Monday, June 20, 2011

More Oversight At the Top - Avoiding Needless Prosecutions

Sue Reisinger at Corporate Counsel has this fascinating piece titled, Why Didn't the Maryland U.S. Attorney Sign the Lauren Stevens Indictment?  But there are some additional questions that need answers.  Why if a top US Attorney is not willing to sign the Indictment did senior officials at DOJ's criminal division not intercede?  And if they did re-examine the case, did they authorize proceeding with this case? (For background on the dismissal of this case by the judge, see here).

There is something to be said about an indictment coming from the district bringing the charges - it's an aspect of venue.  Prosecutors from that district get to look at the case in comparison to other matters being prosecuted in that district, in order to determine if this merits expending funds for a prosecution.  Having outsiders brought in to consider a prosecution may be warranted, especially when the prosecutor has a conflict.  But in any event, someone at the top needs to examine whether the prosecution is warranted.

(esp)

June 20, 2011 in Obstruction, Prosecutions | Permalink | Comments (0) | TrackBack (0)

Sunday, May 22, 2011

11th Circuit Obstruction Decision - No Evidence That Defendant Knew

Obstruction of justice is a common offense used by prosecutors in white collar matters.  I call it, along with perjury and false statements, "short-cut"offenses - as they usually allow prosecutors to obtain a conviction fairly easily without needing to present a lengthy document case - and white collar cases can be very document intense.  But lately, the government has not been so fortunate in its use of the short-cut approach. Because even if proceeding with a short-cut crime, you still need to prove the case. More importantly, you need to have a case with sufficient evidence of all the elements of the crime.  

The Eleventh Circuit in U.S. v. Dennis Friske, a.k.a. Denny, ruled that the "government failed to introduce sufficient evidence to permit the jury to find that he knew the existence of the forfeiture proceeding."   Bottom line - the case was remanded for the district court to enter an acquittal.  

Although this is not a white collar case, it is an important decision for white collar practitioners as it emphasizes the need to focus on whether the government has the sufficient nexus for an obstruction crime. The court in Friske cites to the Supreme Court decisions in Aguilar and Arthur Andersen in holding that the "government was required to prove that Friske knew of, or at least foresaw, the forfeiture proceeding." Merely acting suspiciously will not be enough.

See also Paul Kish, Federal Criminal Lawyer Blog, Atlanta-based Federal Court of Appeals Reverses Obstruction Conviction Because No Evidence Defendant Aware of the Proceeding He Supposedly Obstructed

(esp)(w/ a hat tip to Linda Friedman Ramirez)

May 22, 2011 in Arthur Andersen, Judicial Opinions, Obstruction, Prosecutions | Permalink | Comments (1) | TrackBack (0)

Saturday, May 14, 2011

D.C. Circuit Affirms Safavian Convictions After Retrial

Here is yesterday's opinion from the D.C.Circuit in United States v. David Safavian. The former Jack Abramoff friend and colleague was convicted upon retrial, after the appellate court threw out the original convictions on various grounds. The primary contention in the latest appeal was vindictive prosecution, as new charges were added after the remand. The Court held that the trial court did not abuse its discretion in finding that the government added the new charges to counter Safavian's literal truth defense. Safavian's alleged felonious conduct was incredibly petty and minor in nature. The prosecution was a tremendous waste of government resources.

(wisenberg)

May 14, 2011 in Current Affairs, Judicial Opinions, Obstruction | Permalink | Comments (0) | TrackBack (0)

Tuesday, May 3, 2011

Lauren Stevens Trial: Week Two. Where is the Coverage?

Here is a case of infinitely greater importance than the Rajaratnam insider trading farce, but one that is largely getting the silent treatment from our financial press. I haven't seen a real news story on the Lauren Stevens trial since the first day of trial. This is pathetic. One of the most thoughtful blogosphere commentaries comes here from my friend David Douglas at Shook, Hardy & Bacon. David says that the prosecution represents a "gotcha" game, because the government did not set out clear markers regarding what it would and would not tolerate from in-house counsel responding to FDA document requests.

But that is clearly not the story told by the United States in the charging instrument. The Indictment quotes a 10-29-02 letter from Stevens to the FDA in which she confirms an earlier pledge of GSK's best efforts to obtain and provide "materials and documents presented at GSK-sponsored promotional programs, even if not created by, or under the custody or control of GSK." (That sounds like a pretty clear marker to me.) Stevens then allegedly told the FDA that GSK's production was complete, although she had failed to produce numerous presentation slides containing "incriminating evidence of potential off-label promotion by GSK."

