Tuesday, November 15, 2011

Did Paterno Get a Bad Call?

I have a nagging feeling that Penn State football ex-coach Joe Paterno may have lost the game on a bad call by the referee(s).  Paterno, although not charged criminally, has been fired and vilified for what many suspect was his involvement in a cover-up to protect Penn State and its football program.  While Paterno might arguably be faulted for a moral lapse for not personally reporting the allegation directly to public authorities, he did, promptly and probably accurately, report what he had been told to his administrative higher-ups, including the official in charge of the university police, one of the law enforcement agencies with jurisdiction over on-campus crime.

The basic facts as regards Paterno, according to the Pennsylvania grand jury report (see here), are as follows:  A 28-year old Penn State graduate assistant (known to be Mike McQueary) in March 2002 observed Jerry Sandusky, a former Penn State assistant coach who had access to its football facilities, in a shower room subjecting a boy estimated to be 10 years old to anal intercourse.  The following day, a Saturday, McQueary reported to Paterno "what he had seen."  The next day, a Sunday, according to Paterno he called to his home Tim Curley, the university athletic director and his immediate nominal supervisor, and told Curley that McQueary had seen Sandusky "fondling or doing something of a sexual nature to a young boy."  Subsequently, at a meeting with Gary Schultz, the Penn State senior vice president who oversaw the campus police, Paterno reported (according to Schultz) that Sandusky had engaged in "disturbing" and "inappropriate" conduct in the shower with a young boy.

Approximately one and one half weeks after the shower incident, in a meeting with Curley and Schultz, McQueary testified, he told them he had observed Sandusky having anal sex with a boy.  Paterno was not present at that meeting.

Schultz, who was aware of an allegation against Sandusky in 1998 that was investigated with no resulting arrest, did not report the incident to the police.  Curley and Schultz reported the incident to university now ex-president Graham Spanier as Sandusky "horsing around" in the shower with a "younger" child.  Spanier testified that, as reported to him, the incident was not of a "sexual nature," and he made no report to authorities.

Curley was indicted for making a materially false statement under oath for denying that McQueary (presumably in the meeting not attended by Paterno) had told him that Sandusky had engaged "in sexual conduct or anal sex."  Schultz was indicted for making a materially false statement under oath that the allegations made by the graduate assistant were "not that serious" and that he and Curley "had no indication that a crime had occurred."

Both Curley and Schultz were also charged with the then "summary offense" (less serious than a misdemeanor) of failure to report suspected child abuse.  The applicable Pennsylvania statute (since amended), according to the grand jury report, mandated reporting by "the person in charge of the school or institution" to the Department of Public Welfare.  Presumably that "person in charge" was ex-president Spanier, and Curley and Schultz, it seems, were charged as persons whose alleged playing down of the incident caused Spanier not to make a report.

The criminal case against Curley and Schultz, and the moral case against Paterno, is based to a considerable extent on the accuracy of the un-cross-examined testimony about an incident 9 years ago by McQueary, whom the grand jury, according to the report, found "extremely credible."  It is far from clear exactly what McQueary told Paterno.  Indeed, the grand jury report, which otherwise details what McQueary reported to Curley and Schultz with some specificity, describes what McQueary told Paterno only in very broad strokes -- "what he had seen."  Paterno in a recent statement claimed McQueary did not mention the "very specific actions."  Thus, it appears questionable whether McQueary had reported to Paterno that Sandusky and the child had engaged in anal sex.  Accordingly, when Paterno reported to Curley that he heard Sandusky was "fondling or doing something of a sexual nature," he may well not have been watering down McQueary's report.

Indeed, Paterno is likely the major corroborative witness in the prosecution case against Curley and Schultz.  (The boy, it appears, had not yet been identified.)  The report states that Schultz and Curley "were notified by two different Penn State employees of the alleged sexual exploitation," those witnesses apparently being McQueary and Paterno.  Paterno, Pennsylvania Attorney General Linda Kelly has announced, is not a criminal target.

The public, including me, sometimes feels some satisfaction when it learns of the fall of the rich and famous and the sports figures whom we believe get privileged treatment, and sometimes jumps to hasty conclusions of guilt which turn out to be wrong -- witness the Duke lacrosse players and probably Strauss-Kahn cases.  The grand jury report, most likely written by the prosecution, even while presenting the prosecution case without any challenge by the defense, does not convince me that Paterno did anything wrong -- criminally, civilly or morally.

It may well be that it will ultimately be revealed that Paterno deliberately minimized Sandusky's reported conduct -- and participated in a cover-up -- or that his failure to assume the responsibility to report was a grievous error.  The grand jury report did not concern moral guilt.  And perhaps the prosecutors went out of their way not to criticize Paterno, who, it appears, will be a key witness for them at trial.

Perhaps Paterno acted or failed to act to avoid embarrassment to the university, the football program or himself and/or to protect a colleague from arrest and prosecution, or both.  Perhaps he chose not to go directly to the police or welfare agency for the same or similar reasons.  Paterno, after all, as a coach no doubt believes that "the team" comes first.  He is, as Duke basketball coach Mike Krzyzewski has intimated, also a creature of a different generation -- a generation which believed strongly in personal loyalty and was reluctant to "name names."

