Monday, December 1, 2008

White Collar Prosecutions Continue to Drop

The August data from the TRAC Reporting System is out, and white collar prosecutions continue to decrease. From the previous month it is down -1.4, from a year ago -2.9, and from five years ago -19.5.  See here.

Interestingly, the statistics are not always decreasing when it comes to the number of convictions.  Although there has been a -6.3 drop from last month, for one year it is up .1 and for five years the conviction rate is up 2.7. See  here

According to the TRAC Reporting System, the top charge being used for white collar prosecutions is bank fraud and it is also the top crime listed for convictions.  It is not surprising to see the Fraud-Financial Institution area as being the highest area of those items included as white collar crimes. (see prior discussion here)

(esp) (w/ disclosure that she is a B.S. graduate of Syracuse U.- home of the Trac Reports). 

December 1, 2008 in Think Tank Reports | Permalink | Comments (0) | TrackBack (0)

Thursday, November 13, 2008

White Collar Crime Declinations - Do They Vary from District to District

Is it really possible that certain areas of the country decline more white collar prosecutions than other areas? The Resource Management of US Attorneys' Offices - US Department of Justice Office of the Inspector General Audit Division issued an Audit Report dated November 2008. The Report provides some interesting numbers. Although there is no definition of white collar crime, to truly determine what is included and what is excluded from this category, the Audit Report provides a chart (Exhibit 4-5, p. 45) that shows that in 2003: 6100 white collar matters were filed, 4,575 were declined, and 1,533 were pending.  Contrast this with 2007: 3,324 were filed, 798 declined, and 7593 were pending. The bottom line - a lot less cases were filed and a lot less declined.

Later exhibits in this report discuss specific districts.  For example,  the Southern District of Florida declines only 10.01% of its white collar crime cases.  In contrast, the Southern District of West Virginia declines 41.27% of its white collar cases.  So does this mean that if you commit a white collar crime in Florida, you have a much greater chance of the charges going forward?

See also Pamela A. MacLean, National Law Jrl, Report Criticizes Office That Allocates Resources to U.S. Attorneys


November 13, 2008 in Think Tank Reports | Permalink | Comments (0) | TrackBack (0)

Thursday, October 30, 2008

Reforming Corporate Criminal Liability

The Institute of Legal Reform has issued a new whitepaper on the role of criminal law as it relates to corporate conduct. One of the authors of this Report is former Enron prosecutor Andrew Weissmann. Titled, Reforming Corporate Criminal Liability to Promote Responsible Corporate Behavior - the whitepaper can be found here. It concludes stating -

"Changing the current vicarious liability rules will promote effective compliance programs within companies, and redirect to a more condign track a legal doctrine that has gone far off course. Practitioners and academics have offered practical solutions for balancing society’s need for punishing the guilty and making a victim whole against society’s interest in resorting to criminal sanctions only when a defendant has done something wrong. Given the nearly 100-year long misreading of a single Supreme Court precedent and recent pronouncements from that Court, it is high time to reform the standard for vicarious criminal corporate liability. As described above, the current doctrine is not founded on either an act of Congress or Supreme Court precedent. Compliance-based and hierarchy-based alternatives to the current regime would continue to hold lawless corporations liable for criminal acts, while ensuring that responsible corporations are not unfairly penalized. It is incumbent upon legislators, academics, and practitioners to press the case for a greater recognition of the harmful and counterproductive consequences of the current system and to seize the opportunities for reform outlined herein."

It certainly would be good to see revisions in the present approach to corporate criminal liability. I advocate for the adoption of a good faith defense in my article - A New Corporate World Mandates A Good Faith Affirmative Defense.


October 30, 2008 in Think Tank Reports | Permalink | Comments (0) | TrackBack (0)

Wednesday, October 8, 2008

Task Force Reports - What Is Missing?

So where's the task force to deal with the current financial situation? 

