February 25, 2011
Government Fighting the Filing of Amici Briefs
Anthony J. Franze & R. Stanton Jones (Arnold & Porter LLP) have a wonderful article in Bloomberg Law Reports titled, With Friends Like These: The Troubling Implications of the Government's Recent Effort to Block Amicus Curiae Briefs in a Controversial White Collar Criminal Appeal.
Amici briefs serve an important function and courts often rely on amici to present matters that need to be addressed in a case. One would think the government - as "ministers of justice" - would want the court to hear and read everything. So a non-consent on the filing of amici briefs in a case when government conduct is being questioned is troubling. And if the amici briefs are nothing more than someone "seeking to 'inject interest group politics into this case'" - wouldn't the court be capable of recognizing this?
I have previously blogged about the Rubashkin case here.
Getting Ready for Prison
Check out this story by Lisa Black in the Chicago Tribune titled - Ex Cons Offer Prison Primers for soon-to-be incarcerated execs
(esp)(w/ a hat tip to Professor Bob Batey)
February 22, 2011
Brain Differences In White Collar Criminals?
Do white collar criminals have brains that are "structurally different from the brains of non-criminals with similar backgrounds?" See Steve Connor, The Independent, Study links brain and white-collar crime
February 21, 2011
DOJ Budget Request - Financial Fraud and Transnational Intellectual Property
DOJ's requested budget focuses a good bit on national security. But there is also money for continued activity on financial fraud. In a DOJ Press Release it states,
"The FY 2012 budget also supports the continued efforts to crack down on financial fraud. From August through December 2010, the Attorney General’s Financial Fraud Enforcement Task Force brought charges against over 500 criminal and civil defendants for fraud schemes that have harmed more than 120,000 victims throughout the country, involving more than $8.0 billion in estimated criminal losses and more than $2.1 billion in estimated civil losses. In addition, the FY 2012 budget requests $3.0 million of program increases for the Criminal Division for transnational enforcement of intellectual property law."
In the News & Around the Blogosphere
AP, Pa. judge guilty of racketeering in kickback case; Dave Janoski & Michael R. Sisak, The TimesTrib.com, Defense, prosecution declare victory in Ciavarella conviction; Terrie Morgan-Besecker,The Times Leader, Grounds for an Appeal? - Defense attorney believes sufficiency and admissibility of evidence are key issues
E. Scott Reckard, Wash Post, Criminal probe dropped against Countrywide CEO Angelo Mozilo (w/ a hat tip to Ivan Dominguez)
SEC Press Release, Sean McKessy Named Head of Whistleblower Office
Del Quentin Wilber & Mike DeBonis, Wash Post, Ted G. Loza, former D.C. Council aide, pleads guilty in corruption case
February 20, 2011
A Tale of Two Plea Agreements
Thursday's Wall Street Journal has a fascinating piece here by Steve Eder, Michael Rothfeld, and Jenny Strasburg on the friendship, between Donald Longueuil and Noah Freeman, that was shattered by the SDNY's insider trading probe. As the white collar world now knows, Freeman secretly recorded Longueuil. Longueuil's damaging admissions were captured, quoted in the criminal complaint against Longueuil and Samir Barai, and splashed across the headlines. Freeman has pled guilty and his plea agreement is publicly available.
I thought it might be interesting to compare Freeman's plea agreement to that of Danielle Chiesi, who recently pled guilty in the Raj Rajaratnam case. Chiesi has not agreed to cooperate against Rajaratnam as part of her deal, but Freeman has agreed to cooperate with the government against Longueuil. The Noah Freeman Plea Agreement is a classic, bare bones, SDNY white collar plea deal. Unlike the vast majority of federal criminal plea agreements in other jurisdictions, the Freeman agreement contains no Sentencing Guidelines calculations or stipulations. Freeman agrees to plead to two felony counts--securities fraud and conspiracy to commit wire and securities fraud. The maximum statutory term for those two counts combined is 25 years. Freeman agrees to pay restitution and to forfeit proceeds traceable to the charged offenses. The government agrees not to prosecute him further, except for tax crimes, and to recommend a Section 5K1.1 downward departure if he continues to truthfully cooperate. And that's about it.
Why is the agreement structured this way? Because SDNY prosecutors do not want want to put anything into the agreement which would indicate to a jury what actual sentence Freeman might get. If hard Guidelines numbers were put into the agreement, even as non-binding stipulations, Longueuil's attorney could compare those numbers, during Freeman's cross-examination, to the stratospherically higher Guidelines sentence Freeman would have received sans cooperation. Now, when Freeman takes the stand against his former friend, he can truthfully tell the jury that he has no idea what sentence he will ultimately receive. Sure, he wants a light sentence or probation, but all he knows is that he is looking at a statutory max of 25 years and some kind of 5K1.1 motion if he tells the truth.
And what is Freeman's attorney told by the prosecutors, or what does the attorney already know without being told if he or she has practiced long enough in the SDNY? "Trust us. We are not going to promise your guy anything other than a 5K1.1, but if you look at what past white collar targets have received when they came in early and cooperated, you will see that we treated them fairly. Many of them received probation or light sentences. By the way--if you come in on the eve of trial, don't expect to be treated as well." The defense attorney relays this information in some form or another to the client and tells the client that there is no guarantee. He also tells the client that the people who came in early and cut plea deals in the World Com case got probation or light sentences. That fellow who came in right before trial got five years. The guy who went to trial and lost got hit with 25. The client ususally takes the deal. (Who wants to roll the dice with those odds?) It all makes for a much cleaner trial and cross-examination in the government's view.
Contrast this with Chiesi whom the government does not need and who litigated her case like crazy almost until the eve of trial. The Danielle Chiesi Plea Agreement is highly structured and much more like those you will see in other parts of the country. Chiesi pled to three conspiracy counts, each carrying a five year max. The government and Chiesi stipulated as to the appropriate version of the Guidelines, the Guidelines section applicable to her conduct, the base offense level, the adjusted offense level based on an agreed-upon amount of gain, and Chiesi's acceptance of responsibility. The parties stipulated that Chiesi's Guidelines offense level is 21, her criminal history category is I, and her Guidelines sentencing range is 37-46 months. Either side is free to argue for a Booker downward variance, but neither side can argue for an upward or downward Guidelines departure or adjustment unless it is specifically called for in the agreement. Because the prosecutors do not particularly need Chiesi, they are not worried about how her 37-46 month range compares to what her range would have been sans cooperation.
In one of those delightful traditions peculiar to the SDNY, neither of these plea agreements has been publicly filed with the appropriate district court, although neither agreement is under seal. This is insane. Jason Pflaum's plea agreement is virtually identical to Freeman's. Pflaum consensually monitored the conversations/messages of Sam Barai and is expected to testify against Barai and others.
New Article - Sentencing Loss Guideline
Alan Ellis, John R. Steer, and Mark H. Allenbaugh, have a fascinating article titled "At a Loss for Justice - Federal Sentencing for Economic Offenses." They note how "more than 300 federal criminal statutes are covered by" USSG § 2B1.1. The article contains wonderful tables that compare the amount of loss to the sentence given. The data in this article should prove helpful in making an argument in a sentencing hearing. The authors conclude the article by noting the need to revisit this fraud guideline.
The article has wonderful data that supports an argument I have long made - that we need to rethink giving Draconian sentences, in some cases in excess of twenty-five years, to non-violent first offenders who commit white collar crimes. See Ellen S. Podgor, The Challenge of White Collar Sentencing, 93 Jrl of Criminal Law & Criminology 731 (2007).