Friday, June 24, 2011

Not a Good Day for Conrad Black

Ameet Sachdev, Chicago Tribune, Black headed back to prison; wife collapses in court

(esp)

June 24, 2011 in Fraud, News | Permalink | Comments (0) | TrackBack (0)

Wednesday, June 22, 2011

Second Chance for Bad Guess?

          The appeal of former New York State Senate majority leader Joseph L. Bruno, argued last week before the United States Court of Appeals for the Second Circuit, has raised some interesting double jeopardy issues which may or may not be addressed by the court.  Bruno was convicted of honest services fraud under 18 U.S.C. 1346 based on an undisclosed self-dealing theory.  After Bruno’s conviction and while his case was on appeal, the Supreme Court in United States v. Skilling rejected the undisclosed self-dealing theory under Section 1346 and limited the statute’s application to cases involving bribery or kickbacks (thereby making the statute virtually superfluous since such conduct is usually covered by other statutes).  On appeal in Bruno, the government, conceding reversal was required because the court’s instructions to the jury were flawed under Skilling, nonetheless argued that it should be given a second shot at Bruno, this time with a superseding indictment more specifically alleging bribery.

          Generally, an appeal of a criminal trial marred by instructions proper under prevailing law at the time given (as they apparently were here) but later found defective by a higher court in that or another case results in a retrial with proper instructions.  One underlying justification is that the prosecution cannot be expected to anticipate changes in the law and should be able to rely on current law.  This case is somewhat different, however.  Here, the government could not, or certainly should not, have failed to realize that the theory it chose to pursue was constitutionally questionable on vagueness and overbreadth grounds.  The theory of prosecution had been questioned by courts, scholars, and lawyers and was about to be considered by the Supreme Court pursuant to a grant of certiorari.  The government nonetheless chose to go forward on this theory, most likely because it was easier to prove factually, rather than a bribery charge that was less assailable legally but probably more difficult to prove.  This case thus appears to be a classic example of a prosecutor deciding to seek the instant gratification of a conviction at trial and not to worry about the appeal until later.

          Last week, in Davis v. United States, the Supreme Court held in a search and seizure case that evidence should not be excluded if the evidence was seized pursuant to police procedures compliant with then-binding legal precedent even though that precedent was subsequently overruled.  Following that line of reasoning, a court may well rule that there should not be a double jeopardy bar to retrial if the prosecutor’s conduct was compliant with binding legal precedent that was subsequently overruled.  A different approach seems appropriate, however, when the law the prosecutor relied on was, as here, up in the air.  Indeed, Justice Sotomayor, concurring in Davis, made such a distinction, stating that she would have ruled differently if the law the police relied on was unsettled.  It will be interesting to see how the Second Circuit, if it reaches this issue, will decide it.

(Goldman)

June 22, 2011 in Fraud, Prosecutions, Searches | Permalink | Comments (0) | TrackBack (0)

Friday, June 17, 2011

NACDL's 1st Annual West Coast White Collar Conference, “Turning The Tables On The Government” – “The Accidental Felon: Challenging The Expansion of the Willful Blindness Doctrine,” Friday, June 17, 2011

Guest Blogger: Darin Thompson, Assistant Federal Public Defender, Office of the Federal Public Defender (Cleveland,OH)

One of two breakout sessions, two speakers (Timothy O’Toole and Professor Ellen S. Podgor) reviewed the ever-broadening scope of the willful blindness doctrine and proposed several defenses and counter-attacks to this brutally successful prosecutorial tactic.

The speakers opened by discussing a recent U.S. Supreme Court case, Global-Tech Appliances, Inc. v. SEB S.A. Though this is a patent infringement case, the Court addresses the scope of the criminal law willful blindness doctrine. The Court notes that the instruction has been applied to a wide variety of cases, but sets forth two universal requirements: (1) the defendant must subjectively believe that there is a high probability that a fact exists and (2) the defendant must take deliberate actions to avoid learning of that fact. The Court affirmed, holding there was sufficient evidence that the patent infringer was willfully blind under the criminal law standard.

Professor Podgor began by reviewing U.S. v. Jewell, the Ninth Circuit case most commonly cited as setting forth the law on willful blindness. Professor Podgor noted that Justice (then Judge Kennedy) dissented in the 9th Circuit decision in Jewell, and that he again found himself (this time alone) in the dissent in Global-Tech.

