Saturday, September 17, 2011

Eighth Circuit Affirms Rubashkin Case

One of the 2010 White Collar Crime Blog Awards went to the Sholom Rubashkin case. (see here).  It gave it a "collar  for the Case Most Needing Review - Sholom Rubashkin’s 27 year sentence."

The Eighth Circuit has now reviewed that case, but unfortunately for Rubashkin, with a result that does not change its prior outcome.  The court held that "Rubashkin did not make a timely recusal motion . . " and that "[a]fter studying the lengthy record we find no evidence that the district court's decision to remain on the case prejudiced Rubashkin's verdict."  The court also concluded "that Rubashkin's money laundering convictions were lawful and did not merge with any other of his crimes."  Finally, the court upheld the sentence, saying that "the district court's loss calculation" was not error.  The Eighth Circuit states, "[s]entences within the guideline range are presumed to be substantively reasonable."

And so for now, Rubashkin's 27 year sentence remains. Top law professors who are key sentencing experts wrote an amici brief in this case, in support of Rubashkin. Hopefully, the Supreme Court will re-examine this case.

Opinion here.

See Linda Friedman Ramirez, International Criminal, Extradition and Immigration Defense News, White Collar Crime: 8th Circuit Affirms Rubashkin's Conviction and Sentence (Agriprocessor Fraud Offenses)

See also Doug Berman, Sentencing Law & Policy, Eighth Circuit panel unanimously affirms Rubashkin federal convictions and lengthy prison sentence


September 17, 2011 in Judicial Opinions, Sentencing | Permalink | Comments (0) | TrackBack (0)

Friday, September 16, 2011

In the News & Around the Blogosphere

Thursday, September 15, 2011

"Rogue Trader" - OUCH

UBS is having another "ouch" moment as the media is reporting on a rogue trader. The typical questions are - how could this have happened; why was it not discovered sooner; who should be held liable; and should there be criminal liability?  It is too soon to answer many of these questions. But here are some points of interest -

UBS has a corporate responsibility policy that states:

"UBS is firmly committed to corporate responsibility and actively strives to understand, assess, weigh and address the concerns and expectations of the firm's stakeholders. This process supports UBS in its efforts to safeguard and advance the firm’s reputation for responsible corporate conduct. In very direct ways, responsible corporate conduct helps create sustainable value for the company."

Its policies include a host of different preventative measures, such as money laundering prevention here.  It takes pride in employees and notes that "[o]ur employees have the breadth of our businesses, global career opportunities and a collaborative, performance-oriented culture as a platform for individual success."

Rogue employees are not a new development for the corporate arena. No matter how many controls are in place and no matter how much oversight there might be, it is a problem to have full compliance. Knowing this, it seems important to provide companies with a "good faith" defense when a rogue employee commits acts that might be considered criminal.  Unfortunately, to date, courts have only seen fit to insert such as defense in the civil area and not the criminal sphere.  (See Podgor, A New Corporate World Mandates a Good Faith Affirmative Defense)  But corporate criminality in the federal system is premised on respondeat superior and the acts of a rogue employee are hardly for the benefit of the company.

See also -

Dan Fisher, Why Rogue Traders Get Jail But Bad Execs Get A Pension

Frank Jordans & Paisley Dodds, Houston Chronicle, Rogue trader suspected in $2 billion UBS loss

Nathan Vardi, Forbes, Rogue Trader Deals Big Blow To UBS

Victoria Howley & Emma Thomasson, Reuters, UBS $2 billion rogue trade suspect held in London

The Telepgraph, UBS rogue trader: statement to employees in full


September 15, 2011 in Fraud, Media, News, Securities | Permalink | Comments (1) | TrackBack (0)

Wednesday, September 14, 2011

New Scholarship - Public Perceptions of White Collar Crime Culpability: Drawing Lines Amid Moral Ambiguity

Stuart P. Green (Rutgers-Newark) and Matthew B. Kugler (Lehigh) have a new piece titled "Public Perceptions of White Collar Crime Culpability: Drawing Lines Amid Moral Ambiguity." The abstract states:  

