Friday, July 26, 2019

K & L Gates Podcast - Congressional Investigations 101: To Comply or Not to Comply

Wednesday, July 24, 2019

Mueller - Investigation Was Not Stopped

Special Counsel Mueller answered part of the question I have wondered about - In answer to this question he stated -

Question: "At any time in the investigation, was your investigation curtailed or stopped or hindered?"

Answer: "No."

(Question by Collins, Answer by Mueller). 6 Takeaways from Robert Mueller's Testimony, Wash. Post (see here).


July 24, 2019 in Investigations | Permalink | Comments (0)

Tuesday, July 23, 2019

My Mueller Questions

The media is discussing all the questions they would like asked of Special Counsel Mueller in tomorrow's hearings.  And although many are good questions, it is unlikely that he will answer most of them. 

But there is an important avenue of questioning that it is hoped someone will attempt.  If Attorney General Barr has the power to remove the Special Counsel and if Mueller served at his discretion, then it needs to be determined whether AG Barr cut the investigation shorter than Mueller would have preferred.   

When you started the investigation, was any time limit placed upon you for completing the investigation?

If yes, what was that time limit?

If no, did that change at any point in the investigation?

If it changed in the latter portion of the investigation, or after AG Barr entered the scene, this could be very telling. If there was an initial time limit agreed upon, then this also would be telling, since one cannot predict how things will progress in an investigation. It just seems odd that the investigation was complete as there were still pending cases coming from the Special Counsel's Office.

But maybe it was over and now we just need to hear from Mueller as to whether that is correct.


July 23, 2019 in Investigations | Permalink | Comments (0)

Monday, July 22, 2019

The Third Global White Collar Crime Institute

Guest Blogger - Dmitriy Kamensky 

The American Bar Association Criminal Justice Section Global White Collar Crime Institute convened in Prague, Czech Republic, in June 2019 to examine some to the most pressing issues in the field. The synergy and intellectual power of the two previous Global White Collar Crime Institutes in Shanghai (2015) and São Paulo (2017) has been increased in the beautiful city of Prague, while providing the participants with a deep exploratory insight into the legal complexities of white collar crime in the growing central and eastern European legal markets and beyond.

In his opening keynote address, Matthew Miner, Deputy Assistant Attorney General of the United States, U.S. Department of Justice, discussed enforcement priorities and offered case examples illustrating the increasing level of international coordination between the U.S. Department of Justice and other countries (namely – United Kingdom, Germany, Brazil, Switzerland and Czech Republic). Mr. Miner also commented on current high profile corporate crime prosecutions and informed the participants on the recent updates in the Department Policy on Evaluation of Corporate Compliance Programs. He also specifically addressed the DOJ’s zero tolerance approach to foreign corrupt practices under the FCPA framework and provided examples of two recent cases of large-scale corruption in foreign countries, facilitated by large multinational corporations, as examples of this strong-arm approach.

After Mr. Miner’s address, the Third Global Institute proceeded with the “Meet the Enforcers” panel moderated by Professor Lucian Dervan of Belmont University College of Law and featuring Mr. Miner, Mr. Matthew Wagstaff (Head of the Bribery and Corruption Division, Serious Fraud Office, United Kingdom), and Mr. Pavel Zeman (Prosecutor General of the Czech Republic). Mr. Zeman and Mr. Wagstaff, both representing high public enforcement offices in their respective countries, furthered the American-led discussion of pressing legal issues, related to white collar crime enforcement across the borders, specifically in the more harmonized European Union environment. The Institute also welcomed Dr. Adrian Jung, a Special Counsel on “Internal Investigations” to the German Federal Ministry of Justice. Dr. Jung presented a detailed overview of the drafting legislation for Germany regarding corporate criminal liability and internal investigations with a strong potential for changing the corporate criminal enforcement framework in Europe. It is worth mentioning, that a few of the discussed elements of proposed corporate criminal enforcement regime in Germany mirror the long established provisions of the U.S. corporate criminal liability doctrine.

