White Collar Crime Prof Blog

New DOJ Whistleblower Policy

Deputy Attorney General Lisa Monaco Delivers Keynote Remarks at the American Bar Association’s 39th National Institute on White Collar Crime - here

Lisa Monaco stated in showcasing the new DOJ whistleblower rewards program:

So we’re planning something new: a DOJ-run whistleblower rewards program. Today, we’re launching a 90-day sprint to develop and implement a pilot program, with a formal start date later this year.

The premise is simple: if an individual helps DOJ discover significant corporate or financial misconduct — otherwise unknown to us — then the individual could qualify to receive a portion of the resulting forfeiture.

Over the next several months, we’ll fill out the particulars, and Acting Assistant Attorney General Nicole Argentieri will discuss that process in greater detail tomorrow. But we’ve already established some basic guardrails. For example, we’d offer payments:

Only after all victims have been properly compensated;
Only to those who submit truthful information not already known to the government;
Only to those not involved in the criminal activity itself;
And only in cases where there isn’t an existing financial disclosure incentive — including qui tam or another federal whistleblower program.
Used proactively, this program will fill gaps. It will create new incentives for individuals to report misconduct to the Department. And it will drive companies to invest further in their own internal compliance and reporting systems.

Now, for all the potential whistleblowers listening today, you might be wondering what to look out for. While we’ll always accept information about violations of any federal law, we’re especially interested in information about:

Criminal abuses of the U.S. financial system;
Foreign corruption cases outside the jurisdiction of the SEC, including FCPA violations by non-issuers and violations of the recently enacted Foreign Extortion Prevention Act; and
Domestic corruption cases, especially involving illegal corporate payments to government officials.
Maybe you work — or your client does — at a fast-growing private startup here in the Bay Area, and you discover the company's been paying bribes to get regulatory approvals and doctoring the books to hide the payments. If you come forward, you could get paid as part of the recovery from that criminal case.

For speech/remarks from DOJ - here.

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Hunter Biden Testifies

Here is the transcript of Hunter Biden's testimony before a joint session of the House Judiciary Committee and House Oversight and Accountability Committee on February 28, 2024.

Hunter Biden House Testimony Transcript.

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Motion Denied: Jeffrey Clark Successfully Thwarts DC Bar Office of Disciplinary Counsel's Motion to Enforce Subpoena Duces Tecum on Fifth Amendment Privilege Grounds

In what looks to be a reaffirmation of hornbook law regarding the 5th Amendment's Privilege Against Self-Incrimination, the District of Columbia Court of Appeals, not to be confused with the U.S. Court of Appeals for the District of Columbia Circuit, has denied the DC Bar Office of Disciplinary Counsel's ("ODC") Motion to Enforce its Subpoena Duces Tecum against former Assistant Attorney General Jeffrey Clark.  The ODC is investigating Clark for the draft letter he apparently wrote, but never sent, to various State of Georgia government officials. According to the ODC Complaint, Clark's letter informed the Georgia officials that the DOJ "had identified significant concerns that may have impacted the outcome of the election" in Georgia.  On January 3, 2021, Clark told allegedly higher-ranking DOJ officials, including Acting Attorney General Jeffrey Rosen, that he planned to send the letter to Georgia officials in the event that: Rosen refused to do so, Rosen was fired, and Clark was placed in charge of DOJ by Trump. ODC's subpoena commanded Clark to, "Produce all documents and records (stored in hard copy or electronically), of which you were aware before January 4, 2021, that contain evidence of irregularities in the 2020 presidential election and that may have affected the outcome in Georgia or any other state." What was ODC up to? If Clark was unable to produce any such records in response to the subpoena, his subpoena response would be used against him in the disciplinary proceedings, to show that he was planning to lie to the Georgia officials. Clark moved to  quash the subpoena,  invoking his Fifth Amendment Privilege Against Self-Incrimination. As his brief notes:

ODC’s subpoena is, in substance, a set of disguised interrogatories. For example, the subpoena begins with “[p]roduce all documents and records…of which you were aware before January 4, 2021 that contain evidence of irregularities in the 2020 presidential election.” (emphasis added). If Mr. Clark were forced to comply with this and similarly worded requests, he would not only be producing documents but 'testifying' on various subjects such as the state of his knowledge on a particular date relevant to the case. This is an obvious Fifth Amendment violation under In re Artis, 883 A.2d at 101. Because of ODC’s decision to issue disciplinary interrogatories (which are illegal under In re Artis) under the guise of a subpoena, this Court need not reach the act of production doctrine and can decide the case on pure Fifth Amendment testimonial grounds, as the In re Artis court did as well. However, even if ODC’s subpoena had properly limited itself to requesting documents and not testimony, Mr. Clark would still have a valid Fifth Amendment claim under the act of production privilege.

