Wednesday, December 7, 2016
On August 11, 2016, the Eleventh Circuit issued an 124 page opinion in U.S. v. Clay. Review of this decision in the 11th Circuit was denied. So now the case is likely to be teed up on a Petition for Cert. for review by the Supreme Court. There are important issues presented by this case, two that standout here.
1. Mens rea is the crux of many white collar crimes. The complicated nature of many statutes places individuals in difficult situations in both understanding the laws and abiding by them. Too many times, when individuals are indicted for white collar offenses, there are cries that they did not know the conduct was illegal. After all, it can sometimes be difficult to discern when a business decision crosses the line into illegality. This particular case has a section 1347 claim, a relatively new statute that is modeled on the older mail (1341) and wire (1343) fraud statutes. The fact that it took the appellate court 124 pages, and many of these pages were a description of the alleged illegal conduct (facts go to page 66 and many of remaining pages discuss the facts) sets the tone for the complicated nature of this case. As with another recent case coming from the Middle District of Florida (Yates -1519 fish case reversed by the Supreme Court), the case involves a federal and state initiative.
The Appellate Court finds that the defendants had the requisite knowledge. But was the standard for ascertaining that knowledge correct? The Supreme Court's decision in Global Tech, notes the importance of needing "knowledge" in criminal law. The Court makes clear that "recklessness and negligence" do not suffice. It is clear the Court in Global Tech wants actual knowledge or a clear avoidance of that knowledge. In Clay, the instruction given to the jury was a "statement or representation is false or fraudulent if it is about a material fact that the speaker knows is untrue or makes with deliberate indifference as to the truth and makes with intent to defraud." (emphasis added). The 11th Circuit finds this sufficient because of the use of "and" "with intent to defraud" used in the instruction. But in a complicated white collar case, should additional words following words that are insufficient be enough to meet the required knowledge of the alleged wrongdoing? This presents an interesting question for the Supreme Court to consider. The 11th Circuit's reliance on its pattern jury instruction with only removing the word "reckless indifference" and replacing it with "deliberate indifference" lowers the standard of knowledge that should be required in a white collar case with facts that are clearly complicated as demonstrated by the 11th Circuit's description.
2.To premise a false statement charge on statements that are made by individuals on the scene of a search with approximately 200 agents may seem warranted when the case involves something like a specific act of homicide, rape, burglary or robbery. But put this now in the context of a complicated white collar case and one needs to recognize that being asked specifics about a business requires closer scrutiny of both the context and the statements being made. White collar businesses typically involve hundreds of documents and nuances within those documents. It is not the same as asking - did you have a gun, or did you enter a house. A specific answer may appear false, because explaining a complicated business transaction cannot be done in simple answers to agents that are swarming a place and placing the individuals in a pressure situation. White Collar cases typically proceed through grand juries and with the use of subpoenas. The current use of searches needs to be examined, especially when there are resulting charges of false statements such as in this case.
Tuesday, December 6, 2016
As co-blogger Solomon Wisenberg noted here, the Supreme Court issued an opinion today in Salman v. United States resolving an issue related to insider trading. But is the law really clear now, as some claim (see here)?
It would appear that Salman does little to modify the current landscape regarding insider trading, except to perhaps reaffirm the scope covered under the Court's prior holding in Dirks and reject the Second Circuit's Newman approach. The unanimous Court stresses its adherence to the doctrine from Dirks. The Court states, " Dirks makes clear that a tipper breaches a fiduciary duty by making a gift of confidential information to 'a trading relative,' and that rule is sufficient to resolve the case at hand."
But it is important to note here, that the Court is also issuing a narrow opinion and not providing extensive guidance on how to assess liability for gift-giving. The Court notes that this case "is in the heartland of Dirk's rule concerning gifts." But the Court goes on to say, "[i]t remains the case that 'determining whether an insider personally benefits from a particular disclosure, a question of fact, will not always be easy for courts.'" The Court states, "there is no need for us to address those difficult cases today, because this case involves 'precisely the "gift of confidential information to a trading relative" that Dirks envisioned.'"
Although this factual scenario did not provide a basis for the use of the Rule of Lenity, one has to wonder if another issue not in the heartland might offer such a scenario.
Friday, December 2, 2016
Readers of this Blog are no doubt familiar with United States v. Reddy Annappareddy, the District of Maryland case in which a guilty verdict was overturned (and new trial granted) with the grudging, belated concurrence of government prosecutors, because the government presented false testimony to the jury. The indictment was then dismissed with prejudice, over government objection, due to the government's destruction of potentially relevant evidence and the trial court's finding of prosecutorial misconduct. All of this was the result of the tireless and brilliant work of Annappareddy's post-trial attorneys, Josh Greenberg and Mark Schamel of Womble Carlyle. See my prior posts here, here, here, here, and here. Since my last post, the government moved to withdraw its appeal, the Fourth Circuit granted the motion, and the mandate has issued.
Now, Josh Greenberg, who played a key role in devising and implementing the post-trial strategy, has decided to open his own shop, focusing on white collar criminal defense, civil litigation, and appeals. Congratulations to Josh. We wish him the best.
Tuesday, November 22, 2016
We have been critical of FBI Director Comey's comments (see here and here) during the email investigations of Hillary Clinton. On a positive note, it was good to see him pull together the FBI for a quick review of Hillary Clinton's emails after his missteps, although this should never have been necessary if commenting during the election had not initially occurred.
But one has to wonder what kind of investigation has been occurring on the overarching problem - email hacking that is reported to be coming from outside the United States that disrupts and influences a U.S. election. (see here) The integrity of elections is crucial and a failure to assure that integrity is maintained is of the utmost importance. So where is FBI Director Comey now, and why are we hearing nothing about this important investigation?
The NYMag.com is reporting here that "academics presented findings showing that in Wisconsin, Clinton received 7 percent fewer votes in counties that relied on electronic-voting machines compared with counties that used optical scanners and paper ballots." In light of prior hacking of the DNC and the release of emails of individuals associated with Hillary Clinton, one would think the FBI would be conducting an immediate investigation to assure voters of the integrity of our election process. So where is FBI Director James Comey now?
Sunday, November 20, 2016
Co-blogger Solomon Wisenberg noted here that "[a]nyone who thinks this will be an easy nomination to put through, because Sessions is a sitting Senator, is in for a big surprise. It will be a bruising battle."
