White Collar Crime Prof Blog

United States v. Rubashkin

The white collar crime blog, for two years (see here and here), has given the collar for the case most needing review to the case of Sholom Rubashkin.  The case has an incredible gathering now from a spectrum of individuals and groups across political and ideological views.  The Petition for Cert is here and background on the case is here. Here are some of the interesting updates on this case -

Washington Legal Foundation - Urges High Court to Review Unreasonably Harsh Sentence for Small-Business Owner

Amici Brief for Justice Fellowship & Criminal Law & Sentencing Professors and Lawyers  - Download 11-1203 amici brief  (a wonderful brief authored by David Deitch and Alain Jeff Ifrah that points out the jurisdiction split among Circuits and why it is important for Appellate "judges to state on the record that they have considered each non-frivolous argument for variance under the factors listed in Section 3553(a)" and how and why each such argument affected the sentence imposed.

Amicus Brief of the Association of Professional Responsibility Lawyers (APRL) - Download APRL Amicus Brief in Rubashkin (a strong brief written by W. William Hodes that provides the importance of this case from the perspective of "an independent national organization of lawyers and legal scholars whose practices and areas of academic inquiry are concentrated in all aspects of the law of lawyering." The brief focuses on the jurisdiction split regarding Rule 33 of the Federal Rules of Criminal procedure. The brief also points out important ethics issues that warrant review in this case.)

Hopefully, someone is listening. 

(esp)

Judge Walton Keeps Out Prejudicial Material In Roger Clemens Trial

I mentioned in a recent post that Reggie Walton is a fair judge. That fairness was on display again yesterday in the Roger Clemens trial, when Walton prohibited federal prosecutors from introducing testimony and documents pertaining to Clemens' fat salary as a pitcher. Walton correctly concluded that the prejudicial effect of this evidence outweighed its supposed probative value. It is a very rare federal judge who will bar this kind of "lavish lifestyle" evidence. The government always wants it in, ostensibly to show that a defendant's alleged criminal conduct was part of an effort to maintain a lavish lifestyle. In reality, prosecutors simply want to prejudice the defendant in the eyes of jurors by showing them how rich he is, how "high-on-the-hog" he lives, and how different he is from you and me.

(wisenberg) 

In the News & Around the Blogosphere

Jamie, Sturgeon, Financial Post, Nortel lawyers forced to testify against client -'Completely unprecedented'; Crown wants former CEO's litigators to hand over detailed notes from 2004

Amanda Bronstad, NLJ, Guilty pleas to bribing overseas officials

Mike Scarcella, BLT Blog, In Gulf Spill Probe, DOJ Charges Former BP Engineer with Obstruction

Mathew Huisman, BLT Blog, After Three-Decade Run, D.C. Boutique Janis, Schuelke & Wechsler Dissolves

Jesse J. Holland, Google (AP), Ray of hope for imprisoned ex-Gov. Ryan's appeal

DOJ Press Release, President of Costa Rican Company Convicted in Half a Billion Dollar Fraud Scheme with Thousands of Victims Worldwide

Sara Randazzo, Am Law Daily, Manhattan D.A. Launches Criminal Probe of Ex-Dewey Chair Davis; Firm Opens Internal Inquiry (registration required)

Karen Sloan, NLJ, Baltimore looks to Justice Department for its next dean

Mark Touhy, Paul Enzinna, & Lauren Cury, Corporate Counsel, An In-House Counsel Corporate Corruption Playbook

Sue Reisinger, Corporate Counsel, law.com, Will Wal-Mart Regret Not Disclosing Its Bribery Investigation Sooner?

AP, Washington Post, Ex-aide to John Edwards takes the witness stand against the former presidential candidate (hat tip to Ivan Dominguez)

(esp)

In the News & Around the Blogosphere

DOJ Press Release, Dallas-based Tenet Healthcare Pays More Than $42 Million to Settle Allegations of Improperly Billing Medicare

Brian Baxter, AmLaw Daily, Megaupload Hires High-Profile Quinn Emanuel Laterals for Criminal Defense

Michael Pollick, Herald-Tribune, In flipping fraud case, wife won't join husband in prison

Mike Scarcella, BLT Blog, Lawyer Charged In Trial Scheme Wants Sanctions Against Prosecutors (hat tip to Ivan Dominguez)

