Tuesday, August 28, 2012

Prosecutorial Overcharging is Not "Regular"

In an editorial published July 16, 2012 entitled "Trial Judge To Appeals Court:  Review Me" (see here), the New York Times, in the wake of Judge John Kane's opinion discussed here last week (see here), rightly criticized standard plea waivers in federal court, especially those that preclude appeals based on attorney ineffectiveness or prosecutorial misconduct.  The editorial, however, in alleging that in order to induce pleas     "[p]rosecutors regularly overcharge defendants with a more serious crime than what actually occurred" was largely off-the-mark, as Paul J. Fishman, the respected United States Attorney for the District of New Jersey, claimed in a letter to the Times published on July 26, 2012 (see here).

Federal prosecutors do not, in my view, "regularly" overcharge defendants "with a more serious crime than what actually occurred," at least in white-collar cases (although they often pile on unnecessary if legally justifiable multiple charges).  As Mr. Fishman noted, DOJ has directed prosecutors to charge only provable crimes, and in my experience that directive is generally followed.  In many districts, notably with respect to white collar cases the Southern District of New York, guilty pleas are to the indicted charges or top count, and rarely only to less serious counts.  Since defendants are unlikely to plead guilty to unprovable charges, that practice indicates that the charging decisions are consistent with the law and the facts.

Indeed, there is little incentive for prosecutors to overcharge in order to induce pleas since defense lawyers are aware that the Sentencing Guidelines suggest that the sentencing judge should in any case consider all relevant conduct committed by the defendant, no matter to what crime the defendant has pleaded, and prevailing statutes (and often a conviction of multiple charges) virtually always provide the courts more than ample sentencing leeway.  Unlike many state statutory schemes, most federal statutes in the white collar area -- mail and wire fraud, for instance -- are generic and not scaled by degrees according to the amounts of money involved, such as state statutes concerning grand larceny in different degrees.  The Sentencing Guidelines levels, but not the statutory crimes, are determined primarily by the dollar loss figure.

This is not to say that most defendants do not face considerable institutional pressure to plead guilty (and, if possible, "cooperate" with the prosecution).  Defendants, depending on from which direction one looks, are either "punished" for going to trial or "rewarded" for pleading guilty by the Guidelines provisions for a near-automatic two or three level decrease for pleading (acceptance of responsibility, U.S.S.G. 3E1.1) and a near-automatic two level increase for a convicted defendant who has testified in her defense (obstruction of justice, U.S.S.G. 3C1.1).  Additionally, a defendant who pleads guilty usually receives a more generous interpretation of the Guidelines by the prosecutor, probation officer and the court, and a lessened fervor from the prosecution and more lenient attitude by the judge.  And, of course, the sweet carrot of a U.S.S.G. 5K1.1 letter for those who cooperate with the government is often, perhaps too often, the difference between a severe sentence and a lenient one.

(goldman)

August 28, 2012 in Legal Ethics, Obstruction, Prosecutors, Sentencing | Permalink | Comments (1) | TrackBack (0)

Penn State Faculty & Freeh Report

It doesn't seem like the Penn State faculty is happy with the NCAA's use of the Freeh report - See Robin Wilson, Chronicle of Higher Education,  Penn State Faculty Leaders Attack NCAA's Use of Freeh Report(esp)

August 28, 2012 | Permalink | Comments (1) | TrackBack (0)

Pepper Hamilton and The Freeh Group Join Forces

With corporate internal investigations as a multi-million dollar business, it is not surprising to see this new alliance - see here.

(esp)

August 28, 2012 in News | Permalink | Comments (0) | TrackBack (0)

Monday, August 27, 2012

In the News & Around the Blogosphere

Jane Meinhardt, Tampa Bay Business Jrl, Weinberg awarded for work in prosecuting, defending

DOJ Press Release, Eight Individuals and a Corporation Convicted at Trial in Florida in $50 Million Medicare Fraud

King & Spalding Press Release, Former WellCare Executive Rejoins King & Spalding

Jean Eaglesham & Joe Palazzolo, WSJ, Ex-UBS Traders Offered Deal by U.S. in Rate Probe

Rosa M. Abrantes-Metz & D. Daniel Sokol, Harvard Business Law Review, The Lessons from Libor for Detection and Deterrence of Cartel Wrongdoing

James E. Felman is the recipient of the FBA's Earl W. Kintner Award for Distinguished Service of the Tampa Bay Chapter of the Federal Bar Association

Sue Reisinger, Corporate Counsel, SEC Hands Out First Whistleblower Payment, Hints at More
To Come

(esp)

August 27, 2012 in News | Permalink | Comments (0) | TrackBack (0)

Thursday, August 23, 2012

Government Takes Harsher Position After Judge Rejects Plea Bargain Because of Appellate Waiver

Professor Douglas Berman, in his excellent blog, Sentencing Law and Policy, quoting a Denver Post article, writes that after a federal judge rejected a plea agreement urged by both parties because it included a standard appellate waiver, the prosecutor came back with a harsher offer, albeit one without an appellate waiver, which the defendant accepted.  See here and here.

