Friday, June 21, 2013

Jeff Skilling Sentence Reduced To 14 Years

by: Solomon L. Wisenberg

Judge Lake effectively ratified the deal struck months ago by federal prosecutors and the former Enron CEO. The agreement called for a sentence of from 14 to 17.5 years. Skilling agreed to stop fighting his conviction and to hand over restitution funds to the victims. He obviously gets credit for time already served. WSJ has the story here.

(wisenberg)

June 21, 2013 in Arthur Andersen, Enron, Prosecutions, Prosecutors, Sentencing | Permalink | Comments (0) | TrackBack (0)

DOJ Continues To Violate Brady Rule

by: Solomon L. Wisenberg

Despite all the promises and policy iterations we continue to see blatant DOJ Brady violations. These are violations that first year criminal procedure students would know not to commit. The latest to come to light is from the Eastern District of Tennessee.

Yesterday, the U.S. Court of Appeals for the Sixth Circuit reversed Abel Tavera's conviction for conspiracy to distribute meth and possession with intent to distribute meth. Tavera was the passenger in a truck involved in an undercover drug deal. He plausibly claimed no knowledge of the drug transaction, testifying that he thought he was heading to a roofing job. Some of the physical evidence tended to corroborate Tavera's story. The evidence against Tavera was almost entirely bottomed on the testimony of co-defendant Granado. Non-testifying co-defendant Mendoza debriefed. He first told the government that Tavera had no knowledge of the drug transaction. Later the same day Mendoza told the government that Tavera only gained knowledge of the drug transaction upon entering the truck on the day of the transaction. Mendoza also denied that Tavera came along to count money and provide security, and consistently stated that one of the purposes of the truck ride was to work on a roofing job. All of this was contradictory to Granado's ultimate testimony. Mendoza later pled guilty. Mendoza's written plea agreement stated: "Tavera knew that they were transporting methamphetamine from North Carolina to be delivered to another person in Tennessee and agreed to accompany [Mendoza]. Since they were transporting methamphetamine, Tavera told [Mendoza] that they needed to be careful." The prosecutor, AUSA Donald Taylor, failed to disclose Mendoza's earlier debriefing statements to the defense.

Judge Merritt, speaking for the majority, decided to send a message:

"This particular case is not close. Prosecutor Taylor's failure to disclose Mendoza's statements resulted in a due process violation. We therefore vacate Tavera's conviction and remand for a new trial. In addition, we recommend that the U.S. Attorney's office for the Eastern District of Tennessee conduct an investigation of why the prosecutorial error occurred and make sure that such Brady violations do not continue."

Tavera's attorney never tried to interview Mendoza. The government argued that no Brady violation occurred, under Sixth Circuit precedent. because Mendoza was equally available to both sides. The majority disagreed with this contention,and further found it foreclosed by the U.S. Supreme Court's ruling in Banks v. Dretke, 540 U.S. 668 (2004). Judge Clay accepted the government's position regarding Sixth Circuit precedent and dissented.

The statements were plainly material and exculpatory. So the question remains, why is such conduct continuing to occur and what is the DOJ doing about it when it comes to light? Here, what one branch of the DOJ did was to argue that Brady wasn't violated.

These constitutional violations directly affect the fairness of federal criminal trials. They will never stop, absent legislation with teeth and/or a federal criminal defense bar willing to be fanatical in its intolerance of Brady violations.

Here is the decision in United States v. Tavera.

(wisenberg)

June 21, 2013 in Judicial Opinions, Obstruction, Prosecutions, Prosecutors | Permalink | Comments (0) | TrackBack (0)

Wednesday, June 19, 2013

New SEC Policy On Admissions Of Wrongdoing: Tangibles And Intangibles

by: Solomon L. Wisenberg

SEC Chair Mary Jo White has announced an end to the SEC's blanket "does not admit or deny" settlement agreement policy. In a select number of cases involving "widespread harm to investors" or "egregious intentional misconduct" the Commission will now insist on admissions of wrongdoing on the part of civil defendants who want to settle. The blanket policy was previously eroded, in January 2012, in cases where settling defendants had already pled guilty to related criminal charges. Yesterday's Reuters story is here. Todays Thomson Reuters News & Insight analysis is here.