Other panels in the intensive course of the two-day conference brought together a group of outstanding practitioners from different jurisdictions and provided detailed expert insight into the current developments of traditional and new areas of white collar crime defense bar. The panels covered such topics as Lessons Learned from the VW Internal Investigation, Data Privacy and GDPR, Extradition Process and Interpol Red Notice Enforcement, Current Global Anti-Corruption Trends, as well as Changes in Enforcement Policies after Brexit.

Though he has not yet revealed the location of the Fourth Global White Collar Crime Institute, Professor Dervan, who serves as Chair of the Institute, told participants that the next Institute will occur in 2021. I look forward to that next Institute in some new corner of the globe.

(Dmitriy Kamensky is a Professor of Law at Berdyansk State University, Ukraine and a Visiting Adjunct at Stetson University College of Law)


July 22, 2019 in Conferences | Permalink | Comments (0)

Tuesday, July 16, 2019

New DOJ Guidance on Evaluating Corporate Compliance in Criminal Antitrust Investigations

The DOJ Antitrust Division issued a new guidance memo on Compliance Programs in Criminal Antitrust Investigations (see here). Providing transparency to the evaluation process of corporate compliance is a smart move as companies will now know what is expected of them from DOJ, and thus there is a greater likelihood of achieving compliance on the part of companies. This process can also reduce costs in providing a more efficient way of getting companies to readjust their compliance programs and assure that internal measures are in place to avoid company and individual criminality.  Providing this 17 page compliance memo to  companies should be applauded.

In issuing this new guidance, Assistant Attorney General Makan Delrahim stated that "effective immediately" the Antitrust Division would, "(1) change its approach to crediting compliance at the charging stage; (2) clarify its approach to evaluating the effectiveness of compliance programs at the sentencing stage; and (3) for the first time, make public a guidance document for the evaluation of compliance programs in criminal antitrust investigations." (see here), A major change from past policy is that credit for having a compliance program will now be given at the charging stage.

Eight considerations are provided, but it is noted that "the guidance emphasizes that these elements and questions are not a checklist or formula, and not all of them will be relevant in every case."  Delrahim states that "[d]ivision prosecutors should ask three preliminary questions at the outset to help focus their analysis. First question: does the company’s compliance program address and prohibit criminal antitrust violations? Second, did the antitrust compliance program detect and facilitate prompt reporting of the violation? Third, to what extent was a company’s senior management involved in the violation?" 

In house corporate counsel and outside attorneys representing companies need to be aware of this new guidance and readjust compliance programs to match the specifics provided by this document. 


July 16, 2019 in Antitrust, Deferred Prosecution Agreements, Investigations | Permalink | Comments (0)