I would add that it just got a whole lot easier for Senator Jeff Sessions, as according to President-Elect Donald Trump's Making News page here - Former Deputy Attorney General Larry Thompson states:
"I can tell you as a friend and someone who has known Jeff Sessions for 32 years that Jeff does not have a racist bone in his body. When I first met Jeff, he was U.S. Attorney in Mobile and I was the U.S. Attorney in Atlanta. In order to stretch our limited per diems on travel to Department of Justice conferences, we often booked single rooms with double beds in hotels. You really get to know a person when you interact so closely with them.
"When I was asked by Attorney General William French Smith to head the Southeastern Organized Crime Drug Enforcement Task Force simply because of my strategic location in Atlanta, a delicate situation was presented. The Task Force consisted of eleven other U.S. Attorney Offices but any potential problem was avoided because Jeff rallied the other U.S. Attorneys around our common cause and my leadership.
"As a former federal prosecutor, Jeff knows the workings of the Justice Department inside and out. He is thoroughly familiar with the legal issues the Department will face. He understands the mission of the Department and will carry out his duties in a professional, thoughtful, and balanced manner. More recently, Jeff voted to confirm President Obama’s choice as Attorney General, Eric Holder.
"By the way, I have been an African American for 71 years and I think I know a racist when I experience one. Jeff Sessions is simply a good and decent man."
Friday, November 18, 2016
Steve Eder, Donald Trump Agrees to Pay $25 Million in Trump University Settlement, NYtimes
Harper Neidig, NY announces $25M settlement in Trump University Case, The Hill
This is according to every news source out there, including the Washington Post. Anyone who thinks this will be an easy nomination to put through, because Sessions is a sitting Senator, is in for a big surprise. It will be a bruising battle.
Tuesday, November 15, 2016
The Attorney General, or in cases in which the Attorney General is recused, the Acting Attorney General, will appoint a Special Counsel when he or she determines that criminal investigation of a person or matter is warranted and -
(a) That investigation or prosecution of that person or matter by a United States Attorney's Office or litigating Division of the Department of Justice would present a conflict of interest for the Department or other extraordinary circumstances; and
(b) That under the circumstances, it would be in the public interest to appoint an outside Special Counsel to assume responsibility for the matter.
FBI Director James Comey:
- F for failure to resign in protest when Attorney General Lynch kept the email investigation within the confines of DOJ. If there was ever a case justifiying the appointment of a Special Counsel, this was it. You appointed a Special Counsel to investigate the Plame Email leak when you were Acting Attorney General in the Bush Administration. You should have insisted on the same course of conduct here on threat of resignation. You had the standing and reputation to pull it off. You didn't. You blew it, and later apparently tried to make up for it through your inappropriate prejudicial public pronouncements.
- F for letting Attorney General Lynch off the hook and effectively announcing the non-prosecution recommendation. Prosecutive decisions belong to prosecutors, not FBI agents or FBI officials.
- F for publicly smearing Ms. Clinton while announcing that no charges would be brought against her. If you don't indict, you don't smear, unless you are under a statutory duty to file a report.
- F for answering too many questions about the investigation when appearing before the House Judiciary Committee.
- F for releasing confidential FBI investigative reports to the House.
- F for failure to resign in protest given the kid gloves treatment afforded to Ms. Clinton and her aides during the investigation.
- F for your public announcement 11 days before the election.
Attorney General Loretta Lynch:
- F for failure to appoint a Special Counsel.
- F for your tarmac meeting with former President Bill Clinton.
- F for handing over the prosecutive decision to FBI Director Comey. If you needed to recuse, the final call, at that point in time, should have been made by your Deputy AG Sally Yates.
- A for your four line statement announcing the declination. It is the one thing you got right.
President Barack Obama:
- F for failing to insist that AG Lynch appoint a Special Counsel.
- F for your repeated public statements effectively proclaiming Ms. Clinton's innocence. You interfered with a pending investigation and potentially poisoned the jury pool.
- F for handing out use derivative immunity deals like they were candy and reaping no indictments in return.
- F for allowing Cheryl Mills to attend Ms. Clinton's final interview as one of her attorneys.
- F for not recording Ms. Clinton's interview.
These are preliminary grades, subject to revision as more facts are revealed.
Friday, October 28, 2016
It is common in white collar cases for investigations to span over many years. Being essentially document cases, one sees white collar crime investigations lasting the length of a grand jury or sometimes the span of a few grand juries. It is rare that one sees the investigated party receiving a letter at the end saying that we tried to find something in this investigation against you, but we failed. And having a press conference to announce it, is going even further.
Yet, surprisingly that essentially occurred when FBI Director James Comey investigated Secretary of State Hillary Clinton. As I previously noted, I gave an "A" to Attorney General Loretta Lynch for her 3 1/2 line statement closing the investigation (see here), a contrast to FBI Director James Comey's statement that insinuated wrongdoing while also saying a prosecution was not warranted here because "we cannot find a case that would support bringing criminal charges on these facts." (see here). Case closed.
Now enter the current political climate, a climate that has been contentious, exhausting, and embarrassing to our nation. And on the near eve of the final voting we see the FBI Director re-examining his prior decision and as opposed to keeping his investigation secret, as is typically done, he announces to the world that he is re-examining his case. FBI Director Comey states in a letter updating his prior congressional testimony that the F.B.I. was taking "steps designed to allow investigators to review these emails to determine whether they contain classified information, as well as to assess their importance to our investigation." FBI Director Comey is also saying that he "cannot predict how long this would take. . ." (see NYTimes copy of letter here).
Double jeopardy does not apply here, and an investigation can be re-opened. But why is he telling us this? And why is he stating this just 11 days before the election? The most likely answer is that he had no choice given his prior decision earlier this year to go against the typical process of keeping investigations secret. When evidence is given to the DOJ and then presented to a grand jury, Federal Rule 6(e) of the Federal Rules of Criminal Procedure insures that secrecy.
Now just 11 days before Election Day, we are now seeing the ramifications of FBI Director Comey's initial misstep in commenting on an investigation -- how deep those ramifications are won't be known until the final votes are in. If even then.
Also Jamie Gorelick and Larry Thompson, James Comey is Damaging Our Democracy
Wednesday, October 12, 2016
At Counsel’s Table: A Conversation with Henry W. (“Hank”) Asbill of Jones Day
Hank Asbill is a partner at Jones Day and widely recognized as one of the country’s best white collar criminal defense attorneys. In 2015, he was awarded the prestigious White Collar Defense Lawyer of the Year Award by the National Association of Criminal Defense Lawyers. Mr. Asbill’s most recent accomplishments include representing Virginia’s former governor Robert McDonnell in his battle against federal corruption charges. In Governor McDonnell’s case, Mr. Asbill and his team were able to devise and execute a winning strategy that ultimately resulted in the dismissal of all charges after the Supreme Court reversed Governor McDonnell’s convictions in an 8-0 opinion.