According to one of the defense's responsive pleadings, Stevens and her team, "reached a consensus decision not to produce the presentations immediately, but instead to seek a meeting with the FDA at which GSK would discuss the presentations." Ms. Stevens tried several times to set up such a meeting, but the FDA did not respond positiviely, "and the anticipated meeting never occurred." That isn't exactly a compelling defense.

My friend, DC criminal defense attorney Eugene Gorokhov, of Burnham & Gorokhov, attended the first day of testimony. Eugene's eyewitness account follows:

"The Stevens trial seems to be off to an interesting start.  We missed openings but saw the government's first witness.  He was a reviewer for the FDA and was the person chiefly responsible for communication with GSK and Ms. Stevens in particular.  The first part of his testimony focused on the basic rules - what is a package insert, indicated use, etc., and legality of off-label prescribing versus illegal off-label promotion.  He testified on direct that [the FDA] initially started to send inquiries to GSK based on an anonymous complaint by a doctor regarding off-label promotion at GSK-sponsored events.  The government had him read at length from correspondence between the FDA and GSK (authored by Stevens).  The point seemed to be to establish that GSK clearly sought wide-ranging materials on any and all off-label promotion, and that Stevens was therefore clearly on notice of what was expected and did not provide complete or truthful responses.  The prosecutor repeatedly asked whether this or that statement by Stevens could have influenced the FDA.
 
But on cross, the defense showed some of the non-sensical aspects of the prohibition on off-label promotion.  For example, if a paid speaker discusses a drug for 5 minutes and then is asked unsolicited questions the rest of the time about off-label use, it is perfectly legal.  It is also legal in any setting other than promotion, ie, academia, discussions with other physicians, etc.  In any of the above settings the speaker could use the same words regarding off-label use, and it is not criminalized.  On the other hand, if there is a groundbreaking discovery regarding off-label use the paid speaker must keep that a secret at any promotional event. The defense attacked the government's assertion that the documents sought concerned all off-label use, as opposed to just use for weight loss.  The defense confronted the government witness not only with multiple statements from GSK's correspondence with the FDA that reflected this understanding, but also the statement of the witness in a letter to the DOJ that specified off-label use for weight loss and made no mention of other uses.Finally, the government witness admitted that all of GSK's [advertising] promotional materials were in the FDA's files before they sent any document requests, and and that the FDA never previously took issue with any of these materials.  However, the FDA witness indicated that he did not remember reviewing any of these promotional materials before sending the document requests to GSK."
(wisenberg)  

May 3, 2011 in Obstruction, Prosecutions | 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

Reflecting on Skilling after the Barry Bonds Verdict

Guest Blogger - Dane C. Ball (Gerger & Clarke)

I was annoyed by the result in Skilling—that the unquestionable honest-services error was “harmless” beyond a reasonable doubt.  But at the time I couldn’t articulate exactly why.  After the Bonds verdict, I can.  In short, the Bonds verdict illustrates the silliness of the conclusion in Skilling that appellate courts can and should sit as the 13th, 14th, and 15th jurors, then use a cold record to speak for the first 12 jurors while pretending appellate courts have crystal balls that make this okay.

 Compare the two cases.  Skilling’s trial was infected by honest-services error:  in the indictment; in the evidence; in the argument; and in the instructions.  Kicking a door cracked open by the Supreme Court in Pulido, the Fifth Circuit swept this under the rug—finding harmlessness—by pretending it could satisfactorily predict that the jury would have convicted on all counts even absent the error.  To be sure, this put the nail in the coffin for the Yates standard of review, which said that when multiple theories are charged and instructed and one is impermissible, reversal usually is automatic because it is “impossible to tell” whether the jury relied on the impermissible theory.  The Yates standard respected the constitutional right to an impartial jury of one’s peers (which appellate courts concerned with finality and efficiency certainly are not); it recognized the limitations of an appellate court’s ability to predict the past under changed circumstances; and it acknowledged that juries are composed of human beings (not robots) who can be and often are influenced by intangibles not apparent in a paper record. 

