Wednesday, March 23, 2011
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The Third Circuit issued an unpublished opinion that resolves this issue in a paragraph, stating in part that: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
Tuesday, March 1, 2011
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.
Thursday, August 19, 2010
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.
The Wall Street Journal is reporting here that baseball great Roger Clemens will soon be indicted by a federal grand jury for perjury.
Thursday, June 24, 2010
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."
Sunday, April 18, 2010
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.
Saturday, December 5, 2009
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
Sunday, October 12, 2008
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
Saturday, February 16, 2008
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)
Saturday, February 9, 2008
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
Thursday, January 24, 2008
Home run king Barry Bonds moved to dismiss the perjury and obstruction of justice indictment (brief available below), asserting that the charges are duplicitous -- one of my all-time favorite legal arguments -- and that the questions posed were so ambiguous that his answers were not false as a matter of law. A count of an indictment is duplicitous when it charges two crimes in a single charge, which is to be distinguished from multiplicity, which is charging the same crime in two different charges. The more common duplicity claim involves two separate crimes charged in one count, but here the claim is that there are different responses that may be untruthful, so that the government has too many potential instances of perjury in each count.
The four perjury counts contain a number of questions and answers, so it is difficult to identify any one with particularity that is perjurious. The problem posed by a duplicitous charge is that there is no way for a jury to convict on one offense and acquit on another offense contained in the same count. Similarly, because the jurors have two crimes to consider in a single count, they may convict without reaching a unanimous agreement on either. For example, if some jurors believe one response by Bonds was untruthful while others believed a second response in the same count was a lie, then they could all agree that he committed perjury but not based on the same answers. The problem a defendant faces when there is duplicity in the charges is that it's not clear which of the statements the prosecution will focus on, and indeed the government could shift its theory in response to the defense.
While Bonds raises a valid point about the number of questions and answers in each count, in the government's defense I suspect prosecutors wanted to provide the context for his answers, many of which are fairly clear denials (i,e. "no" in some instances). Moreover, even if the district court found that the perjury counts were duplicitous, the remedy is usually not dismissal but an order to the government to seek a superseding indictment from the grand jury that cleans up the charges or perhaps a bill of particulars to identify one specific answer in each count that it will prove as perjury. It may be that the government will seek more charges by breaking up the counts, so that rather than facing four counts of perjury, Bonds will face eight or twelve. The motion also attacks the obstruction charge on essentially the same ground.
Bonds' second argument goes to the heart of a perjury charge -- the ambiguity in the questions means that he did not answer the questions untruthfully, or at least did not know his answers were false. The key perjury case is Bronston v. United States, 409 U.S. 352 (1973), in which the Supreme Court held that "the perjury statute is not to be loosely construed, nor the statute invoked simply because a wily witness succeeds in derailing the questioner-so long as the witness speaks the literal truth. The burden is on the questioner to pin the witness down to the specific object to the questioner's inquiry." If the questions are ambiguous and the prosecutor does not ask a clear question or seek to clarify the answer, then the defendant cannot be convicted for the responses. Thus, compound questions, and questions using broad terms or imprecise dates, can open the door to a "not guilty" verdict. The problem for Bonds is that the ambiguity defense is usually one left to the jury, and it is the rare case in which a court decides as a matter of law that the questions were so defective that no rational jury could find the answer was untruthful. While this gives us a preview of where the defense is headed at trial, it is unlikely to succeed at this stage of the proceedings.
