Saturday, March 5, 2011

ABA White Collar Crime Conference - At What Cost Winning

This panel was moderated by Michael Pasano, Carlton Fields. It started with a scene from the Verdict with Paul Newman - a scene that explores the question of the tension between justice and winning. The presentation used three movie clips from different movies to discuss the ethical conduct of lawyers.

One of the first topics explored was the prosecutor/defense attorney relationship.  Nina Marino, Kaplan Marino, spoke about how she has never been a prosecutor.  Mark Filip, Kirkland & Ellis, talked about the role of a lawyer in the court, but how you can be colleagues outside the courtroom.   Judge Paul Borman noted that in criminal cases there is civility - he does not always see the same in civil cases. Andre Birotte, Jr., U.S. Attorney for the Central District of California, talked about the training that goes on in his office. There is no case worth cutting corners.

The panel looked at the celebrity defendant, leaks to the press, questioning the venire, the more aggressive use by prosecutors of filing pre-trial motions, and an assortment of other ethical issues.  Some highlights included:

  • Nina Marino said there is one thing you have - it's your integrity - and if you lose this you lose your ability to effectively represent your client. 
  • U.S. Attorney Melinda Haag, said that when the case involves a celebrity, she tries to treat it the same as any other case. She tries to put the celebrity status aside. 
  • Mark Filip noted that structure/procedure can make a difference in a case -  for example, whether it is the local US Attorney handling the case or a special prosecutor - especially if this is the career case for the attorney and it is all they are handling. 
  • Judge Borman  talked about how difficult it can be for the prosecutor to comment on evidence that did not come in but was mentioned by the defendant in perhaps opening statement.  It is espcially difficult when it might cross into the realm of the defendant not testifying, which of course the prosecutor can make no comment about.
  • The panel talked about how DOJ views defense counsel when they bring what the prosecution believes to be frivolous claims - claims of prosecutorial misconduct. This led to a discussion of bullying by the government. Michael Pasano gave the example of the prosecutor who threatens that if you don't take a plea the prosecutor he/she will indict the wife and others related to the target. U.S. Attorney Melinda Haag tried to get the audience to see another side to this action, using an example of a drug case where the mother, father, and grandmother are all involved.  She said she was thinking about a small child in the negotiation and who would care for that child.
  • In discussing leaks, U.S. Attorney Birotte spoke about the difficulties with leaks. He said they tell their agents that things need to be kept confidential. US Attorney Haag reminded the audience of First Amendment rights here.
  • Nina Marino spoke about the importance of being able to question the jury venire.  Judge Borman initiates the voir dire, but lets the parties do follow-up questions. Michael Pansano noted that many judges don't allow follow-up questions.   
  • U.S. Attorney Melinda Haag thought a more aggressive use of pre-trial motions by prosecutors was good.  She said you don't want to pollute the trial with inadmissible evidence.  But Judge Borman jumped in here and said - why don't you run it by the defense first- maybe they'll agree and a hearing will not be necessary on this.

The panel finally got to a discussion of Brady- a topic of enormous importance. Mark Filip said that as a prosecutor you need to try and find the truth with a cooperator. A healthy dose of cynicism with a cooperator is important. U.S. Attorney Andre Birotte said you need to try and corroborate the information given by cooperators.  If you get information that is helpful to the defense you need to turn it over. He said he thinks the department takes this seriously. He said that some small number of defense attorneys are using prosecutorial misconduct as part of the playbook. On the other side, Nina Marino told of her experience in representing a cooperator - that a main witness being a substance abuser - was not being considered by the government to be Brady. She noted that the agents were deciding that something would not be helpful to the defense - things that she thought she could use if she were representing the defendant. Judge Borman noted that if in doubt of whether something is Brady - go to the judge and ask him or her.  Don't take a chance of needing to retry the case.  He has received items from prosecutors and it was clear that it was Brady

I was troubled by the Brady discussion and am glad the ABA is doing a study to find out what is happening across the country. To me the problem here is clear -  can the government really know what is useful to the defense. Prosecutors can't and shouldn't be making the determination of whether something is Brady or not. Hopefully there will be a change to the rules of criminal procedure to recognize the existing problems in discovery practices.