The President's Corporate Fraud Task Force was created several years ago to prosecute corporate frauds. (see here)  It's 2008 Report attempts to demonstrate the successes achieved by this task force.  But as noted here, the Report failed to provide the "not guilty" verdicts and reversals received from appellate courts. As noted here, it was a Report that failed to provide a full assessment of what actually had transpired. But at least there was a task force to handle the alleged frauds.

Just this past week, DOJ issued a Press Release concerning its Katrina Hurricane Task Force and noting the large number of prosecutions and highlighting some of the major ones. Again, no acknowledgment of any unsuccessful prosecutions.  But again, there was a task force to handle the alleged frauds.

If there was illegality in this recent mess as some at a recent debate insinuated, and if the harm was caused by such illegality, shouldn't there be a task force to investigate it? (see here) The FBI has one, where is DOJ's?


October 8, 2008 in Think Tank Reports | Permalink | Comments (0) | TrackBack (0)

Friday, June 20, 2008

2008 Report - Corporate Fraud Task Force

The 2008 Report to the President of the Corporate Fraud Task Force is now available (see here).  And reading the many prosecutions with guilty pleas and convictions after trial, one would certainly think that this task force has been an incredible success.  After all the Report says that the DOJ "has obtained nearly 1,300 corporate fraud convictions."  It states that "[t]hese figures include convictions of more than 200 chief executive officers and corporate presidents, more than 120 corporate vice presidents, and more than 50 chief financial officers." The Report even goes so far as to supply successes with civil enforcement.

But there is something noticeably missing from this report. How about the not guilty verdicts?  Shouldn't a report of this nature present a fair assessment of what really happened with this Corporate Fraud Task Force? Back when they issued their 5 year report I wrote (here) -

But omitted from the list of companies and employees are numbers of those found "not guilty."  The report does not speak about the death sentence given to Arthur Andersen, LLP, a conviction that was later reversed by the Supreme Court.

It is important to remember that prosecutors are to be "ministers of justice."  And "win" or conviction records are not what counts.  What matters is whether the prosecutor has proceeded against criminality in a fair and professional matter.

The closest the latest Report comes to presenting a true picture of what happened, is on page 1.11 when discussing KPMG they say that "the Government is currently appealing an adverse ruling in connection with the remaining 13 individuals."

This Report should be sent back for a rewrite.  Lets see a Report that presents a true picture of what has been accomplished by the Task Force.  That picture may show that the government has been successful in many cases.  But it will allow the President to see exactly what has or has not been accomplished by this Task Force. 


June 20, 2008 in Think Tank Reports | Permalink | Comments (1) | TrackBack (1)

Tuesday, May 13, 2008

Washington Legal Foundation Report: Erosion of Business Civil Liberties

The Washington Legal Foundation issued a 143 page report titled Special Report: Federal Erosion of Business Civil Liberties. (see below for a copy of the report)  It begins with an introduction by the Honorable Dick Thornburgh who writes that "The Washington Legal Foundation's SPECIAL REPORT: FEDERAL EROSION OF BUSINESS CIVIL LIBERTIES provides the legal community with an excellent summary, analysis, and critique of the key legal, judicial, and regulatory developments in the growing trend to criminalize normal business activities."  The Report has seven chapters, followed by an Appendix, reflecting the following topics -

  • Chapter One: Mens Rea, Public Welfare Offenses, and the Responsible Corporate Officer Doctrine
  • Chapter Two: Environmental Protection Agency Criminal Enforcement Policies
  • Chapter Three: Department of Justice Criminal Prosecution Policies
  • Chapter Four: Parallel Civil and Criminal Prosecutions
  • Chapter Five: Attorney-Client and Work Product Privileges
  • Chapter Six: Deferred Prosecution and Non-Prosecution Agreements
  • Chapter Seven: U.S. Sentencing Guidelines

This is clearly a weekend read as it appears to capture the key issues that have been problematic to businesses operating in this country.

The Report - Download wlf_timeline.pdf   (Recommendation to open - save it to your system and then it should open properly)

If you have trouble opening this link, or to obtain additional hard copies of the report and the companion timeline fold-out chart, contact Paul Kamenar at 202-588-0302 or He informed me that they plan to update the report from time to time, so he welcomes stories of abusive criminal prosecution that have not been well publicized.