Nola.com,Tighten prosecutors' power on contributions: A guest column by Theodore B. Olson and David Debold

Finder, McConnell Bolster Baker & McKenzie’s Global Compliance Practice

Jenna Greene, BLT Blog, Goldman Sachs Settles SEC Case Alleging Misuse of Nonpublic Information

(esp)

In the News & Around the Blogosphere

Mike Scarcella, BLT Blog, Clemens Quarrels With DOJ Over Access To Law Firm's Notes

Attorney Michael Volkov joins LeClairRyan  here

Mike Scarcella & Todd Ruger, National LJ, law.com, Competing fixes for bribery law - DOJ to issue new guidance, as Congress weighs big reforms

A. Brian Albritton, False Claims Act & Qui Tam Law Blog, Wellcare Health Plans Agrees to Pay $137.5 Million to Resolve False Claims Act Case; DOJ Press Release, Florida-Based Wellcare Health Plans Agrees to Pay $137.5 Million to Resolve False Claims Act Allegations; AP, Miami Herald, Bondi: Florida to get $54 million from settlement

Katheryn Hayes Tucker, Daily Report, Nursing home lawyer-owner is convicted of health fraud - Judge finds that U.S. paid defendant $33 million for 'worthless services'

Jennifer Peltz, AP, Ex-Tyco CEO loses parole bid in New York

David Voreacos, Bloomberg, U.S. Tax-Evasion Probes Said to Slow as Prosecutors Transfer

Peter Jackson, AP, Daily Times, 3 Pa. GOP corruption defendants get probation

(esp)

Another Deferred Prosecution - "NYCity Payroll Project Scandal" Company

See Benjamin Weiner & Colin Moynihan, NYTimes, Company in New York City Payroll Project Scandal to Pay $500 Million

(esp)

In the News & Around the Blogosphere

Kelly Kennedy, USA Today, Experts seek alternatives to excluding drug companies

Mike Scarcella, BLT Blog, AG Holder: Ted Stevens Report Has "Disturbing" Findings

AP Fox News, Ohio corruption verdict caps long-running case

Campbell Robertson, NYTimes, In Alabama, 2nd Corruption Trial Ends in Acquittals

DOJ Press Release, FORMER DEPARTMENT OF VETERANS AFFAIRS OFFICIAL SENTENCED TO
SERVE 60 MONTHS IN PRISON FOR CONSPIRACY AND WIRE FRAUD

DOJ Press Release on the Stanford Case, Allen Stanford Convicted in Houston for Orchestrating $7 Billion Investment Fraud Scheme

DOJ Press Release, Justice Department Recovers More Than $900 Million in Consumer Protection Cases in 2011

DOJ Press Release, Assistant Attorney General Lanny A. Breuer of the Criminal Division Speaks at the Dallas Health Care Fraud Enforcement Action Press Conference

DOJ Press Release, Attorney General Eric Holder Speaks at Columbia University Law School on Preventing and Combating Financial Fraud

American Greed, CNBC, Best Places to Go to Prison

(esp)

Strauss-Kahn Involved Again in Sex Case

Dominique Strauss-Kahn is once again in trouble with the law in relation to an investigation involving sexual activity.  Strauss-Kahn was detained overnight in Lille, France, for questioning in a French investigation related to an alleged prostitution ring that purportedly supplied women for sex parties with Strauss-Kahn in Brussels, Paris and Washington.

Strauss-Kahn contends that he had no reason to believe that the women at these parties were prostitutes.  His French lawyer bared that defense to French radio in December, "People are not always clothed at these parties.  I challenge you to tell the difference between a nude prostitute and a classy lady in the nude."  Reuters article, see here.  This lack of scienter defense ironically appears to be the converse of what many believed would have been Strauss-Kahn's defense had the New York case in which he was accused of sexual assault gone to trial.  In that case, it was expected that his defense would have been that he did believe that the woman in question was a prostitute.

The investigation, in which eight people have been charged, involves alleged misuse of corporate funds to pay for the services of the prostitutes.  Engaging prostitutes is not illegal in France (although it is in Washington), but if the investigators determine that Strauss-Kahn had sex with prostitutes he knew had been paid for out of company funds, he might be charged as a beneficiary of that misuse of funds.  Most likely, it will be difficult to prove that Strauss-Kahn, even if he were found to have known the women involved were prostitutes, knew how they were paid.