The Bonds verdict illustrates why eradicating the Yates standard was a bad idea—and indeed leads to a standard that infringes the right to an impartial jury of one’s peers.  Bonds was charged with repeatedly lying to a grand jury, and obstruction of justice essentially based on repeatedly lying to that grand jury.  With a proper indictment and charge, the impartial jury of Bonds’ peers hung on whether Bonds lied to the grand jury, but agreed that he obstructed by lying to the grand jury.  There are hyper-technical legal ways to attempt to explain this—but in reality (where jurors live), the verdict makes little sense.  And surely Bonds’ attorneys will file a motion challenging the sole conviction on this basis. 

But more importantly to me, Bonds illustrates what was right with Yates and what is wrong with Skilling.  Appellate court’s aren’t very good at predicting the past under changed circumstances.  I’d venture to guess that if the Fifth Circuit judges who decided Skilling had placed bets on the Bonds verdict, they’d have batted 0 for 3 predicting hung counts on lying but conviction on obstruction based on lying. 

I hope the defense bar won’t give up on the Yates standard.

(dcb)

April 18, 2011 in Celebrities, Enron, Judicial Opinions, Obstruction, Prosecutions, Verdict | Permalink | Comments (1) | TrackBack (0)

Thursday, April 14, 2011

Government Re-Indicts Former GlaxoSmithKline Corporate Counsel

It is interesting to see that the government has issued a press release announcing that it has re-indicted the former pharmaceutical (GlaxoSmithKline) company lawyer with charges of obstruction and making false statements. It is common for the  government to use"short-cut" offenses in white collar cases. (see here).

But shouldn't they have also issued a press release weeks ago when the government's indictment was tossed by a judge (see here).  Why is it that the press releases only tell half the story?  Shouldn't a minister of justice tell both the dismissals and the re-indictments?

More importantly, is this a case that the government should be spending our precious resources for government prosecution. Even if there is a discovery violation here, and I am not convinced that there has been one - does this matter belong in criminal court?    Or, if this conduct did occur, would this better be suited for an administrative or disciplinary matter?   

See also Sue Reisinger, Corporate Counsel, Feds Re-Indict Former Glaxo In-House Lawyer

(esp)

April 14, 2011 in Civil Enforcement, Obstruction, Prosecutors | Permalink | Comments (0) | TrackBack (0)

Wednesday, April 13, 2011

News Reports on Verdict in Barry Bonds Trial

AP, AJC, Barry Bonds found guilty of obstruction

Maura Dolan, LATimes, Barry Bonds Convicted of Obstruction of Justice in Steroids Case

Ben Forer, ABC News, Barry Bonds Convicted of Obstruction of Justice, but Jury Hung on Other Charges

Fox News, Bonds guilty of obstruction of justice

Juliet Macur, NYTimes, Bonds Guilty of Obstruction of Justice

Laird Harrison & Dan Levine, Reuters, U.S. jury finds Barry Bonds guilty on one count

Alan Duke, CNN, Bonds convicted of obstruction of justice

 Why is it that the headlines tend to focus on the conviction and not the counts that did not result in a conviction (although it is noticed that ABC News did not do this).  Was this long investigation and trial worth it?  Is this how our tax dollars should be spent?

For background see here.

(esp)

April 13, 2011 in Antitrust, Celebrities, Obstruction, Sports, Verdict | Permalink | Comments (0) | TrackBack (0)

Monday, April 11, 2011

En Banc Petition Filed in Norris case

The Third Circuit recently ruled in a closely watched case, on the issue of whether corporate counsel had in fact represented an individual within the corporation and as such the attorney-client privilege should apply.  (see here) The unpublished opinion of the court found no error on the part of the district court.  Counsel for Appellant Norris has now filed for a rehearing en banc.   Three issues are presented in this Petition:

 "I. The Panel Decision Squarely Conflicts With Shramm, Arthur Andersen, and Aguilar as to the Requisite Specific Intent for a Conspiracy to Obstruct a Grand Jury Proceeding;

 II.The Panel Decision Squarely Conflicts with Farrell's Holding that 'Corrupt Persuasion' Does Not Include Persuading an Alleged Co-Conspirator to Withhold Incriminating Information;

III. The Panel Decision Misapplied Bevill to Permit the Evisceration of a Corporate Officer's Personal Attorney-Client Privilege."