May 13, 2008 in Think Tank Reports | Permalink | Comments (0) | TrackBack (0)

White Collar Crime Prosecutions - A Long Way to Go to Hit the Levels of 5 Years Ago

White Collar Crime prosecutions continue to be extremely low, despite the fact that they have increased this past month. According to the Syracuse TRAC reporting system, there has been a 28.4 percent increase in the number of white collar crime prosecutions in the month of January.  This number, however, is a -17.3 percent change from 5 years ago (including the magistrate court) and a -19.4 (excluding the magistrate court). It is disheartening to see that white collar crime is not being prosecuted at the levels that it was being handled five years ago, although AG Mukasey can credit himself with increasing these prosecutions from the last couple of administrations. Not surprising, however, is the fact that the number one charge being used by prosecutors is mail fraud - 18 U.S.C. 1341.

This reporting, however, has many deficiencies as DOJ's categories for white collar crime do not match the definition provided by many and also do not include many offenses that clearly are considered white collar crime by the individual U.S. Attorney offices (see Is DOJ Cooking the Books in its Reporting of White Collar Crime?) Interestingly, aggressive overcharging by the government, may be hurting their statistics.  There is no category under white collar crime for recording the use of money laundering and RICO charges that are used by the government in so many of the white collar cases.

(esp) (w/ disclosure that she is a B.S. graduate of Syracuse U.- home of the Trac Reports). 

May 13, 2008 in Government Reports, Think Tank Reports | Permalink | Comments (1) | TrackBack (0)

Sunday, March 9, 2008

White Collar Crime Prosecutions Are Down

Criticisms previously levied against the  statistical reporting of white collar crime remain justified in that lacking a definition of white collar crime, it is impossible to discern what gets included and what doesn't. (See here and here) Whether one limits it to fraud, or includes money laundering and RICO, were concerns mentioned when evaluating studies that reported on increases and decreases in certain kinds of criminal conduct. Without a clear understanding of what crimes or conduct fit the white collar category, it seemed impossible to state with accuracy that it had in fact decreased.

But the latest study by TRAC, does provide clear evidence that agency referrals in many areas are significantly down, while others have increased.  For example, one finds that INS (and DHS Immigration Enforcement) is nearly 3 times what it was in 1987.  But one also sees that tax, postal, and the FBI referrals are significantly reduced. (see here)  TRAC notes that:

"A second possible explanation for the declining number of referrals being made by the agencies traditionally concerned about white-collar criminals is that there are fewer swindlers, anti-trust violators, tax cheats, fraudulent health care providers, etc. roaming the streets and the suites than there were in the past. Partly because such criminals try very hard to go unnoticed, however, criminologists have never been able to devise a good way to measure their presence in society. But given the vast size and booming nature of the American economy — at least until recently — and the growing complexity of federal law, the thought that white-collar criminals are an endangered species is hard to believe. "

And I have to agree with the last statement - white collar criminals are definitely still out there.  But perhaps the enforcement needs to turn to places like the Internet and to focus on the crimes of today - like Identity Theft. The investigation and prosecution here takes significant time and the statistics may be harder to grow.

(esp) (w/ disclosure that she is a B.S. graduate of Syracuse U.- home of the Trac Reports). 

March 9, 2008 in Think Tank Reports | Permalink | Comments (0) | TrackBack (0)

Monday, October 15, 2007

White Collar Crime Prosecutions Down

TRAC summarizes the changes in the prosecutions of white collar cases during the Bush Adminstration stating that "[t]he prosecution of all kinds of white-collar criminals is down by 27% since FY 2000, before President Bush came to office."  Perhaps the methodology here is uncertain, because as previously noted what DOJ includes within the definition of white collar crime and what is not  included, is subject to argument. (see here).  But irrespective of how one defines white collar crime, the consistency of this definition makes this number significant. It means that this definition of white collar crime, a definition very reliant on fraud, has suffered an enormous decrease in prosecutions during President Bush's term as President.

