White Collar Crime Prof Blog

What Others Are Saying About the Stein (KPMG Related) Decision

The decision is here.

Commentary can be found here.

What others are saying:

Anthony Lin, New York Law Journal, 2nd Circuit Affirms Dismissal of Criminal Charges Against KPMG Staffers

Dan Slater, WSJ Blog, 2nd Circuit Upholds Judge Kaplan’s Dismissal of KPMG Indictments

New York Times (AP), Court Upholds Dismissal of Tax Case Against 13

Doug Berman, Sentencing Law & Policy, here

Christine Hurt, Conglomerate, here

Martha Graybow, Reuters, Court upholds dismissal of charges in KPMG case

Richard Janus, CATO, Deputizing Company Counsel as Agents of the Federal Government

Second Circuit Blog, Gimme Shelter

(esp)

In the News & Blogosphere

Martha Neil, ABA Law Journal News Now, Suspended Texas PI Lawyer Gets 35 Years in Client Theft Case

DOJ Press Release, Five Individuals Arrested, Two Contracting Companies Charged in Bribery Conspiracy Related to Department of Defense Contracts in Afghanistan

DOJ Press Release, Convicted Medicare Fraud Defendant Pleads Guilty to Laundering More Than $3 Million in Fraudulent Proceeds

Joe, Swickard, Detroit Free Press, Even plea could damage ability to practice law (discussing case involving the Mayor of Detroit)

David Josar, Detroit News, Mayor Rejects Plea Deal: Reported proposal called for Kilpatrick to plead to one felony, serve four to six months in jail

Ricardo Carvajal & J.P. Ellison, FDA Law Blog, “Male Enhancement” Dietary Supplement Distributor Gets Sentencing Enhancement -- 25 Years for Fraud

(esp)

Upcoming Conferences

The American Bar Association/American Bankers Association - Money Laundering Enforcement Conference - October 19-21, 2008 D. C. here

ABA - National Institute on Criminal Enforcement of Intellectual Property Rights - Septebmer 26, 2008, San Francisco here

ABA - The Foreign Corrupt Practices Act: Current SEC and DOJ Enforcement Initiatives - September 11, 2008 - Teleconference and Live Audio Webcast here

ABA - National Institute on Securities Fraud - October 2-3, 2008, Arlington, Virginia here

Pellicano and Christensen Convicted

A press release of the U.S. Attorney's Office for the Central District of California reports that "[f]ormer private investigator Anthony Pellicano and prominent entertainment attorney Terry Christensen were found guilty today of federal conspiracy and wiretapping charges in connection with their illegal wiretapping of the ex-wife of Christensen’s longtime client, billionaire Kirk Kerkorian, during a 2002 child support dispute."  The jury trial lasted 6 weeks.  Pellicano had previously been convicted of other charges, including RICO, in May.  The government had tapes in this case, something that can be very difficult for the defense to overcome.   

Dan Slater, Wall Street Jrl Blog, Terry Christensen, Pellicano Convicted on Wiretapping Charges

Above the Law - Lawyer of the Day - Terry Christensen

LATimes, Private eye Anthony Pellicano, attorney Christensen convicted of wiretap plot

(esp)

Is DOJ Ready to Make the US Attorney's Manual Law?

According to an article, White-Collar Cringe, by Karen Donovan at Conde Nast Portfolio.com, in speaking about the new DOJ guidelines on the prosecution of corporations (here) "Deputy Attorney General Mark R. Filip said the new rules, which will be placed into the United States Attorneys' manual, rather than just a memo, have the force of 'binding law' and 'binding fact.'" 