As often happens when a sports figure is involved in a case, the temptation is to toss in an analogy (or perhaps a simile) to the athlete's sport is just too hard to resist, even if it only causes the reader to groan. In the brief, the attorneys write with regard to the duplicity in the indictment, "Even Barry Bonds cannot be expected to make contact with a fastball, slider, and knuckler thrown him simultaneously." Please, no one this side of Tim Wakefield throws a knuckle ball any more, and the best sucker pitch in baseball is the splitter. Let's hope the government does not respond by likening the defense filing to the typical defensive shift put on when Bonds comes to bat. (ph)
Wednesday, January 16, 2008
The Congressional hearing on steroid use in baseball played out largely as expected with Representatives beating up on Commissioner Bud Selig and union head Donald Fehr. The session began with a bit of a surprise, though, when House Oversight and Government Reform Committee chairman Henry Waxman announced that he and the ranking Republican, Representative Tom Davis, sent a letter (available below) to the Department of Justice asking for an investigation of a player for possibly lying to Committee investigators. The object of the referral is Miguel Tejada, a former American League MVP who was recently traded from the Baltimore Orioles to the Houston Astros. Tejada was interviewed by the Committee when it investigated one of his teammates, Rafael Palmeiro, who famously testified in the first round of steroid hearings in March 2005 by asserting that he had never used steroids. A few months later, Palmeiro tested positive for steroids, and claimed that he might have gotten them when Tejada gave him an injection of what he thought was vitamin B-12 -- interestingly enough, the very same thing Roger Clemens admitted Brian McNamee injected him with, but not steroids. To investigate whether Palmeiro committed perjury, Committee investigators interviewed Tejada and had the following exchange:
Committee Staff: And you, I believe, testified to this earlier, but I just want to make sure, have you ever taken a steroid before?
Mr. Tejada: No.
Committee Staff: Have you ever taken any illegal performance-enhancing drugs?
Mr. Tejada: No.
Committee Staff: Have you ever taken Andro or any other steroid precursor?
Mr. Tejada: No.
Unfortunately, Tejada is mentioned in the Mitchell Report as having received from an Oakland A's teammate testosterone or Deca-Durabolin, as well as human growth hormone, and the Report includes copies of three checks from Tejada to his teammate. In asking for an investigation, the two Congressmen assert, "In light of the conflicts between the statements that Mr. Tejada provided to the Committee and the evidence in Senator Mitchell's report, we ask the Justice Department to investigate whether Mr. Tejada made knowingly false material statements to the Committee in violation of 18 U.S.C. 1001."
Is another investigation of an athlete for lying about steroid use really necessary? In addition of the perjury prosecution of Barry Bonds, we've seen former Olympic gold medalist Marion Jones given a six-month prison term for making false statements to federal agents, one of which concerned steroids received from Balco. Unlike those criminal investigations, however, this one involved a Congressional Committee interview on a topic that was at best peripheral to any real legislative business. The March 2005 steroids hearing that featured a number of players, including the ill-fated non-assertion of the Fifth Amendment by Mark McGwire, was for the most part the typical grandstanding seen on Capitol Hill. No legislation emerged from hearing, and nothing of any real importance from a policy perspective occurred in the testimony of the players. Now, the interview of an individual (Tejada) on issues that were at best peripheral to an unimportant -- albeit stupid -- witness (Palmeiro) may become the basis for a federal criminal prosecution.
I generally make it a point not to beat the "waste of government resources" drum about a criminal investigation for false statements because I think telling the government the truth is important. But at some point you have to wonder whether every contradiction needs to be the subject of a separate federal investigation. Simply making a public statement at the hearing, that it appears Tejada was less than completely truthful, may well have been sufficient to accomplish whatever purpose Chairman Waxman and Representative Davis had in mind when they began the hearing by announcing their letter to the Department of Justice. Unfortunately, don't think that the upcoming hearings in February with Clemens and McNamee will be any less of a circus. (ph)
Saturday, January 12, 2008
Former Olympic gold medalist Marion Jones received a six-month prison sentence from U.S. District Judge Kenneth Karas for her guilty plea to two counts of making false statements, the maximum recommended term under the Federal Sentencing Guidelines for the offenses. Jones was interviewed by federal agents in 2003 and again in 2006, the first time about the Balco (Bay Area Laboratory Co-operative) steroids operation and the second time about a check-kiting scheme involving her former boyfriend, sprinter Tim Montgomery. In the Balco case, she denied ever receiving steroids and even filed a defamation suit against Victor Conte, the founder of Balco, for his statements about her use of performance-enhancing drugs; that civil case was eventually dropped, for obvious reasons.
