Wednesday, June 6, 2012
Guest Blogger – Rochelle Reback
In light of the prevalence of ESI discovery in white collar cases it is ironic that an important principle regarding electronic discovery is developed for us in an indigent's drug smuggling case. But, we'll take it! In United States v. Stirling ( Download Altonaga order granting new trial(1)) yesterday, District Judge Altonaga found that notwithstanding the government’s technical compliance with its ESI discovery obligations under Federal Rule of Criminal Procedure 16(a)(1)(B) by furnishing an exact replica of defendant's hard drive to the defense, the government's electronic discovery dump in this case so seriously impaired the defendant’s trial strategy that there should be a new trial. Not known to defendant's attorney, on the disclosed and mirrored hard drive were some of defendant's Skype chat logs which the government's forensic expert was able to open and view only by using a specialized computer program. The Skype chats were not visible in any other way. But neither the existence of the Skype chats on the hard drive, nor the expert's employment of the specialized program to view them were disclosed to the defense until after defendant testified. In rebuttal the prosecutor called their expert and used these Skype chats to impeach defendant to devastating effect as they contradicted much of his trial testimony. Stirling was convicted.
Under Federal Rule of Criminal Procedure 33, Judge Altonaga ordered a new trial in "the interest of justice," even though the government had warned the defense that if Stirling took the stand and testified falsely, there was [unidentified] evidence on the computer which the Government would use in its rebuttal to impeach him. Finding that this was not like the cases cited by the government where courts have consistently refused to require the government to identify exculpatory or inculpatory evidence within a larger mass of disclosed evidence, Judge Altonaga wrote that the standard of Federal Rule of Civil Procedure 34(b)(2)(E)(ii) should also apply in criminal cases and the government should be required to produce ESI in a "reasonably usable form." She found the government's "technical compliance with its discovery obligations under Federal Rule of Criminal Procedure 16 (a)(1)(B) by the furnishing of an exact replica of the hard drive" to not be enough. The government "never told defense counsel that incriminating Skype chats could be extracted from the disk or that they even existed." Judge Altonaga agreed with defense counsel that "production of something in a manner which is unintelligible is really not production." She ruled that "If, in order to view ESI, an indigent defendant such as Stirling needs to hire a computer forensics expert and obtain a program to retrieve information not apparent by reading what appears in a disk or hard drive, then such a defendant should so be informed by the Government, which knows of the existence of the non-apparent information. In such instance, and without the information or advice to search metadata or apply additional programs to the disk or hard drive, production has not been made in a reasonably usable form. Rather, it has been made in a manner that disguises what is available, and what the Government knows it has in its arsenal of evidence that it intends to use at trial."
One has to wonder if the "interest of justice" result would have been the same if the defendant in this case was not indigent and did not have to seek the court's assistance for experts and more sophisticated computer resources to unlock the hidden mysteries of the electronically stored information.
(reback) –(with hat tips to Donna Elm and Robert Godfrey)
Tuesday, June 5, 2012
The Fifth Circuit affirmed the convictions and sentences in U.S. v. Brooks, a case involving alleged "false reporting of natural gas trades in violation of the Commodities Exchange Act and the federal wire fraud statute."
Although the court distinguishes the Stein decision from the Second Circuit with the facts in this case, both cases had individual defendants who had their attorney fees cut off. In Brooks, the defense claimed it was from government pressure, but the Fifth Circuit said the factual findings were not present to confirm this conduct. The court found that the company's policy on payment of attorney fees was a discretionary policy. But when a company gets a deferred prosecution agreement one has to wonder if there is an incentive to show cooperation, albeit payment of attorney fees can not be a factor used.
There is also an interesting question of what constitutes "reports" for purposes of the CEA or CFTC regulations. This is an intriguing issue as one is basically violating federal law through a submission document. The Fifth Circuit rejected a void for vagueness argument here.
The Fifth Circuit also found the Fifth Circuit Pattern Jury Instruction as meeting the recent Supreme Court decision in Global Tech, although they admit it does not use the same language. The question here is whether deliberately closing one's eyes is the same as taking "deliberate actions to avoid learning of the fact," the test set forth in Global Tech. I see a difference in that one is passive and the other is active. The Court seems to be satisfied with the evidence in this case, but one has to wonder if the Fifth Circuit should be quickly looking to change its pattern jury instruction to avoid this issue in future cases.