Petition for Rehearing En Banc - Download 2011-04-06 Petition for Rehearing En Banc

(esp)

April 11, 2011 in Defense Counsel, Investigations, Judicial Opinions, Obstruction, Privileges | Permalink | Comments (0) | TrackBack (0)

Friday, March 25, 2011

Commentary on Court Dismissal of Indictment Against Former VP & Associate General Counsel of GlaxoSmithKline

Check out - Sue Reisinger, Corporate Counsel, She Asked, Counsel Told: Case Against Glaxo Attorney Is Dismissed

The former VP and Associate General Counsel of GlaxoSmith Kline had been charged with a 6-count Indictment for the alleged crimes of obstruction (1512), falsification and concealment of documents (1519) and false statements (1000). The Indictment against Lauren Stevents has now been dismissed, but it is without prejudice.

Stevens claimed a defense to the charges of advice of counsel in her responses to the FDA's inquiry. The government response was that 18 USC 1519 is a general intent crime and therefore a "good faith reliance on advice of counsel is only a defense to specific intent crimes." 

The court did not agree with the government, citing applicable sources that provide a solid basis for its holding.  My take is that the statute clearly is requiring two intents - to "knowingly alters, destroys, multilates, conceals, coversup, falsifies, or makes a false entry in any record, document, or tangible object with the intent to impeded, obstruct, or influence the investigation ....."  With two intents it seems clear that one should use specific intent here. 

But what is more questionable here is that the government thinks that specific intent should not be required here.  Should you really prosecute someone who may not have had the specific intent to do these alleged acts?  Will this achieve the deterrence from criminality that we desire?  Irrespective of whether one accepts the government's claim that advice of counsel is an affirmative defense or the defense and court position that it negates the mens rea, is prosecution of this alleged conduct the way we want to spend valuable tax dollars?

This case is a perfect example of how we are failing to use our resources wisely.  Do we really need to spend money prosecuting folks who may not have complied with a government discovery request properly? Or would the money be better spent using it for educating lawyers and others of how to respond to government inquiries correctly.  And what happens if we turn the tables - should we start prosecuting Assistant United States Attorneys who do not comply with constitutional requirements of discovery, or would our resources be better spent educating them of the importance of upholding these constitutional rights. 

Bottom line - don't refile this case. 

(esp) 

Addendum - See here

March 25, 2011 in Defense Counsel, Government Reports, Grand Jury, Investigations, Judicial Opinions, News, Obstruction, Prosecutions, Prosecutors | Permalink | Comments (0) | TrackBack (0)

Wednesday, March 23, 2011

Third Circuit Rules - OK for Corporate Counsel to Testify Against CEO

In a closely watched case (see here), the Third Circuit was asked to consider whether corporate counsel had in fact represented an individual within the corporation and as such the attorney-client privilege should apply. Defendant had argued that the Bevill standard should not "apply here, as here, both the individual and the corporation have an express attorney-client relationship with counsel." Reply Brief of Ian P. Norris - Download 2011-02-25 Norris Reply Brief

The Third Circuit issued an unpublished opinion that resolves this issue in a paragraph, stating in part that:

 "[t]he District Court in this case held an evidentiary hearing and ultimately determined that Norris failed to meet his burden in asserting his privilege pursuant to the five-factor test set forth in In the Matter of Bevill, Bresler & Schulman Asset Management Corp., 805 F.2d 120, 123 (3rd 1986).  The District Court did not legally err in applying this test, and we see no clear error in the District Court's holding based on the facts elicited in the evidentiary hearing."  

To all the corporate executives that are cooperating with corporate counsel thinking that the individual is representing them - beware....

Opinion- Download Opinion

(esp)

March 23, 2011 in Defense Counsel, Judicial Opinions, Obstruction, Privileges | Permalink | Comments (0) | TrackBack (0)