(esp) (w/ disclosure that she is a B.S. graduate of Syracuse U.- home of the Trac Reports). 

October 15, 2007 in Think Tank Reports | Permalink | Comments (0) | TrackBack (0)

Sunday, September 16, 2007

ABA/Criminal Justice Section Program


Thursday, October 18, 2007

3:00 pm — 5:00 pm, with reception following

New York Marriott Financial Center 85 West Street, New York, NY

Program Chair:
Henry E. Hockeimer, Ballard Spahr Andrews & Ingersoll, LLP

U.S. v. Libby became a test for how far the government can and will go to subpoena journalists and their confidential sources. Will the use of such subpoenas expand? And how will the media and lawyers adjust to the post-Libby era? A prominent journalist and experienced attorneys from the defense, prosecution and corporate bar will explore these and other issues.

Kevin DiGregory, Assistant United States Attorney, Alexandria, VA
Max Frankel, Former Editor, The New York Times, New York, NY
Susan Weiner, Deputy General Counsel, NBC Universal, New York, NY
Reid Weingarten, Defense Counsel, Steptoe & Johnson, Washington, DC

Henry E. Hockeimer, Philadelphia, PA
Robert J. Ridge, Thorp Reed & Armstrong, LLP, Pittsburgh, PA

CLE Credit: Accreditation has been requested from all mandatory CLE states.

For more details see here.

September 16, 2007 in Think Tank Reports | Permalink | Comments (0) | TrackBack (0)

Tuesday, July 10, 2007

White Collar Prosecutions Up From Last Month - But Overall Still Down

The Trac Reports are out with statistics from March and David Burnham and Susan B. Long, co-directors at the Transactional Records Access Clearinghouse write that:

"Federal criminal prosecutions in March of 2007 jumped to 10,286 -- 22% over the level in the previous month.  Fueling this monthly surge were large increases in immigration (up 17%), drug prosecutions (up 24%), and weapons (up 35%)."

And looking at the statistics for white collar crime, they were up this month see here and here. But they are still significantly down from a year ago, and even more-so from five years ago. (For a discussion of the February report see here).

(esp)(w/ disclosure that she is a B.S. graduate of Syracuse U.)

July 10, 2007 in Think Tank Reports | Permalink | Comments (0) | TrackBack (0)

Friday, May 25, 2007

Transparency International Issues Annual Global Corruption Report

International corruption watchdog Transparency International issued its 2007 Global Corruption Report, and the focus is on judicial corruption.  The organization notes that "a corrupt judiciary erodes the international community’s ability to prosecute transnational crime and inhibits access to justice and redress for human rights violations. It undermines economic growth by damaging the trust of the investment community, and impedes efforts to reduce poverty."  According to TI's analysis:

The importance of an independent judiciary cannot be overemphasised. Everyone loses when justice is corrupted, particularly the poor, who are forced to pay bribes they cannot afford.  Transparency International’s latest global survey of attitudes towards corruption reveals that in more than 25 countries, at least one in 10 households had to pay a bribe to get access to justice.  Corruption in the judiciary includes any inappropriate influence on the impartiality of judicial proceedings and judgements and can extend to the bribing of judges for favourable decisions, or no decision at all.

Judicial corruption includes:

  • the misuse of judicial funds and power (ie. nepotism or manipulation of contracts for court construction and equipment)
  • biased case allocation and bias in other pre-trial procedures (ie. court clerks bribed to "lose" files and evidence)
  • influence of any trial or court settlement, and the enforcement - or not - of court decisions and sentences

Bribery, the other dark thread of judicial corruption, can occur throughout the fabric of the judicial process.