Then there is the question of defense witness immunity. A witness is on the prosecution witness list and is not called to testify because the prosecution has concerns about the witnesses truthfulness. The witness has not yet been sentenced (the government postponed sentencing for 39 months- obviously to be after this trial) and decides to take the Fifth Amendment. The prosecution called the witness the evening before the witness was to testify, but says the call was to determine if they needed to prepare the witness for cross-examination. The defense argues that the witness has exculpatory evidence for the defense. The defense asks for defense witness immunity and doesn't get it. One has to wonder whether the jury really had full information to resolve guilt or innocence? But the Fifth Circuit held otherwise.
And this is not a case where defendants are receiving light sentences. All the defendants were level one and yet all of their sentences exceeded 11 years imprisonment, with one receiving a 14 year sentence. Whoever thinks white collar offenders are getting off easy, needs to just look at this case to see that this is not the situation.
Sunday, June 3, 2012
Corporate Social Responsibility and Supply Chains Practice: Proposed Dodd-Frank Conflict Minerals Rules
Thursday, May 31, 2012
As noted here, John Edwards was found not guilty on one count, and the jury was unable to reach a verdict on the remaining counts. Prosecutors should now move on and not retry Edwards on these remaining counts.
The government has expended enough taxpayer money on this case and Edwards most likely has had to incur the cost of his defense. Prosecutors have already hurt Edward's reputation with the evidence presented at trial - so there is no punishment basis for proceeding further. Evidence not presented at trial left the murky question of whether this money was even a political contribution, and the testimony of Federal Election Commissioner Scott E. Thomas that was not heard by the jury raises additional issues on campaign contributions. But the place to resolve this is not in the criminal courtroom. More importantly, if skilled folks can differ on this question then one certainly should not hold someone criminally liable.
No one walks out unhurt by this trial. And that is the huge cost that comes with a prosecution. It is for this reason that prosecutors need to consider carefully prior to charging anyone with criminal conduct.
Some have been claiming that corporate prosecutions are down in numbers. It certainly has not seemed that way, so I was glad to see the numbers, which demonstrate that corporate sentencings have been average over the past few years.
Lisa Rich, Director of the Office of Legislative and Policy Affairs at the United States Sentencing Commission provided the following corporate statistics for the recent Federal Sentencing Conference (although I have reworded some of what she provided): In FY 2011, there were 160 organizational cases and 151 pled guilty and 9 were convicted after jury trials. Probation was ordered in 111 cases and 31 had court ordered compliance/ethics programs. Three cases received credit for self-reporting and 44 received credit for cooperating with the government. But of the approximately 74 cases in FY2011 for which the Commission had Chapter 8 culpability information, there were no entities receiving full credit for having an effective compliance program. Not one of the 74 cases received credit under subsection (f).
These statistics do not reach the full corporate efforts by DOJ since they fail to include non-prosecution agreements or deferred prosecution agreements that have not gone through chapter 8. So some bottom line observations: 1) if the government decides to prosecute a corporation - it has an incredibly high chance of success; 2) more emphasis needs to be put into teaching corporations how to operate an effective compliance program; 3) studies need to examine whether by using deferred and non-prosecution agreements the government is increasing prosecutions against corporate individuals (it certainly seems likely that this would be the case).
Friday, May 25, 2012
The DOJ filed a motion to voluntarily dismiss (Download USA v Lindsey, etc., et al.___ecf.ca9.uscourts) in the U.S. Court of Appeals for the Ninth Circuit the FCPA case involving Lindsey Manufacturing Co., its CEO and CFO. The government had filed an appeal on December 1, 2011 following an Order of District Judge Howard Martz, who ruled that the Lindsey prosecution had been tainted by a pervasive pattern of flagrant government misconduct. Contributing Blogger Solomon Wisenberg posted here excerpts from this initial Order. By today's dismissal, the government is finally dropping this prosecution and it also ends the efforts to get the company to forfeit $24 million.