The grand jury report itself, however, does not make, and does not support, an allegation that Paterno deliberately participated in a cover-up.


November 15, 2011 in Celebrities, Grand Jury, Perjury, Sports | Permalink | Comments (2) | TrackBack (0)

Saturday, November 12, 2011

NACDL White Collar Criminal Defense College at Stetson

The NACDL White Collar Criminal Defense College at Stetson is a “boot-camp” program for practitioners wishing to gain key advocacy skills and learn substantive white collar law. The program will cover client retention, investigation in a white collar case, handling searches and grand jury subpoenas, and dealing with parallel proceedings. Participants will have the experience of negotiating a plea, making proffers, and examining which experts to hire and how to protect the client in this process. Interactive sessions with top white collar practitioners will allow the participants to learn trial skills such as opening statements, cross-examination, jury instructions, closing arguments, and sentencing – all in the context of a white collar matter.

More Information and to registrar here

Faculty (which includes 6 past-presidents of NACDL) here.

Seminar Location:
Stetson University College of Law
1401 61st St. S.
Gulfport, FL 33707

Hotel Accommodations:
Tradewinds Island Grand Beach Resort
5500 Gulf Boulevard
St. Pete Beach, FL 33706


November 12, 2011 in Conferences | Permalink | Comments (0) | TrackBack (0)

Wednesday, November 9, 2011

Becker Will Not Be Prosecuted

The Justice Department has decided -- properly, I believe -- not to file criminal charges against former SEC general counsel David M. Becker for participating in SEC policymaking relating to the distribution of funds from the Madoff estate when he had a personal stake in the outcome, a matter we discussed over five weeks ago.  See here.  Although I believe Becker's failure to recuse himself on his own was an exercise in poor judgment, he did report the potential conflict to his ethics officer, who approved his participation, and SEC chairwoman Mary L. Schapiro, who apparently failed to question it.  Hopefully, the SEC will not forget that errors in judgment should rarely, if ever, be actionable.


November 9, 2011 in SEC, Securities | Permalink | Comments (0) | TrackBack (0)

In the News & Around the Blogosphere

Associate Attorney General Lanny A. Breuer Speaks at the 26th National Conference on the Foreign Corrupt Practices Act ("Just two weeks ago, we secured the longest prison sentence -15 years- ever imposed in an FCPA case.")

DOJ Press Release, Brooklyn, N.Y., Medicare Fraud Strike Force Charges 12 Individuals for Participating in Health Care Fraud Schemes Totaling More Than $95 Million

DOJ Press Release, Owner of Miami Company Sentenced to 46 Months in Prison for Scheme to Defraud the U.S. Export-Import Bank

 Dina ElBoghdady, Washington Post, $3 billion settlement expected in GlaxoSmithKline drug-marketing probe (hat tip to Tiffany Joslyn)

DOJ Press Release, Owner of Houston Health Care Company Sentenced to 41 Months in Prison in Connection with $1.3 Million Medicare Fraud Scheme

DOJ Press Release, Miami-Area Patient Recruiter Pleads Guilty in $25 Million Health Care Fraud Scheme

DOJ Press Release, Former “Most Wanted” Health Care Fraud Fugitives Sentenced to 14 Years in Prison for $9.1 Million Detroit Medicare Fraud Scheme


Peter Lattman, Dealbook,NYTimes, Raj Rajaratnam Assigned to Massachusetts Prison  

Jane Crosby, Star Tribune, UnitedHealth hires top white-collar crime fighter

Branden Goyette, ProPublica, Cheat Sheet: What’s Happened to the Big Players in the Financial Crisis

Anthony J. Franze & R. Stanton Jones, Bloomberg, Silencing a Watchdog: Government Seeks to Muzzle Amicus in John Edwards Prosecution



November 9, 2011 in News | Permalink | Comments (0) | TrackBack (0)

Tuesday, November 8, 2011

Prosecutors Unrestrained

Pennsylvania Attorney General Linda Kelly held a press conference yesterday concerning the sexual assault, perjury, and failure to report charges levied against current and former Penn State officials, including one-time Defensive Coordinator Jerry Sandusky. CBSNews.com has the story here.

Attorney General Kelly stood at a podium. In back of her were giant posters, which showed enlarged photographs of the defendants and summarized the allegations against them.

Kelly had at least this much to say about an alleged 2002 sexual assault by Sandusky on a 10 year-old boy in a Penn State shower: "Those officials and administrators to whom it was reported did not report that incident to law enforcement or to any child protective agency. And their inaction likely allowed a child predator to continue to victimize children for many, many years." Of course, "those officials and administrators" include the two defendants facing charges of perjury and failure to report.

State Police Commissioner Frank Noonan, formerly chief investigator for the AG's Office, added his two cents. According to Noonan, defendant Jerry Sandusky's actions constituted "grooming, where these predators identify a child, [and] become mentors. They're usually children that they're having a little difficulty, they're at-risk children. Through the program he was able to identify these children, give them gifts, establish a trust, initiate physical contact which eventually leads to sexual contact, and that is very common in these types of investigations."

