Tuesday, June 5, 2012
The Fifth Circuit affirmed the convictions and sentences in U.S. v. Brooks, a case involving alleged "false reporting of natural gas trades in violation of the Commodities Exchange Act and the federal wire fraud statute."
Although the court distinguishes the Stein decision from the Second Circuit with the facts in this case, both cases had individual defendants who had their attorney fees cut off. In Brooks, the defense claimed it was from government pressure, but the Fifth Circuit said the factual findings were not present to confirm this conduct. The court found that the company's policy on payment of attorney fees was a discretionary policy. But when a company gets a deferred prosecution agreement one has to wonder if there is an incentive to show cooperation, albeit payment of attorney fees can not be a factor used.
There is also an interesting question of what constitutes "reports" for purposes of the CEA or CFTC regulations. This is an intriguing issue as one is basically violating federal law through a submission document. The Fifth Circuit rejected a void for vagueness argument here.
The Fifth Circuit also found the Fifth Circuit Pattern Jury Instruction as meeting the recent Supreme Court decision in Global Tech, although they admit it does not use the same language. The question here is whether deliberately closing one's eyes is the same as taking "deliberate actions to avoid learning of the fact," the test set forth in Global Tech. I see a difference in that one is passive and the other is active. The Court seems to be satisfied with the evidence in this case, but one has to wonder if the Fifth Circuit should be quickly looking to change its pattern jury instruction to avoid this issue in future cases.
Then there is the question of defense witness immunity. A witness is on the prosecution witness list and is not called to testify because the prosecution has concerns about the witnesses truthfulness. The witness has not yet been sentenced (the government postponed sentencing for 39 months- obviously to be after this trial) and decides to take the Fifth Amendment. The prosecution called the witness the evening before the witness was to testify, but says the call was to determine if they needed to prepare the witness for cross-examination. The defense argues that the witness has exculpatory evidence for the defense. The defense asks for defense witness immunity and doesn't get it. One has to wonder whether the jury really had full information to resolve guilt or innocence? But the Fifth Circuit held otherwise.
And this is not a case where defendants are receiving light sentences. All the defendants were level one and yet all of their sentences exceeded 11 years imprisonment, with one receiving a 14 year sentence. Whoever thinks white collar offenders are getting off easy, needs to just look at this case to see that this is not the situation.
Sunday, May 20, 2012
Thursday, May 17, 2012
Judge Walton says that the jury is bored at the Clemens trial, and of course he blames the lawyers. Maybe he should look in the mirror. The proceedings would have moved much faster had the Court put a stop to the government's pettifogging objections to cross-examination questions that allegedly strayed beyond the scope of direct.
The judge has also, according to the latest press reports, characterized Rusty Hardin's lengthy cross-examination of Brian McNamee as confusing.
I stopped in on the trial yesterday morning during Hardin's cross-examination of McNamee. Although there was no smoking gun moment, it was an accomplished cross that ably exposed McNamee's shifty, evasive personality. Near the end, Hardin asked a perfectly acceptable question, the point of which was to stress that McNamee would have been valuable to Clemens as a private trainer irrespective of McNamee's ability to provide illegal drugs. The prosecution objected. Rather than simply ruling on the objection, Walton engaged in an unnecessarily lengthy exchange with the attorneys on the finer points of evidentiary law. You would have thought they were discussing the Ex Post Facto Clause or the Magna Carta.
The trial judge has great discretion to move a case along--even a big case. This doesn't mean that the Court should prevent either side from putting on its evidence or vigorously questioning witnesses. The Clemens case would benefit from quicker bench rulings on objections, particularly objections that only serve to break the other side's pace and stride. The government objections that I witnessed on Wednesday did not merit the lengthy treatment they were given by the Court.
Monday, May 7, 2012
I'd say you had a pretty good week if you got a key government witness to agree there is a 50-50 chance he misheard or misunderstood a purportedly damning admission by your client. That's what happened last week (week one) in the Roger Clemens re-trial, through Mike Attanasio's cross of Andy Pettitte. This morning, team Clemens filed Defendant's Motion to Strike Portions of the Trial Testimony of Government Witness Andy Pettitte. The Motion is an excellent piece of work. The argument?