Attorney Jan Handzlik of Venable LLP stated, "This is a great day for the fair administration of justice. We couldn't be happier for Keith, Steve and the 110 loyal, hard-working employees of Lindsey Manufacturing Company. This dismissal further vindicates Dr. Lindsey's belief in our system of justice and in his innocence. Keith and Steve were steadfast in their belief that the government had not played fair and that the truth would come out."
Congratulations also go to Janet Levine (CrowellMoring), who also represented an accused in this case. Both Jan Handzlik and Janet Levine were the inaugural recipients of the White Collar Criminal Defense Award given at the NACDL White Collar Criminal Defense College at Stetson (see here).
The Statement of Williams Connolly LLP, through Rob Cary, Brendan Sullivan, and Simon Latcovich, truly speaks for itself. We will have more to come on the DOJ's actions.
Monday, May 21, 2012
Here is the Houston Chronicle's take on today's proceedings in U.S. v. William Roger Clemens. Brian McNamee was allowed to testify on re-direct that he injected three other players with HGH. Judge Walton gave the jury a limiting instruction that the testimony could only be used to bolster McNamee's credibility--not to infer Clemens' guilt. Still, this was a significant break for the government.
I am now batting 0 for 2 in my most recent predictions. I predicted that Judge Walton would strike some of Andy Pettitte's testimony and that the judge would not let McNamee talk about injecting other players. So take this next observation wiht a grain of salt. To me, the jurors' questions at the end of each day show their skepticism regarding the government's case and the credibility of key government witnesses.
Sunday, May 20, 2012
The name says it all. On Friday the Clemens prosecutors filed the Government's Motion to Admit Evidence of Brian McNamee's HGH-Based Interactions With Other Players and His Cooperation Relating to the Same to Rehabilitate the Witness. Call it anything you want, it is nothing more than an attempt to convict Clemens through guilt by association. As Judge Walton said before the first trial, in keeping this evidence out:
"I’m just still having some real problems with this because I can see how even with a cautionary instruction, assuming I could craft one that would be intelligible to the jury, I could see how they could still potentially misuse that evidence. I mean, I don’t know. I mean, I use to get cortisone shots when I was playing football in college. And I had to rely upon what the trainer was giving me. And I would not want to be held responsible for having done something inappropriate based upon what that trainer was giving to other people. And that’s the concern that I have.”
“I fully appreciate that the jury is going to have to assess Mr. McNamee’s credibility, and that his credibility is going to be seriously attacked by the defense. But I don’t think, at least at this point, that the mere fact that they are going to seriously attack his credibility necessarily opens the door to bring in evidence regarding Mr. McNamee’s dealing with other players. Because as I say, my main concern is that if Mr. Clemens’ position, and I understand it is at least in part his position that he did not know what he was receiving, it seems to me that there’s a real danger, that the jury may say, well, if they all knew, and that’s especially I guess true in reference to players who are also on the same team, that why wouldn’t Mr. Clemens know? And I think that would be a problem, for them to in some way use the evidence regarding what he was doing with these other players to impute knowledge on the part [of] Mr. Clemens."
Judge Walton's original ruling, which shocked the government, was provisional:
"I’ll reserve a final ruling until I see what transpires during the trial. And if somehow I feel that the door has been opened, I may be inclined to change my position. But my tentative position is that the evidence is not going to come in.”
Now the government is making its move. Of course the prosecutors would have filed this motion irrespective of how McNamee's cross-examination actually went. They immediately violated the Court's order during opening statement of the first trial by mentioning other Yankee players who received illegal substances.
I'm betting that Judge Walton keeps the evidence out.
Saturday, May 19, 2012
Sitting on the bench in a high profile case is not easy on any lawyer or the judge for that matter. Everyone is scrutinizing your motions, your rulings, and even what you may be wearing. Co-blogger Solomon Wisenberg noted here how the judge has the ability to move the Clemens trial along. This may be true - but I am not sure that he should.