Saturday, July 13, 2019

Jeffrey Epstein: The Unanswered Questions

  1. Who in DOJ made the ultimate decision to drop the proposed felony indictment of  Jeffrey Epstein and to cap the Non-Prosecution Agreement ("NPA") sentence at two years--later reduced to 18 months? The 6-2-17 affidavit of AUSA Ann Marie Villafaña, the lead prosecutor on the original federal criminal case, largely supports Alex Acosta's account of certain key events in this week's press conference. Keep in mind, however, that her affidavit was filed as part of the Jane Doe 1 and Jane Doe 2 litigation in SDFL, which resulted in Judge Marra's ruling that SDFL violated the Crime Victim's Rights Act ("CVRA") by failing to notify Epstein's victims about the NPA.  At the time it was filed, the affidavit was focused on the effort to convince Marra that SDFL had not violated the conferral/right to be heard provisions of CVRA. On pages 8 and 9 of her affidavit, Villafaña attests that: "Prior to the Office making its decision to direct me to engage in negotiations with Epstein's counsel, I discussed the strengths and weaknesses of the case with members of the Office's management and informed them that most of the victims had expressed significant concerns about having their identities disclosed. While I was not part of the final decision-making at the Office that arrived at the two year sentence requirement, I was part of the discussions regarding sex offender registration and the restitution provision. It is my understanding from these and other discussions that these factors, that is, the various strengths and weaknesses of the case...together with the Office's desire to obtain a guaranteed sentence of incarceration for Epstein, the equivalent of uncontested restitution for the victims, and guaranteed sexual offender registration...were among the factors that informed the Office's discretionary decision to negotiate a resolution of the matter and to ultimately enter into the NPA." Translation: Villafaña disagreed with dropping the indictment and was not part of the group that made the ultimate decision to go for an NPA with a two year state prison cap. If she was even present at the meeting where the decision was made, she disagreed with the decision and was thus not "part of the final decision-making process." It is unusual, but not unheard of, for the lead prosecutor to be overruled on a case. It is very unusual to go from a 50-plus page multi-count felony sex trafficking indictment to an NPA with no federal charges, particularly when your lead prosecutor wants to go to trial. Villafaña was and is a respected career AUSA. Apparently DOJ's Office of Professional Responsibility ("OPR") is looking into how the case was handled.  OPR will want to see Villafaña's  original pros memo in the case, will seek to interview all government participants in the negotiations, and will want to know every DOJ person involved in the ultimate decision to drop the indictment.
  2. Why was DOJ's standard language making it explicitly clear that the NPA bound only the SDFL not included in the NPA? Such language is employed every day by U.S. Attorneys' Offices throughout the United States and has been for years. It goes like this: "The defendant understands that this agreement is binding only on the U.S. Attorney's Office for the ________ District of _______." Why wasn't that done in Epstein's case? Epstein is now arguing that the SDFL NPA prevents his prosecution in SDNY. He will probably lose, given Second Circuit case law, but why even leave the possibility of challenge open? The NPA does not even include a standard integration clause. This is strange.
  3. Why was the entire NPA placed under seal? I understand the Government's desire to protect the identity of Epstein's victims, but this could have been done through a redacted version of the NPA, and indeed this has been done in the subsequent litigation.
  4. Why weren't all of Epstein's known victims notified of the NPA and its terms in a timely fashion? Acosta and Villafaña have explained that they did not want the victims to see the civil damages portion of the NPA before SDFL was certain that Epstein would be pleading to the Florida felony, because they did not want the victims to be cross-examined about having seen those provisions in the event the deal broke down and SDFL took Epstein to trial. Epstein signed the Florida plea papers only a few days before he actually pled guilty and there was not enough time to notify all the victims. I understand the explanation, and assume no bad faith on SDFL's part, but it doesn't cut the mustard. If Judge Marra is correct, CVRA required notification. And either the NPA or Florida plea deal could have been structured to prevent the fiasco of having to locate and confer with victims over a weekend. Marra ruled that SDFL affirmatively hid the NPA from the victims and essentially deceived them into thinking that the office was still investigating Epstein well after the NPA was signed. That scenario should have been avoided.
  5. Why were Epstein's lawyers allowed to lobby Main Justice after the NPA was signed? I understand going to Main Justice and arguing to overturn an individual office's charging decision. Not every lawyer obtains such access and these efforts to overturn are rarely successful. But they almost always occur BEFORE an indictment has been returned. Why was Epstein's team allowed to lobby for several months AFTER the NPA was signed. The original NPA was signed by attorneys on both sides in September 2007. An addendum was signed by the attorneys in October 2007. Epstein signed in December 2007. The Oosterbaan letter, explaining why federal involvement was legitimate, was not signed until May 15, 2008. This is weird.

