White Collar Crime Prof Blog

In the News & Around the Blogosphere

Neil Gough, NYTimes, Billionaire Brothers Arrested in Hong Kong Corruption Inquiry

Mike Scarcella, BLT Blog, For Three Businessmen Who Pleaded Guilty In A Foreign Bribery Case, A Reprieve

Michael Braga, Herald Tribune, Flipping trial witness counters prosecution's case (w/ a hat tip to Linda Friedman Ramirez)

Benjamin Weiser, NYTimes, Ex-Councilwoman and Admirer Are Found Guilty in Yonkers Case

AP, SanLuisObispo.com, Ex-baseball pitcher agrees to plea deal

Jonathan Stempel, Reuters, Ex-Goldman director Gupta loses wiretap ruling

DOJ Press Release, Third Medical Device Company Resolves Foreign Corrupt Practices Act Investigation Indiana-Based Biomet Inc. Agrees to Pay $17.2 Million for Bribes in Latin America and China (w/ a hat tip Covington & Burling)

John R. Emshwiller & Gary Fields, WSJ, Prosecutors Are Rarely Punished Over Disclosure

Stuart P. Green, NYTimes - Opinion Pages, When Stealing Isn’t Stealing

Mike Scarcella, BLT Blog, Tab For The Ted Stevens Misconduct Report: $981,842

David Voreacos & Janelle Lawrence, Bloomberg, Health Care Prosecution Losses Mar U.S. Marketing Probe

P.J. Huffstutter, Reuters, SK Foods founder pleads guilty in fraud case

(esp)

In the News & Around the Blogosphere

Ross Todd, Corproate Counsel, law.com, Good News and Bad for Gupta as Insider Trading Trial Nears

Weil News, Chief of the Securities & Commodities Fraud Task Force at the USAO-SDNY to Join Weil

John R. Emshwilller & Gary Fields, Wall St Jrl, Evidence Rules Put on Trial -Bill Would Set National Standard for What Prosecutors Must Share With Defense

DOJ Press Release, Mississippi Pharmaceutical Firm and CEO to Pay $2.8 Million to Resolve Allegations of Illegal Marketing of Unapproved Drugs

DOJ Press Release, Lockheed Martin Corporation Reaches $15.85 Million Settlement with U.S. to Resolve False Claims Act Allegations

DOJ Press Release, Former Arizona State Representative Pleads Guilty to Wire Fraud and Tax Evasion Related to the Misuse of More Than $140,000 in Charity Funds

DOJ Press Release, Bizjet International Sales and Support Inc., Resolves Foreign Corrupt Practices Act Investigation and Agrees to Pay $11.8 Million Criminal Penalty

(esp)

Schuelke-Shields Report: We Hold These Truths To Be Self-Evident

1. Compost flows downhill.

2. I'd rather be a hammer than a nail. I'd rather be a supervisor than a line assistant.

3. If I am an experienced prosecutor and supervisor and agree to take over and lead the prosecution team a few days prior to the Indictment, I need to lead that team and take responsibility for my actions and the team's actions.

4. If I am prosecuting a white collar case involving hundreds of FBI 302s and I don't hand them over to the defense before trial, I am virtually guaranteeing Brady error.

5. If I am prosecuting a white collar case involving hundreds of FBI 302s and I don't hand them over to the defense before trial AND I am going up against a United States Senator who is represented by a highly skilled law firm known for its tenacious tactics, I am a fool. I deserve what I get. But the people who work for me don't necessarily deserve what they get.

6. If I prosecute a sitting U.S. Senator in July, knowing that he is up for re-election in November and assuming that he will seek a speedy trial, I better have my discovery, especially my Brady discovery, ready to hand over on the day of the Indictment.

7. If my case has hundreds of 302s, it is likely that some of the agent's interview notes will contain material inconsistent with, or not referenced in, the 302s

8. If four prosecutors and one case agent interview the key prosecution witness three months before Indictment, and the interview goes poorly, AND no 302 is generated, people aren't going to think well of them. This is especially true if the FBI Special Agent later admits that no 302 was written because, "the debriefing...did not go well," and the prosecutors completely forget about the interview and the Brady information gleaned during it.