The Sentencing Guidelines range was 0-6 months, and I speculated earlier (here) that she might receive probation or home confinement. The prosecutors did not recommend any particular sentence other than staying within the Guidelines recommendation, and when Judge Karas floated the possibility of giving her consecutive sentences for each count of conviction or to exceed the recommended sentence, the prosecutors filed a letter (available below) urging the court to give a sentence within the 0-6 months range and not any higher. While in other white collar crime cases prosecutors have taken a more aggressive stance on sentencing, here they urged the court to stay within the Guidelines and gave the impression that a sentence with no incarceration would be acceptable.
Judge Karas' indication before sentencing that he was considering a longer prison term made it likely he would sentence Jones at the high end of the Guidelines range. In explaining the sentence, the Judge stated that he wanted to send a message to other athletes who do not adhere to the values of "hard work, dedication, teamwork and sportsmanship." In addition, Judge Karas said, "Athletes in society have an elevated status, they entertain, they inspire, and perhaps, most important, they serve as role models." An AP story (here) discusses the sentencing.
After the Supreme Court's decision in Gall granting district courts broader discretion in sentencing, individualized factors now play a greater role in the punishment determination. But, should an athlete's celebrity status be a basis for imposing an increased sentence in order to "send a message" to others? Jones did not plead guilty to using performance-enhancing drugs, although she had now admitted to using them, so the message is not one tied to the underlying crime.
It is interesting to consider Jones' six-month prison term in comparison with other sentences handed down in white collar crime cases. Mark Kipnis, a former general counsel for Hollinger International who was convicted along with Lord Conrad Black for his role in a scheme to defraud the company, received probation after a sentencing hearing held the very day Gall came down. The fraudulent scheme cost the company approximately $6 million, and Kipnis was the attorney whose job was to protect his client, the company. I. Lewis Libby's thirty-month sentence for obstruction of justice and perjury was commuted by the President because it was excessive, and he had at least as high a profile as Jones when he breached the public trust. Even in the Balco prosecution, Conte received a four-month prison term for his role in the distribution of illegal narcotics, while Jones' sentence is 50% higher for lying to agents in the case.
In the world of sentencing reasonableness in federal cases fostered by the Supreme Court's decisions in Booker and Gall, it is hard to say that a sentence is "unfair" in comparison with another because the focus now is on an individualized assessment of culpability. One result of this new -- or perhaps return to -- sentencing discretion is that there will be greater disparity, and the "luck of the draw" regarding which judge a defendant draws takes on added importance. The luck of this judicial draw will see Jones beginning a six-month prison term in March, and she will have to serve virtually the entire term because there is no good-time credit for a sentence of less than a year. (ph)
Wednesday, January 9, 2008
Obstruction of justice, perjury, and false statements prove particularly easy charges for the government when the conduct would require extensive investigation prior to indictment. I often call them the government "short-cut" offenses. So it is no surprise to see the government using them extensively.
A press release of the DOJ reports that:
"Iona Uiagalelei, former Assistant Chief of the Department of Property Management for the American Samoan government, was sentenced Monday, Jan. 7, 2008, in federal court in Hawaii for obstructing a federal sex trafficking investigation. In August 2007, Uiagalelei pleaded guilty to witness tampering for instructing two Chinese women to provide false and misleading information to a federal grand jury, the federal prosecutor, and Federal Bureau of Investigation agents.