I do not believe that the Epstein deal was "dirty" in any way. I have heard from multiple sources that Acosta is a person of high integrity, who was well regarded within the office. I was impressed with Acosta's handling of the press conference. I don't think he should have resigned. I don't know how easy or hard it would have been for SDFL to achieve a victory at trial or how many victims would have been further traumatized by a trial. I do know that SDFL has a long history of aggressively prosecuting these types of cases--child sex trafficking and kiddie porn. And I do believe SDFL should have conferred with the victims before NPA was inked. Acosta had no criminal trial experience when he became U.S. Attorney. Was he was out-negotiated here, or overawed by the team of big name defense lawyers representing Epstein? His First Assistant Jeffrey Sloman, a veteran prosecutor who was deeply involved in the negotiations and signed the NPA, has denied this and has publicly defended both Acosta and the deal.

Still, the questions I and others have posed are legitimate and deserve answers. Perhaps we will get them from the OPR investigation.

Here are some additional documents. The first three were made available by Acosta in connection with his press conference in order to help support his explanation of the NPA. Next is the Jeffrey Sloman op-ed defending Acosta and the deal. The final three documents are the most recent filings in the SDNY case and all deal with the government's effort to detain Epstein pending trial.

 Villafana Declaration

 Kuyrkendall Second Affidavit

 Acosta Letter to Starr

 Sloman Op-Ed

 Epstein-Original Government Letter Requesting Detention

Epstein-Letter Motion for Pretrial Release

Epstein-Government Response to Bail Motion


July 13, 2019 in Celebrities, Civil Litigation, Current Affairs, Defense Counsel, Deferred Prosecution Agreements, Investigations, Judicial Opinions, News, Prosecutions, Prosecutors | Permalink | Comments (0)

Tuesday, July 9, 2019

Jeffrey Epstein: Key Documents

Here are some important documents related to Jeffrey Epstein's legal issues. Hopefully they can help people make informed judgements about his federal criminal case.

Here is the Non-Prosecution Agreement ("NPA") from 2007. Epstein-NPA

Here is the current federal indictment.  U-S-v-Jeffrey-Epstein-Indictment

Here is U.S. District Judge Kenneth Marra's decision holding that SDFL violated the CVRA.  Judge Marra's Order and Opinion Holding that Government Violated Crime Victim's Rights Act

Here is a May 2008 letter from DOJ's Child Exploitation and Obscenity Section Chief to Epstein's attorney, explaining why federal prosecution of Epstein was warranted and why there was a legitimate federal interest. The letter is copied to Assistant Attorney General and Criminal Division Chief Alice Fisher. The letter shows both the high levels of Main Justice that Epstein's lawyers had access to and the potential problems that may have been entailed by SDFL in taking him to trial. It does not answer the question of whether Main Justice (or SDNY) knew that standard wording unequivocally limiting the NPA to SDFL was absent from the NPA. Note that this letter was written several months after the NPA was signed but before Epstein entered his state court guilty plea.  Oosterbaan Letter

Here is Jane Doe 1's Emergency Petition for Enforcement of the Crime Victim's Rights Act, filed in July 2008. This was one week after Epstein's state court plea.  Victim's Emergency Petition for Enforcement



July 9, 2019 | Permalink | Comments (0)

Monday, July 8, 2019

U.S. v. Jeffrey Epstein

Although U.S. v. Epstein is not a white collar case, the issues raised by SDNY's federal conspiracy and sex-trafficking charges will reverberate throughout the white collar world, as we deal with such issues all the time. Here is the background in a nutshell.

Epstein was investigated by the U.S. Attorney's Office for the Southern District of Florida ("SDFL") for a series of sex crimes involving minor girls. A Non-Prosecution Agreement ("NPA") was entered into between SDFL and Epstein.  The NPA called for Epstein to plead guilty to related state charges. There were no federal charges, but the NPA was contingent upon Epstein entering into and abiding by the state plea deal. Additionally, Epstein's named victims were allowed to sue Epstein civilly under 18 U.S.C. 2255, which is only available to federal sex crime victims.

