Monday, December 7, 2009
What does the death penalty have to do with white collar crime? Perhaps the most obvious item to those who practice white collar criminal defense work, is that many white collar attorneys handle or assist on capital cases. It therefore seems important to notice the white collar attorneys of a recent American Law Institute change.
On October 23, 2009, the ALI Council voted overwhelmingly, with some abstentions, to accept the resolution of the capital punishment matter as approved by the Institute’s membership at the 2009 Annual Meeting in May. The resolution adopted at the Annual Meeting and now accepted by the Council reads as follows:
“For reasons stated in Part V of the Council’s report to the membership, the Institute withdraws Section 210.6 of the Model Penal Code in light of the current intractable institutional and structural obstacles to ensuring a minimally adequate system for administering capital punishment.”
Wednesday, November 25, 2009
The government dismissed Ben Kuehne's case today. For background on this case see here, here, and here. Congratulations to Attorney Ben Kuehne and to his counsel Jane Moscowitz and John Nields. The Government's motion states in part:
"This motion is based upon the totality of the circumstances surrounding this matter, including the changed circumstances occasioned by the affirmance of this Court's dismissal of Count One of the Third Superseding Indictment. The Government believes that dismissal is in the interests of justice."
Motion - Download Kuehne dismissal order
Thursday, November 19, 2009
The U.S. Attorney's Office for the Southern District of Georgia has their press release telling the world of a 40 count indictment of a Columbus, Georgia attorney. But no where on the website is the fact that a jury acquitted this same individual on all counts. As ministers of justice it should not be enough for prosecutors to merely say on the courthouse steps that they accept the jury verdict. Prosecution press releases should not be limited to indictments and guilty verdicts, but should also include the not guilty verdicts.
Shelnutt had been charged with a list of offenses that reads like someone opening the federal statutes and trying to find anything that could be used to destroy an attorney especially one who represents criminal defendants. They charged him with money laundering, aiding and abetting a cocaine conspiracy, attempted bribery of a federal official, witness tampering, failure to file cash reporting forms, and making false statements to an FBI agent.
The bottom line is that the jury did not accept the government's case. See Chuck Williams, Ledger - Enquirer, Shelnutt acquitted -Juror says government's case 'had a lot of holes'
Monday, October 26, 2009
No surprises in the Eleventh Circuit opinion affirming the trial court's dismissal of Count One in the Ben Kuehne case. The nine page opinion authored by Hon. Barkett, and joined by Hon. Hull and Quist provides a quick response to the government's contention that 18 U.S.C. 1957 (f)(1) was "nullified" by the Court's decision in Caplin & Drysdale - not so. The court states:
It would therefore make little sense- and would be entirely superfluous-to read § 1957(f)(1) as an exemption from criminal penalties for non-tainted proceeds spent on legal representation, as those funds can always be used for any legal purpose. We do not believe Congress intended such an absurd result ...
(esp)(w/ a hat tip to Joe Beeler)
Friday, October 2, 2009
NACDL's 5th Annual Defending the White Collar Case Seminar - "Getting Paid, Not Charged--Avoiding Indictment by Collecting Fees Ethically," Friday, October 2, 2009
Guest Blogger: Jon May, Chair, White Collar Crime Section, National Association of Criminal Defense Lawyers
Over the last ten years, and particularly as a result of the indictment of prominent Miami Attorney Ben Kuehne, criminal defense counsel have had cause to be concerned that they could be the subject of prosecution solely for taking a legitimate legal fee. In this morning’s presentation by Jane Moscowitz and Martine Pinales, lawyers found reasons to be hopeful that such fears may be overblown, at least as to potential prosecution. Forfeiture of fees, on the other hand, remain a significant concern.
The Kuehne prosecution is an instance of ideology trumping common sense. Benedict P. Kuehne is the most unlikely of government targets. As Jane Moscowitz, who is one of his attorneys observed, Ben is the best of all of us. He is not just a leader of the bar—having been the President of the Miami-Dade County Bar Association and a member of the Board of Governors of the Florida Bar—he has devoted countless hours to pro bono activities on behalf of organizations representing the interests of African-Americans, Hispanics, Gays and others. He was also one of Al Gore’s principal attorneys during the Florida recount. Not surprisingly, he was Roy Black’s choice for counsel when Roy Black needed an attorney to vet the legal fees he was to be paid to represent notorious Colombian cartel leader Fabio Ochoa.
