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)

Monday, June 11, 2018

A Deep State Story: The James Wolfe Indictment

Here is the Indictment returned late last week in U.S. v. James Wolfe. Wolfe worked for 30 years for the United States Senate Select Committee on Intelligence ("SSCI") handling top secret and other classified information provided by the Executive Branch to Congress. According to the Indictment, Wolfe leaked the identity of "Male-1" to at least two reporters on two separate occasions and then lied about it to FBI Special Agents. Male-1 is none other than Carter Page and it is clear that the leaks were intended to damage Donald Trump. Reporter #2, referenced in the Indictment, is New York Times reporter Ali Watkins who was romantically involved with Wolfe for almost four years. Records of Watkins' email and phone contacts (but apparently not their contents) were subpoenaed from third party providers. Andrew McCarthy of NRO Online has commentary here, while Alex Pappas of Fox News examines some of Ms. Watkins' embarrassing historical tweets concerning the identity of leakers and the propriety of sleeping with sources. The press and certain members of Congress are concerned, as well they should be, about DOJ's capture of journalistic records. But keep in mind that the press is not the only institution with a watchdog role. The SSCI performs that function as well, and does so officially, with respect to intelligence-related oversight, and it is ironic (in a bad way) that its Chief of Security, if the charges are accurate, betrayed SSCI's trust. At this point Wolfe has only been charged, under 18 U.S.C. Section 1001 (the Martha Stewart statute) with lying to the FBI.

(wisenberg)

June 11, 2018 in Celebrities, Congress, Current Affairs, Investigations, Martha Stewart, Media, News, Obstruction, Prosecutions, Statutes | Permalink | Comments (0)

Wednesday, February 8, 2017

Bernie Madoff and the New Ponzi Supernova Series from Audible

Last week, I listened to a fascinating episode of the 1A podcast focussing on a new Audible series about Bernie Madoff called Ponzi Supernova.  Here is the description of the 1A podcast episode:

Bernard Lawrence Madoff carried out what many consider to be the largest financial fraud in U.S. history: a massive Ponzi scheme which cost his client’s $64 billion.

He’s in jail, serving out his 150-year sentence. Steve Fishman’s new Audible series “Ponzi Supernova” features never-before-heard recordings of Madoff as well as dozens of new interviews with FBI agents, attorneys, traders and victims of Madoff’s devastating Ponzi scheme. The fraud, Fishman says, extended far beyond Madoff and his close associates, and he finds fault in a system that actively enabled him to scam his many victims.

I would highly recommend giving the podcast a listen as an introduction to the six-part Audible series. Having heard a few excerpts of Madoff in his own words during the podcast, I can't wait to hear the full series. 

(LED)

February 8, 2017 in Fraud, Media | Permalink | Comments (0)

Friday, July 15, 2016

Fed Ex Case - Real Change Needs to Happen

In 2014, prosecutors proceeded with a case against fed ex.  Unlike many companies in a post-Arthur Andersen world, they would not be bullied into folding and taking a non-prosecution or deferred prosecution agreement.  Instead, they took the risk - and it is always a risk - of going to trial. What makes this case particularly puzzling is that the company had cooperated with the government.  They hired a top-notch white collar attorney Cristina Arguedas and the government folded shortly after the trial began.  Now, according to Dan Levine and David Ingram in their Reuter's story, U.S. Prosecutors Launch Review of Failed Fed Ex Drug Case, the DOJ is reviewing this matter.  Some thoughts -

1.  It is good to see DOJ re-examining this case.  What happened here should not have happened, and learning from this case is important.

2. The review should not be limited to the fed ex case.  There needs to be an examination, especially for the smaller companies that cannot afford to go to trial, of the government cooperation tactics.

3. If cooperation is going to work, then credit needs to rightfully be given.

4. The government's pitting employees (the corporate constituents) against the employers (company) needs to also be examined.  This practice defeats the ability of corporations and individuals working together to root out corporate misconduct.

5. Criminal defense attorneys need to recognize that one can successfully take a corporation to trial against the government. The risk is enormous, but innocence needs to matter.