Uiagalelei was a business partner with Chinese national Fu Sheng Kuo, who, along with several co-defendants, operated a scheme to recruit and import Chinese women and hold them in prostitution in nightclubs and brothels in American Samoa. Upon arrival, the victims, who were unpaid, were denied access to their passports and return airline tickets, and the opportunity to leave until they had paid off increasing debts. Uiagalelei sponsored numerous Chinese nationals to enter and reside in American Samoa who then engaged in Kuo’s prostitution business.
Uiagalelei was sentenced to 13 months imprisonment and three years of supervised leave. Uiagalelei reports to federal prison Monday, Jan. 14, 2008. Four other defendants in this case have pleaded guilty and have been sentenced."
What might normally not be considered a white collar offense can become one when you use charges such as obstruction and witness tampering. The question becomes where these cases fall with respect to government statistics.
Friday, December 7, 2007
Above the Law has eyewitness reports (here) on the initial appearance and arraignment of Barry Bonds. In addition to the usual procedures, such as Bonds being released without having to post bond or surrender his passport, it appears that the conflict of interest issue with one of his new attorneys, Christine Arguedas, is an issue, at least for the moment. From various reports, it sounds like prosecutors raised the question about one of Bonds' lawyers representing other witnesses in the case, which is probably Arguedas' representation of witnesses in the Balco grand jury investigation in which Bonds allegedly committed perjury. Of course, a defendant can waive the conflict, but the court is not required to accept it. This may be the first test regarding the relationship between the two sides, and if the government takes a hard line and files a motion to disqualify then things are likely to get pretty frosty.
The defense also said it will seek dismissal of the indictment, which will probably require briefing and a hearing on the motion. The next court date is February 7, at which time the judge may set a trial date. With a flurry of motions like to come soon, it is unlikely the case will be completed before the end of the 2008 season, which raises the question whether any major league team will take a chance and sign Bonds to a contract. (ph)
UPDATE: Here's the text of the court's order recounting the hearing:
The defendant’s appearance maybe waive at the next appearance. The appropriate waivers shall be filed in advance of the next hearing. The government indicated that there may be a conflict issue with certain defense counsel. The government shall e.file a letter indicating the situation as they see it and the Court will determine if a hearing is necessary. If the Court determines that a hearing is necessary, the defendant must be present. Defendant indicated that they may file a motion to dismiss the indictment.
Home run king Barry Bonds is supposed to appear in federal court for his initial appearance -- and most likely an arraignment -- on perjury and obstruction of justice charges contained in a federal indictment issued in San Francisco. A Wall Street Journal article (here), by Bay Area legal maven Justin Scheck, points out the problems Bonds has had in hiring a new attorney with significant federal court experience to conduct the defense at trial. The article notes that Bonds met with John Keker, of Keker & Van Nest, a nationally-known white collar defense lawyer who has defended, among others, former investment banker Frank Quattrone, who was also charged with obstruction of justice arising from a forwarded e-mail. There may have been an issue in hiring Keker because he represented the baseball players union in its fight to keep the government from getting the results of drug tests players took (see a New York Daily News story here). In discussing the approach to Keker, and various in-fighting among Bonds' current legal team, the WSJ article raises in my mind the question whether a lawyer would really even want Bonds as a client.
There are obvious benefits to being the attorney for one of the most famous players in professional sports history, in a trial that will gain national -- and probably even international -- attention. Bonds' lead counsel will be on television daily whenever there is any court proceeding, and the chance to have your picture appear over the shoulder of an ESPN SportsCenter anchor on a regular basis is publicity you just can't buy. The lawyer will join the pantheon of well-known defense counsel in this country, one of the "usual suspects" who will begin to appear regularly in a variety of cases, or be asked to comment on them. Pretty tempting, isn't it?
But from this ivory tower, I have to say that there are certainly a few major red flags that a lawyer has to think about seriously before undertaking the representation. The article notes that Bonds asked Keker for a discount on his $900 hourly rate, and wanted another law firm to review the billings. That certainly goes against the grain in white collar cases, in which cost is often not an obstacle. Bonds' past baseball income plus future earnings potential, regardless of the outcome of the case, probably means he can afford Keker's rate. There's nothing wrong with asking for a discount, and it makes good business sense to double check bills. Not the best way to begin a relationship, but it shouldn't be a showstopper, either.