Roy Black was ultimately paid $5 million for his representation of Ochoa. Ben Kuehne earned approximately $175,000 for vetting this fee. Ben was indicted for conspiracy to launder, what the government recognized, and the indictment stated, was a bona fide legal fee. This is despite the fact that the money laundering statute 18 U.S.C. Sec. 1957 contains a specific exemption for the receipt of funds necessary to preserve the Sixth Amendment. It was the government’s position before the District Court and just recently before the Eleventh Circuit in their appeal from the dismissal of this count, that the decision of the Supreme Court in Caplin and Drysdale nullified this exemption. The district court, however, was persuaded that it was the intent of Congress to protect counsel from prosecution, even if attorney’s fees could be forfeited. It appears from the tenor of the oral argument, which I was present to see, that the government’s theory is being met with the same level of skepticism that it received by Judge Cooke.
Martin Pinales discussed his experience dealing with government efforts to seize legal fees. Even in instances where the AUSA states that she has no intent to seize fees, counsel can be faced with a post trial effort by the government’s money laundering/forfeiture counsel to claw back those fees. Strategies were discussed for dealing with that problem. One way is to be paid by a third party from monies totally unconnected to any alleged criminal activity. Where money is obtained from the defendant, it is important to insure that the money did not come from any source named in a forfeiture count. And counsel should do due diligence even as to assets that could be later characterized as a substitute asset. It was also important to have your retainer agreement tie fees received to services provided. Where the funds are clearly substitute assets, counsel who takes these steps will have a better chance of demonstrating that they are bona fide purchasers for value in later forfeiture proceedings.
During the seminar, other important issues were raised. In many districts, counsel do not have to worry about their fees if their clients cooperate. Doesn’t that create a conflict of interest? You can charge a flat fee so long as you can demonstrate that it was earned. But don’t call it non-refundable (unless you practice in Florida, but it still has to be reasonable). The final irony, and outrage, discussed was the fact that the indictment against Ben also includes forfeiture count. The government is seeking to forfeit from Ben, the $5 million that Roy Black received.
Thursday, October 1, 2009
NACDL's 5th Annual Defending the White Collar Case Seminar - "Choppy Waters - The Ethics of Privilege and Disclosure," Thursday, October 1, 2009
Guest Blogger: Peter D. Hardy, Post & Schell, P.C. (Philadelphia, PA)
Moderator: Gerald B. Lefcourt
Gerald Lefcourt noted that it has been over 46 years since the Brady decision was issued, yet we still have no firm definition of Brady that most federal prosecutors can follow. There are varying and conflicting practices amongst prosecutors in regards to definitions and the proper time frame for disclosures. Moreover, incidents of Brady violations or potential violations are not uncommon.
Robert Cary represented Senator Ted Stevens. The heart of the defense was a note that Senator Stevens had sent to Bill Allen, the key government witness and the builder making improvements on the Senator’s chalet, which stated in part that the Senator wanted to make sure that Allen got fully paid, and that “friendship is one thing, but compliance with these ethics rules is another[.]” The government responded to this note by eliciting testimony from Allen that the note was just the Senator trying to concoct a cover story. After the guilty verdict, the second FBI agent on the case filed a self-described whistleblower complaint regarding conduct by the prosecution team. The Court ordered the government to provide discovery regarding the complaint, and a new prosecution team was put in place. New discovery contradicted directly the government’s theory and evidence at trial that Allen regarded the note as a mere cover story. Carey described the Attorney General as a hero for moving to dismiss the case. All of this happened only after a long trial and post-trial process (as well as Senator Stevens losing his re-election bid). Judge Sullivan, who oversaw the case, is to be commended for being careful and not simply taking the government’s word.
So, what should be done? Judge Gertner explained that the solution needs to involve the rules (ethical, court, and criminal procedure). The case law has slid into an outcome-determinative approach, which makes it very hard for the prosecutor to predict. The materiality standard is colliding with the harmless error doctrine. Brady had more to do with a failure to turn over evidence impugning the system, rather than predictions regarding potential outcomes. The definition of Brady should be re-assessed, and there also should be deadlines set for when information should be turned over: for example, 28 days before.
Professor Green described how the ABA code of ethics set forth in the 1970s a discovery rule for prosecutors: you must turn over information that would tend to negate the guilt of the accused. Everyone had assumed that this rule overlapped with Brady. But, the rule is not co-extensive with Brady – for example, it does not have a materiality standard. Rather, it categorically requires the disclosure of favorable information, or information which might lead to favorable evidence. A materiality test is really directed at post-conviction review, and is not well suited to govern the conduct of prosecutors at the time they are making their discovery decisions. Defense attorneys also need to know about exculpatory information in order to assess a case and decide whether or not to proceed to trial.