Mr. O’Toole noted that the use of willful blindness in white collar cases (even though it originated in a drug case) is an excellent example of why white collar defense attorneys should not wall themselves off from other areas of criminal defense.   With respect to Global-Tech, he noted that the second requirement of “deliberate action” appears to narrow the scope of willful blindness in comparison to existing circuit case law. The Supreme Court itself emphasized this requirement in its analysis, noting that the Federal Circuit was in error in not requiring deliberate action.

Professor Podgor emphasized the strength of the language used by the Supreme Court in this case. Powerful jury instructions can and should be crafted based upon the Global-Tech. Mr. O’Toole seconded these comments, pointing out that the willful blindness doctrine is often relied upon by the government in cases where evidence of deliberate actions is non-existent. He questioned whether any circuit’s pattern instruction remains valid in light of a universal failure to include a requirement of “deliberate actions” to avoid learning of the key fact(s). He also noted that the Supreme Court didn’t merely indicate that recklessness or negligence wasn’t sufficient, but actually set forth the definitions of those two mental states, and suggested that proposed jury instructions should do the same.

One questioner asked whether the improvement in the legal standard was so great that defense counsel should ask for this instruction, to allow focus on the absence of deliberate actions. Both speakers cautioned against it.

(dt)

Postscript -  Mentioned in this session was a wonderful article by Dane C. Ball (Gerger & Clarke) titled, Improving "Willful Blindness" Jury Instructions In Criminal Cases After High Court's Decision in Global-Tech, published in the BNA Criminal Law Reporter. With many thanks to Dane C.  Ball and the Criminal Law Reporter for allowing us to post it here - Download BNAinsights.Ball2

(esp)

June 17, 2011 in Conferences, Fraud | Permalink | Comments (0) | TrackBack (0)

Wednesday, May 25, 2011

Government Response in Weyhrauch Hyde Act Case

The Weyhrauch case has had a long journey - but it is not over yet.  It went to the Supreme Court, along with Jeff Skilling's case. (see here). Bruce Weyhrauch came back and plead to a misdemeanor in state court - not federal court.  He then filed a Hyde Act Amendment motion to recover his attorney fees.  The government has now filed it's Hyde Act response.  A couple of sentences in this response are fascinating:

  • "[T]he Hyde Amendment does not provide for discovery, and none is appropriate here. (p. 1)
  • "The fact that Weyhrauch pleaded guilty to a state misdemeanor as opposed to the federal crimes for which he was originally indicted is irrelevant." (p. 6)
  • "...Weyhrauch fails to specify how the government's position in this litigation has been vexatious, frivolous, or in bad faith ...The closest Weyhrauch comes to making an argument on this point is claiming that an FBI agent testified falsely before the grand jury ..." (p. 7)

See also Richard Mauer, Anchorage Daily News, Justice Department rejects Weyhrauch reimbursement WEYHRAUCH: Prosecutors say guilt admission negates his claim.

  (esp)

May 25, 2011 in Fraud, Judicial Opinions, Prosecutions, Prosecutors | Permalink | Comments (2) | TrackBack (0)

Mixed Verdict in Alleged Tax Fraud Scheme

The DOJ Press Release is titled, Jenkens & Gilchrist Attorneys, Former BDO Seidman CEO and Deutsche Bank Broker Found Guilty in New York of Multi-Billion Dollar Criminal Tax Fraud Scheme - Massive, 10 Year Criminal Scheme Generated More Than $7 Billion Dollars of Fraudulent Tax Losses

The Press Release states in part:

"NEW YORK – Paul M. Daugerdas, Donna M. Guerin, Denis M. Field and David Parse were convicted today in Manhattan federal court for their roles in a tax shelter scheme in which they designed, marketed and implemented fraudulent tax shelters used by wealthy individuals to avoid paying taxes to the Internal Revenue Service (IRS), announced Preet Bharara, U.S. Attorney for the Southern District of New York; John A. DiCicco, Principal Deputy Assistant Attorney General for the Justice Department’s Tax Division; and Victor S.O. Song, Chief of the IRS Criminal Investigation. Together, Daugerdas, Guerin and Field made $130 million in profits from the 10-year scheme. 

But the press release also notes that, "Raymond Craig Brubaker,. . . a banker at Deutsche Bank who was also charged along with the defendants, was acquitted by the jury on all counts."