I strongly suspect that the tangible impact of the policy shift will be minimal. Since almost no SEC civil defendants can afford to admit wrongdoing as a condition of settlement (except in cases where a guilty plea occurred or is anticipated), we can expect the instances in which the SEC will insist on such admissions to be extremely rare. And those very rare cases will result in trials.

But the intangible impact of annually insisting on admissions of wrongdoing in three or four cases may be greater over time. First, the trials, though few in number, should be well-covered by the media. Second, the SEC will regain some much needed respect for its toughness. Third, going to trial and airing the dirty laundry accumulated by malefactors of great wealth should have salutary educational and public policy benefits. Fourth, we may actually see some deterrent effect from all this, so that companies don't automatically view SEC settlements as a cost of doing business.

We will revisit this issue as the new policy is implemented.

(wisenberg)

June 19, 2013 in AIG, SEC, Securities, Settlement | Permalink | Comments (0) | TrackBack (0)

Tuesday, June 18, 2013

Non-arrested Person Asserting Right to Silence Must Assert Constitution

by: Lawrence S. Goldman

In Salinas v. Texas, the Supreme Court in a bizarre, unrealistic 5-4 (or more precisely 3/2-4) decision announced yesterday seemed to rule that the pre-arrest silence of a person not in custody may be introduced at trial against that person and commented upon in summation by the prosecutor -- unless that person specifically invoked his Fifth Amendment privilege against self-incrimination.  Justice Thomas, joined by Justice Scalia, concurred only in the result, arguing that Griffin v. California, 380 U.S. 609 (1965), which prohibited prosecutorial use of a defendant's invocation of silence at trial, should not be extended to pre-arrest situations.

According to Justice Alito and two others (Chief Justice Roberts and Justice Kennedy), the individual had the responsibility to demonstrate at the time of his invocation of silence that it was based on his constitutional rights.  ("[I]t would have been a simple matter for him to say that he was not answering the officer's questions on Fifth Amendment grounds.")  Much like a trial lawyer, the defendant thus had the responsibility to make a proper contemporaneous record or forfeit any future legal claim.  ("A witness's constitutional right to refuse to answer questions depends on his reasons for doing so, and the courts need to know those reasons to evaluate the merits of a Fifth Amendment claim.")  Thus, the rules for making a record for a defendant represented by counsel in a courtroom have apparently been extended to an uncounseled layperson on the street or in a police station.

Salinas may affect the advice a white-collar lawyer (or any lawyer) might provide to a non-arrested client who the lawyers suspect might be approached by a law enforcement agent.  Instead of advising the client merely to decline to speak with the law enforcement official, the lawyer should also probably advise the client to explicitly state that his refusal is based on the Fifth (and perhaps also the Sixth) Amendment.  Indeed, perhaps white-collar lawyers should follow the lead of some other criminal lawyers and print the invocation of the Fifth (and Sixth) on the reverse side of their business cards.

(goldman) 

June 18, 2013 in News, Privileges | Permalink | Comments (0) | TrackBack (0)

Monday, June 17, 2013

A Great Moment In The History Of The FBI

by: Solomon L. Wisenberg

This makes me so damn proud to be an American. What a righteous Department of Justice we have! Always going after the malefactors of great wealth. And God Bless the Fan Belt Inspectors too. No crime is too small for the Bureau to root out.

Kudos to John Cook of Gawker.com for posting this item and to Anthony Colleluori for bringing it to my attention.

(wisenberg)

June 17, 2013 in Corruption, Fraud | Permalink | Comments (0) | TrackBack (0)