9. If I discover Brady information, it does not magically lose its character as Brady material because I decide to investigate further and develop contrary information.

(wisenberg)

Additional Item Regarding the Schuelke Report on the Ted Stevens case

Here is a listing of the posts related to this report. One item not previously posted is Ken Wainstein's (counsel to Joseph Bottini) letter to Attorney General Eric Holder.  Here -Download 2012-03-15 Wainstein Letter to AG Holder

(esp)

Schuelke-Shields Report: Williams & Connolly Analysis

Here is the Williams & Connolly Analysis of the Schuelke-Shields Report. It is an excellent dissection, by Brendan Sullivan and Robert Cary, of the rampant prosecutorial misconduct permeating the Ted Stevens case.

(wisenberg)

NACDL White Collar Criminal Defense College at Stetson

The inaugural NACDL White Collar Criminal Defense College at Stetson opened tonight with a standing ovation for Terri MacCarthy, who spoke about cross-examination.

(esp)

Summary of Posts on Ted Stevens Dismissal, Schuelke-Shields Report, and Responses

Brady Reform Legislation

Schuelke-Shields Report: NACDL News Release

Schuelke-Shields Report: Statement from Catherine Stevens

Schuelke-Shields Report: Executive Summary

Schuelke-Shields: The Prosecutors Respond

The Schuelke-Shields Report

Some Further Thoughts On Judge Sullivan's Order

Brady is "Hot" - Order in Stevens

Alaska Discovery Problems - The Latest

Kott Decision Matches Kohring - Prosecutors Violated Brady

The Vic Kohring Catastrophe: Some Reflections Upon Rereading the Ninth Circuit's Opinion

Holder's Statement on the Stevens Case, Commentary, & More

DOJ Moves to Dismiss the Ted Stevens Case

Additional Item Regarding the Schuelke Report on the Ted Stevens case

(esp) (rev. 4-8-12)

Brady Reform Legislation

If one thing is clear from theSchuelke Report, legislation is needed for discovery reform. Senate Bill 2197 does exactly that.  Proposed by  Senator Lisa Mukowski (Alaska) today, along with Senators Inouye, Hutchinson, Begich and Akaka, the bill titled "Fairness in Disclosure of Evidence Act" aims - "[t]o require the attorney for the Government to disclose favorable information to the defendant in criminal prosecutions brought by the United States, and for other purposes." The Brady Supreme Court standard has been around approximately 50 years.  There also are professional responsibility rules that call for disclosure of Brady material.  But what really needs to happen to avoid another Ted Stevens case fiasco is to have this codified in federal law.   

One of the prosecutor responses to the Schuelke Report states - "Because PIN, and, in large part, the Criminal Division, inexplicably had no formal policies or procedures regarding most core investigative and prosecutorial functions ...."  Another takes issue with whether there was a Brady violation.  And several pointed fingers at others.

This bill needs to pass.

See Bill & Synopsis here on the NACDL website.

(esp)

Schuelke-Shields Report: NACDL News Release

NACDL has issued a press release detailing some of the findings in the report - see here

(esp)

Schuelke-Shields Report: Statement from Catherine Stevens

I am grateful Judge Emmet Sullivan has released Mr. Schuelke’s report. I am also deeply thankful, as was my husband, for the dedicated team at Williams & Connolly who have continued to pursue justice.

It will take me and the other members of my family a few days to review the report. I ask that you respect our privacy as we do so.

I can say that the Stevens family continues to be shocked by the depth and breadth of the government’s misconduct. Ted served our country as a pilot in World War II and as a United States Senator for over 40 years. A team of federal prosecutors denied him the Constitutional rights guaranteed to all our citizens. As a former federal and state prosecutor, I find it hard to understand the actions by those who have sworn to uphold our laws.