A panel of the District of Columbia Court of Appeals initially summarily rejected Clarke's claim without comment. Clark moved for reconsideration and the Court of Appeals granted his motion in a brief Order. An opinion will follow. This was really a no-brainer under governing case law. We will publish the full opinion when it comes out. Meanwhile, below are the relevant documents. Congratulations to Clark's attorneys, Charles Burnham, of Burnham & Gorokhov, Harry MacDougald, and Robert Destro.

In re Jeffrey B. Clark Esquire--SUBPOENA.

PETITION - Petition For Rehearing and Rehearing En Banc (1).

In re Jeffrey B. Clark Esquire--Office of Disciplinary Counsel En Banc Response.

In re Jeffrey B. Clark Esquire--Order Granting Motion for Rehearing and Denying DC Office of Disclipinary Counsel's Motion to Enforce Subpoena Duces Tecum.

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Fourth Circuit Delivers Major Post-Ruan Decision Reversing All Counts of Conviction Against Dr. Joel Smithers

On Friday, February 2, 2024, in U.S. v. Joel Smithers, the Fourth Circuit reversed all counts of conviction against Martinsville, Virginia osteopath and pain-killer provider, Joel Smithers. The Government marshalled a mountain of evidence against Smithers, showing that he operated a classic pill-mill operation. But the case went to trial before the Supreme Court's landmark 2022 decision in Ruan v. United States. Ruan held that, in unlawful distribution cases against doctors, "[a]fter a defendant produces evidence that he or she was authorized to dispense controlled substances, the Government must prove beyond a reasonable doubt that the defendant knew that he or she was acting in an unauthorized manner, or intended to do so." Acting in an unauthorized manner means acting without a legitimate medical purpose outside the scope of professional practice. Prior to Ruan, most circuits allowed the Government to prevail if it proved either that a physician acted without a legitimate medical purpose or that he/she acted outside the scope of professional practice. And, importantly, the prosecution was allowed to prove that a doctor acted outside the scope of professional practice under an objective standard, without regard to the defendant's subjective intent or knowledge.  Ruan changed all that. Dr. Smithers was convicted under an instruction that allowed the jury to convict him without regard to his state of mind. That is why he gets a new trial. The unanimous panel opinion, written by Judge Roger Gregory, rejected various waiver and harmless error arguments advanced by the Government. Congratulations to Beau Brindley and his colleagues for the victory. Here is the opinion:

U.S. v. Joel Smithers (4th Cir. 2024).

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Robert Hunter Biden Motion to Dismiss Federal Gun Charges: The Briefs Are In.

The briefing is now complete on Hunter Biden's Motion to Dismiss Based on Immunity Conferred by his Diversion Agreement. This motion was filed in the District of Delaware where three felony gun counts are pending against Biden. Biden contends that the Diversion Agreement was a binding contract once signed by the parties to it, and that the only parties to it were Biden and the U.S. Attorney's Office. DOJ disagrees on both points. Biden also argues that U.S. Probation's approval was not necessary and that, even it was necessary, U.S. Probation in fact approved the Agreement.  A similar motion will no doubt be filed in the federal tax case now pending in the Central District of California, with respect to the aborted tax-related Plea Agreement, but Biden's chances of success are much better at getting the federal gun charges in Delaware dismissed, since Diversion agreements do not require approval by the district court. The Diversion Agreement was related to the overall Plea Agreement that blew up last July in Judge Maryellen Noreika's Delaware federal courtroom. Here are Biden's original brief, the Government's Response, and Biden's Reply. Attached also is the Declaration of Christopher Clark, who was Biden's attorney involved in the negotiations surrounding the Plea and Diversion Agreements.

U.S. v. Robert Hunter Biden-Defendant's Motion to Dismiss Indictment Based on Immunity Conferred by Diversion Agreement.

U.S. v. Robert Hunter Biden-Government's Response to Defendant's Motion to Dismiss Indictment Based on Immunity Conferred by Diversion Agreement.

U.S. v. Robert Hunter Biden-Reply in Support of Motion to Dismiss the Indictment Based on Immunity Conferred by Diversion Agreement.

U.S. v. Robert Hunter Biden--Declaration of Christopher J. Clark.