Giving time for each attorney to state their objections, restate their objections, preserve the record, and yes, restate them even again, is important for everyone. Judge Walton is noted for giving defendants a fair trial - albeit he is also known for being tough if one is convicted. This is all the more reason to make sure that everything is properly on the record, should the defense be unsuccessful at trial.
I am firmly convinced that when prosecutors or defense counsel deliberately clog up a case with needless motions and objections, the jury may eventually catch on. And when prosecutors deliberately attempt to break the stride of the defense counsel or weaken the presentation with objections and distracting arguments, don't always assume it will benefit the prosecution. And keep in mind, that if there is a conviction the appellate court gets to read the entire record and they will have the opportunity to see the motions being made, the arguments supporting the motions, and they will have the opportunity to discern whether one side was deliberately wasting time with worthless motions.
So making sure everything is on the record, and that all arguments are heard is not such a bad thing.
Thursday, May 17, 2012
Judge Walton says that the jury is bored at the Clemens trial, and of course he blames the lawyers. Maybe he should look in the mirror. The proceedings would have moved much faster had the Court put a stop to the government's pettifogging objections to cross-examination questions that allegedly strayed beyond the scope of direct.
The judge has also, according to the latest press reports, characterized Rusty Hardin's lengthy cross-examination of Brian McNamee as confusing.
I stopped in on the trial yesterday morning during Hardin's cross-examination of McNamee. Although there was no smoking gun moment, it was an accomplished cross that ably exposed McNamee's shifty, evasive personality. Near the end, Hardin asked a perfectly acceptable question, the point of which was to stress that McNamee would have been valuable to Clemens as a private trainer irrespective of McNamee's ability to provide illegal drugs. The prosecution objected. Rather than simply ruling on the objection, Walton engaged in an unnecessarily lengthy exchange with the attorneys on the finer points of evidentiary law. You would have thought they were discussing the Ex Post Facto Clause or the Magna Carta.
The trial judge has great discretion to move a case along--even a big case. This doesn't mean that the Court should prevent either side from putting on its evidence or vigorously questioning witnesses. The Clemens case would benefit from quicker bench rulings on objections, particularly objections that only serve to break the other side's pace and stride. The government objections that I witnessed on Wednesday did not merit the lengthy treatment they were given by the Court.
Thursday, May 10, 2012
The white collar crime blog, for two years (see here and here), has given the collar for the case most needing review to the case of Sholom Rubashkin. The case has an incredible gathering now from a spectrum of individuals and groups across political and ideological views. The Petition for Cert is here and background on the case is here. Here are some of the interesting updates on this case -
Washington Legal Foundation - Urges High Court to Review Unreasonably Harsh Sentence for Small-Business Owner
Amici Brief for Justice Fellowship & Criminal Law & Sentencing Professors and Lawyers - Download 11-1203 amici brief (a wonderful brief authored by David Deitch and Alain Jeff Ifrah that points out the jurisdiction split among Circuits and why it is important for Appellate "judges to state on the record that they have considered each non-frivolous argument for variance under the factors listed in Section 3553(a)" and how and why each such argument affected the sentence imposed.
Amicus Brief of the Association of Professional Responsibility Lawyers (APRL) - Download APRL Amicus Brief in Rubashkin (a strong brief written by W. William Hodes that provides the importance of this case from the perspective of "an independent national organization of lawyers and legal scholars whose practices and areas of academic inquiry are concentrated in all aspects of the law of lawyering." The brief focuses on the jurisdiction split regarding Rule 33 of the Federal Rules of Criminal procedure. The brief also points out important ethics issues that warrant review in this case.)
Hopefully, someone is listening.
Monday, May 7, 2012
I'd say you had a pretty good week if you got a key government witness to agree there is a 50-50 chance he misheard or misunderstood a purportedly damning admission by your client. That's what happened last week (week one) in the Roger Clemens re-trial, through Mike Attanasio's cross of Andy Pettitte. This morning, team Clemens filed Defendant's Motion to Strike Portions of the Trial Testimony of Government Witness Andy Pettitte. The Motion is an excellent piece of work. The argument?
1. The threshold for establishing admissibility of a preliminary fact question under Federal Rule of Evidence 104 is preponderance of the evidence. Fifty-fifty doesn't cut it.