Tuesday, March 1, 2011

First Indictment Returned In Upper Big Branch Mine Investigation

The government has unsealed the Hughie Elbert Stover Indictment in the Southern District of West Virginia. Stover is charged with one count of 18 U.S.C.Section 1001 false statements and one count of 18 U.S.C. Section 1519 concealment, mutilation, and destruction of records and documents. This is the first indictment coming out of the government's investigation of the 2010 Upper Big Branch Mine explosion in Montcoal, West Virginia. The charges do not appear to be directly related to the explosion itself, which may account for the relative restraint of the well-crafted speaking indictment and DOJ's Press Release on Hughie Stover. Stover, head of security for Massey subsidiary Performance Coal Company, Inc., is accused of lying to federal investigators by stating that: 1) Performance security guards were forbidden to give advance warning of Mine Safety and Health Administration ("MSHA") Inspectors' presence at the mine; and 2) he would fire any guard who gave such advance notice. According to the indictment, Stover actually devised the system under which advance notice of MSHA Inspectors' presence was quickly relayed through the mine via a mine communications channel. Stover is also accused of directing an employee to destroy records of the warning system. Section 1519 was enacted as part of Sarbanes-Oxley. The indictment nowhere mentions Massey Energy or the explosion itself. The press release does, including quotes from U.S. Attorney Booth Goodwin and Assistant Attorney General Lanny Breuer. Therefore, the press release clearly goes beyond what is in the indictment. I am generally not a fan of broad speaking indictments or lengthy press releases that announce indictments. But here, as mentioned, the indictment, although speaking, is restrained and well-crafted. The purpose of the relatively brief press release is to send a message that any obstruction of an important ongoing investigation will be swiftly and ruthlessly punished. In this regard, it is important to note that both the alleged false statements and the alleged records destruction occurred in January of this year. To me, this is one of the very few valid reasons for any kind of an extended press release announcing an indictment--that is, to send a message that obstruction of a major ongoing investigation will not be tolerated and that those who engage in it will pay a price. Press reports indicate that Stover was arrested at his home. This was unfortunate and unfair. Stover is innocent until proven guilty and, as Stover's Conditions of Pretrial Release indicate, nobody considers him a flight risk or danger to the community. He was released on an unsecured $10,000.00 bond.

(wisenberg)

 

March 1, 2011 in Investigations, News, Obstruction, Prosecutions, Prosecutors | Permalink | Comments (0) | TrackBack (0)

Thursday, August 19, 2010

Roger Clemens Indicted

The Washington Post story is here and has a link to the indictment. Nothing yet up on PACER. Clemens is charged in six counts with perjury, false statements, and obstruction of Congress.

(slw)

August 19, 2010 in Celebrities, Congress, Current Affairs, Grand Jury, Investigations, Media, Obstruction, Perjury, Prosecutions, Sports | Permalink | Comments (2) | TrackBack (0)

Clemens to be Charged?

The Wall Street Journal is reporting here that baseball great Roger Clemens will soon be indicted by a federal grand jury for perjury.

(slw)

August 19, 2010 in Celebrities, Congress, Current Affairs, Grand Jury, Investigations, Obstruction, Perjury, Prosecutions | Permalink | Comments (0) | TrackBack (0)

Thursday, June 24, 2010

NACDL President Comments on Honest Services Trilogy

GUEST BLOGGER-SOLOMON L. WISENBERG

Here is a press release from the National Association of Criminal Defense Lawyers ("NACDL") containing NACDL President Cynthia Orr's comments on today's U.S. Supreme Court honest services opinions. Orr is “heartened that the Court has unambiguously rejected government arguments that the ‘honest services’ fraud statute can be properly used across as broad a range of conduct as the government has sought to do in recent years.” Nonetheless she is"disappointed that the Court has held that there remains a place in our criminal justice system for a statute on whose meaning few can agree.” (In various friend of the court briefs, NACDL has taken the position, now shared by Justices Scalia, Thomas, and Kennedy, that 18 U.S.C. Section 1346 is unconstitutionally vague.)

Orr expects “to see future litigation surrounding efforts by prosecutors to wedge their cases into the ‘bribe or kickback’ paradigm to which the Court has now limited this statute.” Of this we can be sure.

The NACDL press release also bemoans the portion of the Skilling opinion which "shockingly found that pre-trial publicity and community prejudice did not prevent Mr. Skilling from obtaining a fair trial. In fact, though, there has not been a more poisoned jury pool since the notorious first robbery and murder trial of Wilbert Rideau in Louisiana." 

(slw)

June 24, 2010 in Current Affairs, Enron, Insider Trading, Judicial Opinions, Media, News, Obstruction, Prosecutions, SEC, Securities, Statutes | Permalink | Comments (1) | TrackBack (0)

Sunday, April 18, 2010

The CIA & Liability For Rogue Employees

Many have been advocating for a "good faith" defense when a rogue employee does an act within the corporation that is diametrically opposed to company policy (see here).  There is an understanding that corporate compliance cannot control every action, and that on occasion the best of corporations will not be able to control the activities of an employee that goes beyond what the corporation authorizes.  The difficulty here is in deciding whether the corporation really allowed for this activity and then decided when caught that this was unauthorized, or whether the corporation truly had a corporate compliance program that tried to preclude this activity.

