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
Thursday, August 28, 2008
Chief Judge Jacobs of the Second Circuit authored the 68 page opinion that affirms Judge Kaplan's prior ruling (see here and here) in the KPMG related matter. The lower court had dismissed the defendants' indictments. In affirming the lower court opinion, the Second Circuit states -
"We hold that KPMG’s adoption and enforcement of a policy under which it conditioned, capped and ultimately ceased advancing legal fees to defendants followed as a direct consequence of the government’s overwhelming influence, and that KPMG’s conduct therefore amounted to state action. We further hold that the government thus unjustifiably interfered with defendants’ relationship with counsel and their ability to mount a defense, in violation of the Sixth Amendment, and that the government did not cure the violation. Because no other remedy will return defendants to the status quo ante, we affirm the dismissal of the indictment as to all thirteen defendants." (footnotes omitted)
The Second Circuit stated that the Sixth Amendment right to counsel held that the amendment "protects against unjustified governmental interference with the right to defend oneself using whatever assets one has or might reasonably and lawfully obtain." The court noted that-
"Defendants were indicted based on a fairly novel theory of criminal liability; they faced substantial penalties; the relevant facts are scattered throughout over 22 million documents regarding the doings of scores of people,; the subject matter is "extremely complex,"; technical expertise is needed to figure out and explain what happened; and trial was expected to last between six and eight months, As Judge Kaplan found, these defendants "have been forced to limit their defenses . . . for economic reasons and . . . they would not have been so constrained if KPMG paid their expenses." We therefore hold that these defendants were also deprived of their right to counsel under the Sixth Amendment. (citations and footnote omitted)
The best line from the case - "But if it is in the government’s interest that every defendant receive the best possible representation, it cannot also be in the government’s interest to leave defendants naked to their enemies."
The government did not lose this case, as some might say. In fact, they won. When justice is done for all, as is reflected in this opinion -- the prosecution, defense, and society wins.
Wednesday, July 23, 2008
Keith Coffman, Rocky Mountain News, Enron Prosecutor on Joe Nacchio Team - Sean Berkowitz Has Role Defending Former Qwest CEO
Thursday, July 17, 2008
John Pacenti, Law.com (subscription required), Defense Team Argues DOJ Ideology Spurred Money Laundering Indictment of Miami Attorney
Background and Prior Discussion of the Ben Kuehne Case:
Addendum - Southern District of Florida Blog here
Monday, May 19, 2008
We mourn the passing of criminal defense lawyer Donald B. Fiedler. His obituary is here (Omaha World Herald). He will be missed. He was well known for his wonderful teaching at the National Criminal Defense College. See NACDL here.
In lieu of flowers, Memorials to National Criminal Defense College, c/o Mercer Law School, Macon, GA, 31207.
The photo of Don doing William Jennings Bryan. With a thanks to Korey Reiman; John Wesley Hall, and Norman Reimer. (esp)
Saturday, May 10, 2008
The Third Circuit Court of Appeals entered a stay of the Cyril Wecht trial pending appeal (for background on this case see here). The case of the 77 year old coroner charged with federal violations for alleged state conduct was set for retrial following a hung jury.
A motion to expedite the appeal was also entered. The appellee's brief is due on or before May 15th and the appellant's reply brief has a deadline of May 20th. On the day this order was granted, there was also an entrance of appearance by Richard L. Thornburgh, former Pennsylvania Governor and former Attorney General of the United States and now with the law firm of Kirkpatrick & Lockhart, Preston, Gates, Ellis LLP.
Should DOJ really be spending taxpayer money on this attempt to re-prosecute this individual?
