Saturday, May 25, 2019

Third Global White Collar Crime Institute - Prague, June 27-28, 2019

Readers of the blog might be interested in the upcoming Third Global White Collar Crime Institute, which will occur in Prague, Czech Republic on June 27-28, 2019. The Global Institute is a unique ABA Criminal Justice Section conference opportunity structured to bring together experts in the field of international white collar crime to meet and discuss cutting edge issues in a new corner of globe. The experience, therefore, offers not only insights into the latest developments in the field, but the chance to interact and network with colleagues and expand your presence in new regions of the world.

The Third Global Institute will begin with a “Meet the Enforcers” panel featuring Matthew Miner (Deputy Assistant Attorney General of the United States, U.S. Department of Justice), Matthew Wagstaff (Head of the Bribery and Corruption Division, Serious Fraud Office), and Pavel Zeman (Prosecutor General of the Czech Republic). On the second day of the Global Institute, we will also welcome Dr. Adrian Jung, who serves as Special Counsel on “Internal Investigations” to the German Federal Ministry of Justice. Dr. Jung is drafting legislation for Germany regarding corporate criminal liability and internal investigations that has the potential of changing the corporate criminal enforcement landscape in Europe. Other panels during the conference will include Lessons Learned from the VW Internal Investigation, Data Privacy and GDPR, Extradition and Red Notices, Global Anti-Corruption Trends, and Changes in Enforcement After Brexit. 

For those interested in attending, there is more information about the Global Institute on the conference webpage, including a full agenda of the program and the registration form. I hope to see many of you in Prague next month. 

(LED)

May 25, 2019 in Conferences, Current Affairs, International, Investigations | Permalink | Comments (0)

Wednesday, May 1, 2019

AG Barr on Obstruction of Justice - Will this be the new DOJ Policy

AG Barr's statement (here) accompanying his testimony this morning before the Senate Judiciary Committee states in part with regard to obstruction of justice:

"In Volume II of the report, the Special Counsel considered whether certain actions of the President could amount to obstruction of justice. The Special Counsel decided not to reach a conclusion, however, about whether the President committed an obstruction offense. Instead, the report recounts ten episodes and discusses potential legal theories for connecting the President’s actions to the elements of an obstruction offense. After carefully reviewing the facts and legal theories outlined in the report, and in consultation with the Office of Legal Counsel and other Department lawyers, the Deputy Attorney General and I concluded that, under the principles of federal prosecution, the evidence developed by the Special Counsel would not be sufficient to charge the President with an obstruction-of-justice offense."

In answering questions he said that usually you need an "underlying crime" and an "inherently malignant act" for obstruction of justice.  Two questions:

  1. Were the ten items in the Mueller Report insufficient to meet the Barr standard?
  2. Will the DOJ be using this "new" standard in all obstruction of justice cases?
  3.  Can defense counsel argue in obstruction of justice cases, insufficient evidence if it fails to meet the Barr standard?

(esp)

May 1, 2019 | Permalink | Comments (0)

New DOJ Policy on Evaluation of Corporate Compliance Programs

DOJ issued a new Guidance Document on Evaluation of Corporate Compliance Programs (here).
Some thoughts -

  • Prosecutorial discretion remains as the document states - "Because a corporate compliance program must be evaluated in the specific context of a criminal investigation, the Criminal Division does not use any rigid formula to assess the effectiveness of corporate compliance programs."
  • The three "fundamental questions" that a prosecutor should ask are: "1. 'Is the corporation’s compliance program well designed?' 2. 'Is the program being applied earnestly and in good faith?' In other words, is the program being implemented effectively? 3. 'Does the corporation’s compliance program work' in practice?
  • But the document is also quick to note that there is no checklist in answering these questions as it states "In answering each of these three 'fundamental questions,' prosecutors may evaluate the company’s performance on various topics that the Criminal Division has frequently found relevant in evaluating a corporate compliance program. The sample topics and questions below form neither a checklist nor a formula. In any particular case, the topics and questions set forth below may not all be relevant, and others may be more salient given the particular facts at issue."
  • The document then goes on to provide some clues as to what DOJ will look at in its evaluation process.

Bottom line - The document provides a helpful structure for someone making a presentation to the government on why they should not be prosecuted or at the most get an NPA or DPA. Methodically going through this document and demonstrating a company's case for getting corporate compliance program credit will likely make for a longer presentation to the government.

(esp)

May 1, 2019 | Permalink | Comments (0)

Former Penn State President's Conviction Overturned

Billy Witz, NY Times, April 30, 2019, Judge Overturns Conviction of Ex-Penn State President in Sandusky Case

(esp)

May 1, 2019 | Permalink | Comments (0)

Thursday, April 25, 2019

Miriam Baer - Sorting Out White-Collar Crime

Professor Miriam Baer (Brooklyn) has a fascinating new Article in Texas Law Review. The draft, posted on SSRN (here) has the following Abstract -

Our federal criminal code defines crimes, but declines to sort its fraud offenses according to degrees of harm or culpability. Although state prosecutors routinely charge crimes such as homicide or robbery in varying degrees, the federal code’s core fraud statutes are noticeably flat. There is no such thing as first- or second-degree fraud in the federal code.

Amidst a roiling debate as to whether the federal government overcriminalizes or underenforces white-collar crime, scholars have lost sight of the federal code’s lack of gradation. This Article seeks to remedy this neglect, particularly in regard to fraud crimes. Drawing examples from federal and state criminal codes, the Article analyzes the ways in which ungraded statutory regimes generate problematic and self-destructive expressive gaps. By lumping so much conduct under a single statutory umbrella, the federal code deprives the public of the ability to gauge the seriousness of a specific offense and of the will to discern those factors that separate the worst frauds from the merely bad ones.