Brubaker was represented by the law firm of Kramer, Levin, Naftalis & Frankel.

(esp)

May 25, 2011 in Fraud, Tax, Verdict | Permalink | Comments (0) | TrackBack (0)

Wednesday, May 11, 2011

Dog Bites Man. Rajaratnam Guilty On All Counts.

Read all about it. Here is Katya Wachtel's report for businessinsider.com. Carrie Johnson of NPR's All Things Considered discusses the deterrent effect of Wall Street wiretaps in Wiretaps: Not Just For Mob Bosses Anymore, with a quote thrown in from yours truly.

(wisenberg)

May 11, 2011 in Current Affairs, Fraud, Insider Trading, Investigations, Prosecutions, Securities | Permalink | Comments (0) | TrackBack (0)

Monday, April 25, 2011

Holder Recognizes the Importance of being "Smart on Crime"

AG Holder spoke about the DOJ's Priorities and Mission (see here)  He listed four essential priorities:

"In the critical days ahead, these four essential priorities – protecting Americans from national security threats, protecting Americans from violent crime, protecting Americans from financial fraud, and protecting the most vulnerable members of our society – will guide our work."

Specifically when speaking to financial fraud, he stated:

"Third: we will protect Americans from the financial fraud that devastates consumers, siphons taxpayer dollars, weakens our markets, and impedes our ongoing economic recovery.   As we’ve seen, the impact of financial crime is not confined to Wall Street – and many times the victims of fraud have worked hard and played by established investment rules, only to see their retirement and life savings vanish at hands of white-collar criminals. 

"Over the last two years, through reinforced interagency partnerships and new joint initiatives – such as the Financial Fraud Enforcement Task Force and the Health Care Fraud Prevention and Enforcement Action Team – we have transformed the way we deal with fraud crimes.   Not only have we secured record recoveries totaling billions of dollars, we have raised awareness about these crimes and improved the ability of consumers and victims to report suspected fraud schemes.   In the coming months, we must take all of these efforts to the next level.   

"We will vigorously investigate financial crimes and ensure that those who commit them are made to pay the price – by serving long sentences and making restitution to taxpayers, as well as victims.    To identify the most effective ways to prevent and combat financial fraud, senior Department leaders will continue to meet with victims, medical providers, business leaders, and key government and law enforcement partners around the country.   We will also work to bring our HEAT task forces to new problem areas, and to expand other successful programs that will allow us to maximize both our efficiency and our impact."

But it was particularly good to hear that he recognized the importance of using "smart of crime" approaches as opposed to prosecuting haphazardly.  He stated: "We also will invest in scientific research to make certain that this Department is both tough and smart on crime, and that our decisions are economically sound.   This means working closely with state, local, and tribal partners.   It also means broadening our support for effective crime prevention, intervention, enforcement, and reentry strategies."

Thank you, AG Holder.

(esp)

April 25, 2011 in Fraud, Prosecutions, Prosecutors | Permalink | Comments (1) | TrackBack (0)

Saturday, April 23, 2011

Lauren Stevens Case To Start Tuesday: Has The Government Overcharged?

The federal criminal trial involving former GlaxoSmithKline ("GSK") Vice President and Associate General Counsel Lauren Stevens commences this Tuesday in Greenbelt, Maryland. When I first read the Indictment, without knowing anything else about the facts, it struck me that the government may have overcharged. That is probably not a good sign for the feds, since the Stevens charging instrument is a classic one-sided speaking Indictment that seeks to put the United States' case in the best possible light.

The crux of the prosecution theory is that Stevens, who headed up a team of inside and outside GSK counsel responding to an FDA inquiry, withheld information about off-label marketing of Wellbutrin. Specifically, Stevens allegedly learned that several doctors, paid by GSK and speaking at GSK-sponsored events, promoted off-label (weight-loss) use of the drug. GSK's responses were part of a voluntary production pursuant to a written request from the FDA's Division of Drug Marketing, Advertising, and Communications ("DDMAC"). Stevens allegedly agreed, orally and in writing, to provide DDMA with "materials and documents presented at GSK-sponsored promotional programs, even if not created by, or under the custody or control of GSK." But, according to the Indictment, Stevens knowingly failed to produce numerous off-label promotional and presentation materials, provided to GSK by the doctors in question, with intent to obstruct an FDA proceeding. Rather than focusing entirely or primarily on this failure to produce, the Indictment lumps in many other broad statements contained in Stevens' various cover letters to the government. It seems to me that at least some of these statements are open to differing interpretations. Perhaps the government should have more narrowly honed in on the failure to turn over the presentation/promotional materials.