Place this backdrop on the recent disclosure that individuals may have destroyed videotapes that may have provided evidence of improper interrogation techniques by individuals, perhaps ones associated with the CIA. If there was an ongoing investigation into the interrogation methods being used, the destruction of evidence relevant to that investigation would be wholly improper and perhaps criminal. The first question will be whether there was an ongoing investigation, and whether these individuals were aware or should have been aware of that investigation.  If so, the destruction of possible evidence could be considered an obstruction of justice.

News reports say that white house counsel Miers and CIA lawyer Rizzo were "livid" and "upset" to learn of this destruction. (see Mark Mazzetti, NYTimes, C.I.A. Document Details Destruction of Tapes).  But the real question should be how could this have happened and what kind of compliance measures were in place to make certain that this would not happen. If this were a corporation, the fact that leaders were displeased with the activity of individuals within the entity would not serve to keep that entity from being held criminally liable of the conduct of the rogue employees.  

The CIA is not a corporation, but if the government is demanding that corporations are going to be subject to penalties for the acts of rogue employees, then they too must bear the same consequences when someone bypasses their internal directives.

(esp)

April 18, 2010 in Obstruction, Prosecutions | Permalink | Comments (0) | TrackBack (0)

Saturday, December 5, 2009

False Statement Passport Statute Does Not Require Materiality

A defendant convicted of violating 18 U.S.C. 1542, a statute pertaining to a false statement in an application for a passport, argued unsuccessfully that materiality was required. The Second Circuit held that unlike section 1001, materiality was not an element of this particular statute. Authoring the opinion, Hon. Jose Cabranes noted that this issue was one of first impression for this circuit, the Second Circuit.  The court used statutory interpretation analysis to hold that the language of materially was not in this particular statute.  The court noted that its holding was in keeping with other circuits, citing to decisions from the 1st, 9th and 11th Circuits.

The element of materiality presents an interesting issue for courts. In some cases like the false statements statute (18 U.S.C. 1001), perjury (18 U.S.C. 1621), and false declarations (18 U.S.C. 1623), the statutes clearly require an element of materiality. In some cases the nature of the statute requires an element of materiality (See mail fraud, wire fraud, and bank fraud) (See Neder v. United States). 

Some, like myself, argue for requiring materiality with other statutes (arguing for an element of materiality in obstruction of justice cases- see here).  A benefit of requiring materiality is that it can serve as a check on prosecutorial discretion.  It can limit prosecutors who might try to proceed in trivial cases.

Opinion - United States v. Hasan

December 5, 2009 in Judicial Opinions, Obstruction, Perjury | Permalink | Comments (0) | TrackBack (0)

Sunday, October 12, 2008

The Ring Case

Guest Blogger - Stephanie Martz, Senior Director, White Collar Crime Policy, National Association of Criminal Defense Lawyers -

Here’s an evergreen issue that was just brought to my attention – United States v. Kevin A. Ring, 1:08-cr-00274, assigned to D.C. District Court Judge Ellen Huvelle as part of the Jack Abramoff series of defendants:  an obstruction charge based on Ring’s alleged lying to private counsel retained to conduct an internal investigation.  (By the way:  Ring has moved for Huvelle to recuse herself on the grounds that having taking 13 guilty pleas in this case and presided over it for five years has compromised her ability to remain impartial.)

Ring was, among other things, a Greenberg Traurig lobbyist along with Abramoff and seems to have been the point person in the lobbying team’s contact with several Hill offices, including that of former Rep. Istook of Oklahoma (through his now ex-chief of staff, John Albaugh, who faces a stiff prison sentence thanks to a guilty plea). 

Ring was indicted on charges that he conspired to bribe public officials (18 USC 201, 18 USC 371), committed honest services wire fraud, and violated both 18 USC 1512(b)(3) and (c)(2).  The first two sets of charges are alleged through a series of emails which purport to show  Ring promising and delivering tickets to everything from Tim McGraw to the Redskins to the Wiggles (this appears to have been changed to a horse event, but anyway) in exchange for various nods to clients in transportation appropriations bills. 