Paul Shechtman described federal plea agreements in New York which require waivers by the defendant of either impeachment and/or all exculpatory information. These plea waivers apparently run afoul of the rules just described by Professor Green. Current cases strongly suggest that prosecutors need more education regarding their obligations under Brady, in order to be better able to appreciate the exculpatory value of evidence. We need to reassess Brady, which has been hijacked by the materiality doctrine. The burden now is on the defendant to show materiality. In Brady, Justice Marshall wrote in dissent that the test instead should be harmless error, in which the government has the burden to show that the conviction should not be reversed. The materiality requirement invites courts to preserve convictions, despite poor decisions and poor decision-making processes by prosecutors.
Larry Thompson described a case in Detroit in which the prosecutor made false statements to the Court, and actually was prosecuted himself. Judge Gertner noted that part of the problem here is lack of meaningful remedies. There is professional discipline, but discipline is unlikely.
Wednesday, September 30, 2009
The Ninth Circuit Court of Appeals issued a decision in United States v. Ruehle,a case that opens by saying "[w]e here explore the treacherous path which corporate counsel must tread under the attorney client privilege when conducting an internal investigation to advise a publicly traded company on its financial disclosure obligations." The lower court had suppressed "all statements from former CFO William J. Ruehle to attorneys from Irell & Manella LLP, Broadcom's outside counsel, regarding the stock option granting practices at Broadcom." In reversing this decision, the Ninth Circuit, rejected the lower court finding that Ruehle "had a reasonable belief that Irell and Manella were his lawyers prior to the June 1, 2006 interrogation by Irell, and that he never gave informed written consent, either to the dual representation by Irell or the disclosure of privileged information to third parties..." The Ninth Circuit found that the lower court had "applied a liberal view of the privilege that conflicts with the strict view applied under federal common law, which governs here." The Ninth Circuit stated that it "reject[s] the district court's contrary finding that an expectation of confidentiality was established because, upon review of the record, we are left with the 'definite and firm conviction that a mistake has been committed' and thus we determine that this factual finding was clearly erroneous." Some thoughts on this decision:
- Although at first glance it may seem like the Ninth Circuit is usurping a factual finding of the lower court, there is more to this picture - it is factual finding, yes, but one that had been determined by a different legal standard. What is interesting here is that the Ninth Circuit chose not to remand to the lower court when changing the operative standard for determining the issue. On the other hand, the court's decision implies that the evidence does not create a factual question.
- Every corporate officer needs to be aware that statements made during an internal investigation may end up in the government's lap. One can't always count on an attorney client privilege to protect these statements.
- Outside counsel's job in conducting internal corporate investigations may have just been made more difficult as one wonders if corporate officers will want to cooperate in corporate counsel's internal review.
Wednesday, September 23, 2009
David Oscar Markus (Southern District Florida Blog) reports on the oral argument in the Ben Kuehne case in the 11th Circuit here. What is most amazing here is that the government was appealing the decision of the lower court. For background see here. The statute provides that the term monetary transaction "does not include any transaction necessary to preserve a person's right to representation as guaranteed by the sixth amendment to the Constitution." Should we really be spending tax resources on a case like this?
Sunday, May 31, 2009
Ms. Regon, formerly of Shipman & Goodwin LLP, Hartford, CT, has represented individual and corporate clients in state and federal civil and criminal investigations. She is a member of the bars of Connecticut and Massachusetts and is admitted to the U.S. Court of Appeals for the Second Circuit. She has represented clients facing a variety of criminal charges including fraud, public corruption, RICO, tax fraud, espionage, felony escape, criminal harassment and assault; and in civil matters such as Qui Tam, Freedom of Information Act and unfair trade practices. She has also served as pro bono immigration counsel for political refugees seeking asylum.
Wednesday, May 6, 2009
The media is certainly focusing on the "Torture Memos," as they should. See here, here, and here. But one aspect hasn't really been discussed and that is whether there should be reconsideration of another case that involved a lawyer's opinion letter. If the torture memos are not a basis for a criminal prosecution, then can one really proceed against Ben Kuehne for his opinion letters? See here
Sunday, April 26, 2009
"Bill served as NACDL’s president from 1999 to 2000. He also served as president of the Virginia College of Criminal Defense Lawyers, now the Virginia Association of Criminal Defense Lawyers, a NACDL affiliate organization. He was a member of the bars of Virginia and the District of Columbia, the Alexandria (Va.) Bar Association, the American Board of Criminal Lawyers, and the International Association of Criminal Lawyers."