(esp)

 

July 15, 2016 in Deferred Prosecution Agreements, Media, News, Prosecutions, Prosecutors | Permalink | Comments (0)

Friday, December 4, 2015

Plea Bargaining and the Trial Penalty

This morning's Wall Street Journal contains an opinion piece I wrote on the subject of the "trial penalty."  Entitled "The Injustice of the Plea-Bargaining System," the commentary examines the manner in which the trial penalty induces too many defendants to give up their constitutional right to trial.  In examining the issue, the piece includes a discussion of the tragic case of Orville (Lee) Wollard.  Wollard, who was charged with a crime after firing a warning shot in his home into the wall next to his daughter's allegedly abusive boyfriend, turned down a plea offer of five years probation and ended up receiving a sentence of twenty-years in prison after conviction at trial.  I hope you will have an opportunity to read the entire piece

(LED)

December 4, 2015 in Media, News, Sentencing | Permalink | Comments (0)

Friday, July 10, 2015

Holder Returns to Covington & Burling

Though it may come as no surprise given his long history with the firm, Covington & Burling has announced that former United States Attorney General Eric Holder will return to the firm.  Holder previously worked at the firm from 2001 to 2009.  According to the release, Holder will be in the "firm’s Washington office and focus on complex investigations and litigation matters, including matters that are international in scope and raise significant regulatory enforcement issues and substantial reputational concerns."  

Holder also recently gave an interview to The American Lawyer, in which he discusses his return to private practice and his plans to work on a mix of projects at the firm, including pro bono and access-to-justice issues.  In addition, The American Lawyer published an article on the subject of Holder's return.

(LED)

July 10, 2015 in Investigations, Media, News | Permalink | Comments (0)

Sunday, October 6, 2013

A Stacked Deck? The SEC's Administrative Route

The New York Times' Gretchen Morgenson should be declared a national treasure. She continues to write about the financial crisis, and legal and regulatory issues related to the crisis, at a level far above most of her contemporaries. In today's New York Times she explains the administrative law process through which the SEC brings many of its enforcement actions against individuals. The Administrative Law Judges deciding the cases are SEC employees and appellate reversals are rare. Dodd-Frank expanded the kinds of cases that can be heard by the ALJs. All of this is known to the securities bar, but not to otherwise intelligent and informed lay readers, because hardly anyone ever writes about it. Morgenstern's story is here.

(wisenberg)

October 6, 2013 in Media, News, SEC, Securities | Permalink | Comments (0) | TrackBack (0)

Monday, June 24, 2013

The Wall Street Journal Takes Aim At Comey

by: Solomon L. Wisenberg

In what should be a surprise to no one, the Wall Street Journal editorial page today launched an attack on James Comey, President Obama's nominee to be the next FBI Director. The primary offenses? Comey's objection to the Bush Administration's illegal warrantless wiretapping and Comey's appointment of Patrick Fitzgerald as Special Counsel to investigate the Valerie Plame leak. The editorial is here. More commentary on this in the next few days.

Coming soon: Professor Podgor's analysis of the Second Circuit's opinion afffirming Raj Rajaratnam's conviction for insider trading violations.

(wisenberg)

June 24, 2013 in Current Affairs, Legal Ethics, Media, News, Plame Investigation, Prosecutions, Prosecutors, Statutes | Permalink | Comments (0) | TrackBack (0)

Tuesday, July 17, 2012

Freeh Report on Paterno Reaches Speculative But Reasonable Conclusion

Joe Paterno was buried a second time last week -- partly by a report of former judge and FBI Director Louis Freeh and partly by accounts like that of the New York Times, which in a four-column lead story headlined "Abuse Scandal Inquiry Damns Paterno and Penn State," wrote "Mr. Freeh's investigation makes clear that it was Mr. Paterno . . . who persuaded the university president and others not to report Mr. Sandusky to the authorities . . . ." (emphasis added).  See here.  A reading of the report, however, shows that its conclusions as to Paterno are based on hearsay, innuendo and surmise.  While a report such as the Freeh Report certainly need not be based on court-admissible testimony, if indeed the evidence referred to in the report constituted the sole basis for a criminal and/or civil charge against Paterno, the case undoubtedly would be thrown out and would not reach a jury.