Government's Response Arguing that a Stay is Not Necessary - Download govt. Response-Wecht.pdf
Court Order Rejecting Government's Position - Download wecht_order.pdf
Thursday, May 8, 2008
Government Returns Third Superseding Indictment in Prosecution of Defense Attorney Benedict P. Kuehne
Guest Blogger Jon May, Esq. writes:
When the indictment against Miami attorney Ben Kuehne was unsealed, lawyers across the country scratched their heads. The indictment alleged that Kuehne, hired to vet legal fees paid to famed defense counsel Roy Black for his defense of Fabio Ochoa, was guilty of money laundering. The indictment, however, was almost totally devoid of any facts that explained what Ben actually did that violated the law. The government has attempted to remedy that deficiency in the second and third superseding indictments, but lawyers are still scratching their heads. The government does not contend that the source of the Colombian pesos used to pay Black’s fees were proceeds of any unlawful activity. Rather the government argues that the United States dollars exchanged for the pesos in the United States (by United States agents) were derived from drug trafficking. But the "tainted dollars" exchanged for the clean pesos were not proceeds of any illegal activity involving Fabio Ochoa. These dollars came from various sting operations run by the DEA in New York.
It is the government’s theory that all money exchange businesses operating in the United States are so polluted with tainted dollars and that Attorney Kuehne knew that the money ultimately transferred to Attorney Black was illegal proceeds. Because Kuehne’s trust account was used to temporarily hold the transfer of these funds to Black and because Kuehne drafted opinion letters attesting to the legal source of the funds, the government contends that he committed money laundering.
The government has made this same argument in a number of cases against United States banking institutions who have dealt with money exchanges involving currency from various Latin American nations, most recently Wachovia Bank. But thus far each of these investigations has resulted in deferred prosecutions. Ben Kuehne’s prosecution may be the first case where this unprecedented and peculiar theory has been employed against an individual, in this case a prominent criminal defense lawyer.
A new twist is presented by the third superseding indictment. In addition to money laundering, Ben is charged with defrauding the Government of Colombia, on the theory that these money exchanges defeat Colombian currency control laws. What this means is that the United States is now fully engaged in enforcing other nations’ laws in the courts of the United States.
As this prosecution unfolds, it becomes clearer that the government is using this case to test new theories that have broad implications for every lawyer who provides legal advice that is later argued to have impeded law enforcement efforts, even those of foreign countries. It also threatens to subject civil and corporate counsel to potential prosecution for any legal advice given that somehow violates a foreign law.
Third Superseding Indictment -
Wednesday, March 26, 2008
Philly.Com (AP) - Fifth Day of Deliberations End in Wecht Fraud Trial; Pittsburgh Tribune Review - Wecht Deliberations to Resume Thursday
Wall Street Journal - Paulson Joins Advocates of Wider Fed Oversight
Tuesday, March 18, 2008
45 years ago, Justice Black issued the famed decision in Gideon v. Wainwright. One would have never suspected then that the right to counsel would be an issue in white collar cases. One has to wonder whether the high cost of legal fees makes it difficult for many facing these complex cases to receive the representation that they deserve. An accused may be too wealthy to secure a public defender, but too poor to secure counsel that can spend the time examining the many documents that may be found in something like a fraud case. In no way diminishing the need for proper indigent defense, something needed in so many parts of our country, it is also important to note that white collar cases raise new issues with regard to securing proper representation for the accused individual. [See, e.g. Stein (KPMG) case]
(esp) (w/ a thank you to IntLawGrrls Blog for reminding me of this historic day).
Friday, February 1, 2008
[Moved up from January 28 with a brief update at the end]
The prosecution of Dickie Scruggs has been fascinating, to say the least, including the view it has provided on the web of connections between the various lawyers in and around the case. The latest filing by Scruggs' defense counsel raises an interesting issue of legal ethics that could present problems down the road. Earlier, Scruggs sought to hire a well-regarded local Mississippi attorney, Kenneth Coghlan, to be part of his defense team in the bribery case. Unfortunately, Coghlan had earlier represented a co-defendant, Steve Patterson, for a brief period before withdrawing, and Patterson has now entered a plea agreement and will testify against Scruggs. Needless to say, this presents a clear conflict of interest problem, despite the waivers by both Scruggs and Patterson because of the possibility that privileged information will be made available to Scruggs' defense team or Coghlan cannot provide effective representation because of his confidentiality obligations to Patterson -- the privilege lasts forever, of course. Not surprisingly, Senior U.S. District Judge Neal Biggers denied Scruggs' motion to have Coghlan appear as his counsel on January 16.