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Opening Supreme Court Brief in Fischer v. United States

As I noted last week, "the U.S. Supreme Court recently granted the Petition for Writ of Certiorari filed in Fischer v. United States, one of three cases in which the United States Court of Appeals for the D.C. Circuit interpreted 18 U.S.C. Section 1512(c) in the context of the January 6 assault on the U.S. Capitol. In addition to its importance in the prosecution and conviction of January 6 protesters and Donald Trump, the case has potentially broad implications for federal white collar criminal law. This is because it involves the proper interpretation of the word 'corruptly', a term that appears frequently in federal white collar statutes. On Monday of this week, Petitioner Josph Fischer filed his opening merits brief. Here it is."

Fischer v. United States-Petitioner Fischer's Opening Merits Brief.

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U.S. v. Stephen Bannon Case Materials: Willfulness and the Reliance on Advice of Counsel Defense.

We are awaiting any day now a ruling from the U.S. Court of Appeals for the District of Columbia Circuit on Steve Bannon's appeal of his conviction for violating Title 2, United States Code, Section 192 by willfully refusing to testify or provide documents to the January 6 Committee in response to its subpoena. In allowing Bannon to remain free on bond pending appeal, U.S. District Judge Carl Nichols noted that Bannon's appeal raised substantial questions of law: "In particular, as I've noted throughout this case, there is a substantial question regarding what it should mean for a defendant to willfully make default under the contempt of Congress statute and what evidence a defendant should be permitted to introduce on that question." Bannon was prevented from introducing evidence, arguing to the jury, or having the trial court instruct the jury, that his attorney had advised him not to comply with the subpoena. Under a 63-year-old D.C. Circuit precedent, Licavoli v. United States, willfulness in the context of Section 192 does not require a showing that the defendant intended to violate the law or acted with an evil motive or bad purpose. The government need only prove that the failure to comply was deliberate. It is extremely unlikely that Licavoli is still good law today, given numerous Supreme Court white collar crime opinions since 1961 requiring the government to prove an intent to violate a known legal duty in order to show willfulness. Here are some case materials from U.S. v. Stephen Bannon.

U.S. v. Stephen Bannon - Sentencing Hearing Transcript Excerpt.

U.S. v. Stephen Bannon - Declaration of Robert J. Costello.

U.S. v. Stephen Bannon - Defendant's Opposition to Government Motion in Limine on Advice of Counsel.

U.S. v. Stephen Bannon - Government's Reply re Motion in Limine on Advice of Counsel Defense 3.8.22 - FINAL.

U.S. v. Stephen Bannon - Defendant's Surreply re Government Motion in Limine on Advice of Counsel.

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A Tale of Two Sentencing Memos

Peter Navarro, former Presidential Advisor to Donald J. Trump, will be sentenced tomorrow in the United States District Court for the District of Columbia. He was found guilty by the jury of two misdemeanor counts alleging violation of Title 2, U.S. Code, Section 192, which criminalizes the refusal of a witness to testify or produce documents to either House of Congress when summoned to do so. Navarro refused to appear or testify in front of the January 6 Committee, and refused to produce documents. He asserted Executive Privilege. Defendant Navarro has asked for two concurrent 6-month probationary sentences, a $100 fine on each count, and to remain free on bond during the pendency of his appeal. The government seeks a sentence of six months on each count, the Guidelines maximum, and a fine of $200,000. Here are the respective sentencing memos.

U.S. V. PETER NAVARRO-DEFENDANT'S SENTENCING MEMO.

U.S. V. PETER NAVARRO-GOVERNMENT'S SENTENCING MEMO.

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Supreme Court Grants Cert. Petition in Fischer v. United States

The U.S. Supreme Court recently granted the Petition for Writ of Certiorari filed in Fischer v. United States, one of three cases in which the United States Court of Appeals for the D.C. Circuit interpreted 18 U.S.C. Section 1512(c) in the context of the January 6 assault on the U.S. Capitol. In addition to its importance in the prosecution and conviction of January 6 protesters and Donald Trump, the case has potentially broad implications for federal white collar criminal law. This is because it involves the proper interpretation of the word "corruptly", a term that appears frequently in federal white collar statutes. Title 18, U.S.C. Section 1512 is titled, "Tampering with a witness, victim, or informant." Section 1512(c) provides that:

"(c) Whoever corruptly-

(1) alters, destroys, mutilates, or conceals a record, document, or other object, or attempts to do so, with the intent to impair the object's integrity or availability for use in an official proceeding; or

(2) otherwise obstructs, influences, or impedes any official proceeding, or attempts to do so,

shall be fined under this title or imprisoned not more than 20 years, or both."