Noonan emphasized that Sandusky made admissions during a 1998 Penn State police investigation, "and nothing happened, and nothing stopped." 

Noonan stated that subsequent incidents were ignored and/or not reported to the police. "And that's very unusual. I don't think I've ever been associated with a case where that type of eyewitness identification of sex acts [was] taking place where the police weren't called."

According to Rule 3.8 of the Pennsylvania Rules of Professional Conduct, the prosecutor in a criminal case "shall, except for statements that are necessary to inform the public of the nature and extent of the prosecutor's action and that serve a legitimate law enforcement purpose, refrain from making extrajudicial comments that have a substantial likelihood of heightening public condemnation of the accused and exercise reasonable care to prevent investigators, law enforcement personnel, employees or other persons assisting or associated with the prosecutor in a criminal case from making an extrajudicial statement that the prosecutor would be prohibited from making under Rule 3.6 or this Rule."

Rule 3.6(a) prohibits a "lawyer who is participating or has participated in the investigation or litigation of a matter" from making "an extrajudicial statement that the lawyer knows or reasonably should know will be disseminated by means of public communication and will have a substantial likelihood of materially prejudicing an adjudicative proceeding in the matter."

Note 5 to the Comment on Rule 3.6 cautions that "certain subjects...are more likely than not to have a material prejudicial effect on a proceeding, particularly when they refer to...a criminal matter, or any other proceeding that could result in incarceration." Those subjects relate to, among other things, "the existence of a confession, admission, or statement given by a defendant or suspect."

Why do so many prominent state and federal prosecutors appear to believe that they are immune from the obligation to follow such ethical rules?


November 8, 2011 in Prosecutions, Prosecutors | Permalink | Comments (1) | TrackBack (0)

Honest Services and Section 666 Includes Fraud Committed by a Foreign Worker

Second Circuit - United States v. Bahel - Honest Services -  Post-Skilling, courts have struggled with what gets included as bribery and kickbacks and what gets omitted from the new contours of honest services. In Bahel, the defendant was convicted of four counts of mail and wire fraud premised on a deprivation of the United Nations, his former employer, and a 666 violation and conspiracy. Issues of immunity were considered, but the court said that the "United Nations expressly waived Bahel's immunity" and that irrespective he waived the issue. The court held that "Section 1346 is broad enough to encompass honest services fraud committed by a foreign worker at the United Nations."

Bahel also argued "that ‘[n]o reading of [18 U.S.C. § 666] could plausibly be extended to the charges in this case,’ because ‘[t]he United States’ membership in the United Nations is not a "federal program" under [Section] 666(b), and the contributions made to the United Nations under the United States treaty obligation in the U.N. Convention and Charter is not a "benefit" or "form of Federal assistance" under that same sub-section.’ Bahel argues accordingly that Section 666 cannot reach the conduct at issue in this case."  The court, however, held that "the United Nations Participation Act, which authorizes the payment of the United States' dues to the United Nations (UN), is both a "federal program" and a "benefit" within the meaning of section 666, which encompasses bribes as well as illegal gratuities."


November 8, 2011 in Corruption, Fraud, Judicial Opinions | Permalink | Comments (0) | TrackBack (0)

Friday, November 4, 2011

Social Media and Securities Fraud

The Sixth Annual ABA National Institute on Securities Fraud is taking place in New Orleans, and a topic this morning was social media. Yes, social media is a compenent even of securities cases.

Philip Hilder is moderating a panel of Robert B. Hirschhorn, Eric Dezenhall, Carrie Johnson, and Kara Scannell. Robert Hirschhorn noted how we now have information savvy jurors. Eric Dezenhall noted that "if you put a freelance writer on the jury, you should expect them to blog." Carrie Johnson noted how facebook may be used by reporters, and she gave the example of how it was used for a story following events at Virginia Tech. The panel stressed the speed of communication today and how one can receive information quicker than previously, for example via Twitter.

(esp)(blogging from New Orleans)

November 4, 2011 in Conferences, Securities | Permalink | Comments (0) | TrackBack (0)

Wednesday, November 2, 2011

DOJ Office Admits Error

The Department of Justice last week issued an exoneration.  The falsely accused, however, was not a criminal defendant, but the DOJ itself.  Specifically, the DOJ Office of the Inspector General publicly disavowed its criticism, discussed briefly here, that at a hotel conference the Department spent $16 for each breakfast muffin.  Rather, the IG now admitted, the $16 cost included fruit, coffee, juice, taxes and gratuities, and (as suggested in the earlier blog) was part of a package deal with the hotel which included "free" use of meeting rooms.

The DOJ Office of the Inspector General should play an important role in reviewing the conduct of federal prosecutors, not the cost of refreshments.  It would be a more useful use of its resources to investigate accusations of prosecutorial misconduct, such as those made by Kevin Ring and discussed here last week.  The DOJ's own internal reviews are viewed by most defense lawyers and some judges as overly protective.  Of course, such reviews should be done less carelessly than the IG report on the "muffin scandal."


November 2, 2011 in Prosecutors | Permalink | Comments (1) | TrackBack (0)