In this interview, we catch up with Mr. Asbill to talk about his career path, advice for young lawyers, and his thoughts on the McDonnell case.
Q: You have worked as a defense attorney for close to 40 years. What inspired you to work in criminal defense? And what other fields of law have you considered?
I am a child of the 60’s and have always questioned authority. Someone has to keep the government honest. And, I have always been interested in constitutional law. I also watched a lot of Perry Mason as a kid.
I never considered any other field of law. I knew I wanted to be a criminal defense lawyer before law school, and that never changed.
Q: Do you feel that the practice of law has changed in the forty years since you began practicing? If so, how?
It has changed substantially, and in terms of criminal defense, I feel it has been primarily for the worse.
The biggest change has been the decline of jury trials, which keep the system honest. There are far fewer jury trials today because of the enactment of sentencing guidelines in both federal and state systems, as well as the draconian push for mandatory minimums and lengthy sentences for all crimes. These changes have spawned many more pleas because the sentencing risk of losing at trial is so great.
I think the two biggest policy failures in the criminal justice system in my career have been the enactment of the sentencing guidelines and the “war on drugs.”
The alleged war has unfairly targeted the most vulnerable people in society, including minorities and the poor.
As for the Guidelines, I never thought that there was a serious sentencing disparity among judges that would justify the Guidelines in the first place. The Guidelines were promoted by the DOJ to give prosecutors much more control – to make sure that the only way out of a harsh sentence is a 5K1 motion by the government based on the defendant’s assistance in prosecuting others.
This 5K1 regime incentivizes lying by co-defendants and targets. The government does not give 5K1 credit for cooperation when it does not result in prosecution of others. On only one occasion have I had a client who gave honest answers that prevented the government from going down the wrong road and charging innocent people who still received 5K1 credit.
Q: Can you tell us a bit about your career path and how you got to where you are now?
I started as law clerk on the D.C. Court of Appeals. After that I practiced with a large firm, doing civil securities and antitrust litigation, before going to D.C.’s Public Defender Service for four years. I then started a small trial firm with a PDS colleague. We later added a civil trial lawyer, and grew the firm until we were at 9 or 10 people. I worked there for 23 years until I transitioned to Big Law. At that time we had to decide whether to renew a 15-year lease. The management of a small firm was becoming cumbersome, and the desires of the founding partners were diverging.
I was taking on more complicated cases and needed specific subject matter expertise, and more staff to help on projects.
I ultimately ended up choosing Jones Day for many reasons: its culture is unique; it is extraordinarily well-managed; the lawyers genuinely like and respect each other; the Firm has tremendous subject matter expertise; it has a terrific appellate group with many former Supreme Court or Circuit Court clerks who want to work on trial matters; and, there are many talented young lawyers here who have the temperament, talent, passion, and zeal to become great trial lawyers whom I’ve greatly enjoyed working with and mentoring. Lastly, we are given great latitude in terms of pro bono work, both with respect to the type of cases and the amount of pro bono work we can do.
Q: In contrast to many other prominent white collar criminal defense attorneys, you have never worked as a prosecutor. Do you think this background offers any advantages, or drawbacks, in your practice?
I believe being a defense lawyer for my entire career has been a major advantage. I often represent individuals and companies that want to fight, and that’s what I’ve specialized in my entire career.
There is a myth that you need to work as a prosecutor to be able to know how they think. I have interacted with enough prosecutors and have been friends and partners with enough former prosecutors over the years, that I know how they think. Besides, I have never wanted to put people in jail.
Some former prosecutors are able to successfully transition to the defense side. Some are not, and end up exclusively doing internal investigations and turning the results over to the government. That is not the work I prefer to do.
Also, I believe criminal defense attorneys are generally much better cross-examiners than prosecutors, because defendants rarely testify, and often do not put on a direct defense case. In contrast, prosecutors will generally be more experienced in direct examinations. Although both skills are very important, for criminal defense attorneys, the ability to do a good cross-examination is the more important of the two.
The main disadvantage of having never been a prosecutor is that you do not have the network of former AUSAs to access for business development. The prosecutors’ network is often much more active and cohesive than the defenders’ network.
Q: Do you have any advice for younger attorneys who want to get into white collar criminal defense?
First get trial experience, whether with a public defender’s office or prosecutor’s office. That’s the easiest way to develop the essential skills. But it’s not the only way. I’ve got a young partner here whom I’ve mentored for a dozen years who has worked only in law firms. But, she connected with the trial lawyers in those firms and learned a lot by working with them as second chair and being advised by them on her own smaller cases. She has become an extraordinarily talented trial lawyer in her own right.
As for being a public defender, it’s important to try to work at an office that reasonably restricts the intake of new cases. If you look at, for example, the Public Defender Service in D.C., it is a low volume office that accepts mostly difficult cases and it has lots of resources for experts and investigators. You need to be able to expend the time necessary to thoroughly research and prepare a case and, that attention to factual detail and the nuances of the statutes, rules and procedures are very important in the more complex cases.
You can learn by doing but you can also learn by watching. Go see the best trial lawyers in action whenever you have the chance. You can also learn by doing some appellate work because it helps you figure out how to avoid mistakes at trial.
Q: To follow up on that, how can a younger attorney develop the trial experience needed to be an effective criminal defense attorney in today’s environment?
If you want to get trial experience, you need to look for it. Federal courts these days have very few trials. You need to be willing to take on pro bono or court-appointed cases, or smaller cases for lesser fees – often in state court. You need to take trial practice courses and attend CLE programs on trial skills. And, read biographies of great trial lawyers.
In a large firm, you need to figure out who is going to trial, and ask to be on those trial teams. You need to know more about the facts than anyone else working on the case. You need to prove yourself in depositions, or motions hearings, where you are examining witnesses and arguing your positions. You need to lobby and advocate for a chance to do that. The people who really want to be trial lawyers will go out of their way to look for opportunities that large firms do not gratuitously provide.
Q: Let’s talk about the McDonnell case. The trial in that case lasted almost six weeks. Do you have any special tips for handling very long trials that go on for months or longer?
Its not unusual for me to try cases that are several months long. I tried one case for 22 months. That was the longest federal criminal trial in history. It took us four months just to pick the jury.
Lengthy trials are certainly mentally and physically demanding and can take a toll on other aspects of your life. You are always focused on the trial, which means you ignore other things in your life – your practice, your friends, and your family. But minimizing outside distractions is important. If your family and client’s budget will permit, stay in a hotel very near the courthouse even if the trial is local.