The relevant evidence involving Paterno is as follows:

  • In May 1998, with respect to an allegation that Sandusky had showered with an eleven year-old on the Penn State campus, Tim Curley, the Penn athletic director, notified his superiors that he had "touched base" with Paterno about the incident and days later sent to them an email "Anything new in this department?  Coach [Paterno] is anxious to know where it stands."
  • In February 2001, after he observed Sandusky sexually molesting a youth in a Penn State shower room, Mike McQueary, a graduate assistant, reported the incident to Paterno, who told him, "You did what you had to do.  It is my job now to figure out what we want to do."  The following day, a Sunday, Paterno reported the incident to Curley and Gary Schultz, a Penn State vice-president.  Paterno waited a day or so not to "interfere with their weekend."
  • Later in the month, Graham Spanier, the Penn State president, Schultz and Curley devised an action plan which included reporting the incident to the state welfare agency.  A day or so later, Curley emailed Schultz and Spanier and said that he had changed his mind about the plan "after giving it more thought and talking it over with Joe [Paterno] yesterday," and now felt that they should instead tell Sandusky to seek professional help and not report him to the welfare authorities unless he did not cooperate.

The first item, the 1998 Curley email, merely demonstrates that Paterno showed an interest in what was happening with reference to the 1998 incident, which ultimately was reported to both the welfare department and the local prosecutor and resulted in no findings or charges.  Paterno reportedly in 2011, after the incident involving Sandusky's 2001 conduct and the failure to report it to authorities raised public attention, denied that he was aware of the 1998 incident.  In fact, Paterno's testimony in the grand jury in which he purportedly denied any such knowledge was in response to an imprecise, general and unfocused question, and his answer was accordingly unclear.  Additionally, the reported statement denying any prior knowledge was by his "family" and not by him.

In any case, while a denial, if made directly by Paterno or even an authorized agent, might arguably be admissible in court as evidence of consciousness of guilt, such evidence is weak proof of guilt since even wholly blameless people often make false statements distancing themselves from wrongdoing.

The second item, Paterno's response to McQueary is by itself of little moment and says no more than that Paterno, having been apprised of the incident, would now have to figure out what he and the others will do.  Of course, one can read into that facially bland statement a more sinister meaning -- that Paterno intended to tell McQueary to remain silent.  Such a meaning, however, is supported only by surmise and suspicion.  The report also states that Paterno waited a day before reporting the information to Curley and Schultz so as not to "interfere with their weekends."  This one-day delay is not meaningful.

The third item, Curley's change of mind after "talking it over with Joe," might, not unreasonably, albeit with a considerable leap, be construed to indicate that Paterno suggested not reporting the incident to the authorities.  However, it might also be that Curley changed his mind on his own after airing his thoughts with Paterno and deciding that the earlier plan was not preferable.  It is, of course, also possible that whatever Curley wrote, his mention of discussions with Paterno (without any direct or indirect report of Paterno's own views) was an attempt by Curley to minimize or shift personal responsibility from himself.  In any case, any probative value this email has as to Paterno's intent is also based on speculation.

Freeh himself seems to recognize that his conclusions are far from "clear."  He mentions that Curley and Schultz contended that they acted "humanely" and sought "the best way to handle vague and troubling allegations," that Paterno had told a reporter he had "backed away and turned it over to . . . people I thought would have a little more expertise," and that Spanier had denied knowledge "Sandusky was engaged in any sexual abuse of children."

He then rejects these explanations and concludes, "Taking into account the available witness statements and evidence, the Special Investigative Counsel finds that is more reasonable to conclude that, in order to avoid the consequences of bad publicity, the most powerful leaders at the University -- Spanier, Schultz, Paterno and Curley -- repeatedly concealed critical facts relating to Sandusky's child abuse from the authorities, the University's Board of Trustees, the Penn State community, and the public at large" (emphasis added).  During a press conference specifically focusing on Paterno's culpability, Freeh, seemingly inconsistently with the qualified "available witness statements and evidence" language of the report, appeared to exaggerate, "There's a whole bunch of evidence here."  He continued, "And we're saying that the reasonable conclusion from that evidence is that [Paterno] was an integral part of this active decision to conceal" (emphasis added).