High-profile cases in other jurisdictions often affect prosecutorial priorities.  One wonders whether this case will lead American prosecutors to scrutinize corporate books to determine whether corporate funds have been used to supply prostitutes to customers, political figures and others.  I suspect that such payments (and consequent tax deductions as business expenses) are not wholly uncommon, at least for non-public businesses.  Any resulting cases, involving both sex and corporate corruption, are sure to draw media attention.

(goldman)

In the News & Around the Blogosphere

Joelle Scott, Forbes, Bharara's Wiretaps: The Latest Insider Trading Charges

Mike Scarcella, BLT Blog, Federal Appeals Court Upholds Abramoff Associate's Plea Deal (w/ a hat tip to Ivan Dominguez)

DOJ Press Release, Four Individuals and Three Corporations Convicted for Roles in Wire Fraud Conspiracy at New York Presbyterian Hospital.

BLoomberg, Rajat Gupta May Face More Charges, U.S. Says

Fox News, Pa. rep. convicted on 5 counts in corruption case

Kevin McCoy, USA Today, Swiss bank indictment details tax evasion ploys; Lynnley Browning, Reuters,
U.S. indicts Wegelin bank for helping Americans avoid tax

Shannon Green, Corporate Counsel, law.com, Was Penn State's GC Counsel for University Officials?

DOJ Press Release, Medical Device Company Smith & Nephew Resolves Foreign Corrupt Practices Act Investigation -Agrees to Pay $16.8 Million Penalty Related to Bribery in Greece

Mike Scarcella, BLT Blog, DOJ Considers Abandoning Its FCPA Sting Prosecution

(esp)

Paterno's Death May Affect Trial of Penn State Officials

Joe Paterno is dead, his legacy as one of the greatest coaches in the history of sports tarnished by his termination -- unjust, I believe -- on the grounds that he inappropriately failed to pursue vigorously an allegation of child sex abuse (see here, here and here).

Paterno's death and absence as a witness will likely have little or no effect on the trial of Jerry Sandusky, the former Penn State assistant coach who was the subject of the allegation reported to Paterno by a Penn State graduate assistant coach, Mike McQueary.  Paterno's only information about the Sandusky issues appears to have been the hearsay report by McQueary, and thus it is unlikely that he would have been a witness.

Paterno's unavailability, however, may have a considerable impact on the trials of Tim Curley, the former university athletic director, and Gary Schultz, a former university senior vice president, both of whom have been charged with failure to report the suspected child abuse and perjury.  Both have been charged with falsely testifying that McQueary, when he spoke with them, did not mention serious or criminal sexual conduct.  McQueary, whom the grand jury report (presumably written by the prosecutors) deemed "extremely credible," testified that he reported the specific act to both Curley and Schultz, and seemingly also to Paterno.  Paterno's grand jury testimony, however, apparently was that what McQueary related to him was far less specific, and thus more ambiguous.  Accordingly, while the grand jury report indicated that Paterno would be a corroborative witness for the prosecution in that he was told by McQueary of the alleged "sexual exploitation" and then reported what McQueary had said to Curley and Schultz, his testimony would apparently also have to an extent corroborated their defenses that McQueary was less explicit than he now claims.

In another highly-publicized investigation involving a former college sports coach, former Syracuse University assistant basketball coach Bernie Fine, it has been reported that two of the four men who had accused Fine of molesting them when they were children have admitted that they committed perjury in connection with the case.  One has admitted that he lied when he claimed Fine molested him.  The second, the only one whose allegations fall within the applicable criminal statute of limitations, while still claiming that abuse occurred, has admitted doctoring purportedly supporting emails.

The Fine situation is a reminder that not every allegation of child sexual abuse is true.  Indeed, in my experience, there is a far higher percentage of false accusations of sexual misconduct than of any other criminal activity.  Thus, such accusations should be scrutinized especially carefully before they are acted upon by law enforcement or others.

(goldman)

Cybercrime

The Center on National Security at Fordham Law has a news source that provides "weekly news round-up of articles, information, and opinions about cybersecurity and the laws, policies, and challenges - both domestic and global - that define the cyber world week to week."  For more information, see here.

