Saturday, March 10, 2007

FBI Financial Crimes Report

The SanDiego Union-Tribune reports on the latest statistics released by the FBI regarding mortgage fraud. According to the FBI Report there has been an enormous increase in mortgage fraud  ("The number of FBI cases has grown steadily in recent years, from 436 in 2003 to 818 last year.") In the highlights of the Report it states with regard to corporate crime -

"Corporate Fraud: The highest priority of the Financial Crimes Section, the FBI was pursuing 490 cases at the end of FY2006, which ended last September, including 19 cases that individually cost investors over $1 billion. Investigations resulted in 171 indictments and 124 convictions, as well as over $1 billion in restitutions, $41 million in recoveries, and $62 million in seizures."


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

Saturday, February 10, 2007

Upcoming Conference


Hosted by the Georgetown Business Ethics Institute, in partnership with the National Association

of Criminal Defense Lawyers, the Heritage Foundation, the US Chamber of Commerce’s Institute

for Legal Reform, and the American Criminal Law Review

Georgetown University Law Center

March 15, 2007

Washington, DC

For details -

Download corporate20criminalityfeb6.pdf

For registration see here -

For further information, contact John Hasnas at:


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

Friday, December 1, 2006

The Big Business Pushback -- No More Corporate Prosecutions?

The Committee on Capital Markets Regulation, a blue-ribbon panel encouraged by Secretary of the Treasury Paulson, delivered its Interim Report (here) on how to improve the competitiveness of the U.S. financial system and its regulation.  Most of the report is devoted to the civil side of the ledger, including the expected push against Sarbanes-Oxley Act Section 404 that mandates extensive internal control mechanisms in public corporations that are arguably burdensome and too expensive for the benefit gained.  In the criminal law area, the main proposals are to limit the criminal prosecution of corporations and to eliminate from the Thompson Memo any consideration of whether a corporation pays the attorney's fees for its directors and employees in an investigation. 

The proposal to limit the prosecution of corporations to situations that are "exceptional" is bare-bones, saying little more than such prosecutions should not be filed except as a last resort but with no real explanation of when that circumstance will exist except if wrongdoing is "pervasive."  Moreover, the recommendation contains incorrect factual assertions that may undermine the strength of its message.  The Interim Report states:

Except in truly exceptional cases, there is no independent benefit to be gained from indicting what is in fact an artificial entity. As the demise of Arthur Andersen attests, criminal indictments of entire companies—especially those in the financial services industry where reputation is so crucial—effectively results in the liquidation of the entire firm; with this comes the attendant disruption of the lives of many employees and stakeholders who are totally innocent of wrongdoing.

Extant guidelines of the U.S. Department of Justice (the “Thompson Memorandum”) on whether to prosecute a firm fail to take account of the damage to innocent employees and shareholders and, in some cases, to the entire economy. The Committee recommends that the Justice Department revise its prosecutorial guidelines so that firms are only prosecuted in exceptional circumstances of pervasive culpability throughout all offices and ranks.

The assertion that a criminal indictment "effectively results in the liquidation of the entire firm" is simply incorrect.  The demise of Arthur Andersen is certainly striking, and appears to be the guiding, and indeed only, example of a corporate criminal prosecution relied upon for this conclusion.  The Report even muddles that point when it asserts that "[t]he almost instantaneous demise of Arthur Andersen at the indictment stage underscored how in the financial world a defendant can be financially ruined long before conviction."  While the indictment of Andersen certainly harmed its business, it was the conviction, and resulting loss of its accounting licenses, that resulted in the firm going out of business. 

To assert that every corporation indicted for a crime immediately goes out of business ignores the many prosecutions (and convictions) of companies in the environmental and health care fields, among others, that do not result in the company ceasing operations.  Certainly for a privately-held company the consequence of an indictment is usually its demise, but that is often as much a function of its controlling shareholders also being charged with a crime.  Any number of companies have been charged with violating the Foreign Corrupt Practices Act and remain in business, paying the fine and agreeing to make the necessary changes to prevent future wrongdoing. 

While there are certainly good arguments that vicarious liability for corporations may be economically unsound and not a fair reflection of the principles of due process, it is not the case that an indictment results in the immediate destruction of a company.  Heating up the rhetoric to make it sound like many corporations are on the precipice of disaster at the prosecutor's whim is not a good way to advance the debate about corporate criminal liability. (ph)

December 1, 2006 in Prosecutions, Think Tank Reports | Permalink | Comments (0) | TrackBack (0)

Monday, November 27, 2006

The Future of the Attorney-Client Relationship in White-Collar Prosecutions

Upcoming Event of the Heritage Foundation RSVP here.