1. The threshold for establishing admissibility of a preliminary fact question under Federal Rule of Evidence 104 is preponderance of the evidence. Fifty-fifty doesn't cut it.
2. Under Federal Rule of Evidence 401, relevant evidence "means evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." Fifty-fifty doesn't cut it.
3. Even if relevant, the testimony's probative value is substantially outweighed, under Federal Rule of Evidence 403, by the "danger of unfair prejudice, confusion of the issues, or misleading the jury." This is particularly true in light of the Government's statement to the jury, during its opening, that Clemens told Pettitte "he had used human growth hormone and that it helped him with recovery." The real-life fifty-fifty version on the stand didn't cut it.
4. Judge Walton specifically warned the parties before trial about making promises they couldn't keep in opening statements. He said that if it occurred here he would "not hesitate to tell this jury that they must totally disregard any such statements of that nature. I'll specifically identify what those statements were and tell them there was no evidence to that effect, and therefore, they cannot consider that in deciding this case." Judge Walton should make good on his promise, because fifty-fifty doesn't cut it.
Team Clemens also noted that the government could have revisited the conversation during re-direct, but deliberately skirted the issue.
My prediction is that this motion will be granted in some form. It certainly doesn't mean that Clemens is out of the woods. Ted Stevens' outstanding trial team won several motions during trial and Judge Sullivan gave Stevens some very scathing anti-government jury instructions--to no avail. (Of course, in the Stevens case, the government was deliberately hiding important exculpatory material.) But such an instruction will undoubtedly greatly benefit Clemens. It will essentially knock-out a key portion of the government's case.
Kudos to the defense team for an outstanding cross and an excellent motion. One of the nice things about this trial is that co-counsel Attanasio is finally getting some of the national media attention he has long deserved.
Friday, May 4, 2012
Nobody messes with Judge Reggie Walton. Here is a great post from Mike Scarcella of BLT (Blog of Legal Times) on recent bench conferences in the Roger Clemens case. Defense attorney Mike Attanasio incited Walton's wrath this week when he ignored Walton's ruling and tried to go "beyond the scope of direct" during the cross-examination of Andy Pettitte.
According to Scarcella, Attansio was questioning Pettitte about a specific Clemens pitching performance that took place in 1999. Attansio wanted to delve into whether "Clemens was so depressed and beaten up then that he would start taking drugs to perform better." Prosecutor Steve Durham objected that this went beyond the scope of direct. Walton sustained the objection.
Attanasio then asked Pettitte whether he had ever seen Clemens "broken and beaten" after a game. This ticked Walton off: “I’m getting sick and tired of making rulings and counsel not listening to my rulings." Walton reminded Attanasio "that the defense does not have a right to build its case during the government’s pitch to jurors."
That's preposterous of course. Every good defense attorney tries to make his case during cross-examination, and Attanasio was allowed to ask other questions that technically went beyond the scope of direct. For example, Attanasio elicited Pettitte's key testimony that Clemens had never appeared to be pitching on steroids. I haven't read the transcripts yet, but it is unclear to me how far out of the strike zone the additional questioning strayed.
As any experienced litigator knows, courts are all over the map on the scope of cross-examination. Most federal judges allow a relatively expansive cross for reasons of judicial economy. Why make the defense call a witness to the stand in its own case, when you can save time by questioning the witness on cross? But a federal judge's ruling on whether to allow narrow or open-ended cross is virtually unassailable on appeal.
Attanasio did what most good defense attorneys would do in this situation. He ignored (sub silentio) a dubious ruling from Judge Walton and attempted to make the same point through a slightly altered question. That will work with many judges who aren't paying close attention, but it didn't phase Judge Walton.
Judge Walton has many fine qualities. He is intelligent, fair, and couragoeus. But he tends toward rigidity.
