Sunday, May 3, 2020
Professor Miriam H. Baer of Brooklyn Law School recently posted on SSRN a chapter titled Designing Corporate Leniency Programs, to be published in the forthcoming book Cambridge Handbook on Compliance (D. Sokol & B. van Rooij eds.). The Abstract states:
"Corporate leniency programs promise putative offenders reduced punishment and fewer regulatory interventions in exchange for the corporation’s credible and authentic commitment to remedy wrongdoing and promptly self-report future violations of law to the requisite authorities.
Because these programs have been devised with multiple goals in mind—i.e., deterring wrongdoing and punishing corporate executives, improving corporate cultural norms, and extending the government’s regulatory reach—it is all but impossible to gauge their “success” objectively. We know that corporations invest significant resources in compliance-related activity and that they do so in order to take advantage of the various benefits promised by leniency regimes. We cannot definitively say, however, how valuable this activity has been in reducing either the incidence or severity of harms associated with corporate misconduct.
Notwithstanding these blind spots, recent developments in the Department of Justice’s stance towards corporate offenders provides valuable insight on the structural design of a leniency program. Message framing, precision of benefit, and the scope and centralization of the entity that administers a leniency program play important roles in how well the program is received by its intended targets and how long it survives. If the program’s popularity and longevity says something about its success, then these design factors merit closer attention.
Using the Department of Justice’s Yates Memo and FCPA Pilot Program as demonstrative examples, this book chapter excavates the framing and design factors that influence a leniency program’s performance. Carrots seemingly work better than sticks; and centralization of authority appears to better facilitate relationships between government enforcers and corporate representatives.
But that is not the end of the story. To the outside world, flexible leniency programs can appear clubby, weak and under-effective. The very design elements that generate trust between corporate targets and government enforcers may simultaneously sow credibility problems with the greater public. This conundrum will remain a core issue for policymakers as they continue to implement, shape and tinker with corporate leniency programs."
Thursday, April 30, 2015
False Accusation of Rolling Stone Article Suggests prior Notification of Targets in White-collar Cases
In November Rolling Stone published a blockbuster article about a student's account of being gang-raped at a University of Virginia frat house. Within days others, primarily the Washington Post, sharply questioned the truthfulness of the student's claim. Rolling Stone then commissioned an independent investigation by Steve Coll, the respected Dean of Columbia Journalism School, to review the magazine's reporting, editing and fact-checking. That report, written by Coll and two colleagues, came out a few weeks ago. See here. Rolling Stone also "withdrew" the article.
The report (Sheila Coronel, Steve Coll, Derek Kravitz, "An Anatomy of a Journalistic Failure") is "intended as a work of journalism about a failure of journalism." It is thorough and comprehensive and, as expected, clear and thoughtful. Although the purpose of the report was to investigate the conduct of Rolling Stone and not the conduct of the student, it treats the student who made the false accusation and continued it over months of questioning by the reporter much too gently and itself is affected by the implicit bias that it suggests motivated the writer. For instance, it takes pains to state that the student who made the indisputably false accusation may well have in fact been a victim of some predatory sexual act(s), and does not even speculate that she might have made up the incident out of whole cloth. It expresses its regret that the the widely-disseminated revelation of the false accusation might cast doubt on other campus sex accusations (accepting the questionable estimates that false charges make up less than 8% of rape allegations) and fails even to consider the possibility that the false claim here might not be such an aberration , and perhaps will serve a salutary purpose by increasing public (and governmental and institutional) awareness that false accusations are not so infrequent.
To be sure, campus sexual abuse by male students against women is a serious problem and deserves vigorous, but measured and fair, action by universities and, when appropriate, law enforcement, and aggressive reporting on that subject is important to increase public knowledge. School officials, and magazine and newspaper writers (and also law enforcement officers) should be mindful, however, that this is an area where accusations are often inaccurate, exaggerated, and sometimes downright false, and that there are sometimes unjust findings and convictions, by courts and schools, that wrongly destroy the lives of those accused. Indeed, in my opinion, rape is the area of criminal law in which there are the most intentionally false (as opposed to mistaken) accusations by civilian complainants.
