Friday, March 5, 2010

In the News & Around the Blogosphere

David Hechler,,DOJ Unit That Prosecutes FCPA to Bulk Up 'Substantially'

David B. Caruso, (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"

DOJ Press Release, Two Former Executives of Medical Manager Found Guilty in Securities Fraud Scheme

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,, Miami Couple Accused of $135 Million Ponzi Scheme


March 5, 2010 in News | Permalink | Comments (0) | TrackBack (0)

Monday, March 1, 2010

Commentary on Skilling Oral Argument

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.

March 1, 2010 in Enron, Fraud | Permalink | Comments (0) | TrackBack (0)

Oral Arguments in the Skilling Case

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."


March 1, 2010 in Enron, Fraud | Permalink | Comments (0) | TrackBack (0)

Sunday, February 28, 2010

Jeff Skilling's Day With the Supremes is Today

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.

The Briefs for the case can be found here.  See also Scotus Blog here.

Below is a listing of prior posts that lead up to today's oral argument:

 Skilling Files Petition for Cert

Skilling Asks for En Banc Hearing

What Others Are Saying About the Skilling Decision

Skilling - Commentary on the Decision

Skilling- Sentencing Reversal and Remand; Conviction Stands

Skilling Hearing - Sounds Like it Wasn't a Hot Bench

They're Expecting A Crowd for Skilling

Wednesday Is Jeffrey Skilling Day


February 28, 2010 in Fraud | Permalink | Comments (1) | TrackBack (0)

Reining In Honest Services Fraud

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)


February 28, 2010 in Conferences, Fraud, News | Permalink | Comments (0) | TrackBack (0)

Happenings in Scholarship

Check out Prosecution Notes here (NYU) It includes an article by Michael L. Volkov & Allyson Miller (Dickinson Wright) titled, Prosecutorial Misconduct: An Increasing Problem or Overblown Hysteria?


February 28, 2010 | Permalink | Comments (0) | TrackBack (0)