Senior District Judge John Kane of Colorado refused to accept a deal involving Timothy Vanderwerff, a defendant accused of child pornography, because of the waiver provision.  That deal provided that the government would seek no more than 12 years in prison and the defendant seek no less than five.  The judge said that "indiscriminate acceptance of appellate waivers undermines the ability of appellate courts to ensure the constitutional validity of convictions and to maintain consistency and reasonableness in sentencing decisions."

In court papers Vanderwerff's attorney, federal public defender Edward Harris (who worked with me years ago) wrote that the prosecutors refused to agree to the same sentencing position deal without the appeal waiver and instead took a much harsher position.

One possible lesson from this case is that well-meaning judges, reacting to the government's increasing efforts to expand the terms of plea agreements to limit a defendant's ability to appeal and appellate courts' ability to review, might actually do harm to the individual defendant before them in rejecting a bargained-for agreement.  Another possible lesson is that the government does not take kindly to judges interfering with its de facto power to set plea bargaining parameters and may demonstrate its displeasure by treating even acquiescent defendants more harshly when the judge rejects a plea deal it has offered.

Whether the defendant will ultimately suffer is unclear, because the court now, presumably subject to appeal by either side (as well as any applicable mandatory minimums), has the ultimate power to set the defendant's sentence and may well choose to sentence him under the posture both sides agreed upon in the original plea bargain.

(goldman)

August 23, 2012 in Judicial Opinions, Prosecutors, Sentencing | Permalink | Comments (0) | TrackBack (0)

Tuesday, August 14, 2012

New York D.A. Brings State Prosecution After Second Circuit Vacates Federal Conviction

Sergey Aleynikov, a former Goldman Sachs programmer whose federal conviction for stealing source code from the firm's computers had been vacated by the Second Circuit on the grounds that the statutes under which he was prosecuted did not cover his conduct, has been charged by Manhattan District Attorney Cyrus Vance with state charges relating to the same activities.

Arguably, the Fifth Amendment double jeopardy clause does not apply here because the United States and the State of New York are separate "sovereignties."  That "dual sovereignties" exception to the double jeopardy clause has been occasionally questioned but generally remains in force.  One possible exception that may apply here since presumably the D.A.'s case will rely on the federal investigation and prosecution (the federal case agent signed the affidavit supporting the state complaint) is when the two governments are acting in concert. 

Although there may be no federal constitutional bar because of the "dual sovereignties," New York statutory law does in some circumstances preclude a state prosecution after a trial for the same or similar offenses in another jurisdiction.  See New York Criminal Procedure Law Article 40.  Additionally, there is always the possibility that eventually the New York Court of Appeals, which recently has dusted off the New York State Constitution's equivalent of the Bill of Rights (Article 1, Section 6) in Fourth Amendment Cases, may apply the state's constitutional double jeopardy bar more broadly than federal courts have applied the federal constitutional bar.

A New York Times article (see here) about the case quotes Joshua Dressler, an Ohio State University law professor, as saying that this case provides "an exceptionally justifiable reason for the state prosecutor to use a state law to bring a prosecution."  I disagree.  Mr. Aleynikov has already undergone the trauma and expense and disruption of life that a criminal trial entails.  He has already served almost one year in prison for a crime he did not commit.  Even if convicted on state charges, I predict he will never serve an additional day in jail.

Thus, in some ways Mr. Aleynikov is a poster boy for application of the double jeopardy clause.  This case does not involve a situation in which a dismissal or acquittal in the initial proceeding was tainted by misconduct or was so bizarre that it seems viscerally unjust.  Rather, Mr. Aleynikov's case was reversed by a highly-respected court because a highly-respected prosecutorial office charged and convicted him and sent him to prison under statutes that did not apply.  This is not the kind of case that justifies a prosecutorial end-run around the Constitution. 

The Department of Justice's "Petite Policy" concerning federal prosecutions after state trials, as it has been applied, militates against a second prosecution after an unsuccessful prosecution in another jurisdiction when the first prosecution was generally fair.  Apparently, the New York County District Attorney has no such policy. 

(goldman)

August 14, 2012 in Computer Crime, News, Prosecutors | Permalink | Comments (0) | TrackBack (0)

Monday, August 13, 2012

In the News & Around the Blogosphere

Saturday, August 11, 2012

The DOJ: In Action or Inaction?