Bill, in addition to handling many high-profile cases, was also a voice for constituencies that needed a voice. (see here). He testified before Congress against mandatory minimum sentences (see here), he fought against racial injustice (see here), and always aimed for a just and fair system (see here). And despite his incredibly busy schedule, he found the time to stop and speak to law students so that they could learn from his accomplishments. He will be missed.
Sunday, April 19, 2009
The threat of indictment to a corporation is huge, and one need only look at what happened to Arthur Andersen LL.P to reach this conclusion. In the aftermath of Andersen, many corporations have entered into deferred and non-prosecution agreements with the government, paying huge fines but avoiding prosecution. With their "backs against the wall" the companies agree to many controversial terms, including in some cases the waiver of the attorney-client privilege. The net result to the government is not only money, but also evidence that can be used to proceed against individuals within the company.
But how does this scenario play out in the long run. The case of U.S. v. The Williams Companies provides an interesting glance at what can happen when the attorney-client privilege is violated by the company. Williams, an opinion issued this past week by the DC Court of Appeals has the individual asking for discovery in the criminal case, and wanting the government to produce the discovery they received from the company. The problem is that the company does not want the evidence to be produced to the defendant. So the court is left to rule on "a third-party appeal of a discovery order in a criminal case compelling the government to produce 'all materials disclosed' by the third party pursuant to its cooperation with federal investigators during a criminal investigation of the third party and others." The court remands the case to the district court to assess "which documents were material to the defense."
The moral of the story is - you may think that your back is against the wall to enter into a deferred prosecution agreement, but before you agree to waive the attorney-client privilege, be aware of the long-term ramifications of this decision.
(esp) (blogging from Chicago)
Friday, April 10, 2009
A "not guilty" verdict was returned on a drug case in Miami, but what happened during the investigation and prosecution of this case has now resulted in an award of $601,795.88 under the Hyde Amendment. The Hyde Amendment allows for attorney fees when a "prevailing criminal defendant" can demonstrate "that the position the government took in prosecuting him was vexatious, frivolous, or in bad faith." (see Order, infra, citing U.S. v. Gilbert).
Hon. Alan S. Gold, in the Southern District of Florida, issued an Order awarding these attorney fees and enjoined the US Attorneys who practice in that court from "engaging in future witness tampering investigation of defense lawyers and team members in any ongoing prosecution before [this judge] without first bringing such matters to [the judge's] attention in an ex parte proceeding." The judge also issued a public reprimand against the US Attorneys office and specifically 2 AUSAs. And it does not end there, as the judge also makes it clear that a disciplinary body needs to review this matter. (Court's Order - Download 08-20112 (Shaygan) Prosecutorial Misconduct FINAL )
The judge presents a thoughtful Order that gives credit to the USA's office for taking "immediate efforts to investigate" this matter when it came to light. After all, the taping of defense counsel and a defense investigator, by government informants, does present serious concerns. The failure to disclose this material is more problematic. The judge tells of Brady, Giglio, and Jencks issues in this case.
Hon. Alan S. Gold could not have said it better when he stated,
"It is the responsibility of the United States Attorney and his senior staff to create a culture where 'win-at-any-cost' prosecution is not permitted, Indeed, such a culture must be mandated from the highest levels of the United States Department of Justice and the United States Attorney General. It is equally important that the courts of the United States must let it be known that, when substantial abuses occur, sanctions will be imposed to make the risk of non-compliance too costly."
DOJ, the enforcer against corporate misconduct and the one who requests the appointment of monitors in deferred prosecution agreements, may seem to be having its own issues. One has to give the department credit for recognizing their lack of compliance in the Stevens case and agreeing to dismiss it. Likewise one has to give the government credit in this recent Miami case, in that the DOJ stated that they "made serious mistakes in a collateral investigation that was an offshoot of this case and stands ready to pay the additional attorneys' fees and costs incurred by the defendant as a result." Clearly the new AG Holder is taking a strong position against prosecutorial misconduct and sending that clear message to those in his office, something that is wonderful to see happening. But if this were a corporation that had committed misconduct, would these acknowledgments and payment be sufficient? The deferred prosecution agreement would require monitoring, and there would be a need to assure that there was now compliance. Mind you, I am not suggesting that a monitor in another deferred prosecution agreement case, John Ashcroft, be appointed here. But the concern is that both of the cases mentioned here had attorneys who could present these claims. My concern rests with the many cases that might have similar claims of misconduct but no attorney to bring the issues to light.
Wednesday, March 18, 2009
Curt Anderson, Florida AP, US prosecutors accused of misconduct in case - Did prosecutors authorize two witnesses to record their conversations with defense counsel? And did the prosecutor fail to reveal evidence to the defense? The more important question is - what would defense counsel have faced if the tables were turned.