If that was all, then the fact that Bonds wants a discount and will flyspeck bills would hardly be of interest beyond the stereotype of the allegedly cheapskate athlete. But the article also says that "Keker was concerned he wouldn't have control over Mr. Bonds's public relations and legal strategies and bridled at the prospect of collaborating with the player's current legal team." [Italics added] That starts to spell trouble for the lawyer. The fact that Bonds' current legal team is a bit on the dysfunctional side is problematic, but if the strings in the case will be pulled by someone else, then there is a significant danger for the lawyer. A defense lawyer being pulled in different directions, or forced to clear legal strategies through the "home office," may not be effective. Trust is a two-way street, and if the lawyer is not going to be trusted, then why take on the case?
It is always difficult to control a high-profile client who is used to being in charge of everything -- look no further than Lord Conrad Black, when the judge in his case threatened to take action against him for out-of-court comments during the trial if his lawyers didn't muzzle him. I'm not saying the lawyer has to control everything, but a trial is a lot like any theatrical production in which everyone has a role to play. The client who believes he or she can "talk my way out of this" or who showers the government with disdain, no doubt believing it is richly deserved, is looking for trouble. Heaven forbid the client demand the opportunity to testify to "explain" everything for the jury so they will understand how misunderstood the defendant really is -- that drooling person would be the prosecutor waiting for the cross-examination. Especially in a perjury and obstruction prosecution, portraying the defendant as an honest person whose statements were just misunderstood is paramount, but the defendant may be the worst person to say that. The hardest decision in a case, especially a white collar prosecution, is whether the defendant will testify, and there can only be two people involved: the lead counsel and the client. If there is a fight over control of the case from the beginning, then it means other agendas may be playing out, with the trial lawyer getting the blame if things go wrong.
So, would you really want to be Barry Bonds' lawyer? Tough call, but it would be pretty cool to appear on SportsCenter right after the Patriots highlights. (ph)
UPDATE: The San Jose Mercury News reports (here) that Bonds has added two Bay Area attorneys: Allen Ruby and Christine Arguedas. Ruby has represented the NFL in one of Oakland Raiders owner Al Davis' many lawsuits against the league, and Arguedas is well-known in white collar crime circles for her work recently on behalf of various corporate executives caught up in options backdating, including the former GC at Apple, and the former general counsel of Hewlett-Packard in that company's pretexting imbroglio.
Arguedas has represented others in connection with the Balco (Bay Area Laboratory Cooperative) steroids investigation, including witnesses who appeared before the grand jury. That gives her some familiarity with the case. While it can be dicey to represent different people involved in a grand jury investigation, I doubt there is a conflict of interest problem for her because there does not seem to be any overlap between the witnesses who testified before the Balco grand jury and those who are likely to be called in the Bonds trial. It remains to be seen, however, whether prosecutors will look for a potential conflict of interest as the basis to move to knock Arguedas off the case. Another interesting question will be whether Ruby or Arguedas takes the lead in the case, or whether they are co-leaders of the defense -- which one gets to be on SportsCenter. No word yet on whether either discounted his/her fees for the case. (ph)
Friday, November 23, 2007
The prosecution of homerun king Barry Bonds for four counts of perjury requires prosecutors to establish that he lied and not just made misleading statements. The testimony recounted in the indictment shows Bonds clearly denying any knowing use of steroids, and placing his inadvertent use of "the cream" in and around the 2003 season. A "literal truth" defense (see earlier post here) will be difficult to mount when the testimony is explicit and a clear denial. To prove Bonds lied, prosecutors will need to produce evidence that he did in fact use steroids at various times, and that it was done at least with his knowledge of a strong possibility that what he ingested or administered into his body was steroids. While the indictment identifies the alleged lies, it says almost nothing about the government's proof to show the statements were in fact false, and Bonds' knowledge of their falsity.