If criminal law’s function is to distinguish wrongdoing and not solely to prohibit it, then our federal fraud statutes leave much to be desired. Reasonable people can debate the proper methodology for distinguishing bad from worse offenses, but it is quite another matter to abandon statutory sorting altogether. Accordingly, the Article closes by advocating the use of misdemeanor and low-level felony statutes to improve—and sort—the federal code’s fraud crimes.

Professor Lauren Ouziel (Temple)  provides an equally thoughtful response here titled Steering White Collar Enforcement in the Texas Law Review Online. 

(esp)

April 25, 2019 in About This Blog, Prosecutions | Permalink | Comments (0)

Wednesday, April 10, 2019

Prosecutorial Discretion in Operation Varsity Blues

Prosecutors have enormous discretion.  They decide who to charge, who will receive a plea, who gets cooperation credit, and now we see even more of that discretion being used - tacking on additional charges (money laundering) and adding defendants to existing indictments.

In Operation Varsity Blues, prosecutors initially had some Indictments, some Informations (individuals typically cooperating or at least pleading) and some Complaints brought against parents who were alleged to have conspired to  be "involved  [in] 1) bribing SAT and ACT exam administrators to allow a test taker, typically XXX, to secretly take college entrance exams in place of students or to correct the students’ answers after they had taken the exam; 2) bribing university athletic coaches and administrators—[at a variety of schools]—to facilitate the admission of students to elite universities under the guise of being recruited as athletes; and (3) using the façade of XXX’s charitable organization to conceal the nature and source of the bribes." (XXX's inserted here)(See DOJ Press Release here).  Some of the parents came forward quickly and pleaded guilty (see Bloomberg here). This included a former partner in a law firm and an actress. 

Others, however, did not accept the government invitation for a quick plea (not that one is ever directly offered).  And now they find themselves indicted, but with an additional charge tacked onto the fraud charges - money laundering.  Is this unusual?  Not really for some government prosecutors.  Some prosecutors use their discretion to add charges such as money laundering when an initial plea is not quickly reached.  The addition of charges when a plea is not taken has been found not to carry a presumption of prosecutorial vindictiveness (U.S. v. Goodwin).  But wait there's more....

We also see all the cases coming from the US Attorneys Office in Massachusetts, although many are not from this area and their acts did not occur in this district.  Conspiracy is another way that prosecutorial discretion is used to allow the government to choose the place they want to proceed.  Conspiracy allows them to choose the forum where there was either an agreement or where one of the acts took place.  Coupling everyone together gives the government a wider breadth of possible jurisdictions.  Is this unusual?  Not really, the government has been using conspiracy to choose their forum for many years.  And there may be challenges here on whether this is a conspiracy case that warrants severance. But wait there's more... 

The government has also brought recent Indictments via a Second Superceding Indictment of an existing case (see here). And yes, this new revised Indictment includes the charge of Conspiracy to Commit Money Laundering. And it allows the government to go with a judge who may already have been assigned one of the cases.  (see Jack Newsham, NLJ, College Scandal Defense Teams Accuse Feds of Judge-Shopping).  Is this unusual?  Not really, superceding Indictments happen all the time. 

But putting all three of the above prosecutorial decisions together and looking at them cumulatively, one has to ask whether these prosecutorial practices are really beginning to seem too aggressive. Keep in mind that we are only at the preliminary pre-trial stage. If the individuals decide not to enter a plea, one can anticipate some important legal challenges.  

(esp)

April 10, 2019 in Prosecutions, Prosecutors | Permalink | Comments (0)

Sunday, March 24, 2019

AG Barr's Summary of the Mueller Report

One needs to give credit to AG Barr for his quick release of a preliminary statement (see here - Download AG March 24 2019 Letter to House and Senate Judiciary Committees) concerning the Report of Special Counsel Mueller, which is titled, Report on the Investigation into Russian Interference in the 2016 Presidential Election.  But one also needs to read this four-page statement carefully, because the public needs to grasp all of what is being said and what is not being said here. 