The report demonstrates convincingly that there were a series of errors in the investigation, review, fact-checking and editing of the story before it appeared. Among those errors was the failure to give the person accused an opportunity to refute the accusations. "Journalistic practice - and basic fairness - require that if a reporter intends to publish derogatory information about anyone, he or she should seek that person's side of the story."
I could not help but thinking that the defective oversight of the Rolling Stone journalists and their seemingly limited concern for the reputations of the institutions accused were nonetheless far greater and far more likely to uncover false accusations than the minimal or nonexistent review by law enforcement that typically occurs in a criminal case prior to an arrest (and sometimes even after). Once law enforcement officers decide to make an arrest, why should the accused not be allowed to present beforehand his "side of the story?" Obviously, in many cases, such as where there is a need for immediate apprehension by a police officer, no pre-arrest review or notification is possible. Further, in many other cases, for instance where the identity of the alleged perpetrator is unknown, or where there is a reasonable fear that if not arrested he will flee and not be available to face charges, an immediate unannounced arrest is called for.
However, in many, probably most, white-collar cases, there is no such need. In those cases, as a general rule a prosecutor should notify a target that he is under investigation and seek his "side of the story." Nonetheless, many prosecutors proceed the "old-fashioned" way by ordering an arrest first without giving the defendant an opportunity to hire a lawyer and present, should he choose to, his side of the story.
Notifying a prospective defendant that he is likely to be arrested and may choose to present his case beforehand has advantages for prosecutors in many situations. The defendant and his lawyer might provide evidence or legal arguments that will persuade the prosecutor to seek lesser charges or not to go forward at all. Sometimes a plea agreement might be reached with the defendant which will eliminate the need for a time-consuming grand jury presentation. And, should the defendant decide to cooperate, he may be able to do so proactively and generally more effectively since an indictment often tips off others to steer clear of him.
There are, arguably, certain benefits to law enforcement in making surprise arrests. There is a possibility that an upset, unprepared and uncounseled defendant will make incriminating statements. And, a defendant may have on his person or in proximity evidentiary items which will be found by a search. Those advantages, however, are less likely to occur in white-collar case, where defendants are less likely to make statements without lawyers or carry contraband or evidence. Another potential benefit to prosecutors is that at bail hearings a defendant's attorney may not be able to argue that the defendant did not flee after becoming aware of the charges. Such an argument, I have found, does not carry as much weight as it should. In any case, prosecutors are unlikely to provide prior notification of their intent to arrest to any who are conceivable flight risks.
For these reasons, the most successful and sophisticated prosecutors in white collar cases, such as the United States Attorney for the Southern District of New York, generally notify white-collar targets of their investigations and give them or their attorneys an opportunity to dissuade, minimize or deal. Less sophisticated prosecutors of white-collar crimes, often state prosecutors, are more likely to make summary arrests. These cases, generally not well vetted since there was no input from the accused or his counsel, more often lead to dismissals, acquittals or cheap pleas.
Not only is pre-arrest notification to a prospective defendant more fair to him in that it gives him an opportunity to defend, explain, negotiate or prepare psychologically, it will benefit judicial and prosecutorial economy of resources by allowing for some matters to be settled with less or no litigation and court involvement. And, as discussed above, it helps law enforcement. It should be the default position in white-collar (and many other) cases, and deviated from only when there are genuine countervailing reasons.
Monday, February 2, 2015
Judge Rakoff has authored an interesting article in the New York Review of Books examining Professor Brandon L. Garrett’s book entitled “Too Big to Jail: How Prosecutors Compromise with Corporations.” Professor Garrett’s book looks closely at the use of deferred prosecution agreements by the government and includes a wealth of information and data. While Professor Garrett concludes that deferred prosecution agreements have been “ineffective,” he also proposes a number of steps that might make them more efficient in the future. Along with conducting a nice discussion of Professor Garrett’s book, Judge Rakoff offers his own perspective on these agreements in his review. For those interested in deferred prosecution agreements, both Judge Rakoff’s article and Professor Garrett’s book are must reads.