Friday, April 13, 2012
Circuit Judge Pryor not only voted to deny a rehearing en banc in the Ali Shaygan case seeking Hyde Amendment fees, but he went out of his way to explain his reasoning of why he was not supporting the factfinder district court judge. (see here). His opinion, one that seems likely to be headed for a higher review, looks at why he thinks a Hyde Amendment award was improper in this case. His decision spends several pages explaining what he believes was the evidence against the defendant, who by the way was acquitted after a trial by jury. He notes how defense counsel ( who he does not mention by name - it's David Oscar Markus) is "an elite defense attorney, and Shaygan's superb counsel took advantage of the opportunity to focus the attention of the jury on the alleged misconduct by the government in the collateral investigation."
The district court had granted Shaygan's Hyde Amendment motion and ordered payment of $601,795.88 for attorney fees and costs. The award was a response to a finding of prosecutorial conduct including discovery violations. Circuit Judge Pryor comes to the defense of the prosecutors saying that "[t]hese public servants deserve better." He ends his affirmation of the denial for a rehearing en banc stating that "[t]he prosecution of Shaygan, triggered by the death of his patient and supported by substantial evidence, was not wrong." Check out John Pacenti's article in the Daily Business Review, Eleventh Circuit releases new opinion on Shaygan case, criticizes dissent
The two person dissent to this denial of a rehearing en banc by Circuit Judges Martin and Barkett present a very different picture. They note that U.S. District Judge Alan S. Gold's "comprehensive fifty-page Order awarding Hyde Amendment attorneys fees to Dr. Ali Shaygan was 'crowded with thorough findings of fact' detailing government misconduct that took place in his prosecution." They state:
"This Court's opinion also strips our federal judges of a rarely needed, but critical tool for deterring and punishing prosecutorial misconduct. And the prosecutorial misconduct that happened in Dr. Shaygan's case deserved punishment."
This dissent outlines the discovery that was not provided to the defense despite a court order. They state "[t]he government violated Dr. Shaygan's rights, and now, contrary to what Congress has provided, he is left alone to pay the costs he suffered at the hands of these rule breakers."
This case sets up a wonderful review of what should be the role of the Hyde Amendment, who should be the finder of facts when there are allegations of misconduct, what should be the standard of review, and how best to remedy claims of discovery violations. This case also needs to be considered as Congress decides whether to pass Brady legislation.
Thursday, April 12, 2012
Last week, in a blog entitled "DOJ's Lafler/Frye Motion Goes Too Far," I expressed a strong objection to that prong of the DOJ application that requests that the defense lawyer submit an ex parte document signed by him and the defendant explaining defense counsel's reasoning for rejecting a plea. See here.
I, however, found "generally unobjectionable" the request that the defense lawyer report the plea offer and its rejection in open court. I have, upon reconsideration, changed my mind somewhat and come to the conclusion that plea offers and rejections should not be announced in front of the judge. Rather, any necessary record should be made in writing and not made public, if at all, until the case has been concluded. Such a procedure should amply satisfy DOJ's desire to avoid or minimize post-conviction attacks based on a failure to advise (but admittedly not a failure to give adequate advice).
I fear that if plea offers were to be publicly announced, it could affect the severity of some offers, put arguably inappropriate material before the court, and lead to occasional posturing by both prosecutors and defense lawyers. A prosecutor who is concerned about the legal sufficiency of her case might be hesitant to offer a seemingly lenient plea because she fears that a low plea offer might signal the weakness of her case to the judge, who in the event of a trial, will rule on sufficiency, and perhaps even be the trier of fact. Indeed, she might make an exceedingly harsh offer or no offer at all in the hope that the judge be led to believe she feels she has a strong case. Somewhat similarly, a defense lawyer's announced rejection of a lenient plea, especially if unaccompanied by commentary about the lack of merit of the prosecution, might convey to the triers of fact, the judge or in highly-publicized cases potential jurors, a message that the prosecution case is weak.
Additionally, a prosecutor's failure to offer what a judge believes is a reasonable plea offer or a defendant's rejection of such a plea might well have an adverse effect on a judge with an especial concern in processing cases quickly or keeping his workload in check.