The obstruction charges are very interesting, especially for those who have followed the Computer Associates indictments (U.S. v. Kumar, U.S. v. Richards) and the El Paso Gas indictment (U.S. v. Singleton).  In those previous three cases, the defendants were all charged with violating 1512(c)(2), which forbids corruptly obstructing, influencing, or impeding any official proceeding, or attempting to do so.  In Kumar and Richards, the government alleged that the defendants had all but real knowledge that their (false) statements would be turned over to the government by the lawyers who had been hired to conduct CA’s internal investigation, thus suggesting  but not stating outright that the private lawyers were mere conduits for information to the government.  In Singleton, the nexus between the lawyers conducting El Paso’s investigation and the government – and therefore the conduit of information—was more tenuous; there was no reference in the indictment to any agreement by the company that statements and information would be turned over to the government as part of a formal or informal cooperation agreement, and the suggestion was that Singleton should have assumed as much. 

Here are some very interesting observations, in light of this, about the Ring indictment:  First, there is the most specific and clear allegation that I have seen so far that paints a real nexus between a private firm and the government.  According to the indictment, Ring was SPECIFICALLY told that his statements would likely be turned over to DOJ and/or the U.S. Senate Committee that was investigating the matter. If this is true, kudos to the lawyers who were ethical enough to admit outright this development in the culture of internal investigations, and to inform employees accordingly.  As a result, my guess is that this indictment will send fewer chills through the corporate bar than Singleton, in particular.

Second, the Kumar, Richards, and Singleton indictments did not employ 1512(b)(3), which is the only obstruction provision that specifically criminalizes using an intermediary to commit obstruction, and does not require an existing proceeding.  Georgetown Law Professor Julie O’Sullivan observed that this may be because (c)(2) carries with it a massive 20 year maximum, and was therefore a bigger hammer. 

O’Sullivan also observed, though, that in bringing indictments like these, DOJ risks killing the goose that laid the golden egg.  DOJ is happy to reap the benefits of a culture of cooperation in which enforcement agents and the private corporate bar are partners in crime-fighting, but these benefits will diminish over time as indictments are brought that turn the private bar into de facto government agents.   The use of 1512(b)(3) in addition to (c)(2) might make a difference – or it might have the same chilling effect. 

Ring Indictment - Download ring_indictment.pdf

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October 12, 2008 in Obstruction, Prosecutions | Permalink | Comments (0) | TrackBack (0)

Saturday, February 16, 2008

When You Need to Proofread the Brief

The government's response to the motion to dismiss filed by Barry Bonds argues that the indictment is not ambiguous or duplicitous -- yet the filing contains a typographical error that indicated Bonds failed a drug test a year later than alleged in the indictment.  If you're going to defend the precision of the charges, then the brief should at least be read carefully enough to ensure it is accurate, or the whole issue of sloppy drafting comes to the surface.

The brief (uncorrected version available below) responds to the defense arguments that the questions are too ambiguous to be the basis for a perjury charge, and that by citing multiple false statements in a single count the charges are duplicitous in violation of Bonds' due process rights.  The government's position on duplicity seems to concede that each count could in fact charge separate violations of the perjury statute, but essentially tries to shrug off the problem.  According to the brief, "[T]he government may remedy any duplicity in the indictment against Bonds by asking the grand jury to return a superseding indictment charging separate counts for each allegedly perjured statement. Accordingly, rather than electing among the charges in a duplicitous count, the government may elect to obtain a superseding indictment if the defendant is unwilling to remedy any duplicity by agreeing to a jury instruction that requires the jury to be unanimous in finding that at least one of the statements alleged in each count constituted perjury."  Thus, if pushed by Bonds (and the court) to cure the duplicity problem, prosecutors may just seek another indictment with more counts of perjury, perhaps as many as ten or twelve. 

In arguing that the first perjury charge is not based on ambiguous questions, the brief states, "At trial, the government’s evidence will show that Bonds received steroids from Anderson in the period before the November 2001 positive drug test, and that evidence raises the inference that Anderson gave Bonds the steroids that caused him to test positive in November 2001."  The indictment references Bonds failing a drug test in November 2000, but not in 2001.  The media immediately picked up on this, but the U.S. Attorney's Office in San Francisco said it was just a typo, that the brief was referring to the November 2000 failed drug test cited in the indictment, and has since filed a corrected version.  That type of mistake does not enhance the credibility of the prosecutors, especially when the issue is the clarity of the questions.