  1. AG Barr's Summary notes the extensiveness of this investigation ("employed 19 lawyers who were assisted by a team of approximately 40 FBI agents, intelligence analysts, forensic accountants, and other profession staff. The Special Counsel issued more than 2,800 subpoenas, executed nearly 500 search warrants, obtained more than 230 orders for communication records, issued almost 50 orders authorizing use of  pen registers, made 13 requests to foreign governments for evidence, and interviewed approximately 500 witnesses.")
  2. AG Barr's Summary does not provide the same specificity in telling the public the number of indictments and convictions of individual and entities in connection with his investigation, instead saying "all of which have been publicly disclosed." Well that number does seem pretty important, as this investigation had so far 7 guilty pleas, 27 people indicted, and 37 indictments with some of the cases still ongoing.
  3. AG Barr's Summary says that "The Report does not recommend any further indictments, nor did the Special Counsel obtain any sealed indictments that have yet to be made public."
  4. AG Barr's Summary does not say how many matters were turned over to other federal or state offices, perhaps because there was criminality that did not pertain to Russian Interference in the 2016 Presidential Election. Although it does say that "During the course of his investigation, the Special Counsel also referred several matters to other offices for further action."
  5.  We now know for certain that the Investigation had two parts, or at least the Report does: Russian Interference in the 2016 US Presidential Election and Obstruction of Justice.
  6. AG Barr's Summary confirms that there were Russian efforts to influence our 2016 US election.   AG Barr's Summary states that - "The report outlines the Russian effort to influence the election and documents crimes committed by persons associated with the Russian government in connection with these efforts."   This is an important statement that needs both executive and legislative follow-up. How will we be assuring that future efforts by another country do not undermine our election?  And even if they "did not establish that members of the Trump Campaign conspired or coordinated with the Russian government in its election interference activities," do we know if the results of the election were accurate?
  7.  AG Barr's Summary confirms "that Russian government actors successfully hacked into computers and obtained emails from persons affiliated with the Clinton campaign and Democratic Party organizations, and publicly disseminated those materials through various intermediaries, including WikiLeaks." Again, did we have a fair election? What is the appropriate remedy?  What will happen in future elections to preclude such activity?
  8. On Part II - Obstruction of Justice - AG Barr's Summary states that "the Special Counsel considered whether to evaluate the conduct under Department standards governing prosecution and declination decisions but ultimately determined not to make a traditional prosecutorial judgment." Barr's Summary says that "[i]nstead, for each of the relevant actions investigated, the report sets out evidence on both sides of the question and leaves unresolved what the Special Counsel views as 'difficult issues' of law and fact concerning whether the President's actions and intent could be viewed as obstruction."  So it does sound like the President was a "subject" as opposed to "witness" of this investigation.
  9. AG Barr's Summary does not say that evaluating the evidence is typically the job of the jury, after a determination has been made that there is probable cause to indict.  Instead AG Barr restates Mueller's Report that "while this report does not conclude that the President committed a crime, it also does not exonerate him."  AG Barr goes on to say that he and Rod Rosenstein have made the decision "that the evidence developed during the Special Counsel's investigation is not sufficient to establish that the President committed an obstruction-of-justice offense."
  10.  In many ways it is good to see that a "short-cut offense" of obstruction of justice will not be used (see my article here), but one has to wonder about the defendants who have been charged with obstruction of justice.  It will be important for everyone to know what has been declined here so that everyone can understand the DOJ's standard for evaluating obstruction.  Isn't it always stated that "intent can be inferred from the circumstances" in letting juries make those decisions? But it is also good to see DOJ taking a hard line in not prosecuting uncertain cases - it is hopeful that all US Attorneys will follow this lead with the obstruction cases they are currently handling. Having the full Report will provide this important transparency. 
  11. I leave for another day a discussion of AG Barr's decision to extract 6(e) grand jury material from the report prior to its release.

(esp)

March 24, 2019 in Investigations, News, Obstruction, Prosecutions, RICO | Permalink | Comments (0)

Sunday, March 17, 2019

Assistant Attorney General Brian A. Benczkowski's Speech at ABA White Collar Conference

I wasn't there, but was just reading Assistant AG Benczkowski's written remarks from the 33rd Annual ABA National Institute on White Collar Crime (see here).  Here are some thoughts that caught my eye -

  1. It is good to see his approach on recognizing that companies are more likely to comply if they know the rules of the game in reporting and cooperating.  Transparency is key to enforcing corporate compliance and it is wonderful to see this recognized.
  2. He claims that there have been "6,500 defendants in white-collar prosecutions, a modest increase over the prior year."  But he doesn't tell us how he defines white collar crime.  Trac (see here) claims the number is down.  And as I noted, there is no consistent methodology for reporting white collar crime -especially as to what crimes are included.  So we really can't assess who is accurate. When he gets to specific internal numbers, like what the Fraud Section's Securities and Financial Fraud Unit charged, that makes sense.  But claiming that white collar prosecutions as a whole have  increased needs a lot more explaining.
  3. It is good to see that DOJ will be using an "'anti-piling on' policy to reduce or apportion financial fines, forfeitures, and restitution between authorities to ensure that the overall outcome is equitable and just." There needs to be a coordinated effort so it is good to see this new practice continuing.
  4.  It is likewise good to see that the internal DOJ/SEC Resource Guide for FCPA matters will now be "reflected in the Corporate Enforcement Policy itself."  Or does this mean that an internal policy, unenforceable at law, is just being moved from one place on the web to another?
  5. It is likewise good to see a training program for assuring consistency in prosecutorial discretion on evaluating effectiveness of corporate compliance programs. But wouldn't it be best to have this done outside the DOJ since if the program is held to be ineffective, it will be the DOJ moving ahead against the company.
  6. But my real concern with the comments lie here - "In 2018, our Fraud Section prosecutors charged 406 individuals, won 268 convictions, and brought 10 corporate enforcement actions." It is the use of the term "won" that raises flags.  Prosecutors do not win convictions and do not lose cases -  prosecutors do justice and that happens irrespective of whether there is a "win," "conviction," "not guilty," or "declination."

Overall, it's sounds good to see that "corporate transparency" will be something of the future, as this can enhance compliance efforts.

(esp)

March 17, 2019 in Prosecutions | Permalink | Comments (0)

Friday, March 15, 2019

White Collar Prosecutions - Down?

Trac Reports titles the recent report, White Collar Prosecutions Hit All-Time Low in January 2019. They note that "[t]his is an historic low since monthly tracking began in October 1998." They note that "this number is down 20.3 percent over the previous month, and continues a five-month downward slide." Additionally, they say that "[c]ompared to five years ago, January filings were down 35.7 percent." President Trump's term they say has a number "lower than in previous administrations."

I don't doubt that the white collar prosecutions are down.  I also don't doubt that comparing the prosecutions from the current administration to the last administration using the same metrics support it being down.