For these and other reasons, most, perhaps all, federal courts prohibit a judge from engaging in plea discussions. (See Fed.R.Crim.P. 11(e)(1): "An attorney for the government and the defendant's attorneys . . . may discuss and reach a plea. The court must not participate in those discussions . . . .") Arguably, a judge's silent awareness of a plea offer and rejection may not be considered "participation," but that is a thin distinction.
Of course, in some jurisdictions, such as New York state courts, judicial involvement in plea bargaining is the norm.
Monday, April 9, 2012
BLT: The Blog of Legal Times reports that the U.S. Attorney's Office in Washington recently asked to review notes made by attorneys for DLA Piper, including George Mitchell, during interviews of persons such as Brian McNamee and Kirk Radomski who are expected to be government witnesses in the trial of Roger Clemens. See here. Judge Reggie Walton had ordered that these notes, made by the lawyers in their investigation of drug use by baseball players, be produced to the defense over DLA Piper's objection. The government took no position on the defense application for production.
Now, claiming that the government "did not lift a finger" to secure the notes, Clemens' attorneys ask Judge Walton to deny the government access to the notes. Otherwise, the court will "reward the prosecution for taking a head-in-the-sand approach," they claim.
I cannot agree with Clemens' position. Discovery is not a one-way street either for the government or for the defense. Both parties should be equally entitled to the documents. Even objections to production of documents by third parties should not operate as a waiver to review the documents, if they are produced. Although the defense, unlike the government, has no obligation to produce material harmful to its case, when relevant documents are secured by court order from third parties, absent special circumstances such as privilege, they should be available to both sides. A contrary rule would conceal information from defendants much more than from prosecutors.
Wednesday, April 4, 2012
In companion cases decided two weeks ago, Missouri v. Frye and Lafler v. Cooper, the Supreme Court held that the Sixth Amendment right to effective assistance of counsel applies to the plea bargaining process and that a defendant who rejected a favorable plea bargain based on incompetent advice from his attorney may be entitled to relief even though he was subsequently convicted at trial.
In Frye, the defense attorney failed to relay a plea offer from the prosecution. The uncommunicated offer expired and the defendant later accepted a plea deal that involved a substantially greater sentence than did the original offer. The Court held that "as a general rule" defense counsel is required to communicate to his client a "formal offer" that is favorable in that it may result in a lesser sentence, a conviction of a lesser crime or crimes, or both.
In Cooper (the name of the defendant), the attorney conveyed the plea offer but advised the client to reject it based on the attorney's constitutionally defective assessment of the strength of the case. The Court held that such advice in plea-bargaining discussions was ineffective assistance and was not rendered irrelevant by a later conviction at trial. Both decisions were by a 5-4 majority with the opinion written by Justice Kennedy.
Thus, in sum, the Supreme Court has held that in the plea bargaining process, the defense attorney must convey a favorable plea offer (Frye) and must not give ineffective advice relating to the decision to accept or reject it (Cooper). Either failure may result in relief even if the defendant were later convicted after trial and sentenced accordingly.
The Department of Justice, understandably and reasonably concerned in protecting convictions in pending cases headed for trial from later appellate and collateral attack on the grounds that a plea offer was not communicated or was rejected because of unsound advice, has responded, at least in one jurisdiction, with a motion to make a record of "plea negotiation activity." See here - Download Motion Pursuant to Lafler and Frye. This "pro-active" motion essentially contains two prongs.
First, the defense counsel should report the plea offer to the Court in the presence of the prosecutor, and the defendant should acknowledge having rejected it. That prong appears to me generally unobjectionable, although I see no reason why the prosecutor, the offeror, should not state the offer, rather than the defense counsel, the offeree.
Second, DOJ requests that the defense counsel's advice concerning whether to accept or reject the plea also be placed in the record. Recognizing that this advice may be privileged, as Frye states, DOJ asks that this be done in a "sealed ex parte document" signed by the defendant and defense counsel. That prong is highly objectionable, and DOJ should withdraw it. If not, defense counsel should challenge it and courts should reject it.