Make sure you get some exercise, at least a modest amount everyday. Eat well. Try to get at least four or five hours of uninterrupted sleep. I have never gotten more than that amount a night since I was a teenager, but I have been fortunate to be able to thrive on it. I also try to catch up a bit on sleep on the weekends.
You need to be someone who thrives on stress, as opposed to being someone who is enervated by stress. Sometimes you have to play hurt. Your back may be killing you; you have a cold or a headache. You do your best to power through these minor injuries.
Q: What advice do you have for being a source of strength for clients, particularly during long trials?
I like to analogize it to a boxing match. I have never seen one where one guy lands all the blows. When a compelling witness for the government testifies on direct for three days, you can do nothing but sit and listen and grimace. But you will have your chance to fight back when it comes time for cross. There are peaks and valleys in long trials. You need to keep your eye on the end-game. Advise your client before the trial starts that there will be good and bad days. The issue is who is standing at the end. Convince your client that you have a plan to get through this, to be victorious at the conclusion.
You need to be able to adjust during the course of a trial. You need to have a plan that is comprehensive enough and flexible enough to be adaptable to new evidence or new developments.
If the client knows you are working hard, that you are totally prepared, that you have good defense themes and legal theories, it is much easier to distinguish between battles and the war. If I can’t win every battle, I can still win the war. If the client thinks you know what you are doing, and you are it doing well, they will share your confidence and, at a minimum, believe that you have done everything for them you possibly could have.
I always believe I can and will win no matter what the odds are, no matter what unexpected problems may arise. That inspires my clients. The client made a decision to not plead, and understands there’s risk involved. Clients will accept outcomes if they see sustained effort by competent people. At the end of the day, I don’t control what the judge or jury does, and I don’t create the facts. Clients recognize that there can be mistakes, screw-ups, missed opportunities in trial. It’s a dynamic arena. But if you work hard enough, think hard enough, fully accept the responsibility of defending someone’s freedom, reputation and fortune – you can overcome those problems.
Q: In working on the McDonnell case, your strategy involved preserving and seeking Supreme Court review on the official acts issue from the very beginning. Can you tell us what were some of the alternative plans you had for the case?
Before the trial started, we filed a motion to dismiss based on the official acts issue. We also tried to get the judge to give us the legal instructions the prosecutors gave the grand jury, because we thought they misunderstood the law. Both motions were denied. So, I did not go into trial assuming that we would be getting the final instructions we wanted.
We had other defenses besides the correct definition of “official act,” including reasonable doubt, good faith and good character.
I was optimistic. I went into closing arguments thinking we were going to win no matter how bad the instructions were because our client had no criminal intent. I tried to argue as closely as I could to the instructions I wanted. I had a plan, but it was multifaceted.
I knew if we ended up losing the case at trial, we had a fantastic appellate issue that likely would be cert-worthy. I thought if we did get to Supreme Court, we would win, 9-0. If Justice Scalia had been on the bench, the Court might have even invalidated the bribery statutes on vagueness grounds. Several jurors even told the press after the trial that they believed my client’s trial testimony. The jury convicted the Governor because they were directed to do so by the flawed instructions.
Q: Did the location of the McDonnell trial in Richmond, Virginia figure into your preparation for trial at all, and if so, how?
To prepare for any trial, you need to know that court. You need to understand who the players are. You need to know their personalities, likes, dislikes. The trial in this case was held in the Richmond Division of the United States District Court for the Eastern District of Virginia. It is a small court, with only four judges and two magistrates. It is a tight community of prosecutors and judges who work together all the time.
The Richmond Division is also notorious for being fast and formal. You don’t have conference calls with the judge to resolve discovery disputes. You need to file a motion, in the right format, at the right time, with the right page limits. Before the trial started, we belatedly received about 5 million pages of discovery documents. That was sometime in late March. And we had to go to trial at the beginning of August. That was as far out on the calendar as the judge was going to let it go. He wanted to get it over with before his clerks rotated out on Labor Day.
You have to be ready going into that jurisdiction, knowing that you will be on a very fast track. Substantial advance preparation is key. You need the resources to deal with that pace of litigation. You’re filing motions all the time and arguing constantly. You typically won’t get all of the discovery you need until close to the trial date. You need to be prepared for all of that. You need to consult with local lawyers who regularly practice there and make sure you know what problems might arise and how best to avoid or solve them.
In any major case, you need to know the personalities of the players: what annoys them, what makes them happy. The clerks, judges, opposing counsel. The local quirks. For example, in Richmond, if you run out of defense witnesses early on a particular day, maybe because the prosecution didn’t spend long cross-examining your witnesses, your case is over, even if you have more witnesses lined up for tomorrow. You can beg the judge to adjourn early that day, but you don’t want to count on getting that slack.
Also, the Richmond division, like the rest of EDVA, does not allow electronics in the courthouse without the judge’s permission. If you don’t have electronics, it is hard to communicate with people in your firm or witnesses. In Alexandria, you need to line up to use the few available payphones. These are the types of restrictions you need to know about and plan for before a trial. You have to be prepared to inconvenience witnesses by making them show up early. You need to have law clerks or paralegals who are keeping the witnesses happy and on the reservation while waiting.
Q: Governor McDonnell was himself a former prosecutor, and an accomplished attorney. Did this background make any difference for you in terms of your representation?
The Governor’s background created both opportunities and challenges. He was a politician, a lawyer, and the CEO of a state with 100 billion dollar biennial budget and 100,000 employees.
I’ve represented many lawyers and business executives. One common thread is that they are particularly difficult to train as witnesses. Many do not think that anyone on the jury is their peer. They have a hard time trusting the jury. Based on decades of experience, I generally trust jurors, as long as I get a reasonable voir dire. You have to convince your client that this group is a jury of your peers. Even if individually they may not be your peers, collectively they are as smart as you are. You have to convince your client to trust in the system, and the magic number of 12 jurors who must be unanimous. You have to convince your client to believe in a system which has historically proven reliable, even if not unerring.
Lawyer clients, in particular, often second guess you on legal issues and trial strategy. They can’t help themselves. They act like lawyers even though they are the client. They want to expand and explain, question and challenge. CEO’s don't like being told what to do. Politicians want to manipulate the press. You have to convince these clients that you, not they, deserve to be in control.
Q: People have praised you for your cross-examination of the FBI agents in the Governor McDonnell case. Do you have any general philosophy or approach for cross-examining law enforcement agents?
My first rule is that you cannot be the least bit intimidated or afraid to take on an agent on cross-examination, even though they are usually the most well-trained and experienced witnesses in the case.