But there is a separate issue here that raises concerns - how does DOJ measure white collar crime.   Trac includes thirty (30) categories of crimes, including ones related to fraud, antitrust, intellectual property violations, identity theft, and arson for profit.  The list of different types of fraud is impressive, including tax fraud, federal procurement fraud, insurance fraud, securities fraud, computer fraud, health care fraud, and many other classes of fraudulent conduct. 

But what I don't see are the "short-cut" offenses that are often used in white collar prosecutions. Unreported here are obstruction of justice, false statements, and perjury.  And yet we all know that these are common offenses used in white collar cases. And is RICO included in the statistics?  Cases under the Racketeer Influenced Corrupt Organization Act can have many different predicate offenses, some of which are street crimes like homicide, and others are mail and wire fraud.     

So there is no doubt that white collar prosecutions are down.  But we should also be asking -- isn't it about time that DOJ started looking at a better methodology for reporting white collar prosecutions.  See Lucian Dervan & Ellen Podgor, White Collar Crime: Still Hazy After All These Years.

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

March 15, 2019 in About This Blog, Prosecutions | Permalink | Comments (0)

Wednesday, March 13, 2019

Manafort Sentences - Federal Courts

Paul Manafort has now been sentenced by two different judges in two different courts on two different cases.  It remains to be seen if we will have a third sentencing as Manhattan District Attorney Cyrus Vance Jr. just announced additional charges against Manafort. (see here & here).  A week ago  Manafort received a sentence of 47 months from a Virginia federal district court judge.  (see Doug Berman's Sentencing Law & Policy Blog here) Today he received a sentence of 73 months from a D.C. federal district court judge. Although the latter sentence was 73 months, some of the sentence is consecutive and some of it concurrent.  In total it comes to a sentence of  7 1/2 years.  Some claimed the first sentence, a below guidelines sentence, was too light. And many wondered if this could be appealed.  Others felt it was best to wait for this next sentence as the next judge would likely be closer to the guideline range. Some thoughts:

  1. When the sentencing guidelines were created they initially were mandatory, not permitting judicial discretion to sentence the individual as an individual and not a mere numerical calculation. I certainly criticized this. 
  2. When discretion with sentencing happened as a result of a litany of Supreme Court decisions - Blakely, Booker, Gall, Rita, etc. - judges could look at the 3553(a) sentencing factors and sentence the individual as opposed to a mere numerical calculation. I was pleased to see this happen.
  3. But many of us also wondered what would happen once judges were given discretion to deviate from the guidelines.  Would this remove the original intent of the guidelines, an intent to have "predictability and consistency" in sentencing.  Would it send sentencing back to the "wild west" of a no guidelines era?
  4. In my opinion guidelines needed to happen because appellate court judges were not willing to really review district court sentencing. Clearly, because they are not the finders of fact, appellate judges need to give the trial court discretion.  But appellate courts also need to monitor sentences that are appealed, in order to ascertain whether there has been an abuse of discretion.
  5. White collar sentences are different from sentences in street crimes cases.  This should not be because of privilege, and certainly not because of race.  But rather because the very nature of these crimes are different. (see The Challenge of White Collar Sentencing).  And clearly when they differ because of race or privilege that needs to be corrected. 
  6. Back in 2007 I wrote a short piece in the Yale Law Journal Forum (see here), with Andrew Weissmann (w/ Joshua Block) writing a piece presenting another side (see here) of this picture. The opening statement of the Weissmann/Block Essay is "At the margins, the current Federal Sentencing Guidelines for fraud and other white-collar offenses are too severe." He then goes on to criticize my arguments. My piece, Throwing Away the Key" argued that "[t]he problem [then was] not only the draconian sentences that white-collar offenders are receiving, but the fact that because of the elimination of parole they [would] actually have to serve them."  It bothered me that Chalana McFarland, a first-time offender, received a thirty-year prison term for her role in a mortgage fraud scheme that skimmed twenty million dollars from the sale of over one hundred homes from 1999 to 2002. Thirty years was too high for this first-time offender who had a sentence determined by a numerical calculation. 
  7. So the outliers are questioned here, whether it be the unusually low sentence in Manafort's first case, or the usually high sentence that individuals like Chalana McFarland initially received. And perhaps with Manafort's sentence of today, and potential sentence from new charges, it will find the medium place that alleviates my questioning. But we do need to ask appellate court judges to review sentences to assure that sentences are not extreme - whether it high or low.
  8. I don't expect an answer from Andrew Weissmann on this now and respect the quiet approach of the Special Counsel's investigation.  But perhaps when it is over we should be writing the joint article that looks at how best to achieve predictability and consistency in sentencing without outliers and without taking away judicial discretion.  

(esp)

March 13, 2019 | Permalink | Comments (0)

Tuesday, March 12, 2019

"Operation Varsity Blues"

The allegations coming from "Operation Varsity Blues" are incredibly sad -- from all perspectives.  The DOJ Press Release (here) tells of the arrest of "dozens of individuals" alleged to be "involved in a nationwide conspiracy" of cheating on college entrance exams and the admissions of students into top universities. The DOJ Press Release states:  "The conspiracy involved 1) bribing SAT and ACT exam administrators to allow a test taker, typically XXX, to secretly take college entrance exams in place of students or to correct the students’ answers after they had taken the exam; 2) bribing university athletic coaches and administrators—including coaches at Yale, Stanford, Georgetown, the University of Southern California, and the University of Texas—to facilitate the admission of students to elite universities under the guise of being recruited as athletes; and (3) using the façade of XXX’s charitable organization to conceal the nature and source of the bribes." (XXX's inserted here)

So it looks like there are several aspects to the allegations in Operation Varsity Blues 1) a college entrance exam cheating scheme; 2) a college recruitment scheme; and 3) a tax fraud conspiracy.