Information that is "privileged" as attorney-client confidences should not be disclosed to anyone, including the judge, unless absolutely necessary (as it might be in a challenge as to whether the communication is actually privileged). Such disclosure, for instance, might reveal the defense trial strategy so that the judge might be influenced in her trial rulings. It might reveal uncharged crimes about which the judge is unaware. It might suggest that the defendant's arguably unreasonable refusal to accept the attorney's strong advice to plead guilty reflects a lack of acceptance of responsibility that the judge might consider negatively at sentence. It might also reveal the attorney's candid view of the judge's ability, fairness and decency, a factor in many plea decisions.
To be sure, a failure to make a record of an attorney's advice whether to plead guilty might lead to an increased number of appeals or collateral proceedings based on alleged unsound advice, although, as pointed out in Cooper, past history does not support this conclusion. This standard argument, that the floodgates will be opened, however, applies equally to the failure to make a record as to the attorney's advice whether a defendant should testify, or should forego for tactical reasons a motion to suppress, or should call certain witnesses, or any number of issues in a criminal proceeding.
DOJ should reconsider its request that the attorney divulge, even ex parte, confidential plea bargaining discussions between lawyer and client beyond merely that the offer was communicated and not accepted. In the absence of a withdrawal of this request by DOJ, defense lawyers should not voluntarily comply (unless it is to their clients' advantage, and I can think of many instances where a defense lawyer would seize the opportunity to give his evaluation of the case to the judge ex parte), and courts should not enforce such an intrusive requirement.
Thursday, March 15, 2012
Wednesday, February 22, 2012
The NACDL White Collar Criminal Defense College at Stetson announces inaugural White Collar Criminal Defense Award recipients
The NACDL White Collar Criminal Defense College at Stetson has announced the recipients of the inaugural White Collar Criminal Defense Award. Jan Lawrence Handzlik and Janet Levine have both been selected by the NACDL White Collar Criminal Defense College advisory board to receive the award, which honors individuals who have made a profound impact on the field of white collar criminal defense advocacy. Read more here.
Sunday, January 22, 2012
Attorney Jack Fernandez (Zuckerman Spaeder LLP) has an interesting Essay for the the ABA's White Collar Book entitled, An Essay Concerning the Indictment of Lawyers for Their Legal Advice. It is here - Download 3533275_1 DOCX (3) (3)
Thursday, January 19, 2012
Mike Scarcella over at the BLT Blog has an interesting piece titled, D.C. Attorney, Charged In Scheme, Fights Prosecutors Over Evidence. But what sounds unusual here is that the attorney is charged based upon testimony from a client that he represented, who is now cooperating with the government and the charges stem from alleged misconduct during the trial.
Even if these allegations of trial misconduct prove to be true, one has to wonder why this wasn't handled via cross-examination or through objections to the admission of the evidence at trial. Is this a professional responsibility problem, a contempt problem, or should this be considered criminal? And did counsel do anything wrong?
When defense counsel is charged with a crime for trial misconduct, it needs to be scrutinized carefully as the process can have a chilling effect on the right to counsel. And it certainly needs to be looked at very closely when the case is premised on a former client's cooperation. So isn't this just the kind of case that all discovery should be turned over to the defense so that justice can occur?
Monday, December 26, 2011
Leading white collar practitioner Robert G. Morvillo passed away. His firm notes here. The NYTimes has an article here. Contributing blog editor Lawrence S. Goldman writes, "If I had ever been investigated by the U.S. Attorney for the Southern District of New York, I would have hired Bob Morvillo. In the current world, where many defense lawyers try to avoid getting into fights with prosecutors, Bob was a throwback. Although personally conservative on many criminal justice issues, Bob had no hesitancy in using his considerable skills and stature to challenge vigorously a prosecutor, both in the office hierarchy and in court, when he felt that his client was being treated unfairly. He was a brilliant, gutsy, no-nonsense lawyer. His death is a great loss to the white-collar defense bar."