The Future of the Attorney-Client Relationship in White-Collar Prosecutions

Date: November 30, 2006
Time: 11:00 a.m. to 12:00 p.m.

The Honorable George J. Terwilliger III
Former Deputy Attorney General of the United States (1991-93)

The Honorable Larry D. Thompson
Former Deputy Attorney General of the United States (2001-03)

With Introductory Remarks by
Edwin Meese III
Chairman, Center for Legal and Judicial Studies,
The Heritage Foundation

Host(s): Dean Reuter
Director, Practice Groups,
The Federalist Society

Brian W. Walsh
Senior Legal Research Fellow,
The Heritage Foundation


November 27, 2006 in Defense Counsel, Privileges, Think Tank Reports | Permalink | Comments (0) | TrackBack (1)

Sunday, November 19, 2006

White Collar Crime Prosecutions Down?

TRAC Reporting out of Syracuse University is saying that:

"[t]imely criminal enforcement data from the Justice Department document that in July 2006, U.S. federal white collar crime prosecutions reached their lowest number (498) in the last five years. In fact, not since May 2000 (when there were 446 prosecutions) has the number been lower." (see here)

But as previously reported here, here, and here, these numbers are suspect because the definition used to determine what constitutes white collar crime is not consistent.

(esp) (with disclosure that she is a Syracuse grad).

November 19, 2006 in Think Tank Reports | Permalink | Comments (0) | TrackBack (1)

Sunday, November 12, 2006

Survey For New Lawyers

Over at Law School Innovation, Gene Koo of Harvard's Berkman Center for Internet and Society is now guest-blogging and seeking help on developing a survey for new lawyers in order to learn more about how prepared they are for today's legal work world. If you have a minute, how about helping by checking out the survey of new attorneys here.


November 12, 2006 in Think Tank Reports | Permalink | Comments (0) | TrackBack (0)

Sunday, October 8, 2006

McGeorge Law School Program on Corruption

Rethinking Corruption: An Interdisciplinary Look at a Fundamental Problem. 

On Friday, 27 October 2006, the Center’s Institute for Global Business will sponsor a symposium
Rethinking Corruption: An Interdisciplinary Look at a Fundamental Problem.

Does corruption matter in today’s globalized economy? Or has it been overtaken by money laundering and terrorism as the central focus of international business regulation? Did it ever matter? Do current regulatory responses deter or contain corruption? Are enforcement and compliance actions effective in impeding corruption? The leaders in international economic development theory, international business regulation, and transnational corporate practice will offer thoughts and rethoughts on the impact of corruption on development, contemporary national and multilateral responses, the current state of play - and concrete recommendations for effective deterrence.

This program has been approved for Minimum Continuing Legal Education credit by The State Bar of California in the amount of five (5) hours for one day. The University of the Pacific McGeorge School of Law certifies that this activity conforms to the standards for approved educational activities prescribed by the rules and regulations of The State Bar of California governing minimum continuing legal education.

To Register, please or contact Connie Neumann at 916 739 7019,


October 8, 2006 in Think Tank Reports | Permalink | Comments (0) | TrackBack (0)

Tuesday, September 12, 2006

"Challenges Facing Today’s Federal Prosecutors"

After yesterday's hearing on the Thompson Memo and its inclusion of a waiver provision, waiving the attorney-client privilege, today brings a subcommittee hearing on the "Challenges Facing Today’s Federal Prosecutors"  (see here).  The witnesses lined up to appear today are:

Mike Battle
Executive Office of U.S. Attorneys
United States Department of Justice
Washington, DC

Susan Brooks
U.S. Attorney
Southern District of Indiana
United States Department of Justice
Washington, DC

William Shockley
Former President
National Association of Assistant U.S. Attorneys
Lake Ridge, VA

Smooth left corner image

September 12, 2006 in Government Reports, Prosecutors, Think Tank Reports | Permalink | Comments (0) | TrackBack (0)

The Thompson Memo Hearings

The Thompson Memo has without doubt raised significant controversy in the legal community.  It contains provisions such as waiver of the attorney-client privilege, that factor into whether the company will be prosecuted or receive the benefit of a deferred prosecution agreement. Today was the day of airing this issue before a Senate Judiciary Committee (see here).  The day started with a statement from Senator Patrick Leahy, ranking member of the Senate Judiciary Committee. (see here)  He noted that:

"[t]he protection of communications between client and lawyer has been fundamental to our nation’s legal justice system since its inception. The right to counsel has long been recognized as essential to ensure fairness, justice and equality under the law for all Americans. This Administration has taken extraordinary steps to investigate and prosecute the press and to intimidate the press, critics, and attorneys while it has claimed unlimited privileges and secrecy for itself."