I tend to agree that Freeh's conclusion is the "more reasonable" hypothesis, but I do so based more on a visceral feeling and some understanding of Paterno's power and status at the university than an evidentiary basis.  The "facts" demonstrating Paterno's "active" role in the cover-up are insubstantial and equivocal.  The case against Paterno is, as a Scotch jury might say, "not proven."  Perhaps we should require more substantial proof before we topple Paterno's statue -- figuratively and actually.

(goldman)

July 17, 2012 in Celebrities, Current Affairs, Investigations, Media, News, Sports | Permalink | Comments (1) | TrackBack (0)

Wednesday, May 23, 2012

FBI Investigates JPMorgan Chase Trading Loss. Why?

Here is a Huffington Post piece from several days ago on the FBI probe of JPMorgan Chase's $2 billion trading loss. Can anybody tell me what the crime is here? Doesn't there have to be a potential crime before the FBI investigates? Can somebody please identify that potential crime? The probe is a farce, and the mainstream press's failure to ask the most obvious question is par for the course.

(wisenberg)

May 23, 2012 in Investigations, Media | Permalink | Comments (1) | TrackBack (0)

Monday, May 21, 2012

Clemens Daily Wrap-Up

Here is the Houston Chronicle's take on today's proceedings in U.S. v. William Roger Clemens. Brian McNamee was allowed to testify on re-direct that he injected three other players with HGH. Judge Walton gave the jury a limiting instruction that the testimony could only be used to bolster McNamee's credibility--not to infer Clemens' guilt. Still, this was a significant break for the government.

I am now batting 0 for 2 in my most recent predictions. I predicted that Judge Walton would strike some of Andy Pettitte's testimony and that the judge would not let McNamee talk about injecting other players. So take this next observation wiht a grain of salt. To me, the jurors' questions at the end of each day show their skepticism regarding the government's case and the credibility of key government witnesses.

(wisenberg)

May 21, 2012 in Celebrities, Congress, Current Affairs, Judicial Opinions, Media, News, Obstruction, Perjury, Prosecutions, Prosecutors, Sports | Permalink | Comments (0) | TrackBack (0)

Wednesday, May 9, 2012

Judge Walton Keeps Out Prejudicial Material In Roger Clemens Trial

I mentioned in a recent post that Reggie Walton is a fair judge. That fairness was on display again yesterday in the Roger Clemens trial, when Walton prohibited federal prosecutors from introducing testimony and documents pertaining to Clemens' fat salary as a pitcher. Walton correctly concluded that the prejudicial effect of this evidence outweighed its supposed probative value. It is a very rare federal judge who will bar this kind of "lavish lifestyle" evidence. The government always wants it in, ostensibly to show that a defendant's alleged criminal conduct was part of an effort to maintain a lavish lifestyle. In reality, prosecutors simply want to prejudice the defendant in the eyes of jurors by showing them how rich he is, how "high-on-the-hog" he lives, and how different he is from you and me.

(wisenberg) 

May 9, 2012 in Celebrities, Congress, Current Affairs, Judicial Opinions, Media, News, Obstruction, Perjury | Permalink | Comments (0) | TrackBack (0)

Monday, May 7, 2012

Roger Clemens' Motion To Strike: 50-50 Doesn't Cut It

I'd say you had a pretty good week if you got a key government witness to agree there is a 50-50 chance he misheard or misunderstood a purportedly damning admission by your client. That's what happened last week (week one) in the Roger Clemens re-trial, through Mike Attanasio's cross of Andy Pettitte. This morning, team Clemens filed Defendant's Motion to Strike Portions of the Trial Testimony of Government Witness Andy Pettitte. The Motion is an excellent piece of work. The argument?