Part of Stevens' defense will entail her purported reliance on the advice of outside counsel in sending GSK's written responses to the FDA. The original Indictment was thrown out by Judge Roger Titus, because federal prosecutors incorrectly instructed the grand jury that reliance on the advice of counsel is only an affirmative defense. In fact, good faith reliance on advice of counsel negates the specific intent element under the federal obstruction and false statement statutes at issue in the trial.

This prosecution should strike terror into the hearts of inside and outside counsel throughout corporate America. Of particular note is that the FDA inquiry into off-label Wellbutrin marketing did not involve a compelled production and was not even quasi-criminal in nature.

Attached for our readers' benefit are some documents setting out the government's case and what are likely to be key portions of Ms. Stevens' defense.

Here are: Court's Memorandum Opinion Dismissing Indictment, Lauren Stevens Indictment(2), Background Section of Defense Response on Opinion Testimony, and Declaration of Brian O'Connor.

(wisenberg) 

April 23, 2011 in Arthur Andersen, Corruption, Current Affairs, Defense Counsel, Fraud, Grand Jury, Judicial Opinions, Legal Ethics, Obstruction, Prosecutions, Statutes | Permalink | Comments (0) | TrackBack (0)

Monday, April 18, 2011

Ninth Circuit Offers No Relief in Post-Skilling Case

The Ninth Circuit Court of Appeals in U.S. v. Pelisamen ruled that "where the jury returned a special verdict form indicating that it had convicted the defendant on both theories" ("money and propery" and "honest services") the conviction remains valid post-Skilling because the jury has designated that it convicted the defendant on both theories. This case differs from the Skilling remand, where there was an alternative theory issue.  Here in Pelisamen it is clear that the jury looked at both items and convicted on both.  But one also has to wonder if evidence of honest services taints the jury with prejudicial evidence. And one additionally has to wonder why the government felt it necessary to charge honest services if they had such a strong case premised on "money or property."

(esp)(hat tip to Linda Friedman Ramirez)

April 18, 2011 in Fraud, Prosecutions | Permalink | Comments (0) | TrackBack (0)

Thursday, April 14, 2011

Sixth Circuit Vacates Wire Fraud and False Statement Convictions of Former Tennessee State Senator

A fascinating opinion vacating convictions and reversing the district court, was issued by the Sixth Circuit in the case of U.S. v. Ford. This appeal concerned convictions for false statements and two counts of "honest services" wire fraud.  This case does not pertain to another case against Ford in which he was sentenced to 5 1/2 years imprisonment.

The government's problem with the 1001 conviction was that the statute was inapplicable to the defendant's conduct. Section 1001 requires federal jurisdiction. As stated by the court in noting the defendant's argument, "while the facts that he failed to disclose concerned an entity inseparable from federal ties, the entities to which he failed to disclose those facts were anything but federal."  The court noted that the "failures to disclose financial interests were related to functions of the state government of Tennessee - the senate's and election registry's reporting requirements."  The court also used the rule of lenity in support of its vacating these convictions.

The wire fraud counts were easier - Skilling limited honest services to "bribery and kickbacks," and that was not the case here.

Attorneys Representing Ford were Paul Mogin, William E. McDaniels, & M. Jesse Carlson (Williams & Connolly LLP).

(esp) 

April 14, 2011 in Enron, Fraud, Judicial Opinions, Prosecutions | Permalink | Comments (0) | TrackBack (0)

Friday, April 1, 2011

Downward Variances at the District Court: Beware of Pyrrhic Victories

This week's Sentencing Guidelines opinion from the Third Circuit in United States v. Negroni underscores the importance of forcing district courts to create an adequate record at sentencing hearings. Paul Negroni and James Hall IV pled guilty to mail and wire fraud, among other crimes. They were knowing participants in a massive fraud scheme. Hall's original Guidelines range was 87-108 months, reduced to 46-57 months after the district court struck Paragraph 45 of the PSR, which had provided the factual support for a 6-level "250 or more victims" enhancement. The judge then downwardly varied to a 15 month sentence. Negroni's Guidelines range was 70-87 months. The judge downardly varied to a probated sentence with 9 months home detention. The Third Circuit vacated both sentences, because of the procedural unreasonablemess of the downward variances, and remanded for resentencing, I have commented previously on the disturbing trend in federal circuit courts of reversing downward variances based on alleged procedural irregularities, thereby gutting Gall and Kimbrough. The Fourth Circuit is particularly notorious for this.