Some quotes from the testimony -

Hon. Paul McNulty (USA Eastern District of Virginia) here - "We see nothing wrong in asking a corporation to disclose to us the results of their internal investigation to assist us in investigating a corporation’s claim of innocence. Indeed, we believe it is good practice because it conserves public and private resources and, if the corporation’s claim is well-founded, it brings a quick conclusion to the government’s investigation."

Thomas J. Donohue, President & CEO -U.S. Chamber of Commerce here -

  • "A company that refuses to waive its privilege risks being labeled as uncooperative, which all but guarantees that it will not get a settlement.
  • The “uncooperative” label severely damages a company’s brand, shareholder value, their relationships with suppliers and customers, and their very ability to survive.
  • Being labeled uncooperative also drastically increases the likelihood that a company will be indicted and one need only look to the case of Arthur Andersen to see what happens to a business that is faced with that death blow."

Karen J. Mathis, ABA President 

Download attyclientprivissueabatestimonytosenjudcommkarenmathissept122006.pdf

"First, the Department of Justice's policy is inconsistent with the fundamental legal principle that all prospective defendants - including an organization's current and former employees, officers, directors and agents - are presumed to be innocent."

Other compelling testimony was also provided - see here


September 12, 2006 in Government Reports, Think Tank Reports | Permalink | Comments (0) | TrackBack (0)

The Senate Talks About the Thompson Memo

The Senate Committee on the Judiciary has scheduled a hearing on "The Thompson Memorandum’s Effect on the Right to Counsel in Corporate Investigations" for today.  The impressive lineup of individual's giving testimony are:


The Honorable Paul J. McNulty
Deputy Attorney General
U.S. Department of Justice
Washington, DC


The Honorable Edwin Meese
Former Attorney General
Ronald Reagan Distinguished Fellow in Public Policy
Chairman, Center for Legal and Judicial Studies
The Heritage Foundation
Washington, DC

Thomas J. Donohue
President and CEO
U.S. Chamber of Commerce
Washington, DC

Karen J. Mathis, Esq.
American Bar Association
Chicago, IL

Andrew Weissmann, Esq.
Jenner & Block LLP
New York, NY

Mark B. Sheppard, Esq.
Sprague & Sprague
Philadelphia, PA

The testimony from these witnesses will be retrievable online here.  More will be posted on this blog tomorrow regarding this testimony.  But to give a preview,  the written testimony of the Hon. Edwin Meese includes the following passage regarding the McCallum Memo, an unsuccessful attempt by the government to appease people by saying that waivers of attorney client privilege need to coordinated within each individual USA's office.  Meese states:

"Nevertheless, it appears that the McCallum Memorandum does not represent a sufficient improvement. The main objectives of the Memorandum included providing greater uniformity, predictability, and transparency to the process that federal prosecutors use when requesting a waiver of a business organization’s attorney-client privilege. But the McCallum Memorandum does nothing to address the inherently coercive nature of the Thompson Memorandum factors that take into account whether a company has waived its privilege."

There are many important issues of the day that need to be addressed by the Senate.  So why is DOJ allowing so much time to be spent on the waiver issue, an issue they could easily resolve by just removing it from the Memo and from practice? Don't they get it -  asking for a waiver of the attorney-client privilege is just plain wrong.


September 12, 2006 in Government Reports, Legal Ethics, News, Prosecutions, Statutes, Think Tank Reports | Permalink | Comments (0) | TrackBack (0)

Saturday, August 26, 2006

White Collar Crime Prosecutions Up 8.5 % from Last Month

The latest Syracuse Trac Reporting on DOJ white collar crime statistics shows an increase this month in the number of cases being prosecuted in comparison with last month.  (see here).  And as has been the case for the last five years, bank fraud continues to be the number one charge being used, with mail fraud being the second. Conspiracy under 18 U.S.C. sec. 371, which holds the number three spot in the five year statistics, was number five for the month. But as previously noted on this blog, here, here, and here, the reporting needs to be examined closely as offenses that many would consider to be white collar offenses are omitted from the statistical data.

(esp)(with disclosure that she is a Syracuse grad).