Scruggs' defense team has filed a motion to reconsider, arguing that the waivers by Scruggs and Coghlan dissipate any problems from the potential conflict created by the confidential information received from Patterson. No great surprise there, and it's doubtful Judge Biggers will grant the motion because allowing conflicted counsel to appear would be playing with fire. The interesting issue, especially from a legal ethics point of view, is the following statement in the defense filing (available below):
In the event that the Court does not permit Mr. Coghlan to enter an appearance on behalf of Mr. Scruggs, the undersigned counsel wishes to notify the Court that counsel intends to consult with Mr. Coghlan on issues related to local custom and practice, jurisdiction, jury selection and other strictly legal and procedural (i.e., non-evidentiary issues) that may be pertinent to the defense of the case but which do not implicate any attorney-client privileged communications or information. Mr. Coghlan will have no role in the trial of this matter and will not render any legal advice or consultation to Mr. Scruggs. Furthermore, Mr. Coghlan will not be consulted regarding the specifics of either Mr. Scruggs’s or Mr. Patterson’s alleged involvement in the conduct at issue in the Indictment.
Can it be that a lawyer prohibited from representing a defendant because of a potential conflict of interest can continue to work on the case? That strikes me as a bit odd. While Coghlan was not disqualified by Judge Biggers, because he had not yet entered an appearance to represent Scruggs in the case, the district court's denial of the appearance motion seems to me to be the functional equivalent of disqualification under Wheat v. United States. In that case, the Supreme Court gave trial judges broad discretion to disqualify lawyers because of potential conflicts of interest, especially based on concurrent or prior representation of co-defendants. If a lawyer is disqualified due to a potential (or even actual) conflict, I take that to mean the lawyer may not continue any form of representation under the professional responsibility rules. Therefore, can Coghlan consult on Scruggs' case without representing him in court?
It is not clear whether Coghlan would have an attorney-client relationship with Scruggs, or only be a "consultant" to the lead defense lawyer, John Keker. An argument can be made that Mississippi Rule of Professional Conduct 1.9(a) would allow Coghlan to continue to represent Scruggs, only not in court. The Rule states: "A lawyer who has formerly represented a client in a matter shall not thereafter: (a) represent another in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client unless the former client consents after consultation . . . ." Because Patterson agreed to waive any conflict of interest claims against Coghlan, it could be that the continuing representation does not violate the rule. But if Coghlan continues to represent Scruggs, only not appear in court, that seems to go against the spirit of Judge Biggers order, which looked to be based on the district court's authority under Wheat to disqualify an attorney due to the potential conflict. Judge Bigger's decision may have been to remove Coghlan from representing of Scruggs to protect against any possibility of an ineffective assistance claim by Scruggs if there was a conviction.
If Judge Biggers understood his decision to be a disqualification under Wheat, then hiring Coghlan as a "consultant" looks more like a subterfuge to get around the effect of the court's order. If a lawyer has a conflict of interest due to possessing privileged information, then that attorney must be completely removed from the case. The whole idea behind screening lawyers with conflicts is that they can have no contact with the attorneys representing a client, so the lawyer cannot be consulted for general knowledge and background with a promise that no confidential information will be passed. Moreover, if Coghlan is not representing Scruggs, then discussions with him would not necessarily be privileged, although they could qualify for protection under the attorney work product doctrine.