Monday, October 27, 2014
Imagine being so angry at prosecutorial shenanigans in one of your cases that you decide to write a book. A book that names names and settles scores. A book that details the Brady violations you believe occurred in your client's trial. A book that compares those purported violations to the undeniable Brady errors judicially noticed in the Ted Stevens prosecution. A book that identifies the DOJ officials connected to both your case and the Ted Stevens case and traces the rise, high within the ranks of DOJ and the White House, of the prosecutors you loathe. A book with a forward by none other than Ninth Circuit Chief Judge Alex Kozinski. Imagine this and you have imagined Sidney Powell's Licensed to Lie: Exposing Corruption in the Department of Justice.
This book is a terrific read, particularly for anyone making a living in the world of federal white collar investigations and trials. Both the federal white collar specialist and the intelligent lay reader should find it engrossing. I particularly enjoyed the "you are there" descriptions of defense strategy sessions and courtroom hearings.
Powell played a minor role on the Arthur Andersen appellate team and the lead role in the post-trial defense of Enron Barge defendant, and former Merrill Lynch executive, Jim Brown. She covers most or all of the Enron Task Force sins that have long been the subject of controversy in the white collar defense bar, including the practices of: providing mere summaries, rather than full interview reports, of exculpatory materials to the defense; withholding certain exculpatory information altogether; withholding agent notes of witness interviews; creating composite 302s that fail to reveal changing witness statements over time; designating potential defense witnesses as targets, in effect threatening them with prosecution if they testify; convincing compliant trial judges to approve clearly faulty jury instructions.
Powell reminds us as well that every Enron-related conviction that went up on appeal resulted in a partial or complete reversal. And although she had no involvement in the Ted Stevens case, Powell does an excellent job of summarizing, based on two publicly released investigations, the multiple material Brady/Giglio violations that occurred in that prosecution.
And yet this book, as informative and fun to read as it is, has some problems.
For openers, Powell sees the world in black and white terms. You are with her or against her on this ride, and God help you if get on Sidney's bad side. You tend to get painted in black and white terms. Ergo:
Enron Task Force Chief Andrew Weissman is "a narrow faced man with a beak of a nose."
DOJ Criminal Division Chief Michael Chertoff is "sharp-featured."
DOJ's Rita Glavin has "long black hair, sharp features, an easy smirk, and an affinity for androgynous attire."
Original Enron Task Froce Chief Leslie Caldwell is "a short no-nonsense looking woman with closely cropped hair."
FBI Special Agent Raju Bhatia is "smarmy."
Enron Barge Case prosecutor Kathryn Ruemmler, who later served President Obama as White House Counsel, has "a well known passion for expensive Chrisitan Louboutin red-soled stiletto heels." Those heels show up in more than one description of Ruemmler.
Matthew Friedrich, later Acting Assistant AG in charge of the Criminal Division, has "a boyish face that easily appeared smug."
You get the picture. But if you are lucky enough to be on Sidney's side. Well:
Ike Sorkin is "a handsome man with thick gray hair."
Richard Schaeffer is "a tall handsome impeccably dressed New York lawyer."
And so on.
Fifth Circuit Judges who might rule against Powell are suspected of being politically biased or intellectually corrupt. Thus, in describing the panel she drew for her Fifth Circuit argument that Jim Brown deserved a new trial (based on multiple Brady violations), Powell wonders "if [Judge] Graves...might have some connection with Ruemmler. She, logically, would have been the person to advise the president on Graves' nomination and assist Graves in the confirmation process." Powell also wonders "if Friedrich had been part of the confirmation process with [Judge] Southwick. Friedrich's meteoric rise within the department placed him as chief of staff to Attorney General Gonzalez when Southwick was nominated and confirmed." After the panel ruled unanimously against her, in an opinion authored by Judge Jerry Smith, Powell "struggled to grasp how a court that I had respected so much for so long could issue an opinion as result-driven, tortured, and just plain bad as this one was."
