, echoing Massachusetts prosecutors' complaints that defense lawyers in the Bay State are "exploiting" the Supreme Court's 2009 Confrontation Clause decision in Melendez-Diaz v. Massachusetts. (Melendez-Diaz applied the Supreme Court's earlier Crawford v. Washington holding to forensic analysts' laboratory reports.) According to the article, "the state’s 35 chemists have been ordered to prepare for court 1,606 times, but actually testified only 184 times." Allegedly, some defense attorneys insist that state chemists appear for trial in hopes that scheduling conflicts will prevent their attendance and result in dismissal. Imagine that.

Although the story is generally well-written, Ellement fails to explain, in even the most rudimentary form, the Confrontation Clause principles behind the high Court's ruling. Thankfully, he does quote Massachusetts Association of Criminal Defense Lawyers' President John H. Cunha Jr., who reminds Ellement that "[t]o just come in there with a piece of paper that says somebody is guilty is contrary to our system,’’ and that “[c]ross-examination is supposed to test the evidence. . . . The U.S. Constitution is not a technicality.’’ No doubt Cunha made the Confrontation Clause point in more detail that failed to make its way into print. 

The article is not without some irony. One of the bellyachers who Ellement quotes, concerning the supposed deleterious effects of Melendez-Diaz, is John A. Grossman, "the Patrick administration’s top specialist on forensic sciences." Grossman seems to have spoken to the press as part of an official effort to negatively assess Melendez-Diaz. Yet Ellement also reports, near the tail end of the piece, that, "yesterday, the Patrick administration announced it had appointed a UMass Memorial Medical Center official to take over the State Police lab, a job that has been vacant since 2007 after mismanagement of forensic evidence was discovered."  (emphasis added).


June 11, 2010 in Current Affairs, Privileges, Prosecutors, Science | Permalink | Comments (1) | TrackBack (0)

Thursday, June 10, 2010

Welcome Guest Blogger Solomon L. Wisenberg

I am pleased to announce that Solomon L. Wisenberg of Barnes & Thornburg LLP will be joining me for the next couple of weeks as a guest, blogging at the white collar crime prof blog.  You can read more about his extensive background here.


June 10, 2010 in About This Blog | Permalink | Comments (1) | TrackBack (0)

The SEC's Stat Scam


Zachary Goldfarb has an interesting story in today's Washington Post about past turmoil and alleged retaliation in the SEC's Fort Worth District Office. The story highlights the difficulties facing the new SEC regime as it tries to kick-start an agency that rather miserably failed to spot the Madoff and Stanford frauds.

You may recall the name of Julie Preuitt. She is the Fort Worth Examination Branch official who sounded the alarm bell for years about R. Allen Stanford's alleged activities, only to see her complaints ignored or quashed by supervisors in the Fort Worth Enforcement Branch. All of this is detailed in SEC Inspector General H. David Kotz's excellent and shocking Report of Investigation of the SEC's Response to Concerns Regarding Robert Allen Stanford's Alleged Ponzi Scheme.

In 2007, according to Goldfarb, Preuitt's Examination Branch boss, Kimberly Garber, instituted a new super-short method, known as a rave, of examining certain brokerage firms. The exams lasted half a day. Only management personnel were interviewed during the raves, and the examiners did not actually examine any records, although company policies were reviewed. The raves were instituted by Garber, purportedly to boost Fort Worth's exam stats. Preuitt complained vociferously about the raves, and was rewarded with reassignment and demotion. This same management focus on stats over substance was what led to the Fort Worth Enforcement Branch's failure to publicize and halt Stanford's alleged activities in a timely fashion, according to Kotz's Report.

The story also reveals that Garber is alleged to have violated the SEC's ethics rules by using her office for the private gain of relatives. During an official trip to Kansas, Garber arranged for her staff to stay at a bed and breakfast owned by her brother and sister-in-law.

The SEC has discontinued the raves, but hard feelings between management and staff persist in Fort Worth.

This is all interesting stuff, and it points toward a larger and endemic problem within federal regulatory and law enforcement--that is, the obsession with statistics as a sign of progress in the war against white collar crime. Too much of a focus on stats leads management to favor the quick hit and the easy, often small, target. Think about that every time you see an FBI press release touting the latest mortgage fraud guilty plea. My guess is that most of the mortgage fraud convictions in the last two years involved small fries.


June 10, 2010 in Investigations, SEC, Securities | Permalink | Comments (0) | TrackBack (0)