My husband, also a former federal prosecutor, very much wanted to read this report and the yet to be released report by the Office of Professional Responsibility. I am saddened that he is not able to do so.

(esp)

Schuelke-Shields Report: Executive Summary

For all of those who do not have time to read a 500-plus page report and the responses, here is the Schuelke-Shields Report Executive Summary.

(wisenberg)

Schuelke-Shields: The Prosecutors Respond

In the interest of fairness, here are the responses of the federal prosecutors mentioned in the Schuelke-Shields Report. Submission of Brenda K. Morris, Submission of Edward P. Sullivan, Submission of James A. Goeke, Submission of Joseph W. Bottini, Submission of William M. Welch III, Submission on behalf of Nicholas A. Marsh. 

Mr. Goeke also submitted his own separate appendix. Here it is. James A. Goeke Appendix.

(wisenberg)

The Schuelke-Shields Report

And here it is, the Schuelke-Shields Report--detailing the prosecutorial misconduct in the U.S.Department of Justice's Ted Stevens prosecution.

(wisenberg)

Another Deferred Prosecution - "NYCity Payroll Project Scandal" Company

See Benjamin Weiner & Colin Moynihan, NYTimes, Company in New York City Payroll Project Scandal to Pay $500 Million

(esp)

In the News & Around the Blogosphere

Kelly Kennedy, USA Today, Experts seek alternatives to excluding drug companies

Mike Scarcella, BLT Blog, AG Holder: Ted Stevens Report Has "Disturbing" Findings

AP Fox News, Ohio corruption verdict caps long-running case

Campbell Robertson, NYTimes, In Alabama, 2nd Corruption Trial Ends in Acquittals

DOJ Press Release, FORMER DEPARTMENT OF VETERANS AFFAIRS OFFICIAL SENTENCED TO
SERVE 60 MONTHS IN PRISON FOR CONSPIRACY AND WIRE FRAUD

DOJ Press Release on the Stanford Case, Allen Stanford Convicted in Houston for Orchestrating $7 Billion Investment Fraud Scheme

DOJ Press Release, Justice Department Recovers More Than $900 Million in Consumer Protection Cases in 2011

DOJ Press Release, Assistant Attorney General Lanny A. Breuer of the Criminal Division Speaks at the Dallas Health Care Fraud Enforcement Action Press Conference

DOJ Press Release, Attorney General Eric Holder Speaks at Columbia University Law School on Preventing and Combating Financial Fraud

American Greed, CNBC, Best Places to Go to Prison

(esp)

Dog Bites Man: AG Holder Testifies That Schuelke Report Contains Disturbing Findings

BLT has the story here. Holder was testifying on Capitol Hill. Senator Dianne Feinstein complained that Senator Stevens died "before he knew this was a faulty prosecution. That to me elevates this to a new height." In fact, the case was dismissed with prejudice due to prosecutorial misconduct while Stevens was very much alive.

(wisenberg)

Stanford Convicted

Clifford Krauss, NYTimes, Jury Convicts Stanford in $7 Billion Ponzi Fraud

Houston Business Journal, Stanford Found Guilty on 13 Counts in Fraud Trial

(esp)

2012 ABA White Collar Crime Program - Summary of Posts

Five posts from the 2012 ABA White Collar Crime Conference in Miami Beach, Florida can be found here, here, here, here, and here. For materials from the conference, see here. Next year is Las Vegas.

(esp)

2012 ABA White Collar Crime Conference - Ethics

The 2012 ABA White Collar Crime Conference had two ethics panels. The first, Top Ten Reasons You’ll Wish You Had Become a Trusts & Estates Lawyer: Ethical Pitfalls and Blunders in White Collar Practice, was moderated by Professor Bruce Green (Fordham). On this panel was Helen Gredd, Daniel R. Alonso, Evan A. Jenness, and Laura Ariane Miller. Professor Green skillfully walked the panel through a hypothetical that included a host of ethical problems. The panelists did not agree on everything - which is so common when discussing ethics issues. One thing was very clear - the white collar practice comes with many ethics dilemmas and defense counsel has to consider these issues throughout all facets of the case.

