September 11, 2010
NACDL, Defending White Collar Crimes, Sept. 30-Oct. 1, 2010, NY here
ABA Criminal Tax Fraud Conference, Dec. 2-3, 2010, San Francisco here
ABA, The Fourth Annual National Institute on Criminal Enforcement of Intellectual Property Rights, Nov. 5, 2010, San Francisco here
ABA, The Fifth Annual National Institute on Securities Fraud, October 7-8, New Orleans here
Strafford Webinars & Teleconferences - Foreign Corrupt Practices Act in Sub-Saharan Africa -Compliance Strategies Given the Region's Unique Cultural and Governmental Intricacies - Oct. 7, here
ABA, The Supreme Court’s Ruling on Honest Services Fraud:Where Do We Go From Here? - Sept. 14, here
ABA 2010 Fall Conference, Third Annual Sentencing and Reentry Institute and Criminal Justice Legal Educators Colloquim, Nov. 5, Washington, D.C. here
ABA 3rd Annual National Institute on the Foreign Corrupt Practices Act, Oct. 21-22. Washington, D.C. here
September 9, 2010
Fraud Rules the Roost in FBI Press Release Count
I believe that I subscribe to every DOJ press release service pertaining to federal criminal law. My favorite press releases to read are those put out by the FBI. World class self-promoters, the folks at the Bureau like to brag every time one of their investigations results in an arrest, indictment, guilty plea, trial conviction, or sentence. Following the FBI's press releases can give you a quick, informal, and unscientific sense of what's hot and happening in federal law enforcement--at least according to the FBI. Yesterday, the Bureau issued 19 press releases related to specific federal criminal cases. Fraud is in first at 8 press releases. Robbery comes in a strong second at 5. Child pornography is third with 2. Piracy, stolen firearms, stolen cars, and prescription drug abuse limp in at 1 each. White collar crime rules the roost. We're number one!
September 8, 2010
Feds are armed and dangerous in BP criminal investigation
Guest Blogger - Dan Cogdell
As the Justice Department prepares a grand jury investigation of possible crimes involved in the BP oil spill, ex-CEO Tony Hayward is looking smarter for leaving this country for reasons beyond his lack of popularity.
Multiple indictments are likely to be sought, charges could reach well up the corporate ladder and British citizens who are not in this country when indicted might have protection from “double criminality,” which prevents extradition unless the same action is a criminal offense in both countries. It’s very possible the Justice Department will stretch the envelope and that could put their use of U.S. laws in a place not covered by European Union law.
There is no question the federal government is taking dead aim at environmental crimes in the BP oil spill or that the legal artillery is formidable. Federal prosecutors were already ramping up their environmental crime filings before the Deepwater Horizon started spewing oil into the gulf. Now, with massive public pressure, this could be the environmental version of the Enron prosecutions.
This week (8/23-8/27) the U.S. Coast Guard and the Interior Department are holding hearings in Houston to further investigate the BP disaster. Witnesses who invoke the Fifth Amendment may not look like team players, but they will be taking the smartest path.
Expect prosecutors to take fullest advantage of the powerful and far-reaching tools they have available. Expect them to issue more than just wrist slaps and corporate fines out of the Refuse Act, the Migratory Bird Treaty Act and the Clean Water Act. Expect them to seek jail time. There is a lot going in their favor.
Prosecutors will most assuredly rely on the “Responsible Corporate Officer Doctrine,” which allows Clean Water Act violations to be directed at even top corporate officers. Prosecutions under this theory have resulted in convictions of people who were not even at work sites and, in one case, not even working for a company but had “honorary power.” (See United States v. Hanousek, 176 F. 3rd 1116 (9th Cir. 1999), cert. denied, 528 U.S. 1102 (2000), and United States v Brittain, 931 F2d 1413 (10th Cir. 1991)) The “Responsible Corporate Officer Doctrine” may be the prosecutor’s ticket to tag BP’s hierarchical elite while soothing the related political nightmare currently facing the U.S. government.
In a Clean Water Act misdemeanor case, the government does not have to prove that anyone intentionally caused this enormous harm. Negligence is a comfortably lower bar for these prosecutors. And this isn’t BP’s first rodeo. A company culture that prosecutors contend encourages money-saving over safety has landed BP in the government’s sights time and time again, and will only bolster the prosecutor Howard Stewart’s efforts.
Whether BP employees or contractors believe they are targets or not, they must balance the idea of seeing justice done with protecting themselves and their employer. Taking the Fifth at this point may be the least popular but most prudent move.
Dan Cogdell is a Houston-based criminal defense attorney with Cogdell & Ardoin who has represented numerous clients in environmental and white-collar criminal cases.
September 7, 2010
Honest Services Update
Kim Chandler, The Birmingham News, Don Siegelman and Richard Scrushy ask court to dismiss honest services fraud charges against them; Bob Johnson (AP), Tuscaloosa News.com, Siegelman asks appeals court to dismiss charges; Margaret Cronin,Bloomberg, HealthSouth's Scrushy Loses His Bid for Early Release Pending Court Review
Edvard Pettersson, Business Week, Enron’s Skilling to Remain in Prison During Appeal, Court Rules ; Reuters, Judge denies bail for former Enron CEO Skilling-court document
Victoria Pynchon, Forbes, On the Docket, Zach Scruggs Asks Court to Vacate “Earwhigging” Conviction; U.S. v. David Zachery Scruggs, Defendant's Memorandum of Authorities In Support of HIs Motion to Vacate His Conviction Pursuant to 28 USC 2255
Bill Estap, Kentucky.com, Prosecutor Moves to Set Aside Convictions in part of Clay Co. case
Peter Lattman, NYTimes, Fraud Ruling Is Reshaping Federal Cases (hat tip to Tiffany Joslyn)
North NewJersey.com, Sen Joseph Coniglio's bid for bail is shot down by judge
Kevin Ring case - Ken A. Ring's Revised Motion for Judgment of Acquittal - Download 07-19-2010 RING Revised MJOA (DE 155); United States Response to Defendant Ring's Revised Motion for Judgment of Acquittal -Download 07-27-2010 US Response to Def_s Revised MJOA (DE 161); Kevin A. Ring's Reply in Support of his Revised Motion for Judgment of Acquittal - Download 08-03-2010 RING Reply in Support of Revised MJOA (DE 168)
NACDL has created an Honest Services Fraud Filings Decisions Bank for its members here (password protected).