But district judges must step up to the plate and do their part. In Negroni, the sentencing court struck Paragraph 45 of Hall's PSR, but clearly failed to articulate on the record its reason for doing so. The district court also failed to adequately articulate the substantial downward variance it granted to Negroni. Instead, like so many sentencing judges, it rather rotely recited the Section 3553 factors without intelligently discussing most of them or specifically applying them to the facts of Negroni's case and personal history.

It is really not that hard for a district judge to make an adequate procedural record. Defense counsel must force the sentencing court to discuss each Section 3553 factor and apply it in some fashion to a defendant's unique circumstances. How does counsel do this? By literally providing, in writing and in advance, a paint-by-numbers guidebook for the court. I do not know if that was attempted in Negroni. Perhaps it was. It is not always psychologically easy, in the midst of a hearing, to convince a judge who is ruling in your favor to touch all the bases. But don't kid yourself--the circuit courts are waiting, and itching, to send these babies back. Better to educate the district court beforehand, through your sentencing memorandum, about the procedural requirements for a downward variance.

Here is the opinion. Hat tip to Greg Poe for sending this decision our way.

(wisenberg)

 

April 1, 2011 in Fraud, Sentencing | Permalink | Comments (0) | TrackBack (0)

Thursday, March 17, 2011

Ninth Circuit Says Predicates for Section 1028A Are Merely Descriptive

A Ninth Circuit opinion in United States v. Harrell examines a question of first impression for the 9th Circuit: "whether the 'relating to' parentheticals within 18 U.S.C. s 1028A(c) limit the statute's otherwise clear articulation of which offenses may serve as predicates for application of s 1028(a)." Among the charges against Harrell were a charge of aggravated identity theft. The court held that "'relating to'parentheticals do not limit the statute's effect, but serve simply as descriptive aids."  Finding the plain text clear, the court did not "trudge through the deep mud of legislative history." Neither did the court use the rule of lenity.

(esp)

March 17, 2011 in Fraud, Judicial Opinions | Permalink | Comments (0) | TrackBack (0)

DOJ Says "Arrests Follow Largest Corporate Fraud Investigation" for Indiana

A DOJ Press Release says: "Three former executives of Fair Financial Company, an Ohio financial services business, were arrested today and charged in an indictment filed in the Southern District of Indiana for their roles in a scheme to defraud approximately 5,000 investors of more than $200 million."  The press release also states that "'These arrests follow the largest corporate fraud investigation in the history of the FBI in Indiana which resulted in over 5,000 victims and an estimated loss of $200 million dollars,'said Special Agent in Charge Welch."

Indy.com here.  Check out the picture - Was a perp walk really necessary in a case like this?

Indictment - Download Durham

(esp)

March 17, 2011 in Fraud, Investigations, Prosecutions | Permalink | Comments (2) | TrackBack (0)

Government's Response in Brown - Just a Clerical Error

Discussed here is the alleged Brady violations in the James A. Brown case, a former Merrill Lynch executive who was convicted of perjury and obstruction and is contesting these charges on several grounds. Then posted here was a brief filed in the Brown case that argued concerning a possible conflict because Lanny Breuer's name appeared on the brief and he was conflicted out of the case.  The government now responds basically saying that this is just a clerical error.

Government's Brief - Download Filed Version of Government's Opposition to Brown's Motion to Strike

(esp)

March 17, 2011 in Enron, Fraud | Permalink | Comments (1) | TrackBack (0)

Tuesday, March 15, 2011

Weyhrauch Mail Fraud Case Finally Dismissed

As noted here (KTUU.com, Weyhrauch Gets Fine, Probation in Corruption Case Plea) and also Becky Bohrer, Anchorage Daily News (AP),Weyrauch Gets Suspended Jail Sentence, $1,000 Fine , the Weyhrauch case is finally being resolved.  But lets look at what is happening here -

Weyhrauch was initially charged with an individual named Kott, who is now awaiting a ruling on whether his case will be dismissed for discovery violations. Perhaps we have a preview of the reasoning of the Ninth Circuit Court of Appeals by the decision last week in the Kohring case that found that the government had failed to provide Brady material to the defense. (see here, here, and here).