One avenue of evidence involves documents seized from Balco (Bay Area Laboratory Cooperative), which was the source of the steroids Bonds allegedly used. There is a reference in the indictment to an exchange in the grand jury in which the prosecutor shows Bonds a Balco document with a date for possible steroid use and the notation "BB" next to it, but Bonds disclaims any use at that time. The purported creator of the document is former Bonds trainer Greg Anderson, who refused to testify before the grand jury and his attorney recently vowed in an interview (see MSNBC story here) that he will not testify at trial. Anderson would be key to identifying whether BB is Bonds, and he can authenticate the documents for admission in to evidence. While there is a chance prosecutors will call Anderson at trial to at least get the documents into evidence, I doubt they will go down that road. There may be other means to have the document admitted. Moreover, Anderson has shown no willingness to provide any information that could harm Bonds, and if he were to testify prosecutors would have no idea what he would say. He could even "fall on his sword" and testify as a means to exculpate Bonds. While that would subject Anderson to the risk of a perjury prosecution, it would be little comfort to prosecutors if Bonds were found not guilty based on reasonable doubt raised by Anderson's testimony. If he refuses to testify at trial, Anderson could be charged with criminal contempt, but that doesn't help prosecutors much in the Bonds case and gives at least the appearance of vindictiveness against Anderson, who has made his position clear.
Other sources of evidence speculated about in the press (see AP story here) include a former long-time friend and business partner of Bonds and a former mistress, but each carries significant baggage and would not be particularly strong witnesses, or at least not the type of witness on which one centers a case. A likely source of information may be documents and testimony from the staff of the San Francisco Giants, Bonds' former employer for fifteen years. In July 2006, prosecutors allowed the term of an earlier grand jury investigating Bonds to expire because the government had just received Bonds' team medical records pursuant to a subpoena. Those documents, and perhaps testimony from medical personnel with the Giants, could be used to establish his likely usage of steroids, thus bolstering the testimony of any witnesses who might recount statements made by Bonds about his steroids use. In the credibility battle like to unfold at trial, the documents can be the government's best evidence because they don't hold a grudge or have deals with prosecutors.
As a final note, one criticism of the indictment from the media and even Bonds' lawyers was the delay in seeking the charges, that the government had all its evidence back in 2005. The problem with this criticism is that it's not yet clear what evidence the prosecutors plan to use, and whether they obtained any in the past year or so. For example, the medical records were not delivered until July 21, 2006, and that was over the objection of Bonds, who tried to quash the subpoena to the Giants (see San Francisco Chronicle story here). Anderson spent over a year in jail for civil contempt because he refused to testify before the grand jury, and prosecutors cannot be faulted for trying to obtain information from a potentially key witness that results in delaying the investigation. The Bonds case played out over a long period of time, but whether that is a ground for criticism is certainly not clear. (ph)
UPDATE: A New York Times story (here) indicates that Bonds is shopping for new counsel with more experience in federal prosecutions, something lacking on his current legal team. There are plenty of outstanding white collar defense counsel in San Francisco, although a local attorney is not necessary for a case like this, so the search may well involve lawyers throughout the company. Whoever wins the sweepstakes will see his or her name in the newspaper and on ESPN quite a bit. (ph)
Friday, November 16, 2007