One has to wonder if Deputy AG Filip's words are an attempt to keep Congress from acting on the Attorney-Client Privilege Protection Act.  More importantly can these words be reconciled with the opening passages of the U.S. Attorney's Manual which states - 

1-1.100

Purpose 

The United States Attorneys' Manual is a looseleaf text designed as a quick and ready reference for United States Attorneys, Assistant United States Attorneys, and Department attorneys responsible for the prosecution of violations of federal law. It contains general policies and some procedures relevant to the work of the United States Attorneys' offices and to their relations with the legal divisions, investigative agencies, and other components within the Department of Justice. It is also available on line at http://www.usdoj.gov/usao/eousa/foia_reading_room/usam/

The Manual provides only internal Department of Justice guidance. It is not intended to, does not, and may not be relied upon to create any rights, substantive or procedural, enforceable at law by any party in any matter civil or criminal. Nor are any limitations hereby placed on otherwise lawful litigative prerogatives of the Department of Justice.

(esp)

DOJ Offers New Guidelines on Attorney-Client Privilege Issue

On the same day as the Second Circuit issued the Stein (KPMG related) decision (see here), the DOJ issued new guidelines pertaining to principles of federal prosecution of business organizations.  The government uses new language with regard to the attorney-client privilege.  The guidelines provide that "[e]ligibility for cooperation credit is not predicated upon the waiver of attorney-client privilege or work product protection." Although it is wonderful to see the DOJ finally issuing a statement that will provide guidance to new lawyers in their office to reinforce the importance of the attorney-client privilege, this is not enough.

Guidelines are nothing more than guidelines that serve as internal guidance in the office.  Guidelines are not always adhered to, and non-compliance is often left to the department to enforce. (see here) What this new language by DOJ does show is that they support the importance of making sure that the attorney-client privilege remains strong.  Legislation, as is proposed, will make this happen.

The Guidelines - Download DOJPrinciples1.pdf

DOJ Press Release - here

Statement by NACDL here.

(esp)(w/ a hat tip to Jack King)

   

Commentary on Stein (KPMG)

Chief Judge Jacobs of the Second Circuit authored the 68 page opinion that affirms Judge Kaplan's prior ruling (see here and here) in the KPMG related matter.  The lower court had dismissed the defendants' indictments.  In affirming the lower court opinion, the Second Circuit states -

"We hold that KPMG’s adoption and enforcement of a policy under which it conditioned, capped and ultimately ceased advancing legal fees to defendants followed as a direct consequence of the government’s overwhelming influence, and that KPMG’s conduct therefore amounted to state action. We further hold that the government thus unjustifiably interfered with defendants’ relationship with counsel and their ability to mount a defense, in violation of the Sixth Amendment, and that the government did not cure the violation. Because no other remedy will return defendants to the status quo ante, we affirm the dismissal of the indictment as to all thirteen defendants." (footnotes omitted)

The Second Circuit stated that the Sixth Amendment right to counsel held that the amendment "protects against unjustified governmental interference with the right to defend oneself using whatever assets one has or might reasonably and lawfully obtain."  The court noted that-

"Defendants were indicted based on a fairly novel theory of criminal liability; they faced substantial penalties; the relevant facts are scattered throughout over 22 million documents regarding the doings of scores of people,; the subject matter is "extremely complex,"; technical expertise is needed to figure out and explain what happened; and trial was expected to last between six and eight months, As Judge Kaplan found, these defendants "have been forced to limit their defenses . . . for economic reasons and . . . they would not have been so constrained if KPMG paid their expenses." We therefore hold that these defendants were also deprived of their right to counsel under the Sixth Amendment. (citations and footnote omitted)

The best line from the case - "But if it is in the government’s interest that every defendant receive the best possible representation, it cannot also be in the government’s interest to leave defendants naked to their enemies."

The government did not lose this case, as some might say.  In fact, they won.  When justice is done for all, as is reflected in this opinion -- the prosecution, defense, and society wins. 

(esp)

Second Circuit Affirms in Stein (KPMG) Case

Opinion - Download 07-3042-cr_opn.pdf

Commentary to follow

(esp)

Abramoff - The Reward for Cooperation

In 2006, this blog gave Jack Abramoff The Collar for the Best Cooperating Witness, after all Abramoff caused many politicos to fall as a result of his inside knowledge and use of that knowledge in providing cooperation to the government. In 2007 this blog awarded Abramoff  The Collar for the Best Skating Not on an Ice Rink (along with Andy Fastow). And although his cooperation has not always resulted in convictions for the government, (see here) it is clear that he has spent many an hour working with DOJ to unravel alleged improper conduct by government officials.