When a judge decides to disqualify an attorney from a case, I always assumed that it meant the lawyer was completely removed from any aspect of the client's legal representation. The Scruggs prosecution once again presents a new and interesting twist. It remains to be seen whether the U.S. Attorney's Office will seek a complete disqualification if Coghlan continues to do some work on the case, but it would not surprise me to see the prosecutors challenge this type of consultation on behalf of Scruggs. (ph)
UPDATE: Judge Biggers denied the motion for reconsideration in a short opinion (available below), stating that Scruggs could hardly complain about a lack of defense help with "five eminent attorneys" already on his team. Interestingly, the Judge passed on making any decision about whether Coghlan could continue to help out with Scruggs' defense, stating in a brief footnote at the end of the opinion, "As to the extra-judicial matters for which the defendant states he intends to employ Mr. Coghlan, the court has no opinion at this time." I suspect that if Coghlan starts showing up in the courthouse for hearings the judge may express an opinion. (ph)
Monday, January 14, 2008
I discussed in an earlier post (here) that you "Can't Tell the Attorneys in the Scruggs Case Without a Scorecard" because of all the shuffling of counsel in the case. The latest round of plea agreements down in Mississippi sheds a little light on why there was such a flurry of activity on January 9, when lawyers from The Langston Firm who represented Dickie Scruggs dropped out of the case and he tried to add new counsel, Kenneth Coghlan, who had earlier represented a co-defendant, Steven Patterson. Meanwhile, Dickie's son Zach, a co-defendant, terminated his attorney, Anthony Farese, who attempted to withdraw. The smoke has now cleared a bit on the counsel issue as Dickie's former lawyer, Joseph Langston, entered into a plea agreement for conspiracy to pay a bribe to a Mississippi state court judge in a case involving a fee dispute between Dickie and two former partners -- what a shock, because this is the same basic transaction alleged in Dickie's current indictment in Mississippi. The plea agreement (available below) is dated January 7, 2008, and was sealed, but obviously it required Langston to withdraw from representing Dickie because he is named in the criminal information as a coconpirator despite not being charged . . . yet.
Just to make things even more complicated, Langston's attorney is Farese, who was also representing Zach. Both Langston and Zach filed conflict waivers (available below), but it would be a bit difficult to represent a defendant's son in one case and a lawyer who states that the father paid a bribe in a similar case. Even if there's no risk of disclosure of confidential information, it just doesn't engender the kind of trust necessary between a lawyer and client, so Farese's motion to withdraw as Zach's attorney was essentially a foregone conclusion. According to filings in the case, Zach is now being represented by Todd Graves from Missouri. In case that name sounds familiar, Graves was the U.S. Attorney for the Western District of Missouri who became the "eighth" fired U.S. Attorney in 2006 when it came out ther he too had been removed for political reasons by Alberto Gonzales' Justice Department. Odd how the streams have crossed in this case (for the Ghostbusters fans out there).
Dickie's attempt to hire Coghlan could be problematic because of the second plea agreement (available below) in the case, this time by co-defendant Patterson to the conspiracy charge. Given the prior representation of a co-defendant, it will be hard for the judge to allow Coghlan to appear on Dickie's behalf in the case because of the potential (or actual) conflict of interest. Courts are generally loath to allow one lawyer to represent a current defendant after previously representing another one now cooperating in the case and likely to testify against the current client -- that's just playing with fire. Patterson had been a partner of Tim Balducci, who dealt with the judge who was to receive the bribe, and filings in the case indicate that the government has a number of taped conversations between Balducci and Patterson. Patterson will likely be the next person vilified by the defense, but his plea could give the prosecutors a big boost because he can support Balducci's testimony. Like Balducci, Patterson can receive a 5K1.1 motion for a lower sentence based on his cooperation, so the first line of attack is clear -- the "deal with the devil" argument. The remaining defendants in this case are all from the Scruggs law firm, so to this point the government's witnesses remain on the outside.
Things seem to come in bunches in Mississippi, and the trial is currently set to start on February 25. With the Patterson guilty plea and the arrival of Graves to represent Zach, don't be surprised to see the defense move to push the trial back. (ph)
Thursday, January 10, 2008
The prosecution of famed plaintiffs tort attorney Dickie Scruggs and three other defendants accused of bribing a Mississippi state court judge in a case involving a fee dispute has seen a whirlwind of motions by attorneys seeking to withdraw or appear in the case, and Senior U.S. District Judge Neal Biggers has called a halt to the movement for the moment. According to the docket sheet in the case, on January 8, attorneys for Dickie from The Langston Law Firm moved to withdraw. That firm was searched on the day the indictment was returned, and at one time former co-defendant and now cooperating witness Tim Balducci worked there. Whether the law firm or any of its partners are a target of a grand jury investigation remains to be seen, but Balducci boasted on tape about knowing where "bodies" were buried involving Dickie. The Langston Law Firm could be one of the cemeteries.