Second, Powell posits a past DOJ Golden Age, when prosecutors were fair and committed to doing justice, and contrasts it unfavorably with our present era of so-called corruption. Here's a news flash for Ms. Powell. There was never a Golden Age of prosecutorial fairness in the DOJ. There have always been good prosecutors and bad prosecutors, and Assistant U.S. Attorneys have long played a prosecutorial game quite legally and openly rigged in favor of the house.
Last, but by no means least, Powell refuses to deal seriously, or to deal very much at all, with Judge Jerry Smith's Fifth Circuit panel opinion denying Jim Brown a new trial. Powell passionately argues throughout the book that the government hid Brady material from Brown's trial defense team in a grave miscarriage of justice. Virtually every argument she makes, in front of every federal tribunal, is meticulously rendered in 400 plus pages. But her discussion of Judge Smith's opinion is curiously brief, covering two pages, and fails to address Smith's main points.
The Enron Barge case concerned an allegedly sham transaction between Enron and Merrill Lynch to purchase Enron barges. The government maintained that the deal was a sham, and not a real purchase, because Enron orally promised/guaranteed to take Merrill out of the transaction, by buying back the barges, or finding a third party buyer, within six months. Although Jim Brown and the other Enron Barge defendants saw their fraud convictions overturned by the Fifth Circuit, Brown had also been convicted of perjury and obstruction of justice for grand jury testimony regarding his understanding of the transaction.
Prosecutors refused to disclose the FBI's raw notes of Andrew Fastow's interviews to Brown's trial team, instead providing summaries. The raw notes, unlike the summaries, quoted Fastow as saying that he "never used the word promise" in conversations about a buy-back with Merrill executives. Judge Smith pointed out, however, that "any potential exculpatory value of the passages from the Fastow notes that were not disclosed to the defense is eliminated when we read them in context rather than looking just to the portions of the sentences that Brown cherry-picks."
Smith pointed to other portions of the raw notes and explained that:
The notes say, to give only a few examples, (1) “It was [Enron’s] obligation to use ‘best efforts’ to find 3rd party takeout + went on to say there would be 3rd party b/c AF is manager of third party,” (emphasis added); (2) “LJM was 3rd party + was already found;” (3) “[Fastow] told [Merrill Lynch] that [Enron] would get [Merrill Lynch] out, would get [illegible] or LJM to buy out;” and (4) “Come June 2000, if [Enron] did not have a buyer then LJM would step in to buy out.”
In other words, Fastow controlled a captive third party, LJM, and could effectively guarantee that if a buyer could not be found, LJM would take Merrilll out of the transaction in six months. Judge Smith noted that:
[T]he sentences that Brown cites from the Fastow notes do not say that the agreement as a whole was a “best efforts” agreement, pace Brown’s testimony; they say only that Enron would use its “best efforts” to find a buyer but that Fastow guaranteed that LJM2, which he controlled, would be that buyer if no one else was found. Indeed, Fastow admitted that, “[i]f call was transcribed—it should have blown the accounting.”
Now I'm perfectly willing to believe, and in fact I assume, that the Enron Barge defendants, including Jim Brown, got a really raw deal and should never have been indicted. And I'm also willing to hear a good argument that Judge Smith got his Brady analysis backasswards. But in a book devoted to exposing Brady error, written by one of the country's foremost appellate lawyers, I expect more than two pages of cursory, conclusory attacks on a key federal appellate decision. Powell fails to fairly present, much less refute, Judge Smith's specific points (incorrectly referring to his careful 19 page opinion as a "meager" nine pages). I call this a material omission.
Monday, October 6, 2014
Rob Cary's book, "Not Guilty: The Unlawful Prosecution of U.S. Senator Ted Stevens" is a wonderful read and reminder of what needs to be corrected in our criminal justice system. Discovery in a criminal case is incredibly important, and this book emphasizes its importance in the criminal justice system and to society. In white collar document driven cases, the amount of paperwork can be overwhelming. It becomes important to not merely provide discovery to defense counsel, but also that it be given in an organized manner. Dumping documents on defense counsel is not enough. And failing to provide crucial documents, witnesses, and evidence is even more problematic. More needs to be done to correct discovery injustices in society and hopefully this book can serve as the momentum and real-life story to make it happen.