(esp) 

In the News & Around the Blogosphere

Basil Katz, Reuters, 7 charged in $62 million Dell insider-trading case

Scotus Blog, Supreme Court denies cert on Renzi v. United States

(esp) 

In the News & Around the Blogosphere

DOJ Press Release, Former Dow Research Scientist Sentenced to 60 Months in Prison for Stealing Trade Secrets and Perjury

Shannon Green, Corporate Counsel, DOJ Collected $1 Billion-Plus in 2011 Antitrust Fines

Newsday (Published by LATimes), Illness postpones Edwards corruption trial

NYTimes, Op Ed, On the Trail of Mortgage Fraud

Edvard Pettersson, Bloomberg, Foreign Bribery Defendants May Fight More as Cases Falter (w/ a hat tip tp Ivan Dominguez)

AP, WSJ, AP Interview: Feds in Conn. target insider trading

DOJ Press Release, Marubeni Corporation Resolves Foreign Corrupt Practices Act Investigation and Agrees to Pay a $54.6 Million Criminal Penalty - $1.7 Billion in Total Penalties and Forfeiture Orders Obtained for Scheme to Bribe Nigerian Government Officials to Obtain Contracts

(esp)

In the News & Around the Blogosphere

AP, NYTimes, Michigan: Ex-Congressman Gets One-Year Sentence (w/ a hat tip to Ivan Dominguez)

Susan Pulliam, WSJ, Galleon Prosecutor to Leave for Dechert

Peter Lattman, NYTimes, Ex-Fund Manager Gets Prison Term in Insider Trading Case

FCPA Professor, The Year That Was

Danielle Ulman, The Daily Record, Curlett, Levin join forces to form firm specializing in criminal defense (login required)

Gina Passarella, The Legal Intelligencer, Computergate Defendant's Legal Mal Suit Targets K&L Gates, Buchanan Firm (login required) (hat tip to Peter Goldberger)

(esp)

In the News & Around the Blogosphere

Lynnley Browning, Reuters, US moves toward legal action against Swiss bank-sources

Sue Reisinger, Corporate Counsel, law.com, DOJ and SEC Use of Deferred and Non-prosecution Agreements in 2011

Robbie Brown, NYTimes, North Carolina: Edwards Legal Team Asks for Delay (hat tip to Ivan Dominguez)

DOJ Press Release, GE Funding Capital Market Services Inc. Admits to Anticompetitive Conduct by Former Traders in the Municipal Bond Investments Market and Agrees to Pay $70 Million to Federal and State Agencies;

Matthew Huisman, BLT Blog, SEC, Other Agencies Settle with GE Funding in Securities Fraud Case

DOJ Press Release, Former Grant Administrator and Legal Assistant of American Samoa Non-Profit Legal Aid Corporation Plead Guilty to Stealing More Than $150,000 in Federal Grant Funds

Karen Sloan, NLJ, law.com, Study: Jurors can't distinguish between knowing and reckless conduct

Bob Van Voris, Bloomberg News, Ex-trader David Slaine Helped Lead to Rajaratnam, U.S. Says

DOJ Press Release, CDR FINANCIAL PRODUCTS EXECUTIVE AND FORMER EXECUTIVE PLEAD GUILTY IN NEW YORK TO BID-RIGGING AND FRAUD CONSPIRACIES RELATED TO MUNICIPAL BOND INVESTMENTS 

DOJ Press Release, Los Angeles Church Pastor Sentenced to 180 Months in Prison for $14.2 Million Medicare Fraud Scheme - One of the Longest Health Care Fraud Sentences Imposed in the Central District of California 

Mike Scarcella, BLT Blog, D.C. Judge Weighs Mistrial Request In FCPA Case

Sue Reisinger, Corporate Counsel, Ex-GC of WellCare Health Plans Charged with Fraud

Walter Pavlo, Forbes, Will Rajaratnam Testify in Rajat Gupta Case?