Some of the individuals (4) are charged by Information - a clear indication that they have reached an agreement with the government.  We see two cooperating witnesses mentioned in the documents.  The crimes alleged in the Information include charges of racketeering conspiracy, money laundering conspiracy, conspiracy to defraud the US, mail and wire fraud and obstruction of justice. Twelve others face indictment on a charge of  racketeering conspiracy.  The remaining individuals have criminal complaints against them of either conspiracy to commit mail fraud and honest services mail fraud or conspiracy to commit mail and wire fraud. The affidavit for one of the criminal complaints is over 200 pages long (see here).  There are also forfeiture allegations for some of the accused individuals. It will be interesting to see how many of the criminal complaints turn into Informations (requires waivers by the defense) as opposed to Indictments in the next for weeks.

Some thoughts -

  1. The prosecutorial power of using conspiracy and picking one's venue is emphasized here as the cases are being brought in the District of Massachusetts, although the majority of those accused of criminal activity are not from that jurisdiction. The ACT is headquartered in Iowa City and the Educational Testing Service for the SAT is in New York and New Jersey.  
  2. Likewise the prosecutorial power of granting cooperation status appears likely as some of the cases have references to CW-1 and CW-2. Prosecutors get to decide who gets the cooperation status and who gets the cooperator's testimony against them.
  3. The alleged fraud appears to be massive, and one has to wonder how this could have occurred- but compromised college related entrance exams are not something new. Just today the Central District of California filed a 26-count Indictment with charges of conspiracy of false passport, and aggravated identity theft, against defendants for allegedly "using false passports" to take TOEFL (English proficiency) exams for others. (see here).  It may be tougher to detect some issues of fraud outside the United States, but internally this should not be happening. Will the verification processes used with college entrance exams be re-evaluated?  Or were they the ones who detected fraud?
  4. As an educator, I am wondering how the students fared in college.  Were the alleged improper scores an accurate prediction of their college abilities? Could the value of these tests become an issue should someone go to trial?
  5. How many students were improperly admitted to a college, taking a seat of a student who might have had this opportunity?  And if the admitted students were not aware of what their parents had done, one can only imagine the hurt they are feeling right now. So you have issues related to both the admitted students and those who may have been borderline but denied at these institutions.
  6. Likewise, the parents who are accused of this activity were attempting to assist their children, and it is likely that the damage caused is even greater right now. As is so often the case, especially in white collar cases, the collateral consequences can be significant.
  7. And should the collateral consequences to the families who may have committed these acts be considered if determining the plea offers and later sentences that might occur here.
  8. Many of those accused are probably trying to decide how best to handle these charges - plead not guilty and go to trial, or reach a quick agreement with the government. With tapes and other supporting evidence the decisions will likely be examined against possible cross-examination against cooperating witnesses who were involved in multiple cases.  How much sympathy will a parent trying to assist their children receive, and will it surpass criticism against privilege. And there are also legal questions to examine here - is this the intended use of mail and wire fraud, is conspiracy too broad a crime here, and was this a "wheel-and-spoke' conspiracy?   But what is the risk of making such challenges?
  9. The colleges and universities also need to reflect on the allegations here. What kind of compliance programs did they have in place to root out such conduct from individuals involved in sports activities on campus, and what now needs to be done to make certain that this doesn't occur in the future. Perhaps there is nothing they can do, but if the allegations prove true, it should be examined.

There will be much to learn from what happened today.  It was a sad day for many people.

(esp)

March 12, 2019 in Fraud, Money Laundering, Prosecutions, Prosecutors, RICO | Permalink | Comments (0)

Wednesday, February 20, 2019

Barr Issues Statement on President Trump's Intent to Nominate New DAG

Monday, December 31, 2018

2018 White Collar Crime Awards

Each year this blog has honored individuals and organizations for their work in the white collar crime arena by bestowing "The Collar" on those who deserve praise, scorn, acknowledgment, blessing, curse, or whatever else might be appropriate. With the appropriate fanfare, and without further ado, The Collars for 2018:

The Collar for Plumber Unemployment – The Mueller Investigation, which has sprung no leaks.

The Collar for the Most Likely to Inadvertently Pull the Execution Switch on His Client – Rudy Giuliani.

The Collar for the Most Likely to Cause President Trump to have a Heart Attack – Tied between Michael Cohen and Paul Manafort.

The Collar for the Most Likely Agency to be Shut Down – No not the EPA or Department of Education, rather the IRS so that President Trump’s tax returns can’t be revealed.

The Collar for the Most Likely to Get a Second Tattoo on his back – Roger Stone (underneath his Nixon tattoo?).

The Collar for Most Likely to Try Not to Follow in his Father’s Footsteps – Jared Kushner.

The Collar for the Best Insurance Protection if in Prison – To Donald Trump, Jared Kushner, and others for passing a criminal justice reform act that will assist some serving time.

The Collar for Taking a Gamble – To all those pushing ahead with cases with dual sovereignty issues, prior to the Supreme Court’s ruling.

The Collar for the Longest Special Counsel Investigation – Clinton/Whitewater (see https://www.businessinsider.com/how-long-special-prosecutor-mueller-trump-2017-6)

The Collar for the Least Likely to Look Someone in the Eye and Say “You’re Fired” – Donald Trump.