Homerun record holder and erstwhile San Francisco Giant Barry Bonds was indicted on four counts of perjury -- technically false declarations under 18 U.S.C. Sec. 1623 -- and one count of obstruction of justice arising from his testimony before a federal grand jury on December 4, 2003. The testimony was part of the investigation of the Bay Area Laboratory Cooperative (Balco) for the manufacture and distribution of designer steroids, including "the clear." The four perjury counts relate to Bonds' denial that he received steroids from his long-time personal trainer, Greg Anderson, who was involved in Balco and entered a guilty plea to narcotics charges back in 2005. Bonds received immunity before he testified, but a grant of use/fruits immunity does not protect against a perjury indictment if the testimony is false. In looking through the indictment (available below) and thinking about various aspects of an investigation that has dragged on for over two years now, the following occurred to me:
- Is there a "literal truth" defense available? In order to successfully prosecute a person for perjury, the government must establish that the witness statements were lies, and not just misleading or non-responsive. The famous case of United States v. Bronston, 409 U.S. 352 (1973), requires that the testimony be false because "the perjury statute is not to be loosely construed, nor the statute invoked simply because a wily witness succeeds in derailing the questioner -- so long as the witness speaks the literal truth." (Italics added). The Bonds testimony identified as perjurious in the indictment seems fairly straightforward, with him responding "No" to questions about receiving steroids from Anderson or having Anderson inject him. Of course, ambiguity in the questions can preclude a conviction if a defendant can assert he did not understand it, or was confused in how to respond. Some of the questions seem fairly straightforward, such as "in the weeks and months leading up to November 2000, were you taking steroids -- No." Other responses seem a bit more ambiguous, such as "Not that I know of" or "I don't recall having anything like this . . . ." Bonds' lawyers are sure to argue that his statements were not misleading, and perhaps challenge the materiality of the testimony. And even without a "literal truth" issue, the government still has to prove Bonds knew his statements were false, which is no easy task.
- What took so long? Prosecutors have been investigating Bonds for perjury at least since March 2005, and perhaps earlier. Part of the delay is attributable to dealing with contempt issues related to the leaking of Bonds' testimony to two San Francisco Chronicle reporters, who were spared jail when the government determined it was the lawyer for another Balco defendant who leaked the transcripts of a number of baseball players who testified. There was also the contempt citations of Anderson, the former trainer, who has been sent to jail twice for not testifying before the grand jury. Perhaps more importantly, the U.S. Attorney's Office in San Francisco has been involved in quite a bit of turnover, including the removal of former U.S. Attorney Kevin Ryan in 2006 when he was one of the seven U.S. Attorney's fired in what became a major scandal in Washington, D.C. There is still no permanent appointee in the position, and any time there is turnover in the leadership of the U.S. Attorney's Office a case as sensitive as Bonds' will be delayed.
- What happened to the tax evasion investigation? There were media reports about an investigation of whether Bonds declared income from sports memorabilia sales, including claims that an alleged former girlfriend would testify to cash transactions. The credibility of the witnesses in this area, at least as described in the media, was open to serious question, and tax counts would likely have distracted from the core perjury/obstruction case. The tax issue could potentially be used to cross-examine Bonds if he chooses to testify and claim he is a truthful person, so the issue isn't dead, but it was probably a good idea to go with a single issue prosecution.
- Where's Greg Anderson? As noted above, prosecutors subpoenaed Anderson twice to testify before the grand jury, and each time he refused and landed in jail for contempt. The first stint ended when the grand jury's term expired in July 2006, but a new grand jury was empaneled a short time later and Anderson headed back to jail, where he has been for over a year. Anderson was released the same day the indictment issued, and I think it is likely he did not testify before the grand jury. After waiting over a year for him to crack, the federal prosecutors probably decided to move forward without him. Once the indictment issued, there was no further need to hold him in contempt for refusing to testify before the grand jury. Whether the government will try to get him to testify at trial remains to be seen, but I rather doubt it because he would be such a risk, i.e. testifying favorably for Bonds, without grand jury testimony to hold over him.