May 25, 2007 in Think Tank Reports | Permalink | Comments (1) | TrackBack (0)

Saturday, May 12, 2007

White Collar Prosecutions Are Down

TRAC 's latest statistics show a decline in the number of white collar prosecutions. The report finds a drop in white collar prosecutions of 13.3% from a prior month. And if one is looking at the 5 year statistics, then it presents a 21.9 % decrease in prosecutions.  The report provides the categories of case types (as opposed to listing specific offenses) that are included within these crime statistics.  But it also provides the leaders of specific offenses, with bank fraud being at the top. The report lists top ten judges and areas.  But these are not exactly the kind of numbers anyone will be bragging about.  See prior posts on statistical reporting of white collar cases.   

(esp)(w/ disclosure that she is a B.S. graduate of Syracuse U.)

May 12, 2007 in Think Tank Reports | Permalink | Comments (0) | TrackBack (2)

Monday, May 7, 2007

White Collar Crime Conference - Part VI

Stephanie Martz, White Collar Crime Project Director at the National Association of Criminal Defense Lawyers (NACDL), guest blogs a six part series on the recent White Collar Crime Track at the NACDL Cincinnati Conference: 

Session VI: The Use of Experts in White Collar Cases

Barry Pollack presented Mike Mulligan, the Executive Director of Financial Corporate and Legal Advisors International, and a key consultant and witness in several of the Enron cases (including one in which Pollack won an acquittal for his client in the broadband case) as well as US v.Scrushy; and Stan Murphy, a Managing Director in Navigant Consulting’s Tampa office with a specialty in health care fraud. He also coordinated PwC’s corporate integrity agreement services.

One of the most important issues is picking your discrete, understandable battles. You inevitably have to leave off the table some issues that you know you’re right about at the risk of befuddling the jury.

Both experts emphasized the importance of communicating with the defense attorney on a daily basis about which issues are good issues and where things are heading – especially in a criminal case. Murphy originally examined the cost issue in a recent health care fraud case but ended up not putting that in his disclosures because the issue abated.

In a criminal case, as opposed to a civil case, you need to be less concerned about discovery of the communication process between the defense lawyer and expert. But in cross, could the government stumble onto an area like that? Pollack said that hadn’t happened to him yet – he hasn’t been burnt by broadly sharing work product. Mulligan said, though, that he has a high degree or paranoia about privilege issues, even in the criminal context – no emails, destroy faxes, be careful even about phone conversations.

Do you try to maintain your flexibility in your Rule 16 statement about what your expert will talk about? Pollack said the vaguer the better; the experts don’t all agree. Murphy pointed out the differences between Rule 26 and Rule 16; Rule 26 (F.R. Civ. P.) requires you to put your opinion in the report. Rule16 does not; you do the Daubert motion. But you might in some circumstances want to scare the government off of a particular issue; on the other hand you might want to sucker the government into arguing a strong issue and underplay your good hand.

A question came about mounting a full-court press on the government’s witnesses. A problem is that Daubert is taken much less seriously in the criminal context. The government often tries to sneak its expert testimony in through supposed fact witnesses – this definitely happened in some of the Enron cases. The government will also do this through a pre-trial asset forfeiture hearing (in Scrushy, a 30-day TRO hearing at the end of which the government lost).

How do experts like to prepare? Murphy said the scripts don’t work for him, especially if the testimony will be lengthy. No question you have to practice and rehearse; you have to be prepared with the lawyer to change up depending on how the jury is reacting. BTW, Murphy hates hypotheticals, period. They can be useful on direct in terms of preempting cross but they can paint you into a corner – you’ve gotta be very quick on your feet. Mulligan agrees: Don’t script the direct. But the process can be painful. The lawyer needs help in formulating the question so that the answer isn’t "it depends." In Pollack’s Enron case, many, many hours of prepping testimony also made Mulligan better able to deal with cross – he could accept the prosecutor’s premises and still get to where she was going before she did. Thematic rather than scripted preparation for direct prepared the expert better for cross.