March 5, 2011 in Conferences, Prosecutors | Permalink | Comments (0) | TrackBack (0)

Thursday, March 3, 2011

ABA White Collar Crime Conference - Honest Services Fraud Panel

This panel was moderated by Professor Julie O'Sullivan of Georgetown Law School.

It started with Denis J. McInerney, Chief of the Fraud Section of the Criminal Division of the Department of Justice, who gave the history of the mail fraud statute from its inception up to the Court's decision in Skilling.

The second panelist was Martha Boersch of Jones Day.  She spoke about the 110 cases that have been examined post-Skilling. Some circuits have said a fiduciary duty is required - but not all circuits have held this. Another big issue is whether the government has to prove a quid pro quo - she noted the split in some court cases on this issue. There is also uncertainty as to what a quid pro quo would be in this context. Does the government have to prove a contemplated economic harm? There are likely to be future cases on the definition of honest services coming from instructions given in mail fraud cases.

The third speaker wasFrank Razzano, Pepper Hamilton,who spoke about five open questions: 1) Does it require a fiduciary duty? (He said you should make sure that there is a breach on the part of the payor); 2) Is legislation necessary to address this issue or is there a way around this for prosecutors; (He spoke about the case of U.S. v. Jain here- how you can use a pecuniary theory of mail fraud; 3) Does Skilling limit the stream of benefits theory?  4) He noted that you need to analyze the intent of the payor and payee carefully   5) Gratuities - does honest services fraud include this, or is it limited to bribery?  He looked at some of the cases where these issues had arisen.

Finally Professor Julie O'Sullivan talked about congressional acts that have been introduced since Skilling.

(esp)(blogging from San Diego)

March 3, 2011 in Conferences, Congress, Fraud, Prosecutions | Permalink | Comments (2) | TrackBack (0)

ABA White Collar Crime Conference - Public Corruption Panel

This afternoon breakout session on public corrruption was moderated by Joshua R. Hochberg (McKenna, Long & Aldridge).

Jack Smith, Chief of the Public Integrity Section of the Criminal Division of the Department of Justice,spoke about how his office was moving cases along. He stressed the importance of maintaining the deadlines that are established.  He also stated he has not found a problem finding statutes to use when bringing state and local corruption cases post the Supreme Court's modification of 1346. He said that other statutes are available to bring conflict of interest cases.

Robert M. Cary, a partner in the Washington, D.C., office of Williams & Connolly LLP,  noted the lack of transparency in discovery.  Until there is an enforceable rule, it will be a problem.

Laura A. Miller, Nixon Peabody LLP, said that "successful representation is when my name and my client's name does not appear in the press."

Patrick M. Collins, Perkins Coie LLP questioned why the government can't go the extra mile and have open file discovery.

The panel discussed the Speech & Debate Clause and how it can affect a case.  They also looked at discovery issues - Laura Miller noted the lack of uniformity on discovery issues.  She mentioned how in the "rocket docket" they receive Jencks material the Friday before trial. Jack Smith said that if it is close - turn it over.Jack  Smith said they sometimes he will highlight documents for the defense. He recognized his duty to go through documents and find Brady material.  Laura Miller noted that we should all work together to manage discovery.  A final topic discussed was venue.

(esp)(blogging from San Diego)

March 3, 2011 in Celebrities, Conferences, Corruption, Fraud | Permalink | Comments (0) | TrackBack (0)

ABA White Collar Crime Conference - Luncheon Speaker

The luncheon speaker was not Attorney General Holder, as had been planned.  Filling in for him was Deputy Attorney General James Cole. DAG Cole noted the high level of justice department experience at the top of the office.  He said that what is different today from in the past is terrorism.  He noted that a lot of resources in law enforcement were going to terrorism. He said it was important to reinvigorate important parts of the DOJ mission. He spoke about some of the accomplishments in the white collar area, such as in the civil division in 2010 - 2.5 billion dollar from cases - the largest health care fraud case. He also spoke about initiatives on health care  and financial fraud.