Friday, September 2, 2011
CNN has the story here. Judge Reggie Walton apparently blasted prosecutors, accusing them of deliberately violating his rulings during the truncated first trial. But Judge Walton believes that governing law prevents him from barring retrial on Double Jeopardy grounds. The leading Supreme Court case is Oregon v. Kennedy, 459 U.S. 812 (1982), which holds that a mistrial granted upon the request of a defendant, even if necessitated by government misconduct, only bars retrial on Double Jeopardy grounds if the prosecution intended to goad the defendant into moving for a mistrial.
September 2, 2011 in Celebrities, Current Affairs, Defense Counsel, Investigations, Judicial Opinions, Legal Ethics, News, Obstruction, Perjury, Prosecutions, Prosecutors | Permalink | Comments (1) | TrackBack (0)
Monday, August 22, 2011
The Norris case provides an opportunity to consider the role of corporate counsel in dealing with a CEO, in addition to resolving a circuit split with the witness-tampering statute - 18 USC 1512(b). The defense raises the issue as to "whether a person 'corruptly persuades' another in violation of the statute by persuading him or her to decline to provide incriminating information to authorities, where the other person enjoys a privilege or right to so decline."
The underlying factual basis that sets the stage for this issue raises concerns that could use Supreme Court clarification. As noted here and here, the Third Circuit ruled that the district court "did not legally err in applying" the Bevill test. Deferring to the district court, the Third Circuit held that permitting the company's former counsel to testify at trial was not error as Norris had not met "his burden in asserting his privilege pursuant to the five-factor test set forth in Bevill. The defendant had argued that the Bevill standard should not "apply here, as here, both the individual and the corporation have an express attorney-client relationship with counsel."
Ian Norris, CEO of Morgan Crucible, originally faced three counts of obstruction of justice. He was acquitted of two counts following his extradition and trial in the United States, but was convicted of conspiracy to tamper with grand jury witnesses. A key witness against the defendant was corporate counsel. The trial court allowed corporate counsel to testify despite the defendant's argument that corporate counsel had represented Norris. Some of the evidence offered by the defense is included in the attachments to the cert petition. For example, the Antitrust Division explicitly asked counsel who he represented, saying "if your representation is limited to the corporation only, I would greatly appreciate your confirming that fact for me so that there are no misunderstandings as to the scope of your representation." (p. 181-82a). The exchange of letters has counsel telling the Antitrust Division that "[w]e presumptively also represent all current employees of the companies in connection with the matter." It also states - "[s]hould you wish to call other current employees, I assume that we would also represent those individuals." (p. 185a). Norris presents many other documents in the appendix to support his argument that corporate counsel represented him.
Norris Cert Petition - Download Norris Cert Petition (efile)
The government did not file a responsive brief and the Supreme Docket has the case distributed for a conference of September 26, 2011. See here.
See also Sue Reisinger, Corporate Counsel, Jailed CEO Ian Norris Appeals His Conviction to SCOTUS; D. Daniel Sokol, Antitrust & Competition Policy Blog, Norris Cert Petition to the Supreme Court
Monday, July 18, 2011
The National Association of Criminal Defense Lawyers (NACDL) issued a news release here titled "Legislation Would Enforce Government's Duty to Disclose Favorable Information to Accused." The essense is that it calls for new legislation. The press release states:
"To help ensure fairness in federal criminal proceedings, the Board of Directors of the National Association of Criminal Defense Lawyers (NACDL) has endorsed model legislation drafted by NACDL’s Discovery Reform Task Force that would require the government to disclose all information favorable to the accused in relation to any issue to be determined in a federal criminal case."
(esp)(disclosure that this author served on the committee working on this suggested legislation)
Friday, June 17, 2011
NACDL's 1st Annual West Coast White Collar Conference, “Turning The Tables On The Government” – Keynote Address: Benedict P. Kuehne, Friday, June 17, 2011
Guest Blogger: Darin Thompson, Assistant Federal Public Defender, Office of the Federal Public Defender (Cleveland,OH)
The Keynote Presentation, "Standing Tall: Criminal Defense Lawyers as Constitutional First Responder s in Today’s War on Crime," was given by Benedict P. Kuehne.