1. The threshold for establishing admissibility of a preliminary fact question under Federal Rule of Evidence 104 is preponderance of the evidence. Fifty-fifty doesn't cut it.

2. Under Federal Rule of Evidence 401, relevant evidence "means evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." Fifty-fifty doesn't cut it.

3. Even if relevant, the testimony's probative value is substantially outweighed, under Federal Rule of Evidence 403, by the "danger of unfair prejudice, confusion of the issues, or misleading the jury." This is particularly true in light of the Government's statement to the jury, during its opening, that Clemens told Pettitte "he had used human growth hormone and that it helped him with recovery." The real-life fifty-fifty version on the stand didn't cut it.

4. Judge Walton specifically warned the parties before trial about making promises they couldn't keep in opening statements. He said that if it occurred here he would "not hesitate to tell this jury that they must totally disregard any such statements of that nature. I'll specifically identify what those statements were and tell them there was no evidence to that effect, and therefore, they cannot consider that in deciding this case." Judge Walton should make good on his promise, because fifty-fifty doesn't cut it.

Team Clemens also noted that the government could have revisited the conversation during re-direct, but deliberately skirted the issue.

My prediction is that this motion will be granted in some form. It certainly doesn't mean that Clemens is out of the woods. Ted Stevens' outstanding trial team won several motions during trial and Judge Sullivan gave Stevens some very scathing anti-government jury instructions--to no avail. (Of course, in the Stevens case, the government was deliberately hiding important exculpatory material.) But such an instruction will undoubtedly greatly benefit Clemens. It will essentially knock-out a key portion of the government's case.

Kudos to the defense team for an outstanding cross and an excellent motion. One of the nice things about this trial is that co-counsel Attanasio is finally getting some of the national media attention he has long deserved.

(wisenberg)

May 7, 2012 in Celebrities, Congress, Current Affairs, Defense Counsel, Media, Obstruction, Perjury, Prosecutions, Prosecutors, Sports | Permalink | Comments (0) | TrackBack (0)

Wednesday, March 14, 2012

Another Deferred Prosecution - "NYCity Payroll Project Scandal" Company

Wednesday, February 22, 2012

Strauss-Kahn Involved Again in Sex Case

Dominique Strauss-Kahn is once again in trouble with the law in relation to an investigation involving sexual activity.  Strauss-Kahn was detained overnight in Lille, France, for questioning in a French investigation related to an alleged prostitution ring that purportedly supplied women for sex parties with Strauss-Kahn in Brussels, Paris and Washington.

Strauss-Kahn contends that he had no reason to believe that the women at these parties were prostitutes.  His French lawyer bared that defense to French radio in December, "People are not always clothed at these parties.  I challenge you to tell the difference between a nude prostitute and a classy lady in the nude."  Reuters article, see here.  This lack of scienter defense ironically appears to be the converse of what many believed would have been Strauss-Kahn's defense had the New York case in which he was accused of sexual assault gone to trial.  In that case, it was expected that his defense would have been that he did believe that the woman in question was a prostitute.

The investigation, in which eight people have been charged, involves alleged misuse of corporate funds to pay for the services of the prostitutes.  Engaging prostitutes is not illegal in France (although it is in Washington), but if the investigators determine that Strauss-Kahn had sex with prostitutes he knew had been paid for out of company funds, he might be charged as a beneficiary of that misuse of funds.  Most likely, it will be difficult to prove that Strauss-Kahn, even if he were found to have known the women involved were prostitutes, knew how they were paid.

High-profile cases in other jurisdictions often affect prosecutorial priorities.  One wonders whether this case will lead American prosecutors to scrutinize corporate books to determine whether corporate funds have been used to supply prostitutes to customers, political figures and others.  I suspect that such payments (and consequent tax deductions as business expenses) are not wholly uncommon, at least for non-public businesses.  Any resulting cases, involving both sex and corporate corruption, are sure to draw media attention.