Secondly, my experience has been that law enforcement witnesses often act like expert witnesses, even if not qualified as such. They are primed to give opinions at the slightest opportunity. You have to approach them as you would approach an expert witness. This means learning how they think, how they work, how they operate, how they do their job. What rules and practices govern their conduct and influence their thinking. What their biases, motivations are. What their weaknesses and strengths are. Then you exploit these things on cross-examination.
You must remain in control of these witnesses, while giving them enough rope to make mistakes.
I like cross-examining experts and law enforcement agents. I know how agents think, talk and how they collaborate. And what corners they may cut. Whether or not they think the ends justify the means. Then I devise a strategy for cross-examining them that is effective in making the point I want to make.
Q: You have obviously achieved an incredible outcome in the McDonnell case. With that said, we know that no case is ever perfect. Do you believe that there was anything in the case you would have done differently?
To begin with, it was a team effort. It takes a village to win these types of cases. As for doing things differently, I don’t mean to be flip, but I would have preferred to try the case in October or April rather than August. A better month of the year with better weather in Richmond. Fewer potential jurors with substantial business expertise out on vacation.
We probably should not have had so many defense lawyers in the courtroom on a daily basis. It can look odd to a jury. We could have been better at tasking folks in the courtroom to be specifically responsible for keeping track of all the various courtroom dynamics. We could have done a better job of not annoying the judge.
But, you need to try to find ways to give young lawyers on the team opportunities to do something substantive in court.
There was also a benefit to having a large team in trial. If a juror does not like me, maybe she will like the personality of another lawyer on the team. Same with witnesses. Some lawyers draw the judge’s fire more than others.
In hindsight, I would have also tried hard to move the case out of Richmond. The problem was that I did not get the kind of voir dire I expected on pre-trial publicity. Going into the trial, I knew the demographics of the Richmond jury pool. I knew the political polling. I knew what the press coverage was going to be like after the investigation was made public. Knowing all that, I was still convinced that if I got reasonable voir dire, I could get a good jury.
Things did not work out that way. The voir dire was severely restricted. For example: both sides agreed that the Court should ask the following question: “based on your exposure to the media, have you formed any opinions about guilt or innocence of either defendant?” The Court would not ask that question. Instead, the judge asked the entire jury pool of 143 to stand up if they had heard about the case and to keep standing if they could not be fair. Naturally, all sat down. I was not amused.
In terms of other issues, there are things I wished would have come out differently, but not that I would have done differently. For example, I would have liked the two defendants to be severed, but the judge did not allow it. We filed many other motions. The judge ruled against us on nearly all, except 17(c) subpoenas and pro hac vices. I did not expect to win many other motions, but there are strategic reasons for filing them anyway. For example, you get to learn more about the government’s case because they have to respond. You also build up chits, so you can tactfully say: “how about ruling for me once in a while, judge?”
Another issue from the case that I still think about is the problem of dealing with leaks during the grand jury phase. To give some background, during the investigation of Governor McDonnell, many leaks appeared in the press that were attributed to law enforcement sources. However, we were not able to slow the flow of leaks, or figure out a good way to stop them.
Trying to run down grand jury leaks can be a real diversion of resources and time when you are on the fast track to trial. While most prosecutors are ethical and would not leak grand jury info, there are many sources other than prosecutors who can leak information about a grand jury investigation.
The only way to find out is through litigating the issue. Then you would be fighting Williams & Connelly or Cahill Gordon on these First Amendment side issues if you tried to subpoena reporters, while you are also fighting the prosecution on the main front. You may stop the leak and punish the person responsible, but you can’t repair the damage done in terms of influencing public opinion.
One other thing that bothered me during the trial, and which I still don’t have a good answer for, is the problem in a high profile case, of dealing with the constant negative press, before, during and after the trial. Various major publications were obviously out to do Governor McDonnell in, and there was a constant torrent of false narratives being spread in the major news outlets as well as the blogging sphere. The problem only got worse when we were in trial. Reporters were all over the courthouse. There would be twenty or thirty reporters in my hotel whom I couldn’t recognize. Every time I sat with a colleague for breakfast or dinner, I had to worry about whether there were reporters listening to our conversations.
I was never able to figure out an effective way, consistent with the free press-fair trial restrictions, to deal with the negative publicity in the McDonnell case. The best solution I could come up with was to file motions articulating something that I’d like the press to pick up on, and hope that they print it, and if a reporter called me and said he was going to print something which I knew was false and defamatory, I threatened to sue.
Of course, the client is always free to speak to the press because he has First Amendment rights. In Governor McDonnell’s case, the day after the indictment was returned, he, with his wife and his children beside him, gave a short press conference in the lobby of a law firm in Richmond. The magistrate judge at the subsequent bond hearing was upset by this. He quoted me the local free press-fair trial rule, and noted that my client is also a lawyer. Of course, the magistrate was wrong about the rule’s application, because it clearly only applied to attorneys representing a client, and my client was not representing himself. Later at the arraignment, the district court judge said to both sides: “the game playing with the press is over.” From that point forward we were never quoted in the press again until the trial was over.
In sum, I felt that the negative and false press coverage during the trial really hurt us, and I’d like to think if I did the trial again, I’d figure out a better, ethical way of controlling or balancing that narrative.
Q: A final question: sometimes our most memorable cases may not be the most high-profile cases. Do you have any little-talked about cases that are especially memorable to you?
I’ve always liked all of my clients over the years, and found something to admire in each one of them, no matter what types of crimes they were charged with. One especially memorable one was a young man, who was a juvenile at the time I represented him in the Public Defender Service. I won his trial, and he was very grateful.
Later on when he was an adult, he got himself in trouble on major federal offenses I did not know about, and he ended up with a life sentence on cocaine trafficking and firearms related charges. Four or five years ago, while still in prison, he wrote to me and asked for Jones Day’s help with a habeas petition. We ended up getting his life sentence substantially reduced. He is now out of prison, married, working several jobs and doing extremely well.
When he wrote that letter to me asking for help with his habeas petition, he included the pleadings that he had filed pro se up to that point to resurrect some of his legal issues and get his foot in the door. He had turned into quite the jailhouse lawyer. What struck me most, though, were the footnotes at the bottom of the first page of all his motions, expressing gratitude to me personally as his mentor for teaching him everything about the law.
[This interview has been lightly edited for brevity and clarity.]
(EG & ZZ)
Tuesday, October 11, 2016
In this second post from the Fifth Annual ABA Criminal Justice Section London White Collar Crime Institute, I will discuss some of the lessons learned and issues discussed during this morning’s panel on international internal investigations.