(esp)(blogging from San Diego)

March 3, 2011 in Conferences, Prosecutors | Permalink | Comments (1) | TrackBack (0)

ABA White Collar Crime Conference - Lessons Learned From Recent Trials

The opening panel of this morning discussed some recent white collar cases: Karatz (alleged options backing); WebMD (alleged financial statement fraud), and Petters (alleged Ponzi scheme).  Ronald J. Nessim was listed as moderating this panel, but Vince Marella filled in for him. Particularly interesting were the remarks of John Lauro, who talked about how a group of defendants stuck together for a long time - and the importance of this for the case. Both he and John Keker discussed the initial corporate investigation in their cases and how the companies did not conduct it with a purpose to demonize their clients, although in one instance the later relationship might not have been as amicable.

In the Petters  case, the prosecutor explained how the case came to light and how quickly it moved forward.  This was contrasted with the WebMD case where there was no discussion with the prosecutors. What was noted in the WebMD case was the importance of having resources to make the case -  Lauro said it would not have been possible without resources. 

John Lauro explained that one of the biggest challenges for the defense was the discovery.  He also explained how a Daubert challenge allowed them to educate the judge about the case.

I only wish I could have stayed to listen to more of this fascinating presentation - but off to a meeting for my panel on ethics.

(esp)(blogging from San Diego)  

March 3, 2011 in Conferences, Fraud, Prosecutions | Permalink | Comments (0) | TrackBack (0)

Wednesday, March 2, 2011

Opening Session - ABA White Collar Crime Conference - Back to Basics

The opening session titled, Fundamentals of White Collar Investigations, had each panelist providing some pointers on the white collar criminal practice.  Moderating was Jodi L. Avergun.  The first speaker, Hon. Melinda Haag - US Attorney in San Francisco, opened by telling  what folks who are newer to the practice do that irritate them - in other words their pet peeves:

  • The culture in criminal practice is very civil (not necessarily true of the civil side).  There is no need for a lack of professionalism, and no need for sharp practices - the nastiness isn't necessary.
  • Be conscious of obstruction of justice. When agents are executing a search warrant the US Attys Office they may get a call from counsel saying claiming to represent everyone in the company.  Think about the conflict issues.  She said that calling us up and telling us you represent the world doesn't go well with them.
  • We don't like when the attorney tells everyone not to cooperate with us -  safer to tell them what their rights are.
  • Failing to produce something to us and it comes out later that this was a conscious decision can have ramifications.
  • Criminal defense lawyers who get in the way when there is a search warrant is a problem.
  • Lack of respect for the government and the power that they have.
  • Making unfounded allegations of prosecutorial misconduct - the phrase is being thrown around too lightly.
  • Don't come in too soon to speak to the US Attorney's Office - be skeptical of what your client is telling you

The second speaker, David Gerger offered "A Pep Talk for Going the Distance":

  • Many times we look at the same facts and see different things - the agents see the evil intent and you may see a reason for the conduct - you look for the good as defense counsel
  • Start out fighting and having respect and compassion for your client
  • Your credibility with the prosecutor is critical

The third speaker, Matthew W. Friedrich, spoke on Can a Civil Litigator be a White Collar Criminal Defense Attorney?  Key Differences -

  • There are differences between civil and criminal practice - for one the balance of power; on the civil side they can take depositions and it is a long rode - with criminal things it can be quick - things can happen fast and not be subject to delay (you may need to address cooperation immediately); third party discovery requires specificity - this can be difficult to articulate; in civil cases tort victims win 50% of the time - that is not the case in criminal matters  
  • He agreed that the criminal side is more collegial than the civil side

The fourth speaker, David B. Pitofsky, spoke on Managing Client Expectations and Other Client Relationship Issues in White Collar Cases-