2. Under Federal Rule of Evidence 401, relevant evidence "means evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." Fifty-fifty doesn't cut it.
3. Even if relevant, the testimony's probative value is substantially outweighed, under Federal Rule of Evidence 403, by the "danger of unfair prejudice, confusion of the issues, or misleading the jury." This is particularly true in light of the Government's statement to the jury, during its opening, that Clemens told Pettitte "he had used human growth hormone and that it helped him with recovery." The real-life fifty-fifty version on the stand didn't cut it.
4. Judge Walton specifically warned the parties before trial about making promises they couldn't keep in opening statements. He said that if it occurred here he would "not hesitate to tell this jury that they must totally disregard any such statements of that nature. I'll specifically identify what those statements were and tell them there was no evidence to that effect, and therefore, they cannot consider that in deciding this case." Judge Walton should make good on his promise, because fifty-fifty doesn't cut it.
Team Clemens also noted that the government could have revisited the conversation during re-direct, but deliberately skirted the issue.
My prediction is that this motion will be granted in some form. It certainly doesn't mean that Clemens is out of the woods. Ted Stevens' outstanding trial team won several motions during trial and Judge Sullivan gave Stevens some very scathing anti-government jury instructions--to no avail. (Of course, in the Stevens case, the government was deliberately hiding important exculpatory material.) But such an instruction will undoubtedly greatly benefit Clemens. It will essentially knock-out a key portion of the government's case.
Kudos to the defense team for an outstanding cross and an excellent motion. One of the nice things about this trial is that co-counsel Attanasio is finally getting some of the national media attention he has long deserved.
Friday, May 4, 2012
Nobody messes with Judge Reggie Walton. Here is a great post from Mike Scarcella of BLT (Blog of Legal Times) on recent bench conferences in the Roger Clemens case. Defense attorney Mike Attanasio incited Walton's wrath this week when he ignored Walton's ruling and tried to go "beyond the scope of direct" during the cross-examination of Andy Pettitte.
According to Scarcella, Attansio was questioning Pettitte about a specific Clemens pitching performance that took place in 1999. Attansio wanted to delve into whether "Clemens was so depressed and beaten up then that he would start taking drugs to perform better." Prosecutor Steve Durham objected that this went beyond the scope of direct. Walton sustained the objection.
Attanasio then asked Pettitte whether he had ever seen Clemens "broken and beaten" after a game. This ticked Walton off: “I’m getting sick and tired of making rulings and counsel not listening to my rulings." Walton reminded Attanasio "that the defense does not have a right to build its case during the government’s pitch to jurors."
That's preposterous of course. Every good defense attorney tries to make his case during cross-examination, and Attanasio was allowed to ask other questions that technically went beyond the scope of direct. For example, Attanasio elicited Pettitte's key testimony that Clemens had never appeared to be pitching on steroids. I haven't read the transcripts yet, but it is unclear to me how far out of the strike zone the additional questioning strayed.
As any experienced litigator knows, courts are all over the map on the scope of cross-examination. Most federal judges allow a relatively expansive cross for reasons of judicial economy. Why make the defense call a witness to the stand in its own case, when you can save time by questioning the witness on cross? But a federal judge's ruling on whether to allow narrow or open-ended cross is virtually unassailable on appeal.
Attanasio did what most good defense attorneys would do in this situation. He ignored (sub silentio) a dubious ruling from Judge Walton and attempted to make the same point through a slightly altered question. That will work with many judges who aren't paying close attention, but it didn't phase Judge Walton.
Judge Walton has many fine qualities. He is intelligent, fair, and couragoeus. But he tends toward rigidity.
Thursday, May 3, 2012
Two weeks ago Judge Kimba Wood of the Southern District of New York dismissed the indictment in one of the sillier prosecutions brought in that court in recent years. See article here and opinion here - Download Opinion. Julian P. Heicklen, an 80 year-old retired professor, was charged with jury tampering (18 U.S.C. 1503) for distributing at the courthouse steps pamphlets of the Fully Informed Jury Association ("FIJA") that advocated jury nullification.