September 6, 2010
The Patient Protection and Affordable Care Act of 2010 Reduces the Criminal Mens Rea Requirement for Healthcare Fraud and Increases Penalties Under the Federal Sentencing Guidelines
GUEST BLOGGER-BENSON WEINTRAUB
There has been a significant uptick in the number of criminal statutes enacted by Congress that diminish or eliminate the mens rea or “guilty mind” requirement. The Patient Protection and Affordable Care Act of 2010 (“PPACA”), Pub. L. No. 111-148, Title VI, §§ 10606, 6402, 124 Stat. 1008 (Mar. 23, 2010), is the most recent and significant example of legislative relaxation of the standard of criminal culpability in federal courts and healthcare fraud cases in particular.
The PPACA added subsection (b) to the healthcare fraud statute, 18 U.S.C. §1347, stating: “With respect to violations of this section, a person need not have actual knowledge of this section or specific intent to commit a violation of this section.” The same language was added to the Anti-Kickback Statute now codified at 42 U.S.C. 1320a-7b(h).
Section 1347 previously contained elements of the offense underscoring that a specific intent to knowingly or willfully violate the criminal healthcare fraud statute is necessary before imposing criminal liability:
To support a conviction for health care fraud under 18 U.S.C. § 1347, the government must prove that the defendant: (1) knowingly and willfully executed, or attempted to execute, a scheme or artifice; to (2) defraud a health care benefit program or to obtain by false or fraudulent pretenses any money or property under the custody or control of a health care benefit program; (3) in connection with the delivery of or payment for health care benefits, items, or services.
United States v. Abdallah, 629 F.Supp.2d 699, 720 (S.D.Tx. 2009); United States v. Choiniere, 517 F.3d 967 (7th Cir. 2008), cert. denied, 130 S.Ct. 193 (2009).
Moreover, the Patient Protection and Affordable Care Act of 2010 includes Congressional mandates increasing the Sentencing Guidelines in healthcare fraud cases. Under the PPACA, the Guidelines will be amended to provide a specific offense characteristic enhancing the otherwise applicable fraud Guideline by two to four additional levels according, again, to the amount of “loss.” Loss is an elusive term of art and the Guidelines authorize several methodologies for loss determination.
Yet, the Act materially impacts the common law of sentencing’s definitions of loss and instead directs that: “… the aggregate dollar amount of fraudulent bills submitted to the Government health care program [which] shall constitute prima facie evidence of the amount of the intended loss by the defendant. Pub. L. No. 111-148 at §10606(a)(2)(B).
In conclusion, one result of the PPACA engenders conflict between competing values of allocating criminal blameworthiness for culpable criminal conduct and reconciling social imperatives reflected by Congressional intent to deter burgeoning healthcare fraud. On balance, the legal issues that emerge from amendment of 18 U.S.C. §1347(b) and 42 U.S.C. §1320a-7b(h) will be the subject of significant litigation concerning both the guilt/innocence and penalty phases of healthcare fraud prosecutions.
In the News & Around the Blogosphere
60 Minutes, The $60 Billion Fraud (incredible story of medicare and medicaid fraud in South Florida - it shows how a billing scam can operate when there is little government oversight) What is the government doing? Check out AG Holder's talk here
Stuart Pfeifer, LATimes, Man accused of fraud may get life in prison under California's three-strikes law
Alicia A. Caldwell, Business Week, 11 indicted in Texas county public corruption case
Mike Scarcella, BLT Blog, Former Republican Congressional Committee Treasurer Pleads Guilty to Theft
Jenna Greene, BLT Blog, ICE's Interior Decorator Pleads Guilty to Conspiracy to Defraud Government
DOJ Press Release, Partner at Major International Accounting Firm Convicted of Tax Crimes
David Phelps & Dan Browning, Star Tribune, Informant gets year in Petters case
Brian Witte, San Francisco Examiner, US attorney: State Sen. Ulysses Currie indicted
FBI Press Release, $600 Million Settlement in Botox Case
NYTimes (Reuters), Ex-Fund Manager Settles Insider Trading Claims
Mary Pat Gallagher, law.com, Ticket-Fixing N.J. Judge Is Handed Jail Term but May Not Serve
Mark Hamblett, NYLJ, law.com, High Court Restriction on Reach of U.S. Laws Is Applied to RICO -Venezuelan citizen claims he was wrongly imprisoned for almost three years in Venezuela as part of a foreign currency extortion scheme
September 5, 2010
New Books, Articles, and Other Materials
Sara Sun Beale, (forthcoming Ohio St J of Criminal Law), An Honest Services Debate
Alexander Bunin (Federal Public Defender Northern District of NY), Federal Convictions Reversed (a wonderful compilation of federal cases from the United States Courts of Appeal and the United States Supreme Court. The opinions contain at least one point favorable to criminal defendants), Download Federal Convictions Reversed 08.2010