The Collar for Most Likely to Win the Tom Petty “I Won’t Back Down Award” – Jeff Sessions for not firing Mueller.

The Collar for Least Likely to Teach Professional Responsibility at a Law School – Acting US Attorney Matthew Whitaker.

The Collar for the Joe Friday Award for Catching the Most Fish in his Net – Special Counsel Robert Mueller.

The Collar for the Least Likely to Discuss Politics in Bed – Kellyann Conway and George Conway.

The Collar for the Timex Watch “Takes a Licking and Keeps on Ticking” – Jeff Sessions.

The Collar for the Next James Patterson Mystery – The undisclosed company with a subpoena problem.

The Collar for the Least Likely to Play Poker with Mueller – William Barr and Matt Whitaker.

The Collar for Best “Stand Your Ground Defense” – Second Year in a Row, to Rod Rosenstein who continues to stand firmly on Mueller’s appointment.

The Collar for Clotheslines –Second Year in a Row, to Donald Trump for hanging so many of his subordinates out to dry.

The Collar for Directional Impairment – Second Year in a Row, to Donald Trump for demonstrating that loyalty is a one-way street.

The Collar for Best Game of Hide and Seek – To Donald Trump for continuing to refuse to disclose his tax returns (third year in a row).

The Collar for the Best Parent – Retired years ago and renamed the Bill Olis Best Parent Award – not awarded again this year since no one comes even close to Bill Olis, may he rest in peace.

(esp)

December 31, 2018 in About This Blog | Permalink | Comments (0)

Friday, December 7, 2018

Call for Presentations - White Collar Crime Symposium

The Belmont Criminal Law Journal at Belmont University College of Law in Nashville, TN, will hold a symposium in early 2019 regarding “White Collar Crime in the 21st Century: When Corporations and Individuals Collide.”  This year’s symposium will consider, among other things, the tensions that can develop between the interests of a corporation and the interests of an individual during a white collar criminal investigation and how these conflicts impact the representation of each party.

The symposium will occur at Belmont University College of Law on Friday, February 1, 2019, and include three academic addresses and two practitioner panels.  Professor Ellen S. Podgor, the Gary R. Trombley Family White-Collar Crime Research Professor of Law at Stetson University College of Law and editor of this blog, will deliver the keynote academic address at this year’s event.  The Belmont Criminal Law Journal is seeking two additional academics to give 30-minute presentations on topics related to this year’s theme.  Belmont University College of Law will cover travel and lodging expenses.  Further, all academic addresses presented during the symposium will be transcribed for publication in the Belmont Criminal Law Journal, which we anticipate being published in May of 2019.  Please note that the Belmont Criminal Law Journal has a policy of allowing all presenters to make edits to the transcript prior to publication to bring the text in-line with what the presenter intended to say.

Our goal is to once again bring together academics, legal practitioners, government officials, and non-profit leaders to explore a cutting-edge issue in the field of criminal law.  I hope you will consider joining us in Nashville for this interesting discussion.  Those interested in submitting a proposed topic to present at the symposium should submit a draft title and brief one page summary of the proposed topic to Lexie Ward (Editor-in-Chief of the Criminal Law Journal) at lexie.ward@pop.belmont.edu by Monday, December 17, 2018.  Decisions regarding the submitted topics will be made by Friday, December 28, 2018. 

(LED)

December 7, 2018 in Conferences | Permalink | Comments (0)

Thursday, December 6, 2018

More Clues From Special Counsel Mueller

The latest filing by Special Prosecutor Mueller is very telling as to the status of the investigation.  Michael Flynn pleaded guilty on Dec. 1, 2017, to making false statements to FBI agents, in violation of 18 U.S.C. 1001.  In anticipation of sentencing on December 18th, the government filed its Memorandum in Aid of Sentencing, along with a heavily redacted Addendum. Some thoughts:

1.  The fact that Flynn plead to a Section 1001 violation hurts Mueller's future cases if they decide to use him to testify against others in those cases.  Pleading to a section 1001 charge is admitting that the individual gave a false, material statement, knowingly and willfully, within the executive, legislative, or judicial branch of the government.  The opening cross-examination questions for such a witness might be - 1) You are a convicted felon? 2) And you were convicted for a crime of lying? 3) And you lied to the FBI? 

2. But three things are noteworthy here - 1) the charge is false statements and not perjury - if it had been perjury then the cross-examination would go on about lying under oath and be dragged out for many more questions than the three previous ones; 2) prosecutors do not get to choose their witnesses and if they can provide an explanation for the lie (e.g. pressure or duress) it stings less; and 3) if you can back up the individual's testimony with other evidence then the false statement charge is less problematic.  It seems likely here that there are documents, emails, or other evidence to support whatever Flynn may be saying.

3. Using a "shortcut offense" like section 1001 is typically not good since it takes away from the actual wrongdoing and society never sees the underlying conduct. Deterrence is best achieved when the actual criminality is disclosed and punished. (see White Collar Shortcuts here).  But that is not the case here. Here Flynn is likely a source providing information for other investigations that can have charges beyond shortcut offenses.  For one, Mueller did not use a shortcut in his charging of cybercrimes against Russians (see here). So using false statements here is again justified.

4. 19 interviews - WOW.  That is significant.  One doesn't meet 19 times and get nothing. 

5. This is an ongoing investigation.  Investigations in white collar cases take time.  This investigation is certainly not finished -- one need only look at the number of redactions in the Addendum to reach this conclusion.