Benedict Kuehne spoke regarding the important role that criminal defense attorneys play in America. He noted that criminal defense lawyers often put at risk not only their fee, but their own liberty. Because the role of criminal defense lawyers is to safeguard our constitutional rights, that role itself is threatened. Mr. Kuehne used his personal story to examine these principles. In 2004, his office was searched pursuant to a federal warrant. He was the subject of a grand jury investigation into conspiracy and money laundering. His alleged crime related to legal advice he provided another criminal defense lawyer regarding the source of his fee.
This prosecution was part of an overall trend towards the broadening of the scope of money laundering prosecutions, Mr. Kuehne suggested, noting that money laundering has replaced conspiracy as the prosecution’s weapon of choice.
Mr. Kuehne noted that this prosecution theory threatened to chill the assertion of the Sixth Amendment right to counsel and the willingness of counsel to provide legal representation to individuals facing prosecution.
Mr. Kuehne then explored the history of litigation surrounding the specific statutory exemption for criminal defense fees. For 20 years, the government persisted in attempts to convince courts that the exemption did not mean what it said. These efforts, combined with the ability to seek forfeiture of fees, had a chilling effect on that Sixth Amendment right.
His case resulted in the decision U.S. v. Velez, vindicating the criminal defense fees exemption in money laundering cases. Mr. Kuehne's story is an inspiring one that clearly demonstrates the importance of the work that we defense lawyers do everyday.
NACDL's 1st Annual West Coast White Collar Conference, “Turning The Tables On The Government” – “Monsanto and More: Ethical Tactics for Getting Paid When the Government Gets There First,” Friday, June 17, 2011
Guest Blogger: Darin Thompson, Assistant Federal Public Defender, Office of the Federal Public Defender (Cleveland,OH)
John Cline began the discussion with a hypo of an indicted individual who has millions of dollars that the government believes were garnered through criminal activity. Mr. Welk presented the government’s perspective and outlined the steps taken to identify the assets the government believes can be tied to the charged crimes. Typically this involves going to the Magistrate and obtaining seizure warrants for assets and then seizing them. If it involves real property, then they will go get a lis pendens.
Mr. Cline asked about ex parte restraining orders and when and how the government uses them. Mr. Welk explained that once he obtains the restraining order, he will typically approach the counsel for the client, inform them of the order, and then set up a plan. Typically the parties sit down and work out the issues together. Mr. Welk noted that going in ex parte can be extremely disruptive to the business and that is why the defense is willing to sit down. However, there is always a concern that the assets could disappear if the government does not come in strong.
Mr. Cline then sought the defense perspective from Ms. McNamara—what steps she takes when faced with an ex parte restraining order. She would first seek out help from an experienced forfeiture lawyer. This is because this process is quite draconian and it allows the government to basically step into the defendant’s shoes. However, given the practicality of the temporary restraining order, where the government must show its cards, the parties are usually willing to come to the table and talk.
A member of the audience asked about money that the lawyer already has, such as a retainer. Mr. Welk explained that there is a wide diversity of views on how to handle this situation. He will typically sit down with the attorney and work out an arrangement, typically involving a return of a portion of the money.
Ms. McNamara noted that there has been an uptick in asset forfeiture since the Madoff case but Mr. Welk noted that it was really a coincidence of timing. Rather, he noted that the uptick was a product of at least five years of work by the Asset Forfeiture Working Group. It just happened that their work aligned with the Madoff case.
Mr. Cline then asked the panelists to discuss negotiations that frequently happen in order to avoid an evidentiary hearing. Both parties usually go in hoping to cut a deal and come out with a clear plan. Ms. McNamara explained that the government typically comes in with a pragmatic approach, but that is not always the case.
The panelists engaged with the audience on the interaction between bail and forfeiture, the potential conflict for the defense attorney in seeking to protect the client’s assets in general and specific to defense fees, and the question of government authority over third-party assets. Mr. Welk noted that while the government has authority to seize third-party assets, but the courts don’t like that.