August 26, 2006 in Think Tank Reports | Permalink | Comments (0) | TrackBack (1)

Tuesday, June 13, 2006

More White Collar Crime Stats

Yet another month of decreasing white collar crime prosecutions?  This time the Syracuse Trac Reporting here says that the DOJ shows a -10.6 drop in white collar crime prosecutions from last month, and the percent change from five years ago, if one includes magistrate court is -43.3 %. So much for statistics. See prior posts here and here.

(esp) (with disclosure that she is a Syracuse grad).

June 13, 2006 in Think Tank Reports | Permalink | Comments (0) | TrackBack (0)

Thursday, June 1, 2006

Is White Collar Crime Down?

The Syracuse Trac Reporting here on DOJ statistics reports this month that the number of white collar filings for the month is down over the previous month.(see here).  And looking over five years "the data show[s] that the prosecutions are down 31.3 percent from levels reported in 2001."

The report provides the offenses most often charged, areas of the country prosecuting the most white collar cases, and also the members of the bench handling the greatest number of these cases.  Judges: to see if you made the top ten, click here.

But the report does raise some questions, and the authors duly note the DOJ definition of white collar crime here.  The DOJ interpretation of what is a white collar crime will probably differ from many.  DOJ omits from its definition, as it has for a good number of years, several categories of prosecutions.  These include corruption cases and regulatory offenses like environmental crimes.   But oddly enough (see here), the local USA's may not be agreeing with this categorization.  For example, the USA for the Northern District of California states right on the website for this district:

White Collar Crime: The White Collar Crime Section is responsible for prosecuting a wide range of complex cases, including public corruption (such as bribery, kickback schemes, and theft of government funds) health care fraud, financial institutions fraud, bankruptcy fraud and mail and wire fraud. Civil rights cases are also monitored, evaluated and prosecuted by the section. Environmental cases are prosecuted under the Clean Water Act, Clean Air Act and other federal environmental statutes. The section also prosecutes cases involving the protection of wildlife and Food and Drug Administration cases concerning the safety of the nation's food supply.


June 1, 2006 in Think Tank Reports | Permalink | Comments (0) | TrackBack (0)

Monday, May 15, 2006

ABA President Addresses ALI

American Bar Association President Michael S. Greco addressed the American Law Institute (ALI) yesterday morning, and in speaking on attorney-client privilege he presented a contrast to a presentation at an ethics seminar of the prior afternoon. Interestingly the ethics seminar of the ALI-ABA concerned the topic of "Representing a Corporate Employee as an Individual During an Investigation; Current Issues Regarding the Attorney-Client Privilege." At that seminar, the speaker on the DOJ attorney-client privilege issue was Gregory F. Linsin, Special Litigation Counsel of the Environmental Crimes Section, Environment and Natural Resources Division of the DOJ.

The next morning, before the American Law Institute annual gathering of members, Greco spoke of the ABA stance regarding DOJ's  "efforts to erode the privilege."  He enlightened the ALI audience on the Thompson Memo, the position of the Sentencing Commission, and on the importance of the attorney-client privilege. The ABA position can be seen in this letter here of May 3, 2006 to Attorney General Gonzalez.


May 15, 2006 in Defense Counsel, Privileges, Think Tank Reports | Permalink | Comments (0) | TrackBack (0)

Tuesday, April 25, 2006


Bob Weninger, a law professor at Texas Tech University School of Law, is surveying lawyer reaction to a proposed amendment to Federal Rule of Evidence 408. The proposal is now before the Supreme Court and may soon be before Congress. Under the amendment, statements made in settlement talks in civil cases brought by public agencies might be admissible in later criminal cases. He asked readers if they might take 10-15 minutes to complete a brief questionnaire online. He stated that responses will remain anonymous. Here is the link to his survey.

April 25, 2006 in Think Tank Reports | Permalink | Comments (0) | TrackBack (0)

Friday, April 21, 2006

How Prosecutors Secure Corporate Cooperation

The University of Maryland held a Roundtable yesterday called the Criminalization of Corporate Law. (see here). David B. Anders, a former Assistant United States Attorney for the Southern District of New York who handled the Ebbers and Quattrone cases was the keynote speaker.  Larry Ribstein at Ideoblog here does a wonderful job of capturing some of the comments made by this speaker. This is definitely worth reading.  Does it bother anyone that corporations have become mini-prosecutors that serve up the government its employees?


April 21, 2006 in Think Tank Reports | Permalink | Comments (0) | TrackBack (0)

Monday, April 3, 2006

Is ID Theft Really Lower?