The immediate question in Fischer was whether Section 1512(c)(2) applied to January 6 protesters who delayed Congressional counting and certification of electoral votes from the 2020 Presidential election.  Section 1515 of Title 18 defines an "official proceeding", as used in Section 1512, as "a proceeding before the Congress." The government argued that the January 6 riot obstructed an official proceeding, because it obstructed a proceeding before the Congress. To the government, it was a matter of straightforward textual interpretation. The defense argued that that the history and structure of 1512(c)(2), passed as part of the Sarbanes-Oxley Act (in response to the Enron scandal) to fix a loophole in the federal obstruction of justice statutes, showed that the statute only applied to classic efforts to obstruct evidentiary proceedings. More to come on this important case.

Attached is the Petition for Writ of Certiorari that was granted by the Supreme Court. Fischer v. United States-Petition For A Writ Of certiorari.

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Wishing everyone a happy, healthy, and peaceful new year!

(esp)

Fortenberry Conviction Reversed on Venue Issue

In United States v. Fortenberry, the Ninth Circuit "reversed former congressman Jeffrey Foretnberry's conviction" for allegedly making a false statement in violation of the false statement statute (18 USC 1001). It remands the case without prejudice to retry in a proper venue. 

The government extends venue beyond its deeped rooted constitutional origins in cases alleging that an "effects-based" test can be used for venue in false statement cases. In rejecting this approach, the Ninth Circuit states:

Because a Section 1001 offense is complete at the time the false statement is uttered, and because no actual effect on federal authorities is necessary to sustain a conviction, the location of the crime must be understood to be the place where the defendant makes the statement.

The court concludes:

Fortenberry’s trial took place in a state where no charged crime was committed, and before a jury drawn from the vicinage of the federal agencies that investigated the defendant. The Constitution does not permit this. Fortenberry’s convictions are reversed so that he may be retried, if at all, in a proper venue.

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Supreme Court Grants Cert. Petition in Snyder v. United States

There is a circuit split on whether 18 U.S.C. Section 666 prohibits bribes alone or bribes and gratuities. We recently discussed it here. Yesterday the Supreme Court finally decided to resolve that split, granting the petition for writ of certiorari in Snyder v. United States. Attached is the outstanding Amicus Brief filed on behalf of the National Association of Criminal Defense Lawyers by Latham & Watkins. James Snyder v. United States - NACDL Amicus Brief in Support of Petitioner.

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Free Speech v. Fair Trial: D.C. Circuit Rules on Trump Gag Order

On Friday, December 8, 2023,  a panel of the U.S. Court of Appeals for the District of Columbia Circuit affirmed in part and vacated in part District Court Judge Tanya Chutkan's Gag Order in U.S. V. Trump. Here is the opinion, written by Judge Patricia Millett. Trump's attorneys praised the opinion, but vowed to appeal. 

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Hunter Biden Tax Evasion Indictment

The Hunter Biden Indictment for tax evasion, filing false tax returns, and failure to pay and file taxes was handed down last Thursday in the Central District of California. There were nine counts--three felonies and six misdemeanors. The felonies were for willfully filing a false 2018 personal tax return, willfully filing a false 2018 corporate return, and willful evasion of the 2018 tax assessment.  Presumably, no major new investigative steps were taken after the original plea deal blew up in July of this year. Here is the Hunter Biden Central District of California Tax Evasion Indictment. Although this appears to be a well-crafted and aggressive speaking Indictment brought by Special Counsel David Weiss, Hunter has an outstanding criminal defense team, lead by Abbe Lowell, and potentially better defenses than the typical tax evasion defendant.

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Trump Immunity Claim Rejected By D.C. Circuit For Now

On Friday December 1, 2023, in Blassingame v. Trump, the U.S. Court of Appeals for the D.C. Circuit ruled that, at this stage of the proceedings, former President Donald Trump is not entitled to dismiss the consolidated civil case against him (brought by Capitol Police officers and others who were present at the Capitol on January 6, 2021) based on the doctrine of Presidential Immunity. Importantly, and overlooked in most of the press reporting on the ruling, the Court left open the possibility that Trump could prevail on a later motion for summary judgement. But at this stage of the proceedings, prior to the development of a factual record, the Court had to accept the plaintiffs' allegations as true. Since a President's purely private acts, even while serving as President, are not protected by the doctrine of Presidential Immunity, the record was not sufficiently developed to grant the former President's motion to dismiss.

Here is the opinion in Blassingame v. Trump.