- Why the obstruction charge? The obstruction of justice charge is broader than the perjury charges because it does not require proof that Bonds made literally false statements, only that he sought to impede the grand jury investigation. The charge looks like a backstop -- note the use of baseball terminology -- in case there are problems with one or more of the substantive perjury counts that leads to a "not guilty" verdict. The obstruction count includes both the alleged false statements by Bonds and that his testimony before the grand jury was "evasive and misleading." This claim would be insufficient for perjury, but can be enough for obstruction. If Bonds were convicted of obstruction, then any "not guilty" verdicts on perjury counts would not affect the likely sentence.
- Why Didn't Word About the Indictment Leak Out in Advance? In a case riddled with leaks, the indictment, or at least its timing, seems to have been a complete surprise. This has been a closely watched case, and there was some speculation that an indictment would be returned after the baseball season ended in late September, but nothing happened and it seemed to drop off the radar screen. For once, grand jury secrecy seems to have worked.
- When will the trial take place? While there is a very slight chance a trial could be completed before baseball's regular season starts in April, I don't see any realistice possibility of that happening. Indeed, the trial is likely to take place after the next baseball season, and it may well start in 2009 rather than 2008. In looking at other prosecutions of a high-profile defendant on similar charges, Martha Stewart was indicted in June 2003 and convicted in May 2004, while I. Lewis Libby was indicted in October 2005 and convicted in March 2007. The Bonds case is sure to include the usual array of pre-trial motions, from discovery to dismissal, and getting the lawyers and judge to clear time for the case will likely result in a trial date no earlier than nine months from now, and perhaps even next November. The initial statement from Bonds' attorney indicated a likely charge of prosecutorial misconduct related to leaks in the case, and that will require time to sort out. Claims from either side that they want a quick trial date does not necessarily mean that's in their interest. Delay beyond the start of the 2008 season may mean that Bonds remains permanently at 762 as his homerun total. Bonds has been cut loose by the Giants, and at this point no team has signed him during the free agency period. There is a chance that MLB Commissioner Bud Selig will suspend Bond pending resolution of the case, but that remains to be seen. It may be that no team will sign him, and Selig then won't have to take any action one way or other until the case is resolved, probably after the 2008 season. If Bonds does not play in 2008, will any team take a chance on a 44-year old player who has sat out a year and had serious steroid use allegations aired, even if he's found not guilty?
- What are the odds of a plea bargain? The morning line in Vegas won't be less than 100-1, roughly the same odds as the Tampa Bay Rays winning the World Series. This may be Bonds' last chance to salvage his legacy, so I think a trial is a foregone conclusion, unless somehow a court dismisses the charges, which is equally unlikely.
Let the games begin. (ph)
Thursday, November 15, 2007
KTVU.com has a story with a headline of, "Bonds Indicted By BALCO Federal Grand Jury." Press reports say the charges are perjury and obstruction of justice. (Wall Street Jrl (AP) here, CNN here) More to follow.
Thursday, November 1, 2007
Former assistant U.S. Attorney Richard Convertino and a former State Department security officer were acquitted of all charges relating to their alleged obstruction of justice for not turning over evidence in the first post-September 11 terrorism trial. Three of the four defendants were convicted in the original case, U.S. v. Koubriti, the so-called "Detroit Terrorism Trial," but the Department of Justice asked that the convitions be reversed and the charges be dismissed because of prosecutorial misconduct. Convertino was the lead prosecutor in Koubriti, and was indicted on conspiracy, obstruction, and false declaration charges in 2006. The trial lasted nearly three weeks, and the jury deliberated less than a day before returning the "not guilty" verdicts. One obstruction charge against Convertino alone, related to the sentencing in an unrelated drug case, was severed before trial, and it's not clear whether prosecutors will pursue that charge in a second trial.
The charges related in large part to discovery in the Koubriti case, and involved questions of whether evidence was suppressed in violation of Brady v. Maryland. The prosecution was unprecedented in making a claim of prosecutorial misconduct the basis for a criminal case, at least when there were no allegations of falsified evidence or perjury by fact witnesses. A Detroit News story (here) discusses the trial and "not guilty" verdicts. (ph)