Mr. Cline closed the panel with a discussion the potential for prosecutors to clawback fees that have been unfrozen for defense. Mr. Welk said this is rare and there are other venues to explore, one of which is a strongly worded letter to counsel explaining that it is the government’s belief that all the client’s money comes from illegal activity and thus any money accepted may be subject to forfeiture. There is serious debate over the use of these letters, but defense counsel should be aware of them and on the lookout.
NACDL's 1st Annual West Coast White Collar Conference, “Turning The Tables On The Government” – “Navigating the Wilderness of Mirrors: National Security Issues for the White Collar Lawyer,” Friday, June 17, 2011
Guest Blogger: Darin Thompson, Assistant Federal Public Defender, Office of the Federal Public Defender (Cleveland,OH)
Day two of the seminar started with a discussion of the issues that arise when classified information is implicated in a white collar case. Led by John D. Cline, the panel consisted of Deborah Boardman, Matt Apuzzo (of the Associated Press), Joshua L. Dratel, Ross H. Garber and Nancy Hollander.
John Cline began the discussion by reviewing the Classified Information Procedures Act (“CIPA”) and the Foreign Intelligence Surveillance Act (“FISA”).
Mr. Garber suggested that there are a number of cases in which defense attorneys don’t realize that national security information is implicated. This is for many reasons, including unfamiliarity with the statutes involved and an increasingly aggressive use of FISA and national security related charging decisions by the government. The increased numbers of FISA warrants granted and their revealed use in non-“terrorism” cases (money laundering, export violations, FCPA, among others) were cited in support. Mr. Apuzzo noted that the potential for these issues to arise in cases is often underestimated. The scope of the government’s use of its surveillance powers is constantly increasing.
Mr. Dratel noted that an increasing amount of information has been designated classified, leading to this increase in cases with these issues. Once information is classified, however, a Judge cannot declassify it. There are administrative procedures available, but they are impractical for most cases due to timing. Once classified information is involved, CIPA is going to be the sole avenue of relief. He further noted several examples of the “tactical” use of classification and CIPA by the government, including the use of section 4 of CIPA (which allows the government to submit potentially exculpatory classified material to a Judge for review prior to any disclosure).
Ms. Hollander noted tactical de-classification was also a weapon in the government’s arsenal. She also added that FISA includes more than that wiretapping authority: it includes sneak and peek warrants, email, among other powers. Another hurdle caused by classification arises, she noted, in the context of obtaining security clearances for experts, an additional time-consuming burden imposed in these cases. Deborah Boardman noted that the delay in getting clearances can apply to anyone on the defense team that an attorney wants or needs to have access to classified material in order to effectively defend the client.
Many of these practical problems are best understood by using a case study method. To facilitate that, Ms. Boardman used her recent litigation in U.S. v. Thomas Drake to review these problems and how navigating CIPA enabled her excellent result. Mr. Cline and Ms. Hollander also commented upon the practical problems. The role of Classified Information Security Officers as neutral problem solvers was emphasized. John Cline described them as “the best bunch of problem solvers I have ever run across,” a description with which anyone who has ever dealt with them will readily agree.
Mr. Garber, characterizing these problems as “fun”, described the FISA procedure for challenging the warrant. Unlike traditional search warrant applications, FISA applications are not routinely provided to defense counsel. There is a procedure for requesting the application for the warrant. No such request has ever been granted in 30 years.
Ms. Hollander noted a new problem with FISA warrants: they may continue after indictment. She emphasized that if the FISA information is not going to be used by the government, the existence of the wiretap won’t even be disclosed.
In conclusion, Mr. Apuzzo spoke about the problems of reporting on national security cases. He noted reporters actually have several advantages in understanding these cases. For example, because defense counsel receives only a well-defined set of information, they often miss the larger picture, whereas reporters who work on these cases are often more able to quickly understand the significance of new disclosures. He also indicated that communicating effectively with the media is especially important where a case may have (or appear to have) national security implications. Nancy Hollander emphasized Mr. Apuzzo’s points, emphasizing that a good reporter can often find information that defense could never find.