(sm/posted by esp)

May 7, 2007 in Think Tank Reports | Permalink | Comments (1) | TrackBack (0)

Sunday, May 6, 2007

White Collar Crime Conference - Part V

Stephanie Martz, White Collar Crime Project Director at the National Association of Criminal Defense Lawyers (NACDL), guest blogs a six part series on the recent White Collar Crime Track at the NACDL Cincinnati Conference:

Session V: "Litigating intent in white collar cases"

This was a single-person presentation by Ed Garland, senior partner of Garland, Samuel & Loeb in Atlanta, GA.

Intent, in white collar cases, is all about the facts. And when gathering the facts, start with the jury charge. Your motions will help you to get details – industry standards, regulations alleged to be violated, etc.

Be mindful of the application of cases like the recent US v.Holmes, which held that defendants have a right to present their theories of the case – he believed the money was going to a legitimate rather than illegitimate enterprise; or the defendant did not know that the salary he was receiving was income (that’s US v. Cheek; also see US v. Rogers, an 11th Circuit case, in which the defendant did not know the nature of his weapon).

And of course, in dealing with intent, you will come up on the issue of deliberate ignorance. The district court should only give that instruction where there is active avoidance – where the defendant went out of his/her way to avoid knowledge of the incident.

The bad news about how even intent to defraud has been watered down: in a money laundering case with a mail fraud predicate, the judge denied defendant’s request for a good faith defense in mail fraud. And the 11th Circuit ultimately ruled that the general instruction on intent and knowledge was enough to cover good faith; although the district court was wrong not to give the instruction, it was "harmless error" (if the facts are bad enough, the law goes out the window) (US v. Martinelli). But push the good faith instruction, especially where you’ve relied on the advice of an accountant or an attorney. (Of course, this can be difficult evidence to adduce from the professional at issue – pin the lawyer/accountant down early and try to take a signed statement.)

Character witnesses can serve as surrogate proof of intent – if your client can take the stand. Jurors lump all kinds of evidence like that into the equation: "bad person = bad intent."

Finally, relevance is often your threshold argument in getting evidence admitted re: intent. Did he believe that the employees would have sanctioned the withdrawal of funds and therefore it wasn’t embezzlement? (Proof allowed) … You have to get creative sometimes. "He did not intent for his statements to deceive anyone" is the hardest to prove and the hardest on which to get evidence admitted; you need to put the haystack in evidence. … This rapidly brings to mind the Scooter Libby case. The court let numerous stipulations and other evidence come in based on the myriad things he was trying to remember; but the predicate to the relevance was his OWN testimony. And he didn’t testify. Was this the right ruling under US v. Holmes? This is sure to be a huge issue on appeal.

Where your only defense is intent, you have to think very long and hard about the risk of the whole case rising and falling on your client’s testimony.

(sm/posted by esp)

May 6, 2007 in Think Tank Reports | Permalink | Comments (0) | TrackBack (0)

Saturday, May 5, 2007

Health Care Fraud Conference

The American Bar Association 17th Annual National Institute on Health Care Fraud is scheduled for May 16-18 in New Orleans, LA.  For details see here.  Alice S. Fisher, Assistant Attorney General - Criminal Division, is scheduled to speak at lunch on May 17, 2007.


May 5, 2007 in Think Tank Reports | Permalink | Comments (1) | TrackBack (0)

Tuesday, May 1, 2007

NACDL White Collar Conference - Part IV

Stephanie Martz, White Collar Crime Project Director at the National Association of Criminal Defense Lawyers (NACDL), guest blogs a six part series on the recent White Collar Crime Track at the NACDL Cincinnati Conference:

Session 4: Attorneys’ Fees and Asset Forfeiture

The panelists, Steve Weisbrod of Gilbert, Heintz & Randolph in Washington, DC and David Smith of English & Smith in Alexandria, VA, addressed a hypothetical accounting restatement case with parallel proceedings.

What kinds of assets can/should you accept? Smith said "no" to proceeds of fraud crimes. You should be chary of assets from the CEO who has received most of his assets from the business itself (which was financed as a start-up from his own pocket). One circuit (the 7th) has said that you don’t have to do any investigation at all to determine likely source of the proceeds. DOJ guidelines, which have not been updated since 1985, require an "actual knowledge" test. If there are no restraining orders or indictments in place yet, it would be difficult to show that anyone’s assets were subject to forfeiture. Bottom line, though, is that there are many U.S. Attorneys’ offices that have never sought to forfeit a fee – it varies widely and the politics are interesting.