Next came a withdrawal motion on January 9 from Anthony Farese, the only counsel of record for co-defendant Zach Scruggs, Dickie's son who works for his father's firm. According to Farese's motion, Zach terminated him and plans to hire new counsel. At about the same time, Dickie moved to add Kenneth Coghlan as a new member of his defense team. Here's where Judge Biggers threw up a "Stop" sign in an order issued at the end of the day (available below). First, the Judge noted that there was no motion by a new attorney to appear for Zach, so he would be left without counsel. Judge Biggers expressed concern about waiting for a new lawyer to appear who then may ask for a postponement of the trial, so for the moment Farese's motion to withdraw is denied. It will likely be granted once the new lawyer shows up, but don't be surprised to see Judge Biggers hold that attorney's feet to the fire to avoid a postponement of the trial. The Judge also denied the motion to have Coghlan appear as counsel for Dickie because of a potential conflict of interest. Coghlan previously represented co-defendant Steven Patterson, who was a partner of Balducci. As the Judge explained in the order, if Patterson or Dickie were to break ranks and cooperate with the government, Coghlan could well have a conflict because of confidential information learned from one client that could not be used to the benefit of the other. While Dickie will, in all likelihood, be happy to waive a conflict, the same may not be true of Patterson, who terminated Coghlan in favor of a new attorney. And even in the event both waive the conflict, the district court has fairly wide discretion to disqualify an attorney with a potential conflict. Given that Dickie already has other lawyers, including well-known white collar defense lawyer John Keker, Judge Biggers may not feel constrained to accept a waiver from the defendants.
Why all these attorney machinations at the same time? I would certainly expect Dickie and Zach Scruggs to coordinate their defenses, so Zach's new attorney will likely come with his father's seal of approval. The withdrawal of The Langston Law Firm could indicate an expansion of the case into other areas, and the lawyers would have to withdraw because of the conflict with their client if they were targets of an investigation involving Dickie, or there is the possibility that the lawyers could be witnesses against their client, which would knock them off the case. Prosecutors may well seek a separate indictment if there is evidence of bribes in other cases, so the problems for Dickie may not be over any time soon. The Wall Street Journal Law Blog has an excellent summary of the attorney shuffling (here). (ph)
Wednesday, December 26, 2007
The first issue raised by the government in the prosecution of Barry Bonds for perjury and obstruction of justice involves the potential -- or perhaps even actual -- conflict of interest his two new attorneys may have because of their prior work representing witnesses in the Balco (Bay Area Laboratory Co-operative) steroids investigation. The much-heralded lawyers are Alan Ruby and Christine Arguedas, and both were hired right before Bonds' arraignment on December 7. Ruby earlier represented Dr. Arthur Ting, Bonds' personal physician, for about a month, and Dr. Ting was a witness before the grand jury that investigated Bonds for perjury. Arguedas represented, among others, former track star Tim Montgomery and three former members of the Oakland Raiders.
In a filing raising the potential conflicts of interest (available below), prosecutors note that they are unlikely to call Montgomery and the three football players, probably because they had nothing to do with Bonds and could not provide any valuable testimony. I doubt there is even a colorable claim of a conflict of interest involving Arguedas based on her representation of witnesses with no connection to her current client who are not going to tesify. Dr. Ting, however, is another matter as the government motion notes that he is likely to be a witness at trial. Indeed, he could well be a crucial witness in establishing that Bonds use steroids during the periods that he denied their use before the grand jury. Media reports indicate that Dr. Ting accompanied Bonds to Balco, and participated in a private drug test of Bonds in 2000. The filing redacts a portion of a paragraph relating to Dr. Ting, most likely because it refers to his grand jury testimony, which remains secret under Federal Rule of Criminal Procedure 6(e). Any redaction draws attention, of course, and it is intriguing to specualate about what he might say at trial, and whether he will try to defend Bonds.