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U.S. v. Calk: 18 U.S.C. Section 215 and Perspective Rolls

In a case of first impression in the Second Circuit regarding 18 U.S.C. Section 215, a panel has affirmed the conviction of Stephen Calk. Calk facilitated The Federal Savings Bank's ("TFSB") approval of significant loans to Paul Manafort in exchange for Manafort's assistance in securing positions for Calk in the Trump Campaign and, later, the Trump Administration. Calk was TFSB's CEO. The Trump Administration position did not pan out, despite Calk's submission of a a professional biography and document entitled “Stephen M. Calk Perspective Rolls in the Trump Administration." The Court held that Calk's assistance was a "thing of value" within the meaning of the statute and that Calk's conduct in facilitating the loans was "corrupt" under the statute.

Here is the opinion.

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Gratuities and 18 U.S.C. Section 666: Will The Supremes Finally Slay The Mark Of The Beast?

On December 8, 2023, the U.S. Supreme Court will decide whether to grant the Petition for Writ of Certiorari in United States v. James Snyder, a case out of the United States Court of Appeals for the Seventh Circuit. There is a split in the federal circuit courts over the question of whether 18 U.S.C. Section 666 criminalizes gratuities as well as bribes. The majority of circuits have held that 666 criminalizes both bribes and gratuities. A minority of circuits have held that the statute only criminalizes bribes. The case has enormous implications for the federal prosecution of public corruption at the state and local level in the United States. Attached are the relevant filings by the government and the defense, plus a brilliant amicus brief filed by the National Association of Criminal Defense Lawyers.

U.S. v. James Snyder Petition for Writ of Certiorari

U.S. v. James Snyder Government Brief in Opposition to Cert. Petition

U.S. v. James Snyder Defense Cert Reply

NACDL Amicus Brief in Snyder v. U.S.

 

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Judge Chutkan Denies Trump's Motion To Strike Allegedly Inflammatory Portions of the Indictment

On Friday, D.C. United States District Court Judge Tanya Chutkan, unsurprisingly, denied former President Donald Trump's Motion to Strike Inflammatory Allegations from the Indictment in U.S. v. Trump. At issue were the portions of the Indictment covering the January 6, 2021, assault on the U.S. Capitol by some of Trump's supporters, which, according to the defense, constitute irrelevant and prejudicial surplusage. Motions to strike surplusage are disfavored under U.S. Court of Appeals for the D.C. Circuit case law and need not be granted by the trial court unless a defendant can establish that the challenged  language is both irrelevant to the charges and prejudicial. Judge Chutkan did not reach the question of relevance, finding that Trump had failed to show that the alleged surplusage would prejudice the jury, particularly in light of her practice, which she intends to follow in this case, of not sending indictments back to the jury room during deliberations. Chutkan also promised to weed out prejudice in the jury panel, caused by the government or Trump, during the voir dire process. Here is the opinion.  U.S. v. Donald Trump - Order Denying Defendant's Motion to Strike Inflammatory Allegations from the Indictment

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Trump Gag Order Appeal: Oral Arguments Are Next Up In D.C. Circuit

The parties' briefs are all in and the case is set for oral argument on Monday, November 20, at the U.S. Court of Appeals for the District of Columbia. Gathered together here are: Former President Trump's Opening Brief re Appeal of Judge Chutkan's Gag Order; the Government's Answering Brief; Trump's Reply Brief; and the Gag Order itself.

10-17-23 Trump Gag Order in DC Case

U.S. v. Trump - Donald Trump's Opening Brief re Appeal of Gag Order

U.S. v. Trump - Answering Brief of the United States re Donald Trump's Appeal of Gag Order

U.S. v. Trump - Reply Brief of Defendant-Appellant Donald Trump re Trump's Appeal of U.S. District Court Chutkan's Gag Order

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Hunter Biden's Motion for Issuance of Rule 17(c) Subpoenas Before Trial

Today Hunter Biden's lawyers filed a Motion for Pretrial Issuance of Subpoenas Duces Tecum, pursuant to Federal Rule of Criminal Procedure 17(c)(1), to Donald Trump, William Barr, Jeffrey Rosen, and Richard Donoghue. The proposed subpoenas demand documents relating to decisions involving the investigation or prosecution of Hunter Biden in both the Trump and Biden Administrations. The defense maintains that the documents are highly likely to be relevant to its contention that the Hunter Biden Indictment is an example of a constitutionally impermissible vindictive or selective prosecution. Defendants are entitled under the Sixth Amendment to present a defense and to  compulsory production of witnesses and documents in aid of that right. Here is the motion. U.S. v. Hunter Biden - Defense Motion for Issuance of Subpoenas Duces Tecum Pursuant to Rule 17(c) and Memorandum in Support.

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