The pamphlet stated, in part: "You may choose to vote to acquit, even when the evidence proves that the defendant 'did it,' if your conscience so dictates." It also suggested that jurors may choose to be less than candid when asked questions during jury selection about their ability to follow the law as instructed by the judge. It is "your moral choice," the pamphlet stated, whether to "give answers that are likely to get you excused from serving, or say whatever it takes to be selected, so you can do your part to see that justice is served."
Jury nullification, as commonly understood, goes only one way. It allows jurors to ignore their oaths and acquit a defendant even if they are convinced that her guilt has been proven beyond a reasonable doubt. The potential effect of Heicklen's pamphleteering -- if it were to have any, which I question -- would be acquittals (or hung juries) in cases that otherwise would have resulted in jury verdicts of guilty.
The prosecutors in the Southern District were understandably upset. Heicklen was in a sense treading on their turf -- both the courthouse and the law. The prosecutors reacted aggressively, investigating by using an undercover agent and indicting based on an apparently unclear statute and in a bedrock area of First Amendment protection. In court, a prosecutor called Heicklen's advocacy "a significant and important threat to our judicial system."
Rather than the crucial decision to prosecute being made by independent, disinterested prosecutors, as it should always be, here it was made and carried out by the very prosecutors who were in a practical sense themselves the aggrieved parties or "victims." It was their cases -- their convictions -- that Heicklen arguably put in jeopardy by suggesting that jurors might still acquit even if they believed the defendant had been proven guilty beyond a reasonable doubt. The Southern District prosecutors were too conflicted and too involved to be allowed to make the decision whether to prosecute Heicklen (and they were too conflicted and too involved to make a reasoned, dispassionate and intelligent decision). The conflict here was not the potential or hypothetical conflict that prosecutors often argue should disqualify defense counsel, but an actual one. If the prosecutors felt Heicklen should have been prosecuted, they should have referred the ultimate decision to the Department of Justice in Washington. (While I do not know definitively that the Southern District prosecutors did not, if they had, I would have expected that the case would have been prosecuted by Central DOJ lawyers.)
There is an obvious imbalance in the criminal justice system. One litigant, the prosecutor, may charge the opposing litigant with perjury, the litigant's lawyer with obstruction and the litigant's advocate with jury tampering. The other litigant, the defendant (and his counsel), can only howl about agents who lie and prosecutors who secure convictions and jail sentences by concealing evidence. The power of one litigant to protect his case (or cases) by charging one seeking to undermine it (or them) is a drastic one that should be used with care and extreme caution. Here, prosecutorial discretion went awry.
Judge Wood's decision was calm, deliberate, and thorough, considering statutory construction, legislative history, judicial rulings and constitutional implications, and not, at least directly, criticizing the prosecution. Granting the defendant's pre-trial motion to dismiss under Fed. R. Crim. P. 12(b) on the grounds that the facts did not state an offense, she ruled that the statute was limited to advocacy relating to a specific case, not a general philosophy, as here. Although Judge Wood ultimately relied on a plain language analysis and did not explicitly rule on the First Amendment issue, she indicated that Heicklen's conduct was constitutionally protected free speech.
The case represents governmental overreaching in a sensitive free speech area. Perhaps if the decision whether to prosecute were made at Central DOJ, it would have been different, and the Office of the United States Attorney for the Southern District of New York, a highly respected and effective office, would have been spared an embarrassing defeat (and Mr. Heicklen spared a prosecution, although I suspect he rather enjoyed it).
The ultimate result may be that FIJA now has a license (in the form of a district court decision) to distribute literature suggesting nullification on the steps of federal courthouses, or nearby, throughout the nation. (Judge Wood did recognize that reasonable restrictions on such distribution under other laws may apply.)
Sunday, April 29, 2012
Here are ten basic observations regarding criminal discovery. They send a loud message that the proposed Senator Lisa Mukowski (Alaska) (along with Senators Inouye, Hutchinson, Begich and Akaka) "Fairness in Disclosure of Evidence Act" legislation is needed to codify the holding in Brady and add teeth to making certain that defendants receive a fair trial.
Ten Basic Premises:
- Most prosecutors play by the rules.