Ruby only represented Dr. Ting for a short time, so the potential conflict is not clear. One common basis for claiming that defense counsel cannot represent a current defendant because of prior representation of a government witness is that the lawyer will not be able to fully cross-examine the witness due to the confidentiality rules. For example, if the prior client made a statement to the lawyer and then makes a different assertion at trial, the lawyer would not be able to use that earlier statement to undermine the former client's credibility because of the protections afforded to attorney-client communications. The lawyer's obligations to the two clients would come into conflict because of the need to protect one at the expense of the other getting the best possible defense, and so might result in the lawyer providing ineffective assistance to the current client, the defendant. If Ruby has a conflict of interest because of what he might have learned from Dr. Ting during the earlier representation, then his presence on the case could result in the reversal of any conviction due to a Sixth Amendment violation due from claimed ineffective assistance of counsel.
The government's filing notes that prosecutors will accept a waiver from Bonds of the possible conflicts, which triggered his brief appearance before U.S. District Judge Susan Illston on December 21. At this point, there has not been a motion to remove either Ruby or Arguedas, and prosecutors are raising the conflict at this point to avoid being whipsawed if there is an actual conflict of interest. One of the dictionary definitions of "whipsaw" is "to defeat or best in two ways at once." The issue prosecutors are raising is that they do not want to lose a conviction because of a problem that the defense lawyer has with his/her client. If the case goes to trial with conflicted counsel and the jury returns a "not guilty" verdict, then there is no harm from the conflict. If the jury convicts, then a defendant can claim that the result is tainted due to defense counsel's conflict, a difficult argument to win but one that results in overturning the verdict if an actual conflict is found that affected counsel's performance at trial. Hence the whipsaw, because the defendant can win either way with a conflicted lawyer, at least in the government's eyes, because prosecutors did not do anything wrong.
The waiver is one form of protection for the case, although it does not provide an absolute shield against a defendant raising the issue on appeal. By requiring Bonds to appear in court to answer questions, Judge Illston is taking steps to avoid having the case affected by the potential conflict. She has ordered Bonds and his attorneys to make a submission by January 4, 2008, waiving the conflict to establish a record that it is both knowing and voluntary. Because Dr. Ting is likely to be a witness, he too must agree to waive any confidentiality or conflict of interest claim he might have against Ruby. While the current client is often happy to waive the conflict, the former client has an interest that must be protected.
If Dr. Ting were to refuse to waive, then the issue becomes much more complicated and I would expect Judge Illston to seriously consider removing Ruby as a member of Bonds' legal defense team. Of course, that is a decision also fraught with danger, because the recent Supreme Court decision in United States v. Gonzalez-Lopez held that improper denial of a defendant's right to counsel of choice results in an automatic reversal of a conviction. While I expect the court to accept Bonds' waiver, assuming Dr. Ting also waives the protections of the confidentiality rule, this is an issue that can rear its ugly head at any point in time. (ph)
Friday, December 7, 2007
Home run king Barry Bonds is supposed to appear in federal court for his initial appearance -- and most likely an arraignment -- on perjury and obstruction of justice charges contained in a federal indictment issued in San Francisco. A Wall Street Journal article (here), by Bay Area legal maven Justin Scheck, points out the problems Bonds has had in hiring a new attorney with significant federal court experience to conduct the defense at trial. The article notes that Bonds met with John Keker, of Keker & Van Nest, a nationally-known white collar defense lawyer who has defended, among others, former investment banker Frank Quattrone, who was also charged with obstruction of justice arising from a forwarded e-mail. There may have been an issue in hiring Keker because he represented the baseball players union in its fight to keep the government from getting the results of drug tests players took (see a New York Daily News story here). In discussing the approach to Keker, and various in-fighting among Bonds' current legal team, the WSJ article raises in my mind the question whether a lawyer would really even want Bonds as a client.
There are obvious benefits to being the attorney for one of the most famous players in professional sports history, in a trial that will gain national -- and probably even international -- attention. Bonds' lead counsel will be on television daily whenever there is any court proceeding, and the chance to have your picture appear over the shoulder of an ESPN SportsCenter anchor on a regular basis is publicity you just can't buy. The lawyer will join the pantheon of well-known defense counsel in this country, one of the "usual suspects" who will begin to appear regularly in a variety of cases, or be asked to comment on them. Pretty tempting, isn't it?