(goldman)

February 22, 2012 in Celebrities, Corruption, International, Investigations, Media, News, Tax | Permalink | Comments (0) | TrackBack (0)

Wednesday, February 8, 2012

Prosecutorial Discretion Is The Better Part Of Valor: Lance Armstrong; FCPA Gabon Sting

One of the supposed hallmarks of the American criminal justice system is the prudent exercise of prosecutorial discretion. But prosecutorial discretion, even when it works, is a blessing and a curse. A blessing, because it allows for the flexibility and compromise without which most systems, even well-constructed ones, cannot function. A curse, because liberty should not depend upon the the character and wisdom of the person temporarily wielding power.

The U.S. Attorney's Office for the Central District of California has decided not to prosecute Lance Armstrong. An announcement to that effect was made last Friday. The L.A. Times story is here. A good Washington Post piece is here. Today's Wall Street Journal discusses the declination and a potential future probe of of improper leaks related to the case.  (An internal investigation of some kind appears to be warranted given the massive leaking that has occurred.) According to the WSJ, the declination decision by U.S. Attorney Andre Birotte and his top aides went against the recommendation of the two line AUSAs handling the case. Maybe, but take it with a grain of salt. News stories about the internal machinations of prosecution teams often get it wrong.  

Based on what I know about the case, the decision to decline appears to have been a no-brainer. Recent federal prosecutions involving alleged drug use by star athletes have expended enormous sums of money with mixed or poor results. In the Armstrong matter, the doping, if it occurred, was not itself a federal crime. Prosecutors would have been peddling a wire fraud theory under which Armstrong allegedly defrauded team sponsors by intentionally violating a contractual obligation to avoid improper drug use. Not very sexy. Twelve typical American jurors might well wonder at the start of such a case, "Why are we even here?" Finally, Armstrong is enormously popular and has a sterling defense team with unlimited resources.

The U.S. Anti-Doping Agency (USADA) vows to continue its investigation, accurately noting that its "job is to protect clean sport rather than enforce specific criminal laws." But USADA wants the grand jury materials. This would be a travesty, and is unlikely to happen. Federal grand jury materials are presumptively secret by law for good reason. Don't count on a federal court sanctioning transfer of grand jury materials to an agency like USADA.

In other declination news, the DOJ attorneys prosecuting the Gabon sting case have informed U.S. District Judge Richard Leon that DOJ is considering dropping all future prosecutions. A decision will be made by February 21. The BLT piece is here.  Full disclosure: I briefly represented one of the defendants, and considered representing another of the defendants, neither of whom has gone to trial. My comments here are based on the public record. The two cases brought to date have resulted in three acquittals and two hung juries. Nobody going to trial has been convicted in what DOJ thought was a sure win. Whatever merit there was in initially bringing the case, reconsideration is in order. The two trials to date have revealed a number of weaknesses. First, this was a sting--a crime engineered by the U.S. Government. Second, the informant who helped orchestrate it was far more compromised than the typical informant in a white collar case. Third, in a key tape recorded conversation between that informant and one of the defendants, the defendant seeks to back out of the alleged unlawful transaction, but the informant reels the defendant back in by telling him that attorneys have approved the deal. Fourth, the inherent ambiguities and weaknesses in the FCPA itself.

If there has been a benefit to the Gabon FCPA prosecution it is this--it has taught the white collar defense bar that FCPA cases can be fought and won and, presumably, has taught DOJ that FCPA cases aren't as easy to win as they first appear. 

(wisenberg)

February 8, 2012 in Celebrities, Corruption, Current Affairs, FCPA, Fraud, Government Reports, Grand Jury, Investigations, Media, Prosecutions, Prosecutors, Sports, Statutes | Permalink | Comments (0) | TrackBack (0)

Thursday, January 26, 2012

Romney Non-Disclosure? Ho-Hum.

The L.A. Times reports here that Mitt Romney did not "explicitly disclose" certain foreign and offshore bank accounts on his required federal campaign disclosure forms. These same accounts were reported, however, to the IRS. Doesn't look like there's much to the story. There are different reporting requirements on campaign forms and IRS returns and some of the items revealed to the IRS were apparently listed at a higher level of generality on the campaign forms. Even assuming that there was some misreporting, one would be hard pressed to call it anything other than inadvertent.