6. That the substantial assistance provided extends beyond the special counsel.  Part A says "XXX Criminal Investigation" and Part B says "The Special Counsel's Office's Investigation" and then appears to have three separate subsections - with one subsection completely redacted.  So one could conclude that the special counsel has 3 investigations that Flynn has been useful for, and that someone else perhaps is using him.

7. Mueller has yet again maintained secrecy, and there have been no leaks.  This is impressive.  It is also impressive that Mueller is speaking only through court papers and not providing any additional information.

8.  It may be frustrating to many that more information has not been released, but in time it is likely we will know more. We need to be patient and trust someone who is clearly upholding the highest of ethical values.

(esp) 

December 6, 2018 in Investigations, News, Prosecutions, Prosecutors | Permalink | Comments (0)

Thursday, November 29, 2018

Deutsche Bank Raid

News media are reporting that Deutsche Bank has been raided by German prosecutors. (see BBC here), (see NYTimes here).  A money laundering investigation is what is being reported.  Deutsche Bank stated that "[i] is true that the police are currently conducting an investigation at a number of our offices in Germany.  The investigation has to do with the Panama Papers case. More details will be communicated as soon as these become known.  We are cooperating fully with the authorities." (Tweet @ Deutsche Bank). They also have stated that "[a]s far as we are concerned, we have already provided the authorities with all the relevant information regarding Panama Papers." So if Deutsche Bank provided everything, why is there a raid?

(esp)

November 29, 2018 in International, Investigations | Permalink | Comments (0)

Cohen Pleads to a Sec. 1001 Charge- The Moscow Project

Special Counsel Mueller filed an Information (here) and Plea Agreement (here).   The most telling is paragraph number 7 of the Information  -

"Cohen's representations about the Moscow Project he made to SSCI (US Senate Select Committee on Intelligence) and HPSCI (House of Representatives Permanent Select Committee on Intelligence) were false and misleading.  Cohen made the false statements to (1) minimize links between the Moscow Project and Individual 1 and (2) give the false impression that the Moscow Project ended before 'the IOWA caucus and ... the very first primary,' in hopes of limiting the ongoing Russia investigations."  

Other interesting points - "Cohen discussed the status and progress of the Moscow Project with Individual 1 on more than the three occasions Cohen claimed to the committee, and he briefed family members of Individual 1 within the Company about the project."

And note page 6 - "Cohen responded, 'My trip before Cleveland. [Individual 1] once he becomes the nominee after the convention.""

So were there ties to Russia - clearly yes. 

Thank you Special Counsel Mueller for continuing this important investigation.  And for those who claim this is going on for too long -  just remember that white collar cases typically take a long time.

(esp) 

November 29, 2018 | Permalink | Comments (0)

Thursday, October 25, 2018

ABA Criminal Justice Section White Collar Town Hall

I hope you will join me and the ABA Criminal Justice Section for a spectacular White Collar Crime Town Hall on Thursday, November 1 from 3:30pm-5:00pm at the Mayflower Hotel in Washington, D.C.  Due to the generosity of our sponsors, the program is free and will be followed by our Criminal Justice Section welcome reception at the hotel. You may register for the CLE on-site.

Below is a description of the White Collar Town Hall and the exemplary panelists who will discuss The Role of the Media in White Collar Criminal Investigations and the Mueller Probe.

The panelists will first examine the role of the media in these investigations generally, including the obligations/interests of the media in protecting the integrity of investigations, the tools available to prosecutors and defense attorneys to address media coverage during the investigative stage, and the tools and standards for fair trial protections due to pretrial media exposure. Then, the panel will delve into the Mueller probe specifically, addressing the media’s sources of information about the Mueller investigation, what the leaked information reveals about the investigation, the media’s impact on the Manafort trial, the Congressional role in providing investigative information to the public, and implications on other ongoing aspects of the investigation.

Moderator: Henry Asbill, BuckleySandler LLP, Washington, DC

Rebecca Ballhaus, Reporter, Wall Street Journal, DC Bureau, Washington, DC

Kevin Hall, Pulitzer Prize Winner, Chief Economics Correspondent and Sr. Investigative Reporter, McClatchy Newspapers

Michael Isikoff, Chief Investigative Correspondent, Yahoo News

Prof. Jessica Roth, Cardozo Law School, Reporter, ABA CJS Standards on Fair Trial and Public Discourse

In addition to our white collar program on Thursday evening, there will also be complimentary CLE programs at the Mayflower Hotel all day Friday.  Our Friday program will begin with a keynote address on plea bargaining by Judge Jed Rakoff.  This will be followed by a host of fascinating panel discussions focusing on the work of the Section and its committees.  These will include:

A Fresh Look at Plea Bargaining in our Criminal Justice System

Prosecutors as Agents of Change

GITMO Twelve Years Later

Re-Entry and Innovation

What Civilians Can Learn from the Military Experience with Sexual Assault & Harassment

Enhancing Justice: Reducing Bias – Strategies for Change in the Criminal Justice System

On Friday, we will also hold our prestigious Criminal Justice Section Awards Luncheon and Address, which occurs at 12:30pm.  The Address will be given by Hilarie Bass, immediate past President of the American Bar Association.  Ms. Bass will discuss her work creating a new organization to address issues critical to women and minorities.  These important remarks are incredibly timely given the recent launch by the Criminal Justice Section of the new Women in Criminal Justice Task Force. 

Our Friday programming will be followed by our Criminal Justice Section fall reception. 