The government's primary argument on ambiguity is that the questions are sufficiently clear, although perhaps a bit inartful, and that Bonds never indicated he was confused.  Thus, the issue of ambiguity is one for the jury and not for the court.  The Supreme Court's seminal decision in Bronston v. United States on perjury, however, makes it clear that a court can decide as a matter of law whether a question is sufficient to be the basis for a perjury charge, and to determine whether the defendant's answer is literally true.  That is clearly Bonds' first line of defense, that poor questioning by prosecutors caused him to make statements he did not intend to be false, even if they were a bit misleading.  Throw in an attack on IRS Special Agent Jeff Novitzky, the government's lead investigator who was also at the Roger Clemens hearing, as the embodiment of outrageous government conduct, and there may be enough there to raise a reasonable doubt.  While it is tough to win dismissal of an indictment at this stage, there may well be some significant reworking of the document because of its drafting problems. (ph)

Download us_v_bonds_government_response_to_motion_to_dismiss_feb_14_2008.pdf

February 16, 2008 in Obstruction, Perjury, Prosecutors | Permalink | Comments (0) | TrackBack (0)

Saturday, February 9, 2008

Indicted for Writing Opinion Letters

Would the government actually indict an attorney premised upon allegations that the attorney wrote several opinion letters for another lawyer?  As surprising as it might seem, the answer is "yes." The government has indicted Attorney Ben Kuehne for his alleged writing of six opinion letters based upon his investigation of whether funds being paid to an attorney were proceeds of criminal conduct.

Several observations and comments on the Indictment and the accompanying Motion to Seal:

  • The indictment is preceded by a page titled - "Motion to Seal."  It is signed by a "trial attorney - DOJ." It requests the indictment be sealed "for the reason that the named defendants may flee and the integrity of the ongoing investigation may be compromised." - Did the government really believe that Attorney Ben Kuehne would flee?  A later sentence states that"many of the named defendants are foreign nationals." But the government fails to limit the language used in the prior sentence that explicitly states "that the named defendants may flee" to only those who might be foreign nationals.  That is a powerful statement to claim that a prominent Miami attorney might flee.  If they didn't mean to apply this statement to him, is it prosecutorial over-reaching, an attempt to taint the accused, or just sloppy drafting? 
  • The indictment alleges that Kuehne's opinion letters were inaccurate in stating that some of the moneys had come from an individual/company that "his investigation" "had determined.... were reputable and well-established, without any connection to illegal activities."  The indictment claims that some of these opinions were untrue because moneys had in fact come from "undercover law enforcement operations."  ----  Isn't the very purpose of an undercover operation to make it seem like things are real?  Is this a situation of accusing someone of issuing incorrect opinion letters because the government did a good job of misleading him?
  • Count Six of the Indictment charges Obstruction of Justice. The charge is expressed in a total of 2 sentences. It states: 

"From on or about January 23, 2003, continuing to the date of this indictment, the defendants, .......did corruptly endeavor to influence, obstruct and impede the due administration of justice; that is investigations by the grand jury; to wit, endeavoring to influence, obstruct, and impede a federal investigation, as set forth above.  In violation of Title 18, United States Code, s 1503."  (names omitted)

A charge without any facts?  Did the government actually put a mere restatement of section 1503 as the basis of a criminal charge against an attorney? Co-blogger Peter Henning called the Indictment of Ben Kuehne a "head-scratcher," but that was prior to receiving the document. But after reading it, I'd go a step further - they have actually indicted an attorney for obstruction of justice and alleged no facts in this count to support the charge.  It almost sounds like a case the 11th Circuit reversed, U.S. v. Thomas, 916 F.2d 547 (11th Cir. 1990).

Perhaps the most troubling aspect of this indictment is that it represents yet another instance of the government interfering in the payment of attorney fees for the criminally accused.  As opposed to going to court and asking for the fees to be returned as improper, they have opted to proceed with criminal charges that in some cases carry up to 20 years.

Indictment - Download us_v_kuehne_indictment_oct_2007.pdf

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February 9, 2008 in Attorney Fees, Money Laundering, Obstruction, Prosecutions | Permalink | Comments (3) | TrackBack (0)