Tuesday, January 27, 2009
The National Association of Criminal Defense Attorneys (NACDL) posted the following notice seeking a Director for White Collar Crime Policy:
National Association of Criminal Defense Lawyers
Sunday, January 18, 2009
Vesselin Mitev, NLJ (Law.com), Lawyer Cannot Be Prosecuted for Giving Advice, Panel Finds -The attorney last year denied encouraging the resignation by the nurses, who had been accused by the DA of abandoning their patients
"We cannot conclude that an attorney who advises a client to take an action that he or she, in good faith, believes to be legal, loses the protection of the First Amendment if his or her advice is later determined to be incorrect. Indeed, it would eviscerate the right to give and receive legal counsel with respect to potential criminal liability if an attorney could be charged with conspiracy and solicitation whenever a District Attorney disagreed with that advice. The potential impact of allowing an attorney to be prosecuted in circumstances such as those presented here are profoundly disturbing. A looming threat of criminal sanctions would deter attorneys from acquainting individuals with matters as vital as the breadth of their legal rights and the limits of those rights. Correspondingly, where counsel is restrained, so is the fundamental right of the citizenry, bound as it is by laws complex and unfamiliar, to receive the advice necessary for measured conduct.
"Moreover, by placing an attorney in the position of being required to defend the advice that he or she has provided, the state compels revelation of, and thus places within its reach, confidential communications between attorney and client. . ."
The opinion is here.
(esp) (w/ a hat tip to Bill Olis)
Thursday, December 11, 2008
Alex Bunin, of the Federal Public Defender's Office in New York puts out a wonderful publication on federal convictions that are reversed. His latest update can be found at -
In the white collar area you'll find cases on mail fraud/ RICO/perjury/false statements, etc.
Thursday, November 20, 2008
Dan Slater has a wonderful piece on the importance of the Sixth Amendment's Right to Counsel and the implications to this right when the government proceeds criminally against legal counsel. See Dan Slater, Wall St Jrl, Scales of Justice: The Right to Counsel vs. the Need to Bar Tainted Legal Fees The article speaks directly to the Ben Kuehne case. For background see here and here. But I have to wonder about a statement at the end of the article that seems to imply that cases to PDs aren't increasing, so therefore lawyers aren't being skeptical about taking these cases. Could it perhaps be that there hasn't been an increase of drug cases to the PD's office because there has been such a strong focus by the FBI on terrorism and immigration, and a movement away from drug cases? Drug cases have declined and no longer hold the top priority that they did in past years. TRAC notes here in a September 2008 report:
"Ranked 3rd was "Drug Abuse Prevention + Control-Prohibited acts A" under Title 21 U.S.C Section 841. Title 21 U.S.C Section 841 was ranked 2nd a year ago, while it was the 1st most frequently invoked five years ago. It was ranked 1st ten years ago and 1st twenty years ago."
So perhaps lawyers are really being deterred from taking these cases, and the fact that PDs are not seeing a decrease in cases in their office is an indication of just that.
Sunday, August 31, 2008
The decision is here.
Commentary can be found here.
What others are saying:
Anthony Lin, New York Law Journal, 2nd Circuit Affirms Dismissal of Criminal Charges Against KPMG Staffers
Dan Slater, WSJ Blog, 2nd Circuit Upholds Judge Kaplan’s Dismissal of KPMG Indictments
New York Times (AP), Court Upholds Dismissal of Tax Case Against 13
Doug Berman, Sentencing Law & Policy, here
Christine Hurt, Conglomerate, here
Martha Graybow, Reuters, Court upholds dismissal of charges in KPMG case
Richard Janus, CATO, Deputizing Company Counsel as Agents of the Federal Government
Second Circuit Blog, Gimme Shelter
Friday, August 29, 2008
A press release of the U.S. Attorney's Office for the Central District of California reports that "[f]ormer private investigator Anthony Pellicano and prominent entertainment attorney Terry Christensen were found guilty today of federal conspiracy and wiretapping charges in connection with their illegal wiretapping of the ex-wife of Christensen’s longtime client, billionaire Kirk Kerkorian, during a 2002 child support dispute." The jury trial lasted 6 weeks. Pellicano had previously been convicted of other charges, including RICO, in May. The government had tapes in this case, something that can be very difficult for the defense to overcome.
Dan Slater, Wall Street Jrl Blog, Terry Christensen, Pellicano Convicted on Wiretapping Charges
Above the Law - Lawyer of the Day - Terry Christensen