Under the NPA's terms, "on the authority of R. Alexander Acosta, United States Attorney for the Southern District of Florida, prosecution in this District for these offenses shall be deferred in favor of prosecution by the State of Florida, provided that Epstein abides by the following conditions and the requirements of this agreement as set forth below." (Emphasis added.) If the United States Attorney determines that Epstein has violated the NPA, the United States Attorney may notify Epstein of the violation and "shall initiate its prosecution." But, if Epstein timely fulfills all of the NPA's obligations, "no prosecution for the offenses set out on pages 1 and 2 of this Agreement, nor any other offenses that have been the subject of the joint investigation by the Federal Bureau of Investigation and the United States Attorney's Office, nor any offenses that arose from the Federal Grand Jury investigation will be instituted in this District, and the charges against Epstein, if any, will be dismissed." (Emphasis added.) It is undisputed that Epstein fulfilled all of his obligations under the NPA. The NPA does NOT include a standard provision near the signature block explicitly affirming that the agreement binds only the SDFL.

About a week after Epstein's state guilty plea, one of his victims, Jane Doe, filed a federal civil action seeking enforcement of the federal Crime Victim's Rights Act ("CVRA"). She claimed that SDFL had failed to confer with her as required by CVRA. Neither Jane Doe nor any of Epstein's other victims were aware that an NPA had been entered into that would free Epstein from having to face federal charges, at least in SDFL. In fact, it is clear from her pleading that Jane Doe thought federal plea negotiations were still under way when she filed. Jane Doe's case continues to wind its way through U.S. District Judge Kenneth Marra's court, and new plaintiffs, including Jane Doe 2, have been added. On February 21, 2019, Judge Marra held that SDFL violated the CVRA by hiding the NPA and its terms from Epstein's victims. Judge Marra also held that the CVRA authorizes the rescission of an NPA reached in violation of a prosecutor's conferral obligations. SDFL prosecutors maintained, as recently as June 24, that judge Marra had no authority to force them to reopen Epstein's case.

Fast forward to late last week, when Epstein was arrested on new federal sex crime charges emanating from the SDNY. The SDNY indictment was unsealed today. The SDNY charges are clearly covered by the NPA, if the NPA extends beyond the Southern District of Florida.

So, the battle lines are drawn for what promises to be a fascinating and important test of constitutional and statutory issues.

You can be certain that Epstein will move quickly to dismiss the new charges as a violation of the NPA and the Double Jeopardy Clause of the U.S. Constitution. What are some of the key issues likely to be litigated?

  1. Was the CVRA really violated? Does it even apply to non-prosecution agreements, or does it require a federal court filing by the prosecutors?
  2. If the CVRA was violated, does the violation affect the NPA provisions that benefitted Epstein?
  3. Is the NPA really unambiguous as to where it applies? If the NPA is ambiguous, have Epstein's due process rights been violated by the SDNY prosecution?
  4. Does the Double Jeopardy Clause even come into play here? Epstein only pled to state charges and the doctrine of Dual Sovereignty would appear to control. Does the joint federal-state nature of the NPA bring the Double Jeopardy Clause back into play? In other words, is the federal action here brigaded with state action for purposes of Double Jeopardy Clause analysis? Could an exception to Gamble be carved out? If jeopardy only attaches after a court accepts a guilty plea, how would that work here where there was no federal plea? Would jeopardy attach when the state court accepted the plea or when Epstein fulfilled the terms of the plea, thereby fulfilling the NPA's terms?
  5. Regarding potential remedies to a CVRA violation, is it fair to punish Epstein for the government's transgression? Is it relevant that Epstein's attorneys were keenly aware of the CVRA's provisions and vigorously tried to minimize the government's disclosures of the NPA to the victims? Isn't it the defense attorney's duty to aggressively defend his/her client to the full extent allowed by law and ethical rules?

On the political front, I have been asked whether it is possible that SDNY acted on its own in charging Epstein. I find such a scenario to be highly unlikely. If not, how high within DOJ did the approval request reach?

Stay tuned. It's going to be a rocky ride. Case materials will be posted later tonight or tomorrow morning.


July 8, 2019 | Permalink | Comments (0)