Here is an interesting piece from the Washington Examiner's Mark Tapscott, commenting on the Government Accountability Institute's new report, Justice Inaction: The Department of Justice's Unprecedented Failure to Prosecute Big Finance. According to Tapscott, the GAI "has concluded that conflicts of interest among President Obama's top Department of Justice appointees may explain why nobody on Wall Street has been prosecuted by the government following the economic meltdown of 2008." Notice those weasel words--may explain. I haven't read the report yet, but I'm not buying GAI's theory. DOJ's stunning failure to prosecute elite financial control fraud is coming from a pay grade much higher than Holder's.

(wisenberg)

August 11, 2012 in Fraud, Prosecutions, Prosecutors | Permalink | Comments (2) | TrackBack (0)

Friday, August 10, 2012

50 Former Prosecutors (And Judges) Can't Be Wrong

The BLT reports here on the amicus brief filed by former federal prosecutors and judges in Ali Shaygan v. United States. At issue is whether the government can be fined and sanctioned under the Hyde Act, which covers vexatious, frivolous, or bad faith prosecutions, when the charges brought have an objectively reasonable basis in fact. In other words, can federal prosecutors act out of improper motives of bad faith and malice if they have a pretextual fig leaf to cover their actions? The WSJ Law Blog reports here on the brief, which was signed by yours truly, and greater lights.

(wisenberg)

August 10, 2012 in Judicial Opinions, Prosecutions, Prosecutors | Permalink | Comments (1) | TrackBack (0)

Thursday, August 9, 2012

Dog Bites Man. Dewey Takes Manila. DOJ Won't Prosecute Goldman Sachs.

Pete Yost has the AP story here. DOJ conducted an "exhaustive investigation" for an entire year. Wow. They really know how to investigate financial fraud over there!

(wisenberg)

August 9, 2012 | Permalink | Comments (0) | TrackBack (0)

Wednesday, August 8, 2012

DOJ's Fraud Protection Racket

Here is an excellent story by Michael S. Schmidt and Edward Wyatt in today's New York Times about DOJ's pathetic track record in prosecuting and convicting individual high profile fraudsters in connection with the financial crisis. Instead, companies pay whatever it takes by way of civil and (sometimes) criminal penalties in order to move on. For most of these companies it is a cost of doing business and a drop in the bucket. Make no mistake about it, the failure of this Administration's Justice Department to go after individual criminal fraud at the highest levels of the private sector is a decision that has been made at the highest levels of the public sector. The article quotes Acting Associate Attorney General Tony West as follows: “There is a lot of behavior that makes us angry but which is not necessarily illegal. If the evidence is there, we won’t hesitate to bring those cases.” Sorry Mr. West, but the most charitable interpretation of your remarks is that you don't know what the hell you're talking about.

(wisenberg)

August 8, 2012 in Fraud, Prosecutions | Permalink | Comments (1) | TrackBack (0)

Tuesday, August 7, 2012

None Dare Call It Misconduct: Except For The Second Circuit

And there it is. Right on page 24 of the Second Circuit's opinion in U.S. V. Mahaffy, posted here yesterday. "None of this [the government's various rationales for withholding exculpatory and/or impeaching SEC transcripts] excuses the government's misconduct. The transcripts contained substantial Brady material, much of which was easily identified as such." In fact, an SEC attorney, cross-designated as a Special AUSA in the first squawk-box trial, identified some of the material as potential Brady to his trial team superiors before the first trial commenced. 

Here are some interesting dates. Jury selection in the squawk-box retrial began on March 30, 2009. The government rested on April 14, 2009, as did the defense. The jury returned its verdict on April 22. Ted Stevens had been found guilty in Washington DC in October 2008 and, as Judge Sullivan has noted, "[d]uring the course of the five-week jury trial and for several months following the trial there were serious allegations and confirmed instances of prosecutorial misconduct that called into question the integrity of the criminal proceedings against Senator Stevens." Attorney General Holder moved to set aside the Ted Stevens verdict and dismiss the indictment with prejudice due to gross Brady-related misconduct on April 1, 2009. Judge Sullivan granted the government's motion on April 7, 2009. According to the Mahaffy opinion, the second set of squawk-box prosecutors deliberately chose not to revisit any of the disclosure decisions made by the first trial team. New York prosecutors must not read the DC papers.They did not start to sift through the SEC transcripts until after the second trial concluded.

(wisenberg)

August 7, 2012 in Judicial Opinions, Legal Ethics, Prosecutions, Prosecutors, Securities | Permalink | Comments (1) | TrackBack (0)

Monday, August 6, 2012

Brady Violations. Again.

Here is the Second Circuit's opinion (U.S. v. Mahaffy) from last Thursday in the EDNY's Squawk-Box case, vacating the convictions due to Brady violations and an untenable honest services jury charge.

(wisenberg)

August 6, 2012 in Judicial Opinions, Prosecutions, Prosecutors, Securities | Permalink | Comments (0) | TrackBack (0)