"Although we are accustomed to thinking of "crime" as involving the most unambiguously blameworthy sorts of conduct in which citizens can engage, the reality is more complex, especially when we look at certain kinds of "white collar" behavior. In this set of empirical studies, participants were asked to assess a series of scenarios that presented potentially criminal white collar behavior. Lay persons made fairly fine-grained distinctions when deciding which behaviors they thought worthy of criminalization. In some cases, the distinctions made by respondents were consistent with current law. For example, in the case of fraud, participants distinguished between misrepresentations that went to the heart of the bargain and misrepresentations that were extraneous. In other cases, however, there were significant divergences between lay subjects’ views and current law. In the case of perjury, for example, participants drew a weaker distinction between lying in court under oath and lying to police while not under oath, and between literally false statements and literally true but misleading statements, than does the law. There are also divergences with respect to bribery: respondents sought to criminalize both commercial bribery and payments accepted by an office-holder in return for performing a non-official act, while American federal law criminalizes neither."


September 14, 2011 in Scholarship | Permalink | Comments (0) | TrackBack (0)

DOJ Hiring - What Constitutes Merit?

David Ingram, BLT Blog, Senator Wants Inquiry Into DOJ Civil Rights Hires has an interesting post on a request for an investigation of hiring practices at DOJ.  DOJ hiring practices was an issue in a prior administration (see here, here, and here)(see also The Tainted Federal Prosecutor in an Overcriminalized Justice System). 

But this new request for an investigation seems different.  What was alleged in the past was politicized hiring, something that is clearly improper.  To now call for an investigation merely because folks might have membership in certain groups is different from claiming that folks are hired because of this status.  It does not seem unusual that those seeking to join the civil rights division of the DOJ would have been active in groups that pressed for civil rights in the past.  In fact, such activities (not membership) might add to the qualifications of the individual if they had experience researching, writing, or handling civil rights issues. To think that these activities is a function of just one political party demeans the excluded party.   

Listening (here) and reading (here) the testimony of Thomas Perez, Assistant Attorney General Civil Rights Division shows a most impressive record. For example, "[i]n fiscal year 2009, we filed more criminal civil rights cases than ever before, and then exceeded that record in Fiscal Year 2010, filing 125 criminal cases."  He also spoke about the protection being provided to servicemembers from improper foreclsures. I'm impressed.


September 14, 2011 in Prosecutors | Permalink | Comments (0) | TrackBack (0)

Monday, September 12, 2011

Maxim Healthcare Gets DPA

A DOJ Press Release here  states that "Maxim Healthcare Services Inc., one of the nation’s leading providers of home healthcare services, has entered into a settlement to resolve criminal and civil charges relating to a nationwide scheme to defraud Medicaid programs and the Veterans Affairs program of more than $61 million."  The Deferred Prosecution Agreement (DPA) provides that Maxim will pay "a criminal penalty of $20 million and to pay approximately $130 million in civil settlements in the matter."  The DPA, which requires the company to meet reform and compliance measures, lasts for two years.

As with many companies who enter into DPAs, there are also individuals being prosecuted.  In this case the press release notes that "[t]o date, nine individuals – eight former Maxim employees, including three senior managers and the parent of a former Maxim patient – have pleaded guilty to felony charges arising out of the submission of fraudulent billings to government health care programs, the creation of fraudulent documentation associated with government program billings, or false statements to government health care program officials regarding Maxim’s activities."

The press release also states that "[t]he government’s willingness to enter into a DPA with Maxim is due, in significant part, to the company’s cooperation and the reforms and remedial actions the company has taken – beginning particularly in May 2009 – including significant personnel changes: terminating senior executives and other employees the company identified as responsible for the misconduct; establishing and filling of positions of chief executive officer, chief compliance officer, chief operations officer/chief clinical officer, chief quality officer/chief medical officer, chief culture officer, chief financial and strategy officer, and vice president of human resources; and hiring a new general counsel."


September 12, 2011 in Fraud, Investigations, Prosecutions | Permalink | Comments (1) | TrackBack (0)