The second ethics panel also emphasized the difficulty for white collar practitioners, the title of the program being the Prosecution of Attorneys in Connection With Providing Legal Advice. This panel was moderated by Morris "Sandy" Weinberg, Jr., with the panelists discussing the prosecution of the associate general counsel of GlaxoSmithKline.

Sara M. Bloom started the discussion of the Lauren Stevens case by saying that this was not a case about a discovery dispute. This, she said, was a case of statements that were made to the government. Reid H. Weingarten , in response, emphasized how his client’s actions were not criminal. It was clear that Lauren Stevens was a strong enforcer at the company and that she was well-respected as being ethical. Further, she hired well-respected outside counsel. The question was - what more, if anything, could she have done.

Hon. Roger W. Titus noted that this was the only Rule 29 he has ever granted. He said that he talked to jury after this and they were pleased with the decision. He said, no one expressed concern about it being taken away from them – they just could not understand the prosecution.

Sandy Weinberg turned the tables around on this case to discuss prosecutors who fail to turn over Brady material - he asked - is it any different from what was being alleged here? Mary Patrice Brown, from the Department of Justice, said prosecutors must self report when there is a finding of a discovery violation. One hopes that others in DOJ will take her position - unless someone is going to die – give them the evidence. She noted that it can boil down to the "intent" – and reasonable minds can differ as to what the difference is with respect to intent. In this regard she said that attorneys are treated the same as any other person, although she did note that the DOJ Manual requires approvals for prosecuting an attorney (9-2.032).

Carl D. Liggio, Sr., a general counsel for 22 years, pointed out the huge challenges today for general counsel, with so many new law and regulations. You don’t know all that you need to know, he said. He told how he outlines all the negatives more forcefully then the positives and explains how it is not prudent for them to take risks. He said when it is blatantly illegal you need to put your foot down. He expressed concern that general counsel are facing reduced budgets. But he stressed the importance of supporting good valuable employees. "If you don’t support your people you have long term problems." He noted that when he accompanies someone to the SEC, he reminds the government that they too could be liable under 1001 for being misleading.

In response to Reid Weingarten’s comment that a proffer can make it difficult to put a client on the witness stand, Sara Bloom said that prosecutors who meet the person can find it much harder to prosecute the person.

(esp)(blogging from Miami)

ABA 2012 White Collar Crime Conference - Environmental Enforcement

This panel was moderated by Joseph G. Block (Venable). Panelists were Richard E. Byrne (Exxon), Marc R. Greenberg (Keesal, Young, & Logan), Gregory F. Linsin (BlankRome), and Stacey H. Mitchell (Chief, Environmental Crimes Section of the Environment and Natural Resources Division of the Department of Justice). The panel covered issues related to the ongoing investigation into Deepwater Horizon, Lacey Act violations, vessel pollution, and a host of other white collar related environmental matters.

The panelists talked about how to handle legal issues arising with emergency responders. Several panelists noted that the most important thing is to mitigate damages to injured, being candid to first responders, and telling them what they need to know - such as where folks may be.

When there is death or significant environmental damage occurs, you can expect that the government might investigate. Richard Bryne said you need to presume investigation - you need to set up a privileged internal investigation

The panelists talked about how to handle searches. Some panelists on the corporate side commented that you should have a developed plan in place; get to the facility as quickly as possible; instruct individuals to cooperate with the search warrant but also telling them that there is no way they must agree to be interviewed. The importance of truthfulness was stated. From the government perspective there is concern about the safety of agents.

The corporate and defense attorney panelists discussed approaches in giving Upjohn warnings to employees being interviewed. It was noted that Upjohn warnings can trigger questions from the employees being interviewed. It may be difficult for the company because they may not know at this point whether they will cooperate with the government in resolving the matter. There is also the question of whether to appoint counsel for company employees.

(esp)(blogging from Miami Beach, Florida)