The panel emphasized that one of the first issues for consideration after the discovery of potential misconduct by a corporate employee is disclosure obligations. One of the issues discussed in this context was the tension the exists when a corporation wants time to develop the facts, but mandatory disclosure requirements restrict the time frame during which this can occur. This is an issue made even more complex in the international context, where the disclosure obligations might vary significantly from one jurisdiction to another. Further, along with mandatory disclosure obligations, there are permissive disclosure considerations. One of the most important, of course, is the decision whether and when to disclosure the issues discovered to the government in an effort to demonstrate cooperation and voluntary disclosure.
The panel also considered the importance of seeking to preserve evidence immediately. As readers know, failure to protect evidence from destruction can both jeopardize the ability of counsel to conduct an effective internal investigation and, potentially, lead to charges of obstruction of justice.
Part of the hypothetical discussed during the panel involved a number of emails being collected by private counsel as part of the internal investigation. These emails came from various parts of the world, including Hong Kong and Amsterdam. While counsel in the U.S. are comfortable with collecting emails and other corporate documents during an investigation without significant impediment, data privacy laws in other countries introduce a number of complexities. In the European Union, for example, there are many restrictions on the transfer of data out of the country. One related issue explored by the panel was whether U.S. prosecutors understand or appreciate the significance of these data privacy obligations. Based on discussions both today and yesterday at the conference, it appears that one of the reasons tension exists in this area is because of the different approaches to these data privacy obligations taken by corporations during pending investigations.
The panel then discussed issues associated with employee interviews during an internal investigation. Here, the panel examined the ways that local employment, criminal, and civil laws can impact the ability of counsel to conduct such interviews. Once again, while few restrictions exist in the United States, a host of restrictions and requirements related to interacting with employees in this way may apply abroad. Can the interview be recorded? Can the employee’s statements be disclosed to the government? Does the employee need to be given notice or provided with representation prior to the interview? What types of disclosures need to be made to the employee before the interview begins? Are interview notes privileged? How do the answers to these questions impact an internal investigator’s strategy? As these questions illustrate, each step of the investigation on the international stage posses various pitfalls and perils.
As part of this panel, we also heard an interesting discussion of the economics of profit and loss calculations in a bribery case. The presentation reminded us of the complexities of profit and loss calculations and the significant impact these calculations might have on the outcome of the case. It also reminded us of the importance of retaining the right experts in any case, particularly one that crosses borders.
The panel as a whole served as a nice reminder of the importance of considering local laws and rules when engaging in a cross-border investigation.
Monday, October 10, 2016
I’m attending the Fifth Annual ABA Criminal Justice Section London White Collar Crime Institute this week and the program will be touching on various important issues in the field. I thought I might share some of what was discussed with our readers.
In this first post, I’ll focus on what was discussed during the first morning session where we heard from Andrew Weissmann, Chief of the DOJ Criminal Division’s Fraud Section, and Mark Steward, Director of Enforcement and Market Oversight at the Financial Conduct Authority (“FCA”) in London. During the panel, Mr. Weissmann and Mr. Steward focused on four themes – cooperation, corporate compliance programs, individual accountability, and reliance on internal investigations.
Regarding the first issue, Mr. Steward noted that currently there is significant contact between the FCA and the DOJ. In particular, he noted that there is little preclusion today regarding regulators and prosecutors collaborating on investigations and how they might conclude. Mr. Weissmann agreed that there is significant cooperation today, not just between the U.S. and U.K., but also with many other countries around the globe. The challenge he noted is that moving forward global enforcement bodies need to be cognizant of what each other wants and ensure that the penalty at the end of the day is fair.
Regarding compliance programs, there was discussion of the DOJ compliance expert, Hui Chen. Mr. Weissmann noted that there are two key questions for Ms. Chen based on the Principles of Prosecution. He described those as (1) did the company have an adequate compliance program and (2) did the company adequately remediate the issue? The DOJ, he noted, looks at compliance programs through this lens. The take-away from the discussion was that the process of receiving credit for a compliance program is much more rigorous than in the past and is, at least in part, data driven. Mr. Steward stated that compliance programs are important because of the manner in which they speak to a company’s culture.
Regarding individual accountability, Mr. Weissmann stated that the Yates Memo has been somewhat misunderstood. To illustrate this point, he noted that the DOJ Fraud Section prosecuted 225 individuals and 11 corporations last year. So it has not been the case, he emphasized, that the DOJ has been focusing only on corporations. There was a focus on individuals before the Yates Memo, he said, and that focus remains after the Yates Memo. Mr. Weissmann also noted that it is important to recognize that the issue of individual responsibility is important when considering compliance programs and remediation. From his comments, it appears clear that corporations must consider not only how to sanction those responsible for the actions under investigation, but also those who were responsible for monitoring or supervising these individuals.
Regarding internal investigations, Mr. Weissmann stated that the DOJ finds it very helpful for a company to conduct an internal investigation. He encouraged cooperation and coordination during such inquiries. For example, he said that the DOJ is interested in learning who will be interviewed in an investigation because the government might like a particular issue asked during the interview or might like to interview the employee before investigating counsel. In general, Mr. Weissmann stated that the DOJ is looking for investigations that are “independent and candid.” Mr. Steward was more skeptical of the value of internal investigations because of what he described as an inherent conflict of interest. He stated that he must base a decision in a matter on evidence gathered and corroborated by his organization, not by a private law firm. Mr. Weissmann stated that internal investigations are particularly helpful in complex cases. For example, he stated that in large cases it could be difficult to determine who might actually have valuable information. Investigating counsel, he said, can help focus the DOJ on the right individuals so the government can use its resources in a targeted manner. As another example, Mr. Weissmann noted that many cases today have international components. In such matters, it can be difficult or time consuming to gather information from abroad through the MLAT process. Law firms, he noted, can be very helpful is assisting to get information and determine where further inquiry might be valuable.
Saturday, October 8, 2016
This week in U.S. v. Free, the Third Circuit sent a sentencing case back to the district court for further proceedings, because the sentencing judge appeared to have based his loss calculations on defendant's harm to "the integrity of the judicial process." Free was convicted after a jury trial on bankruptcy fraud charges. The sentencing court found that Free lied and obstructed justice throughout the bankruptcy court proceedings and hid assets totaling over $1 million. But in the end all creditors were paid in full and it appears that Free filed for bankruptcy for reasons unrelated to defrauding his creditors of the funds he owed them. The Third Circuit held that it is improper to base loss calculations on harm to the integrity of the judicial process, as opposed to real harm inflicted on the actual victims of a bankruptcy fraud. The Third Circuit, however, virtually invited the district court to upwardly vary on remand, based on Free's obstructive conduct.