According to a NYTimes (AP) story here, the DOJ is reporting that identity theft has decreased.  The Federal Trade Commission seems to have numbers that show a decrease in identity theft from prior years, but an increase number of fraud cases (see here). 

But if a victim of identity theft, the Federal Trade Commission's website may prove helpful. (see here)


April 3, 2006 in Think Tank Reports | Permalink | Comments (0) | TrackBack (0)

Monday, January 23, 2006

Deferred and Non Prosecution Agreement Report

A Report called "Crime Without Conviction: The Rise of Deferred and Non Prosecution Agreements," was released in late December by Corporate Crime Reporter. (see here)  It provides fascinating data on the government's use of deferred and non-prosecution agreements, with detailed accounts of the many agreements formed between companies and the government. The report states that the government has entered into twice as many such agreements in the last four years than in the prior ten years, and that these agreements "have become the settlements of choice for prosecutors and corporate defense attorneys."

So is this a negative? Some may believe that failing to have a full prosecution, followed by a conviction, is less favorable to our justice system.  It might be argued that these agreements diminish the deterrent effect of corporate criminality by failing to proceed to a formal conviction against the company.

Two Responses: 

1) First, there is another component that may also play a factor in the increase in the use of these agreements. This is the institution and progression of the corporate criminal sentencing guidelines.  The carrot-and-stick approach to these guidelines may in fact be producing favorable responses that allow the government to avoid proceeding criminally and move instead to reprimanding the corporation for its failure to have full compliance with the corporation's compliance program.  After all, corporations are basically mandated to have an "effective program" as corporate directors can be civilly obligated to institute these measures (see In re Caremark International Inc. Derivative Litigation) Yet, we all know that if the compliance program was really "effective," there would be no criminality.  But the very institution and existence of such a program demonstrates an attempt at avoiding criminal activity. Thus, the corporate sentencing guidelines may have the net effect of reducing criminal charges and likewise reducing criminal conduct in a corporation. 

Obviously, this does not preclude individuals within a corporation from committing crimes. Thus, we see the DOJ move to prosecute more individuals and less corporations. The Corporate Crime Report's conclusion that we have moved from a criminal justice system that "save[s] the individuals and plead[s] the corporation" to a system where "the individual executives are sacrificed to save the corporation," may thus be, in part, an outgrowth of the institution of the federal sentencing guidelines. But that said, it is clear that the Thompson Memo encourages corporations to give up individuals and inappropriately demands the waiver of the attorney-client privilege, actions that also play a part in the increased individual prosecution and reduction in corporate criminal convictions.

2) Second, these agreements should not be considered a negative in the fight against corporate criminality. Many of these agreements produce substantial income to the federal government and provide for victims to receive funds (e.g., Aetna Life Insurance paid 5.2 million in fines and restitution; AOL paid a 60 million dollar fine and 150 million into a victims settlement account; Bristol-Myers Squibb is paying 300 million, etc.).  Are these fines any different than what would have been achieved if the company were prosecuted?  This is especially true since a corporation cannot be incarcerated.

Punishment comes in many forms, and corporations are certainly not skating from punishment by entering into these agreements.

Now mind you, there are clearly some negatives to many of the existing deferred prosecution agreements.  But perhaps the negatives go to the internal provisions within these agreements, provisions that are fundamentally unfair.


January 23, 2006 in Think Tank Reports | Permalink | Comments (0) | TrackBack (0)

Wednesday, December 14, 2005

Global Economic Crime Survey

PricewaterhouseCoopers has released its third biennial Global Economic Crime Survey (2005) as reported on the Law Librarians blog here. The report, written in collaboration with Professor Dr. Kai-D Bussman, Chair of Criminology and Penal Law at Martin-Luther-University, Halle, Germany, explores two new topics: "the effectiveness of fraud risk management systems" and "the profiles of fraud perpetrators."

Within the latter section is an interesting finding- that is that: "[t]he development of internal control and risk management systems is important in managing the risk of fraud, but they can only go so far before they become complex and unwieldy - and, importantly, before they create an atmosphere of distrust."  This is an important point in looking at how best to structure an "effective program" within a company.  To minimize fraud, a "trust-oriented" approach is better than a "control-oriented" method. 

(esp) (with thanks to Joe Hodnicki) (see also co-blogger Peter Henning's Comments here)

December 14, 2005 in Think Tank Reports | Permalink | Comments (0) | TrackBack (0)