Monday, November 11, 2013
Sunday, October 2, 2011
Professors Jim Finckenauer and Stuart Green have created a free website titled, Criminal Law and Criminal Justice Books. It is aimed to feature "high-quality, timely, and concise on-line reviews of important and interesting new books in criminal law, criminal procedure, and criminal justice." It is here.
Friday, September 9, 2011
"O’Connor’s Federal Criminal Rules & Codes 2011 is the only codebook with annotated Federal Rules of Criminal Procedure and Federal Rules of Evidence. The book also includes other federal rules, Title 18 U.S.C., and selections from many other U.S.C. titles that provide for offenses or relate to criminal procedure."
The author list on this book is truly incredible.
Wednesday, September 7, 2011
Robert M. Cary, Craig D. Singer, and Simon A. Latcovich, all of Williams & Connolly, have a new book titled, Federal Criminal Discovery. It is published by the ABA and can be found here. The ABA website states:
Federal Criminal Discovery thoroughly covers each of the different methods of discovery available to the parties in federal criminal cases. It serves as an invaluable resource for judges, academics, prosecutors, and defense lawyers by providing an exhaustive discussion on the statutory and constitutional bases for discovery, and by covering the existing law fairly while examining both sides of the issues.
Specific topics include:
- Defendant's constitutional right to obtain exculpatory evidence under Brady v. Maryland
- Extensive coverage on Rule 16 of the Federal Rules of Criminal Procedure
- The discoverability of witness statements
- Additional federal rules and statutes which contain discovery rights and obligations
- The court's power to order discovery in criminal cases
- Ethical rules and Justice Department policies that impact the federal prosecutor's disclosure obligations
- Restriction of criminal discovery in appropriate cases
- Policy reform
This looks to be an incredibly useful book.
Tuesday, August 30, 2011
Compiled and edited by white collar defense lawyers Daniel J. Fetterman of Kasowitz, Benson, Torres & Friedman LLP and Mark P. Goodman of Debevoise & Plimpton LLP, the book is being published by West/Thomson Reuters. The chapters are authored by key former government prosecutors, such as James B. Comey. For details see here.
Wednesday, June 1, 2011
Scott Hilsen, a lawyer and certified fraud examiner in Atlanta, has written his first novel. It is described as a novel "based on the true story of a corporate deal gone bad and the internal investigation that exposed a shocking online fraud." For details see here.
Hilsen is a partner at Alston & Bird - see here.
Tuesday, April 26, 2011
Professor Nancy King (Vanderbilt) and Joseph L. Hoffman (Indiana) have a new book published by University of Chicago Press, titled, Habeas for the Twenty-First Century: Uses, Abuses, and the Future of the Great Writ.
If this book is like the authors recent op-ed in the NYTimes, it is likely to be extremely controversial on its recommendations on state prisoner habeas. (see op-ed by King and Hoffman here and letters to the editor in response here)(see also Andrea Lyons op ed in response and Nancy Kings response here). Although I tend to be on the side of the responses against the King Hoffman op-ed, I do think this book will offer a much needed history of 2255 and I understand that chapter 6 includes federal criminal cases, which will be helpful to white collar practitioners.
But I do hope that recommendations such as advocated in this op ed are not adopted. Justice is never too expensive. Nor can we assume that eliminating one process will pour money into indigent resources that might correct problems with the system. No matter what the cost of correcting an injustice in the system is, it needs to be done. I am deeply disappointed that too many today reference cost, expensiveness, or efficiency as rationales for shortcutting processes that may assist only a few folks. As I always ask - if you are that one person who could benefit from this criminal process correction, would you want it discarded for efficiency sake?
But that said, I do look forward to seeing this forthcoming book in an area that definitely needs study.
Sunday, February 6, 2011
Lance Cole & Stanley M. Brand, Congressional Investigations and Oversight: Case Studies and Analysis, Carolina Academic Press (2011) - Carolina writes:
"This book examines the legal and policy issues surrounding congressional investigations through a series of case studies, with an emphasis on the period from the second half of the twentieth century to date. It is organized by case study topic, with each chapter using one or two case studies to introduce and analyze a discrete area of legal authorities and policy issues. The central thesis and organizing principle of this book is to highlight the importance of effective congressional oversight and investigative activities in our American democratic system of government, as well as the constitutional and parliamentary bases for this legislative power. In addition to collecting legal authorities, the book includes relevant historical information and structural analysis of government functions, with an emphasis on separation of powers issues."