  • You have a confused scared individual; you need to build trust but also have to have skepticism as to what they are saying - he tries to be enthusiastically agnostic
  • Explain the process and ask questions - you are trying to learn
  • You need to gain the client's trust; as the relationship evolves you can ask the more pointed questions
  • Put the words in the mouths of the judge or prosecutor - e.g., I am not sure the prosecutor will understand the email in which you say you are destroying documents
  • Manage expectations - but after you get the trust - you need to prepare them for what might happen
  • If you say you will get bail and then don't, and haven't prepared the client -  you're likely to get fired
  • Whatever you think the retainer should be - double it -  plan for the unexpected

The panel then moved to a hypothetical.  Some of the topics discussed were whether it was a conflict to represent multiple clients in a company, how to handle a search, what is the client's status (target, subject, witness), should the witness receive immunity, should there be a proffer and by who, and also how districts may operate differently.

This was a two hour panel - but it moved extremely quickly - and the panelists did a wonderful job of covering a lot of ground.

(esp) (blogging from San Diego)

March 2, 2011 in Conferences | Permalink | Comments (0) | TrackBack (0)

Tuesday, March 1, 2011

In the News & Around the Blogosphere

Who Is A Foreign Official For Purposes of the FCPA?

This seems to be a hot issue these days.  First in the case of United States v. Carson (see discussion of Mike Koehler here) and now in the Lindsay case (see here for prior discussion of this case). The question in the Lindsay case is whether the FCPA applies to state-owned entities.

See Motion - Download 600740499_Motion to Dismiss the First Superseding Indictment CONFORMED 02-28-11


March 1, 2011 in FCPA | Permalink | Comments (0) | TrackBack (0)

First Indictment Returned In Upper Big Branch Mine Investigation

The government has unsealed the Hughie Elbert Stover Indictment in the Southern District of West Virginia. Stover is charged with one count of 18 U.S.C.Section 1001 false statements and one count of 18 U.S.C. Section 1519 concealment, mutilation, and destruction of records and documents. This is the first indictment coming out of the government's investigation of the 2010 Upper Big Branch Mine explosion in Montcoal, West Virginia. The charges do not appear to be directly related to the explosion itself, which may account for the relative restraint of the well-crafted speaking indictment and DOJ's Press Release on Hughie Stover. Stover, head of security for Massey subsidiary Performance Coal Company, Inc., is accused of lying to federal investigators by stating that: 1) Performance security guards were forbidden to give advance warning of Mine Safety and Health Administration ("MSHA") Inspectors' presence at the mine; and 2) he would fire any guard who gave such advance notice. According to the indictment, Stover actually devised the system under which advance notice of MSHA Inspectors' presence was quickly relayed through the mine via a mine communications channel. Stover is also accused of directing an employee to destroy records of the warning system. Section 1519 was enacted as part of Sarbanes-Oxley. The indictment nowhere mentions Massey Energy or the explosion itself. The press release does, including quotes from U.S. Attorney Booth Goodwin and Assistant Attorney General Lanny Breuer. Therefore, the press release clearly goes beyond what is in the indictment. I am generally not a fan of broad speaking indictments or lengthy press releases that announce indictments. But here, as mentioned, the indictment, although speaking, is restrained and well-crafted. The purpose of the relatively brief press release is to send a message that any obstruction of an important ongoing investigation will be swiftly and ruthlessly punished. In this regard, it is important to note that both the alleged false statements and the alleged records destruction occurred in January of this year. To me, this is one of the very few valid reasons for any kind of an extended press release announcing an indictment--that is, to send a message that obstruction of a major ongoing investigation will not be tolerated and that those who engage in it will pay a price. Press reports indicate that Stover was arrested at his home. This was unfortunate and unfair. Stover is innocent until proven guilty and, as Stover's Conditions of Pretrial Release indicate, nobody considers him a flight risk or danger to the community. He was released on an unsecured $10,000.00 bond.



March 1, 2011 in Investigations, News, Obstruction, Prosecutions, Prosecutors | Permalink | Comments (0) | TrackBack (0)

Monday, February 28, 2011

In the News & Around the Blogosphere