Thursday, September 29, 2016
In white collar cases, prosecutors often stress the signs or "indicia" of fraud inherent in a given defendant's conduct. In the FBI/DOJ investigation of Secretary Clinton we have several signs of incompetence and/or highly irregular conduct on the part of those in charge. The one that stands out most clearly to anyone who practices white collar criminal defense was the decision to allow Cheryl Mills to attend Secretary Clinton's FBI interview. Competent prosecutors do not allow a key witness to participate as an attorney in an FBI interview of the main subject. It just isn't done. It isn't a close question. It is Baby Prosecution 101. Director Comey's attempt to justify this decision during yesterday's House Judiciary Committee Oversight Hearing was disingenuous and disgraceful. According to Comey, the FBI has no power to control which attorney the subject of an investigation chooses to represent her during an interview. This is literally true, but irrelevant and misleading. Prosecutors, not FBI agents, run investigations. Any competent prosecutor faced with the prospect of Ms. Mills's attendance at Secretary Clinton's interview would have informed Clinton's attorneys that this was obviously unacceptable and that, if Clinton insisted on Mills's attendance, the interview would be conducted under the auspices of the federal grand jury. At the grand jury, Secretary Clinton would not have enjoyed the right to her attorney's presence in the grand jury room during questioning. In the event Clinton brought Ms. Mills along to stand outside the grand jury room for purposes of consultation, competent prosecutors would have gone to the federal judge supervising the grand jury and attempted to disqualify Ms. Mills. In all likelihood, such an attempt would have been successful. But of course, it never would have gotten that far, because Secretary Clinton will do anything to avoid a grand jury appearance. So, Director Comey's response was a classic dodge, one of several that he perpetrated during yesterday's hearing. As noted above, the decision to allow Ms. Mills to attend Secretary Clinton's FBI interview was only the clearest example to date of irregular procedures sanctioned by the prosecutors in charge of the Clinton email investigation. More to come on that in a subsequent post.
Monday, September 26, 2016
In the recently-released hit movie "Sully," about a pilot who landed a disabled US Airways plane on the Hudson River after its engines hit a flock of geese shortly after taking off from LaGuardia Airport, the film's heroes, Capt. Chesley B. Sullenberger lll (the "Sully" of the title), played by Tom Hanks, and the co-pilot Jeff Skiles, played by Aaron Eckhart, worry that the agency investigating the water landing, the National Transportation Safety Board ("NTSB") will publicly criticize them for making a dangerous water landing rather than just turning around and returning to LaGuardia. In the movie, the agents appear adversarial and close-minded and looking to blame the pilots based on simulated tests and preliminary expert evaluation.
NTSB released a statement regretting that the filmmakers had not asked it to review the film before its release, and the now-retired leader of the NTSB inquiry complained that the film unfairly characterized the agency as prosecutorial. According to the New York Times (Negroni, "'Sully is Latest Historical Film to Prompt Off-Screen Drama" Sept. 9, 2016), the NTSB maintained that its investigations are primarily meant to understand how humans and machines fail to prevent accidents, and not to blame individuals. (Later that week, however, the NTSB strongly criticized the pilot and crew of a Delta airplane that had skidded off a LaGuardia runway).
While "true story" films often veer from accuracy, as this one apparently did, one of the film producers denied that the film took creative license as to the pilots' fears, saying that the film was told through the perspectives of the pilots, who felt under "extreme scrutiny." And, Mr. Sullenberger, in an e-mail to the Times, wrote that the film accurately reflects his state of mind. "For those who are the focus of the investigation, the focus of it is immense," he wrote, and that the investigative process was "inherently adversarial, with professional reputations absolutely in the balance."
The contrasting viewpoints of the former NTSB investigator and its investigatee, Mr. Sullenberger, demonstrates the not uncommon disconnect in perception between how those who investigate and those who are investigated. Investigators view their behavior, even if aggressive and apparently hostile, as just rightfully doing their jobs. Those being investigated, no matter how innocent or blameless they might be, often feel that the investigators are biased and out to get them, regardless of their blameworthiness or lack of it.
To be sure, investigators often believe that an aggressive, hostile, unbelieving manner is a good way to reach the truth. Those being questioned often view that type of investigation and interrogation as a means to reach a predetermined result regardless of its accuracy.
Investigators - and I include criminal prosecutors - often lack sensitivity to how those they investigate perceive them or the psychological toll their investigations take. They rarely understand, in Sully's words, "the [immense] intensity " that affects an individual, including the innocent. Investigators virtually never take into consideration how heart-wrenching, all-consuming and destructive an investigation may be to an individual when they determine whether and how to investigate. They generally believe, and judges rarely disagree, they (and especially the grand juries prosecutors nominally act for) have an absolute right to investigate and question (with some constitutional and statutory restraints) anyone. In the movie, and in real life, the investigation consumed and heavily worried the pilots, members of a profession known for calm and equanimity. One would expect people in other walks of life to be more affected.
I do not suggest that prosecutors or agencies forego investigations if based on reasonable suspicion or another more than insubstantial basis. I do suggest, however, in instances where there is little factual or other basis to suggest wrongdoing by an individual, that prosecutors and agencies consider the human cost and anguish an investigation or the manner in which it will be conducted may cause the person being investigated or interrogated.
As a young lawyer just out of a prosecutor's office, I worked for a state investigative commission with subpoena power. Its chair, a prominent Wall Street lawyer and former bar association president, was hesitant to issue subpoenas to individuals without a substantial basis to believe there was wrongdoing, a hesitancy which bothered its ex-prosecutor lawyers (including me), who used to issue subpoenas like street vendors issue flyers. As Sully's situation suggests, some hesitancy in starting investigations, issuing subpoenas or harshly interrogating witnesses based on how it would affect the individuals involved may be appropriate.
Monday, September 12, 2016
I agree with my colleague Prof. Podgor that DOJ made the "right decision" to drop the prosecution of former Virginia governor Robert McDonnell. Under the narrow definition of "official act" given by the Supreme Court a re-prosecution was doomed. I further agree with Prof. Podgor that McDonnell's legal team, led by Hank Asbill and Noel Francisco, deserves plaudits for its determined and outstanding lawyering.
I do not, however, criticize DOJ for bringing this case. McDonnell's acts - accepting $175,000 in money and gifts in exchange for favorable treatment for the donor - although ultimately determined not to be "official acts" and thus not criminal, were unseemly and corrupt. That the Commonwealth of Virginia, in its wisdom or lack of it, chose not to criminalize such activity to me was a reason for federal prosecution, not for abstention. To be sure, the government should have been aware that there was Supreme Court case law arguably undermining its position. On balance, the egregiousness of McDonnell's conduct, I believe, justified a prosecution, even if it "pushed the envelope."