Weyhrauch's case went to the Supreme Court as one of three cases being examined as part of the "honest services" doctrine that prosecutors stretched to a point that the Court decided to place new limits upon -- requiring a showing of  "bribery and kickbacks."  In its ruling in Skilling, the Court did not directly address the question raised in the Weyhrauch case as to whether you needed a violation of state law for a mail fraud charge that uses honest services.  Rather the Court reframed the question with a new test of "bribery or kickbacks."  (see also here)

Now Weyhrauch is back in court pleading to the charge noted in the articles above.  In dismissing the federal case against him he filed a non-opposition to the motion to dismiss as follows:

"Weyhrauch non-opps the motion to dismiss for two reasons.  First, this was a very weak case from the beginning and all the evidence the government ever really had was that Weyhrauch had participated in, aided, or abetted a lobbyist engaging as a lobbyist without being registered.  See, attached Exhibit 1, Information and Plea Agreement.  Now that Weyhrauch has pled to that crime in state court, there are no longer facts to support a federal indictment.  Second, Weyhrauch believes there is evidence to support dismissal of the indictment because of "misconduct before the grand jury which returned the indictment against Weyhrauch." (reference to a letter filed under seal), which is filed under seal because it refers to grand jury testimony and other grand jury proceedings.  If the standard is that dismissal is appropriate when the ends of justice are served, then this case qualifies by any measure."

The more important question is:  Did the ends of justice warrant the federal government using the mail fraud statute to bring this alleged state case in the first place?

(esp) 

March 15, 2011 in Fraud, Prosecutions, Prosecutors, Sentencing, Settlement | Permalink | Comments (0) | TrackBack (0)

Holder on Health Care Fraud

AG Holder speaking at the Detroit Health Care Fraud Prevention Summit stated:

"In just the last fiscal year, we obtained settlements and judgments amounting to more than $2.5 billion in False Claims Act matters alleging health care fraud – the largest annual figure in history and an increase of more than 50% from fiscal year 2009.  We also opened more than 2,000 new criminal and civil health care fraud investigations, reached an all-time high in the number of health care fraud defendants charged, stopped numerous large-scale fraud schemes in their tracks, and returned more than $2.5 billion to the Medicare Trust Fund and more than $800 million to cash-strapped state Medicaid programs."

Full press release here.

(esp)

March 15, 2011 in Fraud, Prosecutors | Permalink | Comments (0) | TrackBack (0)

Friday, March 11, 2011

Third Circuit Post Skilling Decision

The Third Circuit Court of Appeals examined convictions on five counts of honest services mail fraud in violation of 18 U.S.C. §§ 1341 and 1346 and one count of extortion under color of official right in violation of 18 U.S.C. § 1951(a) and vacated the convictions and sentences on the honest services counts, See opinion here. The defendant had argued:

"(1) in light of Skilling, the District Court erred in instructing the jury that it could convict him under the [honest services mail fraud] HSMF Counts based on the Concealed Conflict Object; (2) his HSMF convictions must be vacated because the error concerning the Concealed Conflict Object was not harmless beyond a reasonable doubt and (3) his Extortion Count conviction should be vacated due to "prejudicial spillover" from the HSMF Concealed Conflict Object error. Alternatively, [the defendant] contends that his convictions should be vacated because the District Court erroneously charged the jury in several other respects."

The court held:

"Upon careful review of the record below, it is not possible for us to conclude beyond a reasonable doubt that a rational jury would have convicted [the defendant] based solely upon the Bribery Object. At trial, the Government inextricably intertwined evidence of bribery and concealment. The District Court itself specifically charged the jury that it might convict [the defendant] on either the Bribery Object or the Concealed Conflict Object, and the District Court's evidentiary rulings throughout the trial may have been affected by the existence of the Concealed Conflict Object charges. Moreover, there is no escaping the fact that, while understandably emphasizing the Bribery Object to a greater degree, the United States did argue that the Concealed Conflict Object alone was a sufficient basis for conviction."

(esp) 

March 11, 2011 in Fraud, Judicial Opinions | Permalink | Comments (0) | TrackBack (0)

Thursday, March 3, 2011

ABA White Collar Crime Conference - Honest Services Fraud Panel

This panel was moderated by Professor Julie O'Sullivan of Georgetown Law School.