The complete agenda is available on the Fall Institute website

All CLE programming, including the White Collar Town Hall, is complimentary and participants may register on-site.  Those wishing to attend the Awards Luncheon and Address should register online.  The cost of the luncheon is $50.  For those registering online, please note that website issues have resulted in improper pricing information being listed.  The correct price should populate when you move to the checkout.  If you have any difficulty registering online, please contact Regina.Ashmon@americanbar.org   

(LED)

 

October 25, 2018 in Conferences, Current Affairs, Investigations, Media | Permalink | Comments (0)

Wednesday, September 26, 2018

DOJ Announces Updated USAM - Now Called the Justice Manual

Earlier today, the Department of Justice announced the issuance of an updated United States Attorneys' Manual.  The new manual, now called the Justice Manual, represents the "first comprehensive review and overhaul of the Manual in more than 20 years."  From the DOJ press release:

“This was truly a Department-wide effort, involving hundreds of employees collaborating from many different Department components,” said Deputy Attorney General Rod Rosenstein. “To mark this significant undertaking, and to emphasize that the Manual applies beyond the United States Attorneys’ Offices, we have renamed it the Justice Manual. Though the name has changed, the Manual will continue as a valuable means of improving efficiency, promoting consistency, and ensuring that applicable Department policies remain readily available to all employees as they carry out the Department’s vital mission.”

By 2017, many provisions of the Manual no longer reflected current law and Department practice. This diminished the Manual’s effectiveness as an internal Department resource, and reduced its value as a source of transparency and accountability for the public. To bring the Manual up to date, employees from around the country, primarily career attorneys, undertook a yearlong, top-to-bottom review. The Department’s goals were to identify redundancies, clarify ambiguities, eliminate surplus language, and update the Manual to reflect current law and practice.

Some specific changes include expanding the Principles of Federal Prosecution to incorporate current charging and sentencing policies, and adding new policies on religious liberty litigation, third-party settlement payments, and disclosure of foreign influence operations.

The Justice Manual may be accessed here

(LED)

September 26, 2018 in Prosecutions, Prosecutors | Permalink | Comments (0)

Saturday, September 15, 2018

Manafort: The Fall of a Domino Can Trigger Others to Fall

As noted here, the Special Counsel's Office filed an information, which immediately indicated that either the accused waived a Grand Jury Indictment or an Agreement had been reached (which typically includes the waiving of the indictment).  In this case it was the latter, as seen in the entering of a plea agreement (see here) by Paul Manafort. The plea is to two counts of a sec. 371 conspiracy, with the first count having multiple objects of the conspiracy (money laundering, tax fraud, false statements, etc.) and the second count being limited to a conspiracy to obstruct justice under sec. 1512. Accompanying the plea we find the Statement of the Offense (here) and Exhibits (here). So here are some thoughts on the plea:

  1. The government and defense used specific objects of the conspiracy as opposed to just saying it is a conspiracy to the defraud the government, although on afterthought it does appear to be a conspiracy to defraud. It provides a roadmap to a vast array of alleged underlying criminal conduct.
  2. The Agreement makes clear that no additional charges will be brought against Manafort for his "disclosed participation in criminal activity including money laundering, false statements, personal and corporate tax and FBAR offenses, bank fraud, Foreign Agents Registration Act violations for his work in the Ukraine, and obstruction of justice."
  3. The Advisory Guidelines range is 210-262 months imprisonment, but each side left some room for argument here.  And sentencing in this DC case, as well as the prior Virginia case will be delayed pending Manafort's cooperation.  But of key importance is that the government will file a 5K1.1 if Manafort provides substantial assistance, which could bring down his sentence.
  4. Cooperation is a component of the agreement, including providing testimony in court proceedings. But the essence of that cooperation is obviously omitted here.
  5. The Plea contains the typical trial, appellate, and post-appellate waivers often found in plea agreements. But, noteworthy, is that Manafort is waiving his right to counsel during his cooperation with the government.  This will save him attorney fees, but it also will mean that anything he says will be between him and the government.
  6. The forfeiture of both money and property is significant, and this plays well against any claims that this special counsel investigation was overly costly.  Special Counsel Mueller is doing a good job here at trying to get money to cover the costs of this investigation.

   And some thoughts on the Statement of the Offenses and Other Acts -

  1. It looks like the theme is how to disseminate misinformation.   One has to wonder if this is a preview to the 2016 U.S. presidential campaign.
  2. Several individuals and companies are named only by letter in the Statement (A, B, D1, and D2) - did they previously provide information to the Special Counsel or have we now moved closer to these dominos.  And if there are future cases here, will the Special Counsel's office handle these or refer them to other US Attorneys. I hope someone is watching the statute of limitations here.
  3.  #35 is intriguing - Manafort initially told the DOJ "that he [did] not [have] relevant documents."  But the statement here is that Manafort did in fact have "numerous incriminating documents in his possession, ..."  The implication is clear that the government now has these documents. So, what other documents did Manafort have?  

General Thoughts -

  1. Mueller's team plays a tough game as so many have folded to protect their family, or for the sake of their family.
  2. The Plea, the Statement and the Accompanying Exhibits make one wonder how pervasive phony media campaigns, such as this, have occurred.
  3. What is really important is not what is here in these documents, but rather what is not here. Mueller has been careful not to show his hand as he climbs the ladder of indictments and pleas that have individuals charged and convicted of federal crimes. And he certainly has done an impressive job in accumulating these. And from each plea he obtains additional evidence that implicates the next person.
  4. So who will be the next domino?

See also, Jack Townsend, Federal Tax Crimes - here.

(esp)   

September 15, 2018 | Permalink | Comments (0)