So it is no surprise to see an article in the Washington Post (AP) by Matt Apuzzo titled, Prosecutors Seek to Slash Abramoff Prison Term.

Cooperation provides benefits to the cooperator.  But it also continues to raise serious questions such as:

• What about the individual who is the last one approached, and who has no one left to provide evidence against?  Is it proper to deprive this individual of the enormous benefits associated with cooperation?
• And what about the individual who avails him or herself of the constitutional right to a jury trial - is there a penalty for proceeding to trial if the person is convicted?

(esp)

Government's Brief in Ionia Management Case

The appellant's brief in the case of United States v. Ionia Management S.A.,and an amicus brief from a host of different organizations, were previously noted on the blog here.  These briefs raise the issue of the viability of corporate criminal liability and whether corporations will be held liable for acts by employees.

To add to the collection of briefs from this case is now the DOJ appellee's brief, that in response to the corporate criminality argument notes that "[i]t is for the Supreme Court, and not the lower courts, to overrule their decisions or extend them to new contexts."

Government's Brief - Download ionia_managementgovt_appeal_brief.pdf

(esp)

In the News

Chad Bray, Wall Street Journal, More Guilty Pleas Vacated In Probe of NYSE Trading

New York Attorney General Cuomo, Press Release, Attorney General Cuomo Announces Settlements with Merrill Lynch, Goldman Sachs, and Deutsche Bank to Recover Billions for Investors in Auction Rate Securities

DOJ Press Release, Former New York Power Authority Employee Pleads Guilty to Fraud and Tax Charges

Amanda Bronstad, National L J., Katrina Lawyer Pleads Not Guilty to Campaign Finance Charges

(esp)

Fixing DOJ

Former Assistant Attorney General James K. Robinson authored an article in the Harvard Law and Policy Review titled, "Restoring Public Confidence in the Fairness of the Department of Justice's Criminal Justice Function." Now a business partner at the law firm of Cadwalader, Wickersham & Taft LLP, Washington, D.C., Robinson provides sage advice to the next DOJ administration stating:

"It is my hope that the next Administration, regardless of political affiliation, will learn from the hard lessons of recent years and make restoring the credibility of the Department a high priority. Under the right leadership, and with what I know from experience will be the full support of the Department’s dedicated career professionals, the Department can once again fulfill its core mission of ensuring the fair and impartial administration of justice for all Americans."

The article - Download Robinson_HLPR.pdf

(esp) (w/ a hat tip to Peter Henning)

In the News

Adam Goldman, AP, USA Today, Unique Investigative Agency Tackles NYC Corruption

DOJ Press Release, Three Defendants Plead Guilty for Online Commercial Distribution of Pirated Software

(esp)

Analysis of the 2007-08 Supreme Court Term

I previously posted (here) Professor Rory Little's summary of the recent criminal decisions of the past term of the Supreme Court.   

Here is another piece by BNA's, Hugh B. Kaplan, titled, "Big Decisions of 2007-08 Term Addressed Sentencing, Death Penalty, Money Laundering" that provides description and commentary of the term's decisions. BNA has been kind enough to allow me to provide this wonderful piece to you on the blog.  It's the kind of article that everyone practicing or teaching in the criminal area just loves to have available.

Reproduced with permission from Criminal Law Reporter, Vol. 83, No. 20, pp. 738-743. Copyright 2008 by The Bureau of National Affairs, Inc. (800-372-1033) <http://www.bna.com>.

here- Download 07-08SCT.pdf

(esp)

Keep Your SOX On

The Sox First Blog discusses, the D.C. Circuit's decision upholding Sarbanes Oxley here.  The Court held:

"We hold, first, that the Act does not encroach upon the Appointment power because, in view of the Commission’s comprehensive control of the Board, Board members are subject to direction and supervision of the Commission and thus are inferior officers not required to be appointed by the President. Second, we hold that the for-cause limitations on the Commission’s power to remove Board members and the President’s power to remove Commissioners do not strip the President of sufficient power to influence the Board and thus do not contravene separation of powers, as that principle embraces independent agencies like the Commission and their exercise of broad authority over their subordinates. Accordingly, we affirm the grant of summary judgment to the Board and the United States."