Sunday, September 19, 2010
Ellen C. Brotman, Careers in Criminal Law here -
"The book is organized into five different parts:
- Part I focuses on traditional criminal defense, including public defending, white collar criminal defense, big firm practice, solo practice and appellate and post conviction advocacy.
- Part II tells the stories of those who prosecute, in state court, federal court, and juvenile court.
- Part III describes the journeys of three judges in three very different venues.
- Part IV explores careers representing defendants who have been convicted as they attempt to get back on track.
- Part V presents a handful of careers in criminal law that simply defy categorization."
Sunday, September 5, 2010
Sara Sun Beale, (forthcoming Ohio St J of Criminal Law), An Honest Services Debate
Alexander Bunin (Federal Public Defender Northern District of NY), Federal Convictions Reversed (a wonderful compilation of federal cases from the United States Courts of Appeal and the United States Supreme Court. The opinions contain at least one point favorable to criminal defendants), Download Federal Convictions Reversed 08.2010
Wednesday, August 25, 2010
The second edition of Kings of Tort has recently been released by Pediment Publishing. Billed as "the true story of Dickie Scruggs, Paul Minor, and two decades of political and legal manipulation in Mississippi," it is written by my old friend Tom Dawson (former AUSA and Criminal Chief in the Northern District of Mississippi) and Alan Lange. The story is clearly told from a pro-prosecution point of view, but, that said, it is a terrific read. The case fell into Dawson's lap through the courage of Mississippi State Court Judge Henry Lackey, who was offered a bribe (in a case pending before him) by a co-conspirator of tort king Dickie Scruggs. Lackey went to the feds and the rest is history. The book gives a fascinating look at the strategy and tactics employed by Dawson, his colleagues at the U.S. Attorney's Office, and the FBI. Dawson had to keep the entire investigation secret in a very small legal community where everybody's business is typically well known. Good luck, good planning, and tough professionalism kept the undercover operation running smoothly, while co-conspirators were confronted and turned one by one. Make no mistake about it, this is an account written from the federal government's perspective. Yet it offers a unique contemporary glimpse into how a federal public corruption case is built. The subtitle is somewhat misleading, as there is far more about the Scruggs case than the Minor case in the book. I recommend it highly. There is an accompanying web site, with supplementary materials, at kingsoftort.com.
Saturday, August 14, 2010
Tuesday, December 15, 2009
Saturday, September 5, 2009
Dan Hurson, The New SEC Whistleblower Proposal: Make It Fair, Make it Pay, and They Will Come - Download THE NEW SEC WHISTLEBLOWER PROPOSAL
Houston Business & Tax Law Journal here with articles by Geraldine Szott Moohr, Introduction: Tax Evasion as White Collar Crime; John A. Townsend, Tax Obstruction Crimes: Is Making the IRS's Job Harder Enough?; Robert Edwin Davis & Danny S. Ashby, Federal Criminal Tax Enforcement in 2009: The Role of Criminal Tax Enforcement in the Federal 'Voluntary' Self-Assessment and Payment Tax System; John A. Townsend, Tax Obstruction Crimes: Is Making the IRS's Job Harder Enough? Online Appendix; Stuart P. Green, What is Wrong With Tax Evasion?
Stuart Michelson, Jud Stryker, Betty Thorne, Stetson University, The Sarbanes-Oxley Act of 2002: What Impact Has It Had on Small Business Firms, forthcoming Managerial Accounting Jrl. - Download MAJ 287_final 110609
Monday, June 1, 2009
If you wondered why the white collar crime blog has been a bit slow these past few months, this is one of several reasons. Professor Jerold Israel and I just finished the 4th edition of White Collar Crime in a Nutshell. For information on the book, see here.
Your readership is appreciated.