Ed Beeson, Star-Ledger, Ex-Chicago Bears wide receiver Willie Gault latest pro athlete accused of white-collar crime

(AP) Washington Post, Ex-Israeli leader Olmert indicted on new corruption charges in Jerusalem real estate scandal

Editorial, Detroit Free Press, Editorial: Lopsided justice in grand jury system (w/ a hat tip to Ivan Dominguez)

(esp)

False Claims Act - Qui Tam Law

Check out A. Brian Albritton's, False Claims Act & Qui Tam Law Blog - Recent news and cases concerning the False Claims Act, Qui Tams, whistleblowers, and other related collateral proceedings.

(esp)

In the News & Around the Blogopshere

Bruce Alpert, Times-Picayune, William Jefferson has chance to shed 4 guilty counts, experts say

Jason Turbow, NYTimes, Bonds Avoids Prison Time for Giving Evasive Testimony

Jenna Greene, BLT Blog, SEC Charges Six Former Fannie and Freddie Executives with Securities Fraud

Mike Scarcella, BLT Blog, Judge Rules For DOJ In Suit Over Politicized Hiring (w/ a hat tip to Ivan Dominguez)

Steven Erlanger, NYTimes, Chirac Found Guilty in Political Funding Case

DOJ Press Release, Texas Oil Company Sentenced to Pay $12 Million for Clean Air Act and Obstruction Crimes in Louisiana -Sentence Is the Largest-Ever Criminal Fine in Louisiana for Air Pollution

 Forbes, Financial Crimes Up 47% Since '08 Crisis: FBI

Mike Scarcella, BLT Blog, Judge Chides Prosecutors In FCPA Case Over Secret Notes

Tom Huddleston Jr., AMLaw Daily, Ex-Am Law Associate Kluger Pleads Guilty in $37 Million Insider Trading Scheme

DOJ Press Release, Three Patient Recruiters for Miami Home Health Companies Sentenced to Prison in $25 Million Health Care Fraud Scheme

Michael Volkov, Punishing the Wrongdoer: Environmental Crimes and the Lack of Criminal Intent

Bloomberg, Jordan Thomas on Dodd-Frank Whistleblower Program Report

(esp)

In the News & Around the Blogosphere

DOJ Press Release, Eight Former Senior Executives and Agents of Siemens Charged in Alleged $100 Million Foreign Bribe Scheme

Law.com, The Recorder,  Ginny Laroe, 9th Circuit to Consider Whether Employees' Computer Misuse is a Federal Crime

Amanda Bronstad, NNLJ, law.com, Government misconduct in FCPA prosecution cited in related case

Sheri Qualters, NLJ, At 1st Circuit, two ex-lawyers appeal mortgage fraud convictions

DOJ Press Release, FORMER NEW YORK CON ED MANAGER SENTENCED TO SERVE 70 MONTHS IN PRISON FOR FRAUD, BRIBERY AND TAX CRIMES -Manager Also Sentenced to Pay Criminal Fine And Restitution to Con Ed

(esp)

In the News & Around the Blogosphere

Christopher Matthews, WSJ, Catnip For Compliance Officers

Robert J. Anello & Robert G. Morvillo, N.Y.L.J., Media: Defendant's Friend or Foe?

DOJ Press Release, Owner of Miami-Area Mental Health Company Sentenced to 35 Years in Prison for Orchestrating $205 Million Medicare Fraud Scheme

(esp)

Congress Considers New Limits on Its Members

The New York Times yesterday wrote that in the wake of a CBS 60 Minutes report which said that members of Congress bought stock in companies while considering legislation that might affect those companies, Congress is considering laws banning such trading.  The CBS report said none of the trading was illegal at the time.  See here.

The 60 Minutes report said that the current chairman of the House Financial Services Committee, Spencer Bachus (R-Ala.), then the ranking Republican on the committee, bet stock prices would fall at the time he was being briefed privately that a global financial crisis might be imminent.  According to the Times, at that time Congressman Bachus' office denied he had used nonpublic information as a basis for trading.

I do not venture to assess whether any Congressperson traded on inside information.  I am also generally opposed to "new laws" since most are unnecessary and duplicative.  Nonetheless, I see no reason that Congress should not be held to the same standard as private businesses or citizens.  I also suggest consideration that a new statute, a mirror image to 18 U.S.C. 1001, which criminalizes a false statement to a government official, be enacted prohibiting false statements by a government official to the public.

(goldman)