- One of the rules is you have to give up Brady material.
- Brady is going to be 50 years old in 2013.
- The ethics rules require prosecutors to give up exculpatory material.
- Some prosecutors have no clue what Brady material really is.
- In some cases prosecutors can’t tell if something is favorable to the defense because they don’t know what the defense will be presenting.
- Discovery in national security cases, terrorism, and cases where someone will get hurt needs to be treated differently.
- The chances of prosecutors being caught if they fail to give up Brady material is slim.
- If Brady material is not given or given late, most courts will find it to be harmless error.
- The chances of a prosecutor being disciplined for not giving up exculpatory material is slim.
Wednesday, April 25, 2012
I expect that any day now one of my non-white-collar criminal clients will come to my office and ask me to incorporate him to protect him from future criminal liability. Of course, incorporation does not immunize an individual from criminal liability. Nor, generally, does it protect small corporations from prosecution.
However, it appears that just as massive corporations are "too big to fail," they are too big to prosecute. In the wake of the government's destruction of Arthur Andersen because of an ill-conceived, aggressive and ultimately unsuccessful indictment which caused the loss of thousands of jobs, DOJ has been highly reluctant to aggressively prosecute major corporations.
Although there are occasionally indictments of major corporations, most often these are disposed of by "deferred prosecutions," which are essentially delayed dismissals with financial penalties in numbers that are large in absolute terms but meager in comparison to the profits and assets of the corporation. To be sure, even when prosecuted to conviction, corporations do not go to jail and thus there may be little practical difference between a conviction of a corporation and a deferred prosecution. However, to the extent a goal of the criminal justice system is to achieve apparent fairness and equality, there is a genuine, if symbolic, reason for the prosecution of the large and powerful, whether they be individuals or corporations.
According to a thorough account in the New York Times this past Saturday, April 21, see here, Wal-Mart in Mexico, where the company has, according to the Times, one-fifth of its stores, engaged in a systemic countrywide scheme in which it spent millions of dollars to bribe hundreds of Mexican officials to gain favorable and expedited treatment and a competitive advantage. According to the Times, this conspiracy was not, as is often the case in corporate wrongdoing, the act of a rogue individual or group. Rather, it was orchestrated from the very top of the Wal-Mart Mexican hierarchy. Additionally, again according to the Times, when reports of this corruption reached Wal-Mart's U.S. headquarters, top executives took great pains to cover up the wrongdoing.
The alleged conspiracy, if the Times report is accurate, appears to be the kind of corporate crime, therefore, that deserves aggressive prosecution (not just an indictment and a deferred prosecution), especially if the government wants the Federal Corrupt Practices Act ("FCPA") to be taken seriously. Of course, there may be statute of limitations or other fact-finding or evidentiary problems involved in putting together a case involving facts from 2005, the year, according to the article, the bribe payments were made. It is far easier to write an article reporting corruption than to prove it under the rules of evidence beyond a reasonable doubt. It will be interesting to see what, if anything, DOJ does with respect to this matter.
Friday, April 6, 2012
In the wake of the Schuelke/Shields report and the introduction of new discovery legislation, one has to wonder whether the Supreme Court will take a case that raises a Brady discovery issue. At their doorsteps is the case of James A. Brown, a case from the Enron days. As previously noted (here) Brown, is a former Merrill Lynch executive who "was convicted of perjury and obstruction of justice for his testimony before the Enron grand jury about a transaction between Merrill and Enron in late 1999." There are important issues here like the appropriate standard of review for Brady cases. Should it be "clear error" or should it be de novo. (see here) The case also examines "materiality," a term that has created some confusion. What must a prosecutor provide to the defense counsel. And isn't it odd that the adversary in the process is making the determination for what the defense is entitled to receive. The case looks at summaries being provided to defense counsel. Bottom line - summaries are not the same as the real thing.
In the reply brief recently filed, they argue-
"Here, as in Stevens, many exculpatory statements appear only in raw notes of government interviews of key players. In Brown, the Enron Task Force actually yellow-highlighted these notes before trial – along with prior testimony and FBI 302s – indicating that the information met the requirements of Brady and was material, but suppressed them anyway. While continuing to deny that any evidence fell within Brady, new prosecutors recently disclosed 6,300 pages including much (but still not all) of the evidence suppressed by the Task Force." (Reply Brief - Download FILED REPLY ON CERT.)