The McDonnell decision will allow federal prosecutions of politicians accepting things of value for favorable votes or actions on legislation or favorable decisions awarding governmental appointments, contracts and benefits, the areas within which most corruption cases fall. It will, however, eliminate or preclude almost any prosecution for payments to officials for access, referrals and introductions, allowing donors an advantage over non-payers. "Pay-for-play" systems do not guarantee winning a contract, but do allow one to be among those considered - a giant and necessary step. Thus, the decision will, like Citizens United, most benefit the rich, powerful and politically-connected.
I, like many others, was surprised by the unanimity of the court. Although I am no expert on Supreme Court internal politicking, I suspect some justices might have gone along with the decision to prevent a broader decision which would have greatly limited, or even eliminated, federal prosecutions of state and local corruption, either by finding the term "official acts" constitutionally void for vagueness, or on federalism grounds. In his opinion, Chief Justice Roberts mentioned, but did not rule on, both considerations.
I cannot dismiss an undiscussed "elephant in the room," alluded to by Prof. Podgor. The American election system commonly allows campaign contributions to be rewarded by at the least access to elected and appointed officials. It is extremely doubtful whether McDonnell would have been prosecuted for accepting campaign contributions and rewarding the donor with access to state officials. It seems to me extremely difficult to make a lawful/unlawful distinction between situations involving gifts to politicians for their personal use, as in McDonnell, and those involving gifts to politicians for campaign purposes. Absent such a distinction, an affirmance of McDonnell might have led to cases concerning campaign contributions, which might have led to an upheaval in campaign financing practices generally accepted in America. Thus, it is not surprising that a host of former Counsels to the President and Attorneys General submitted amicus briefs in support of McDonnell, a fact noted with apparent respect in the opinion.
Lastly, I wonder whether the Court was wary of allowing federal prosecutors expansive power to prosecute political officeholders. There is always a danger - at least theoretical - that a prosecutor will misuse her power to indict political opponents, as is not infrequently done in foreign nations, and perhaps occasionally done in the United States. It may well be that the case should be considered primarily as a limitation of prosecutorial and executive branch power.
Thursday, September 8, 2016
As noted here by Solomon Wisenberg, DOJ moved to remand the case against Robert F. McDonnell to the district court in order to dismiss the indictment with prejudice. Many in the media have reported about this dismissal (e.g., Washington Post here, USA Today here) The Washington Post states that this results from a "new legal definition" being given to public corruption (Washington Post). While others criticize the Supreme Court with comments such as "[w]e are now seeing that the Supreme Court's decision will in fact result in corrupt conduct going unpunished, just as we feared it would." See Statement here - Citizens for Responsibility and Ethics in Washington.
But some media and critics are missing the point here. The McDonnell decision was not a close call - it was a unanimous decision of the Supreme Court. There were no dissents.
This is not a case that puts a stop to prosecuting bribery and extortion cases. The law clearly allows such prosecutions and there have been many such prosecutions without reversals.
The McDonnell case was one we see too many times, where prosecutors push the envelope and prosecute conduct that does not meet the statute. And Hank Asbill, Noel Francisco, and the rest of McDonnell's legal team did a wonderful job showing this.
Elected officials who corruptly take money or items of value for an official act can be prosecuted. And prosecutors need to focus on bringing cases that meet the language of this statute. But the receipt of money or items of value alone are not a crime. If a politician's merely taking money is considered to be a crime, then politicians would be unable to accept any campaign contributions. And although many may find this result good - it is not the law.
So, DOJ should be applauded for making the right decision here. Spending more time or money on a case that does not meet the legal mandates is a poor choice of how to spend limited resources. What is particularly outstanding on the part of DOJ here is that they issued a press release stating, ""[a]fter carefully considering the Supreme Court's recent decision and the principles of federal prosecution, we have made the decision not to pursue the case further."
It is rare that DOJ issues a press release noting a not guilty verdict, a court dismissal, or something other than an indictment or conviction. It is hopeful that what DOJ has done with the McDonnell case, of issuing a statement of dismissal, will be replicated in non-white collar cases.
It's now official. Former Virginia Governor Robert McDonnell and his wife Maureen will not be retried and all charges are to be dropped. The Washington Post has the story here. It is unclear whether Main Justice overruled the EDVA or caused that office to change its mind regarding proceeding to a second trial. More analysis to come.
Wednesday, September 7, 2016
Finally, as promised, here is the U.S. v. Reddy Annappareddy 9-1-16 Motion to Dismiss Hearing Transcript. At the conclusion of that hearing Judge George Levi Russell dismissed the Indictment with prejudice. Judge Russell's rationale for his ruling can be found at pages 49-62 of the transcript. This was a health care fraud case and a core government theory was that Mr. Annappareddy received Medicaid reimbursement for pills that were never given to patients. The government sought to prove its theory by showing that Mr. Annappareddy's pharmacies billed for more pills than they received. The most significant evidence that the prosecutors offered in support of this allegation was a calculation of the purported “loss” from the alleged fraud. The following factors were key to the Court's finding that the government committed due process violations that shocked the conscience and rendered it impossible to put Mr. Annappareddy back on an even footing with the government: 1) the government violated Brady by failing to disclose loss calculations from its initial auditing team that were significantly smaller (in total and with respect to two key pharmacies) than the calculations of a subsequent government auditor who testified at trial; 2) the government violated Brady by failing to disclose the risk of double-counting errors in the loss calculations; 3) the government presented false testimony regarding the loss calculations due to double counting errors; 4) the government presented false testimony by a government agent, based on her examination of the wrong set of phone records, that Mr. Annappareddy had NOT made any calls to a key individual in response to a material email from that individual, when in fact Annappareddy had several phone contacts with the individual within minutes of the material email; and 5) the government destroyed potentially key exculpatory evidence without a court order or the defense's permission. The Court also sent a not so subtle warning to the government: "In the event that my record is not clear or exercise of my discretion too broad, this Court will conduct an extensive time-consuming and costly hearing as to these matters and the other grounds supporting the motion to dismiss and other motions which have already been filed. To that end, the balance of all other motions in this case are denied as moot." Translation: If you appeal this ruling and I am reversed, we will delve in detail into the other grounds of error raised by the defense. And it will not be a pleasant process. Hat Tip to David Debold of Gibson Dunn for sending along the transcript.