(wisenberg)

January 26, 2012 in Celebrities, Current Affairs, Media, Tax | Permalink | Comments (1) | TrackBack (0)

Wednesday, December 7, 2011

Blago Gets 14 Years

The Washington Post, via AP, has the story here.

(wisenberg)

December 7, 2011 in Fraud, Judicial Opinions, Media, Prosecutions | Permalink | Comments (0) | TrackBack (0)

Wednesday, November 23, 2011

Some Further Thoughts On Judge Sullivan's Order

My colleague Ellen Podgor recently commented here on Judge Emmet Sullivan's 11-21-11 ORDER in In Re SPECIAL PROCEEDINGS, the ancillary proceedings initiated by Judge Sullivan to investigate the multiple Brady violations committed by DOJ prosecutors in U.S. v. Theodore Stevens. The ensuing investigation was conducted, on Judge Sullivan's behalf, by veteran DC lawyers Hank Schuelke and William Shields, who have now issued a report that is, I hope, only temporarily under seal.

It is obvious from reading his Order that Judge Sullivan is still outraged. That's a good thing. Until enough federal judges get hopping mad about systemic DOJ Brady violations, we will have no real legislative discovery reform at the federal level.

In addition to the points highlighted by Professor Podgor, Judge Sullivan's Order notes the following findings and conclusions by Schuelke and Shields:

1. "[T]he investigation and prosecution of Stevens were 'permeated by the systematic concealment of significant exculpatory evidence which would have independently corroborated his defense and his testimony, and seriously damaged the testimony and credibility of the government's key witness.'"

2. "[A]t least some of the concealment was willful and intentional, and related to many of the issues raised by the defense during the course of the Stevens trial."

3. Schuelke and Shields "found evidence of concealment and serious misconduct that was previously unknown and almost certainly would never have been revealed--at least to the Court and to the public--but for their exhaustive investigation."

4. Schuelke does not recommend criminal contempt proceedings, because "in order to prove criminal contempt beyond a reasonable doubt under 18 U.S.C. [Section] 401 (3), the contemnor must disobey an order that is sufficiently 'clear and unequivocal at the time it is issued'... [but] no such Order existed in this case. Rather, the Court accepted the repeated representations of the subject prosecutors that they were familiar with their discovery obligations, were complying with those obligations, and were proceeding in good faith."

5. "Mr. Schuelke also notes that '[i]t should go without saying that neither Judge Sullivan, nor any District Judge, should have to order the Government to comply with its constitutional obligations, let alone that he should feel compelled to craft such an order with a view toward a criminal contempt prosecution, anticipating its willful violation.'"

6. "Mr. Schuelke 'offers no opinion as to whether a prosecution for Obstruction of Justice under 18 U.S.C. [Section] 1503 might lie against one or more of the subject attorneys and might meet the standard enunciated in 9-27.220 of the Principles of Federal Prosecution.'" 

It is clear that most or all of this Report is going to be publicly released. It will be interesting to compare it to DOJ OPR's report, assuming that DOJ decides to release it. Two attorneys for two of the prosecutors under scrutiny have already announced that OPR's report clears their respective clients. DOJ has a long history of ignoring the critical comments of federal judges. The latest example of this took place in reference to the prosecution of former Blackwater employees. Despite Judge Ricardo Urbina's scathing factual findings regarding the conduct and credibility of the original set of prosecutors, they were treated to a laudatory/fawning DOJ press release upon reassignment. Urbina, like Sullivan, is one of the most respected federal judges in the country and his factual findings were not questioned or disputed on appeal. 

Some final thoughts.

1. For every Emmet Sullivan (or Ricardo Urbina or Howard Matz) there are 10 federal judges who unquestioningly accept the Government's representations regarding Brady issues, irrespective of non-frivolous matters brought to their attention by the defense bar.

2. The defense attorney has an obligation to ferret out Brady issues through the filing of detailed, fact-specific Brady motions closely tied to the formal allegations in the case.