The decision is here.

(esp)

In the News

Scott Horton, Harper's Magazine, More Prosecutorial Mischief in Mississippi

Joshua R. Hochberg, Legal Times, Who Guards the Guardian? The Justice Department Can Monitor Corporate Monitors Just Fine (subscription required)

MaryClaire Dale, Washington Post (AP), Fired Philly TV anchor admits e-mail hacking

Thomas E. Dwyer Jr., ABA White Collar Crime Newsletter, Informed by U.S. Experience, U.K. Embarks on Marjor Anti-Fraud Law Initiatives

(esp)

Assuring Clean Teeth

A DOJ Press Release reports that "[t]wo individuals and two corporations pleaded guilty . . . to charges of trafficking in counterfeit . . . toothpaste."  They admitted  "to having trafficked in a combined total of 518,028 tubes of counterfeit . . . toothpaste with an estimated retail value of $730,419."   What product will someone think of next?

(esp)

DC Circuit - Plame Decision - Rove, Cheney, & Others Win Another Round Two in Plame Matter

No charges were filed against any leakers in the Valerie Plame matter, and the only remaining sign of the case was the civil action brought by Plame against several administration officials. Valerie Plame lost round one (see here) and now also round two.

The D.C. Circuit court ruled in Valerie Plame Wilson & Joseph C. Wilson IV v. I. Lewis Libby et. al., affirming the dismissal of this matter.  Chief Judge Sentelle, writing the decision, did reject the vice-president's claim of a lack of jurisdiction under the political question doctrine, a claim of the identity of a covert agent implicating foreign policy and national security.  But although he reached the merits of the case, he affirmed the lower court finding on the Bivens claim and held that the appellants had "failed to exhaust their administrative remedies as required to pursue a tort claim."  Circuit Court Rogers concurred in part and dissented in part.

(esp) (w/ a hat tip to Whitney Curtis)

Back to School

The blog has been fairly quiet this summer, but today is the opening day of school - so it's back to more detailed blogging and new blog developments.  I'd like to thank those of you who stayed with the blog this summer, and to the newcomers - thanks for clicking this way.

Law profs - if you have an interest in doing an occasional guest blog - let me know.

(esp)

Biden and White Collar Crime

The announcement of Senator Biden as Senator Obama's running mate for the Presidency will clearly cause some to start investigating every nuance of his record.  There will likely be the references to his receipt of funds from a Mississippi lawyer (see WSJ Blog here) and hopefully these references will also note his return of these funds to Dickie Scruggs. (see folo here; Paul Quinn's Weblog here; LA Times  Blog here)

But it is also important to note that Senator Biden has a long history of fighting corporate criminality and trying to reduce white collar crime. When it comes to eradicating white collar crime, he is clearly a person who made this a top priority. His "US Senator for Delaware" website says:

Senator Biden has also been a leader in cracking down on white collar crime and corporate scandals. He authored legislation requiring corporate CEOs to certify the accuracy of their companies' financial statements, or face stiff criminal penalties. He also led the fight to close the "penalty gap" between white collar and violent crimes, requiring corporate crooks to do more time when they defraud the public.

Thinking back over the last few years, the one hearing that stands out the most to me, was a hearing he chaired back in 2002 titled, "Penalties For White Collar Offenses: Are We Really Getting Tough On Crime?" In this hearing we heard from individuals who had been victims of white collar offenses. It was followed by experts commenting on how best to tackle the problems. Senator Biden actively participated in leading this discussion and spoke about white collar crime problems and how best to resolve them.

(esp)

Addendum - Dan Slater, WSJ Blog, The Mess in Mississippi, Redux: The Joe Biden Connection?