It started with Denis J. McInerney, Chief of the Fraud Section of the Criminal Division of the Department of Justice, who gave the history of the mail fraud statute from its inception up to the Court's decision in Skilling.

The second panelist was Martha Boersch of Jones Day.  She spoke about the 110 cases that have been examined post-Skilling. Some circuits have said a fiduciary duty is required - but not all circuits have held this. Another big issue is whether the government has to prove a quid pro quo - she noted the split in some court cases on this issue. There is also uncertainty as to what a quid pro quo would be in this context. Does the government have to prove a contemplated economic harm? There are likely to be future cases on the definition of honest services coming from instructions given in mail fraud cases.

The third speaker wasFrank Razzano, Pepper Hamilton,who spoke about five open questions: 1) Does it require a fiduciary duty? (He said you should make sure that there is a breach on the part of the payor); 2) Is legislation necessary to address this issue or is there a way around this for prosecutors; (He spoke about the case of U.S. v. Jain here- how you can use a pecuniary theory of mail fraud; 3) Does Skilling limit the stream of benefits theory?  4) He noted that you need to analyze the intent of the payor and payee carefully   5) Gratuities - does honest services fraud include this, or is it limited to bribery?  He looked at some of the cases where these issues had arisen.

Finally Professor Julie O'Sullivan talked about congressional acts that have been introduced since Skilling.

(esp)(blogging from San Diego)

March 3, 2011 in Conferences, Congress, Fraud, Prosecutions | Permalink | Comments (2) | TrackBack (0)

ABA White Collar Crime Conference - Public Corruption Panel

This afternoon breakout session on public corrruption was moderated by Joshua R. Hochberg (McKenna, Long & Aldridge).

Jack Smith, Chief of the Public Integrity Section of the Criminal Division of the Department of Justice,spoke about how his office was moving cases along. He stressed the importance of maintaining the deadlines that are established.  He also stated he has not found a problem finding statutes to use when bringing state and local corruption cases post the Supreme Court's modification of 1346. He said that other statutes are available to bring conflict of interest cases.

Robert M. Cary, a partner in the Washington, D.C., office of Williams & Connolly LLP,  noted the lack of transparency in discovery.  Until there is an enforceable rule, it will be a problem.

Laura A. Miller, Nixon Peabody LLP, said that "successful representation is when my name and my client's name does not appear in the press."

Patrick M. Collins, Perkins Coie LLP questioned why the government can't go the extra mile and have open file discovery.

The panel discussed the Speech & Debate Clause and how it can affect a case.  They also looked at discovery issues - Laura Miller noted the lack of uniformity on discovery issues.  She mentioned how in the "rocket docket" they receive Jencks material the Friday before trial. Jack Smith said that if it is close - turn it over.Jack  Smith said they sometimes he will highlight documents for the defense. He recognized his duty to go through documents and find Brady material.  Laura Miller noted that we should all work together to manage discovery.  A final topic discussed was venue.

(esp)(blogging from San Diego)

March 3, 2011 in Celebrities, Conferences, Corruption, Fraud | Permalink | Comments (0) | TrackBack (0)

ABA White Collar Crime Conference - Lessons Learned From Recent Trials

The opening panel of this morning discussed some recent white collar cases: Karatz (alleged options backing); WebMD (alleged financial statement fraud), and Petters (alleged Ponzi scheme).  Ronald J. Nessim was listed as moderating this panel, but Vince Marella filled in for him. Particularly interesting were the remarks of John Lauro, who talked about how a group of defendants stuck together for a long time - and the importance of this for the case. Both he and John Keker discussed the initial corporate investigation in their cases and how the companies did not conduct it with a purpose to demonize their clients, although in one instance the later relationship might not have been as amicable.

In the Petters  case, the prosecutor explained how the case came to light and how quickly it moved forward.  This was contrasted with the WebMD case where there was no discussion with the prosecutors. What was noted in the WebMD case was the importance of having resources to make the case -  Lauro said it would not have been possible without resources. 

John Lauro explained that one of the biggest challenges for the defense was the discovery.  He also explained how a Daubert challenge allowed them to educate the judge about the case.

I only wish I could have stayed to listen to more of this fascinating presentation - but off to a meeting for my panel on ethics.

(esp)(blogging from San Diego)  

March 3, 2011 in Conferences, Fraud, Prosecutions | Permalink | Comments (0) | TrackBack (0)