3. We must rapidly move toward open discovery in the federal criminal system, with appropriate safeguards in place to protect witnesses where necessary. The presumption, however, must always be in favor of open discovery. Many states have gone this route without any disastrous consequences. It is appalling that civil litigants have substantially more access to discovery at the federal level than do people who are literally fighting for their liberty.

4. In the meantime, federal prosecutors must be relieved of the burden of determining whether exculpatory information is material. DOJ already recommends this in the Ogden Memo, but it should go one step further and require it. The rule should be: IF IT HURTS MY CASE IN ANY WAY, TURN IT OVER! When a man judges himself, the verdict is always in his favor. When a federal prosecutor, in the heat of trial or pretrial battle, is deciding whether exculpatory evidence is material, the verdict will too often be that it is not. Let's end this invitation to injustice.

5. Of course, federal prosecutors do not think like criminal defense attorneys. That's okay. We don't want them to! But this is the very reason why they cannot ultimately be trusted to make the determination of what is or is not exculpatory. The competent defense attorney headed to trial or sentencing is constantly thinking about anything that will help the defense. Prosecutors are not trained or inclined to do this. Even when they are trying to fulllfil their Brady obligations, AND THE VAST MAJORITY OF FEDERAL PROSECUTORS ARE TRYING TO DO THIS, they cannot be trusted to spot the issues. This difference in outlook/inclination/thought processes really comes to the fore during the period leading up to sentencing hearings, when the prosecutor looks at the defense attorney like a deer in the headlights when reminded of his/her obligation to provide any and all mitigating evidence!

6. Please. Let's have no more: "We understand our Brady obligations and intend to abide by them." Congress should pass a statute requiring some form of detention for any prosecutor who utters this bromide.

(wisenberg)

November 23, 2011 in Contempt, Corruption, Current Affairs, Government Reports, Investigations, Judicial Opinions, Legal Ethics, Media, Obstruction, Perjury, Prosecutions, Prosecutors | Permalink | Comments (4) | TrackBack (0)

Thursday, September 15, 2011

"Rogue Trader" - OUCH

UBS is having another "ouch" moment as the media is reporting on a rogue trader. The typical questions are - how could this have happened; why was it not discovered sooner; who should be held liable; and should there be criminal liability?  It is too soon to answer many of these questions. But here are some points of interest -

UBS has a corporate responsibility policy that states:

"UBS is firmly committed to corporate responsibility and actively strives to understand, assess, weigh and address the concerns and expectations of the firm's stakeholders. This process supports UBS in its efforts to safeguard and advance the firm’s reputation for responsible corporate conduct. In very direct ways, responsible corporate conduct helps create sustainable value for the company."

Its policies include a host of different preventative measures, such as money laundering prevention here.  It takes pride in employees and notes that "[o]ur employees have the breadth of our businesses, global career opportunities and a collaborative, performance-oriented culture as a platform for individual success."

Rogue employees are not a new development for the corporate arena. No matter how many controls are in place and no matter how much oversight there might be, it is a problem to have full compliance. Knowing this, it seems important to provide companies with a "good faith" defense when a rogue employee commits acts that might be considered criminal.  Unfortunately, to date, courts have only seen fit to insert such as defense in the civil area and not the criminal sphere.  (See Podgor, A New Corporate World Mandates a Good Faith Affirmative Defense)  But corporate criminality in the federal system is premised on respondeat superior and the acts of a rogue employee are hardly for the benefit of the company.

See also -

Dan Fisher, Why Rogue Traders Get Jail But Bad Execs Get A Pension

Frank Jordans & Paisley Dodds, Houston Chronicle, Rogue trader suspected in $2 billion UBS loss

Nathan Vardi, Forbes, Rogue Trader Deals Big Blow To UBS

Victoria Howley & Emma Thomasson, Reuters, UBS $2 billion rogue trade suspect held in London

The Telepgraph, UBS rogue trader: statement to employees in full

(esp)

September 15, 2011 in Fraud, Media, News, Securities | Permalink | Comments (1) | TrackBack (0)