How do you investigate what funds are subject to forfeiture or not? Sometimes clean property can be substituted for dirty property if the dirty property is not available for forfeiture. If clean and dirty money is co-mingled, it helps to know what percentage is each (in a money laundering case, for example) – and it’s a very messy area of the law.

Weisbrod then discussed the right to indemnification. It comes from 3 sources: employment agreements, corporate by-laws, and statutes in all 50 states. Payment in advance, as opposed to indemnification, is quite difficult to get in many circumstances. Even indemnification is mandatory under state law only when you are "wholly successful" or something close to it. Most indemnification statutes provide mandatory indemnification under limited circumstances and optional indemnification under others. Insurance policies are contracts with usually very specific terms and limits.

Both panelists talked about the case of United States v. Wittig, in which the government alleged that the pre-existing indemnification agreement itself was the product of the fraud. Smith said that this case, while extremely disturbing, is still an outlier (and the result was ultimately vacated when the convictions were overturned). However, one should note that in general, forfeiture has bled significantly outside of the original core of drug cases.

Weisbrod noted that in the last 2 years, a quarter of all of the cases ever decided in which companies or insurance companies have argued against an indemnification agreement, have come down. This certainly evidences a trend towards fighting against paying employees in fraud cases. The "ancillary" proceeding in United States v. Stein, the KPMG case, is a prime example of this.

Weisbrod also cautioned that insurance, if it exists, should be your first source of funds, rather than your last, because notice and what you say in that notice is extremely important.

(sm/posted and links by esp)

May 1, 2007 in Think Tank Reports | Permalink | Comments (0) | TrackBack (0)

Monday, April 30, 2007

NACDL White Collar Crime Conference - Part III

Stephanie Martz, White Collar Crime Project Director at the National Association of Criminal Defense Lawyers (NACDL), guest blogs a six part series on the recent White Collar Crime Track at the NACDL Cincinnati Conference:

Session 3: Sentencing Update – White Collar

Amy Baron-Evans, Sentencing Resource Counsel for the Federal Defenders, did a terrific presentation on both new amendments to the Guidelines and case/litigation developments. She began by noting that after Booker, there is no need to wait until Congress finalizes the proposed Guideline amendments that will be sent to the Hill on May 1 in order to argue them.

One of the most relevant new Guidelines for white collar lawyers is that implementing the Crime Victims Rights Act. Baron-Evans noted that while judges have rejected definitions of "victims" that include plaintiffs in civil class-action suits (derivative suits are harder, though), victims of acquitted or uncharged conduct, and certain types of collateral victims, lawyers should be chary of attempts to push the definition further.

Another helpful new (proposed) Guideline is the policy statement in 1B1.3, "Sentence Reduction." Courts may now consider terminal illness (which greatly expands the old "death rattle" standard); permanent medical conditions that require care by someone else, including age-related deterioration; and situations in which the only family member capable of caring for a minor has died or become incapacitated (in the past, foster care was often considered good enough).

In terms of litigation, Baron-Evans repeated the message that I’ve often heard her impart but that bears constant reminder because it is so important: Always go back to the "shalls" in 3553 – especially, that a sentence "shall" not be greater than necessary to meet the goals of criminal punishment. In that vein, white collar lawyers should be mindful of raising – starting with the pre-sentence report, that all-important document that determines so much – the factors that predict reduced recidivism: age, stable employment, education level, marriage, abstinence from drugs, first-time offender status, poor health, and emotional problems that are treatable. Lastly, remember that no statute requires the government alone to move for substantial assistance departures.