But from this ivory tower, I have to say that there are certainly a few major red flags that a lawyer has to think about seriously before undertaking the representation. The article notes that Bonds asked Keker for a discount on his $900 hourly rate, and wanted another law firm to review the billings. That certainly goes against the grain in white collar cases, in which cost is often not an obstacle. Bonds' past baseball income plus future earnings potential, regardless of the outcome of the case, probably means he can afford Keker's rate. There's nothing wrong with asking for a discount, and it makes good business sense to double check bills. Not the best way to begin a relationship, but it shouldn't be a showstopper, either.
If that was all, then the fact that Bonds wants a discount and will flyspeck bills would hardly be of interest beyond the stereotype of the allegedly cheapskate athlete. But the article also says that "Keker was concerned he wouldn't have control over Mr. Bonds's public relations and legal strategies and bridled at the prospect of collaborating with the player's current legal team." [Italics added] That starts to spell trouble for the lawyer. The fact that Bonds' current legal team is a bit on the dysfunctional side is problematic, but if the strings in the case will be pulled by someone else, then there is a significant danger for the lawyer. A defense lawyer being pulled in different directions, or forced to clear legal strategies through the "home office," may not be effective. Trust is a two-way street, and if the lawyer is not going to be trusted, then why take on the case?
It is always difficult to control a high-profile client who is used to being in charge of everything -- look no further than Lord Conrad Black, when the judge in his case threatened to take action against him for out-of-court comments during the trial if his lawyers didn't muzzle him. I'm not saying the lawyer has to control everything, but a trial is a lot like any theatrical production in which everyone has a role to play. The client who believes he or she can "talk my way out of this" or who showers the government with disdain, no doubt believing it is richly deserved, is looking for trouble. Heaven forbid the client demand the opportunity to testify to "explain" everything for the jury so they will understand how misunderstood the defendant really is -- that drooling person would be the prosecutor waiting for the cross-examination. Especially in a perjury and obstruction prosecution, portraying the defendant as an honest person whose statements were just misunderstood is paramount, but the defendant may be the worst person to say that. The hardest decision in a case, especially a white collar prosecution, is whether the defendant will testify, and there can only be two people involved: the lead counsel and the client. If there is a fight over control of the case from the beginning, then it means other agendas may be playing out, with the trial lawyer getting the blame if things go wrong.
So, would you really want to be Barry Bonds' lawyer? Tough call, but it would be pretty cool to appear on SportsCenter right after the Patriots highlights. (ph)
UPDATE: The San Jose Mercury News reports (here) that Bonds has added two Bay Area attorneys: Allen Ruby and Christine Arguedas. Ruby has represented the NFL in one of Oakland Raiders owner Al Davis' many lawsuits against the league, and Arguedas is well-known in white collar crime circles for her work recently on behalf of various corporate executives caught up in options backdating, including the former GC at Apple, and the former general counsel of Hewlett-Packard in that company's pretexting imbroglio.
Arguedas has represented others in connection with the Balco (Bay Area Laboratory Cooperative) steroids investigation, including witnesses who appeared before the grand jury. That gives her some familiarity with the case. While it can be dicey to represent different people involved in a grand jury investigation, I doubt there is a conflict of interest problem for her because there does not seem to be any overlap between the witnesses who testified before the Balco grand jury and those who are likely to be called in the Bonds trial. It remains to be seen, however, whether prosecutors will look for a potential conflict of interest as the basis to move to knock Arguedas off the case. Another interesting question will be whether Ruby or Arguedas takes the lead in the case, or whether they are co-leaders of the defense -- which one gets to be on SportsCenter. No word yet on whether either discounted his/her fees for the case. (ph)
Sunday, December 2, 2007
One of the defendants in the SEC's civil lawsuit (amended complaint here) against a number of former Nortel Networks defendants for alleged accounting fraud has filed a motion to dismiss based on the claim that the Commission sought to improperly pressured the company to deny her the payment of attorney's fees. The argument is reminiscent of the KPMG case, which is cited in the brief, in which the indictment of thirteen defendants was dismissed because of pressure from prosecutors on the accounting firm to deny attorney's fees to a number of former partners and employees later charged for their work on tax shelters. A Globe & Mail article (here) discusses the filing, and notes the connection with the KPMG case. Whether the two are the same is questionable because there are differences between the cases that may be crucial.