The government's brief sees things differently - Download SG OPP32312.
This case is distributed for conference on April 20th.
Sunday, April 1, 2012
We don't need new legislation insuring that defendants receive the exculpatory information they are entitled to under the U.S. Constitution, because the DOJ has learned its lesson from the Ted Stevens case and will NEVER let something like that happen again.
For example, in the high-profile insider trading case of U.S. v. Rajat Gupta, the DOJ recently argued that its prosecutors did NOT have to review 44 SEC interview memos for Brady material, even though the memos summarized interview sessions jointly conducted by SEC and DOJ attorneys. According to SDNY prosecutors, the overall DOJ and SEC investigations were not technically "joint" in nature, so SDNY AUSAs had no Brady obligations with respect to the SEC memos. The SEC attorneys were capable of conducting the Brady review on their own. Yeah, right. Just like the FBI and IRS Special Agents were capable of conducting the Brady review in U.S. v. Stevens. I completely forgot about the Brady training that SEC attorneys receive on a regular basis. DOJ's position is not only contrary to SDNY and Second Circuit case law--it also violates the letter and spirit of the Ogden Memo, promulgated after Stevens to prevent future Brady debacles. I guess SDNY didn't get the memo. (They're special you know.) Judge Jed Rakoff was having none of it. See his Gupta Brady Ruling, issued last week, for details. In truth, all of the SEC memos should be turned over in their entirety to the defense, just as all of the 302s and MOIs in Stevens should have been turned over.
It is clear that the DOJ has learned almost nothing from the Ted Stevens case. Suppression of exculpatory and/or potentially exculpatory evidence is largely not an issue at the line level. The typical AUSA knows Brady/Giglio when he sees it, and knows to disclose it. The problems tend to arise in high profile cases, particularly those captained out of DC. The sickness extends to very high levels at the DOJ. The Stevens prosecution clearly showed this. The Bill Allen-Bambi Tyree subornation of perjury allegation, reported in 2004 to a federal judge by DOJ prosecutors in a sealed pleading, was classic Giglio material. It should have instantly been recognized as such by the Chief and Deputy Chief of the Public Integrity Unit and they should have ordered it turned over immediately to the defense. It wasn't and they didn't.
The DOJ has run out of scandals and excuses. Enough already. At long last, have they no shame?
Monday, March 26, 2012
1. Compost flows downhill.
2. I'd rather be a hammer than a nail. I'd rather be a supervisor than a line assistant.
3. If I am an experienced prosecutor and supervisor and agree to take over and lead the prosecution team a few days prior to the Indictment, I need to lead that team and take responsibility for my actions and the team's actions.
4. If I am prosecuting a white collar case involving hundreds of FBI 302s and I don't hand them over to the defense before trial, I am virtually guaranteeing Brady error.
5. If I am prosecuting a white collar case involving hundreds of FBI 302s and I don't hand them over to the defense before trial AND I am going up against a United States Senator who is represented by a highly skilled law firm known for its tenacious tactics, I am a fool. I deserve what I get. But the people who work for me don't necessarily deserve what they get.
6. If I prosecute a sitting U.S. Senator in July, knowing that he is up for re-election in November and assuming that he will seek a speedy trial, I better have my discovery, especially my Brady discovery, ready to hand over on the day of the Indictment.
7. If my case has hundreds of 302s, it is likely that some of the agent's interview notes will contain material inconsistent with, or not referenced in, the 302s
8. If four prosecutors and one case agent interview the key prosecution witness three months before Indictment, and the interview goes poorly, AND no 302 is generated, people aren't going to think well of them. This is especially true if the FBI Special Agent later admits that no 302 was written because, "the debriefing...did not go well," and the prosecutors completely forget about the interview and the Brady information gleaned during it.
9. If I discover Brady information, it does not magically lose its character as Brady material because I decide to investigate further and develop contrary information.