(sm/ posted and link by esp)

April 30, 2007 in Think Tank Reports | Permalink | Comments (1) | TrackBack (1)

Saturday, April 28, 2007

NACDL White Collar Conference - Part I

Stephanie Martz, White Collar Crime Project Director at the National Association of Criminal Defense Lawyers (NACDL), guest blogs a six part series on the recent White Collar Crime Track at the NACDL Cincinnati Conference:

Part I -

We’re here this morning (Friday, April27, 2007) at NACDL’s spring white collar track in Cincinnati, Ohio. This is a one-day session in which numerous pre-indictment and post-indictment strategies are on the table for discussion. (In addition, Earl Silbert, a panelist in the first session, is being honored at NACDL’s luncheon today. Silbert was the "first" Watergate prosecutor, who prosecuted the five Watergate burglars and Hunt and Liddy, and is currently one of the deans of the white collar bar, practicing at DLA Piper in Washington, DC).

The first panel is called "The Who’s, What’s, When’s, and How’s of Internal Investigations." Moderator Blair Brown of Zuckerman Spaeder LP.

Joseph Heyd, Senior Litigation Counsel for General Electric, talked first – in response to a hypothetical – about who needs lawyers and what kind, in an internal investigation. He said that one of the first things in-house counsel needs to do when notified of an investigation is to interview the individuals who are the risk factors – those who are alleged (by an FBI agent? By the AUSA?) to have been involved in misfeasance. The interview should be conducted by someone competent in the in-house counsel’s office, complete with a corporate Upjohn warning. (The necessity of a Computer Associates warning was also discussed – and rejected by Heyd as a bridge too far.)

Silbert talked about the role of outside counsel. He said most outside counsel would recommend that outside counsel conduct any kind of mildly substantial internal investigation. The reasons: in-house counsel too closely allied with management; employees might speak more freely. Also, never do the interviews alone! And watch your privilege if you don’t go with outside counsel. But Heyd pointed out a problem: if time is of the essence, it can be hard to get outside counsel up to speed.

The panelists also discussed the necessity for the "rhythm method" for document retention – companies need to have a regular cycle of document retention that won’t raise any timing or motive questions about destroying documents. At the same time, some class of documents will obviously be subject to a suspension order from in-house counsel. This will, in turn, create gossip and speculation in the company. Silbert’s tactic is to distribute to some employees written bullet-point instructions about talking, telling the truth, what’s at stake, etc. At the same time, you must be careful about obstruction and be crystal clear about what you say and don’t say to employees about how to behave – that’s why you want something in writing about what your advice has been.

The perennial issue: attorneys’ fees. Do you require an employee to submit to an interview before paying for a lawyer? Heyd said no, it depends on pre-existing written company policy, which might require an employee to cooperate with all such interviews and investigations but is not a pre-condition, otherwise, for fees.

Kent Wicker, of Reed Wicker LLP in Louisville, KY, played the role of representing an individual (in the hypothetical, a former employee who seems a little too willing to make nice with the company). "I suppose there is a case n which I’d let him testify under oath, but I haven’t found it yet." Wicker also emphasized the necessity to convince the company that it’s good to have no daylight between the employee and the company, in other words, that the employee can be helpful to the company and not harmful. "I’m going to be on the phone and in their face."

Part of the hypothetical also involved the company’s own attempt to unearth information about potential witnesses – i.e. "pretexting" a la Hewlitt Packard. Wicker said you have to be extraordinarily careful, if you use a private firm at all, that you know the person well and give him/her extremely specific instructions and supervision.

On the topic of Joint Defense Agreements (JDA’s): There was a case recently in the E.D. Ky. in which one defendant paid fees for others and the evidence was quite thin about whether there was real obstruction; but the defendant was convicted and the case is on appeal.

(sm/ w/ links by esp)

April 28, 2007 in Think Tank Reports | Permalink | Comments (0) | TrackBack (0)

Monday, March 19, 2007

More on the Georgetown Conference

A description of one panel from the Georgetown Conference on Corporate Criminality: Legal, Ethical, and Managerial Implications is here.  One can also hear the entire conference here.


March 19, 2007 in Think Tank Reports | Permalink | Comments (0) | TrackBack (0)