The motion by Mary Anne Poland (available below), a former assistant controller at Nortel, makes two interconnected arguments. First, Nortel Networks cut off payment of her attorney's fees when the SEC indicated that it was looking at her as a possible defendant in an enforcement action. Unlike the company's former CEO and CFO, also defendants in the suit, she does not have the deep pockets necessary to fight an SEC securities fraud case, which usually involves significant discovery and a long trial if it gets that far. The motion states that Nortel's counsel, who was the former head of the Enforcement Division at the SEC, counseled the company to terminate the payment so that it could appear cooperative with the SEC in the case. Nortel eventually settled the accounting case by paying a $35 million civil penalty.
Poland's motion points to the company's cooperation as evidence of the Commission's involvement in the decision to terminate the attorney's fees. The SEC's Litigation Release (here) announcing the settlement with Nortel states that "the Commission acknowledges Nortel's substantial remedial efforts and cooperation." In addition, the motion notes that the SEC announced in another case -- involving telecom equipment manufacturer Lucent -- the Commission highlighted the company's cooperation that involved terminating attorney's fee payments for employees. The argument is that the Commission, at least indirectly, caused Nortel to terminate Poland's attorney's fees. Hence, the specter of the KPMG case, in which such governmental pressure led the firm to cut off the attorney's fees that eventually triggered the dismissal of the indictment.
The problem for Poland is that the SEC's policy was not as explicit as the Thompson Memo that the defendants pointed to in the KPMG case as the basis for terminating the attorney's fees. The motion leads off with the district court decision in United States v. Stein that found the violation of the defendant's rights based on the governmental pressure to deny attorney's fees. While the SEC's policy certainly emphasizes a company's cooperation, it is not nearly as explicit at the Thompson Memo was on the attorney's fee issue -- a point changed in the current iteration of the Department of Justice's policy on charging corporation, the McNulty Memo. It is not clear whether there is any direct evidence of pressure by the Commission staff on Nortel to cut off attorney's fees, and pointing to the company's lawyer as the source of that decision may be a crucial distinction from the KPMG case. Moreover, unlike Stein, a criminal case, there is no Sixth Amendment right to counsel in a civil case, so that ground is unavailable to dismiss the complaint.
The second related claim is that while Poland did not have counsel, the SEC sought and obtained two tolling agreements that allowed the investigation to continue beyond the five year limitations period. The motion argues that the denial of attorney's fees was related to these requests because the Commission took advantage of Poland's position of acting without legal advice. She claims that the SEC staff pressured her to agree to the tolling, once even saying that an FBI agent might join the interview. Because there is no Sixth Amendment claim, the argument is that the government violated Poland's due process rights. That was one basis for the Stein decision, but the due process concerns in criminal cases are different from those in a civil case. Poland could have refused to sign the tolling agreement, or could have hired counsel with her own resources to advise on that issue. Moreover, she is now represented again by lawyers. Unlike a criminal case, the SEC cannot seek a prison term, so the decision to sign the tolling agreement may be viewed by the courts as less significant under the Due Process Clause.
The motion relies largely on the overtones of the governmental policy that was castigated in the KPMG case and has led to significant criticism of the Department of Justice on Capitol Hill. The connection, however, between Nortel's decision to cut off the attorney's fees and any particular pressure from the SEC is less clear in this case. The fact that a company decides to terminate the payment of fees, even if it is based on the hope that it will curry favor with the SEC, does not necessarily mean the Commission acted improperly. Whether the dismissal motion gains any traction remains to be seen, but the damage from the government's actions in the KPMG case show how widely felt its effects will be for other cases and agencies. (ph -- thanks to YH for passing along the information)