Tuesday, January 18, 2022
Peter Henning RIP
Peter Henning was an incredible writer, scholar, and teacher. Most of all to me - he was a good friend.
In November of 2004, Peter Henning and I started this WhiteCollarCrimeProfBlog. He moved on to later write the White Collar Watch for the NYTimes, but we continued to co-author many a book on criminal law, criminal procedure, and white collar crime. Whether it was a criminal law casebook, a criminal procedure treatise, or the hornbook on white collar crime, Peter was amazing. He understood the nuances in cases, the rationales of the prosecutors, and had a gift of writing quickly in highly complex areas of the law.
On the rules of law he and I seldom disagreed. On whether the prosecution or defense had the better argument, however, we often differed. When that happened, our rule was simple - let the reader hear both sides, but always make sure the representations were accurate.
I will miss Peter's humor, his writing, and his friendship. His family was his everything to him, so my heart goes out to them.
Wayne State Law School Announcement - here
January 18, 2022 in News | Permalink | Comments (0)
Monday, January 17, 2022
Fifth Circuit Reverses Tax Counts
Last week in United States v. Pursley, the Fifth Circuit reversed and remanded all counts of conviction against appellant Jack Pursley. Appellant had been charged with a Klein conspiracy and three tax evasion counts. The convictions were reversed because: 1) the trial court refused to give a requested instruction requiring the jury to find that the charged offenses were committed within the 6 year statute of limitations period; and 2) the trial court neglected to make a ruling as to how long the statute of limitations had been suspended pursuant to 18 U.S.C. Section 3292 (suspension of limitations to obtain foreign evidence). Under Section 3292 (b), "a period of suspension under this section shall begin on the date on which the official request is made and end on the date on which the foreign court or authority takes final action on the request." According to the Fifth Circuit, the trial court must make the factual determination as to the date on which the foreign court or authority took final action on the request for evidence, assuming that there is a dispute as to this issue, but failed to do so here. It is often not at all clear when such final actions by foreign authorities take place. Sometimes the foreign authority will state that it has taken final action, but continue to send documents after this date. Sometimes the foreign authority will not indicate whether it is taking its final action. The case has a good discussion of statute of limitations issues in tax evasion cases.
January 17, 2022 in Judicial Opinions, Prosecutions, Tax | Permalink | Comments (0)
Monday, January 10, 2022
Briefs Filed in Ruan and Kahn.
Last November, guest bloggers Eugene Gorokhov and Jonathan Knowles posted here about the Supreme Court's granting of certiorari in Ruan v. United States and Kahn v. United States, two federal Circuit Court of Appeals decisions that effectively eviscerate the scienter requirement in criminal cases charging physicians with illegal distribution of Schedule II drugs. There is a longstanding split between those federal circuits that have criminalized malpractice and those requiring the government to actually prove beyond a reasonable doubt that physician defendants had a subjective intent to prescribe drugs for no legitimate medical purpose and outside the scope of their professional practices. Other circuits fall in-between, allowing hybrid jury instructions with objective and subjective intent elements. Amicus Briefs and the Petitioners' Briefs were filed in late December. I am posting some of them here. The smart money is on the Court substantially clarifying and strengthening the government's obligation to prove knowing or intentional efforts by physicians to prescribe outside the scope of professional practice and without a legitimate medical purpose.
Brief of Petitioner Shakeel Kahn
Ruan - Amicus Brief of Due Process Institute
National Pain Adv Ctr Amicus Brief
January 10, 2022 in Judicial Opinions, Prosecutions | Permalink | Comments (0)
Tuesday, January 4, 2022
More on Elizabeth Holmes
The speculation now begins about where Elizabeth Homes will serve her sentence, what her sentence will be, and how "cushy" she will find things in confinement. The Bloomberg Law story is here. Her sentence is likely to be more substantial than the three years being predicted by anonymous experts in this story. Nevertheless, as a first-time offender with no violent past and a non-violent offense of conviction, she is very likely going to a minimum security camp unless her sentence is longer than 10 years. That's the way the system works.
January 4, 2022 in Prosecutions, Securities, Sentencing | Permalink | Comments (0)
Monday, January 3, 2022
Theranos Founder Elizabeth Holmes Convicted On 4 Of 11 Counts. And That Will Be Enough.
Here is the CNN story. The jury acquitted Holmes, the former CEO of blood-testing startup Theranos, on all 4 counts related to the alleged defrauding of patients. She was convicted on 4 counts related to defrauding of investors, including a conspiracy count. The jury hung on 3 additional investor fraud counts. There will be no retrial of the counts that the jury could not reach agreement on, because Holmes' ultimate sentence would not be affected by a guilty verdict on those counts. Moreover, under current Supreme Court case law, the trial court can (unfortunately) consider the government's evidence against Holmes on both the acquitted and hung counts in determining her sentence. The SEC long ago settled its case against Holmes without demanding an admission of wrongdoing on her part. Had she made such an admission there would have been no need for a criminal trial.
January 3, 2022 in Current Affairs, Fraud, News, Prosecutions, SEC, Securities, Sentencing, Settlement, Verdict | Permalink | Comments (0)
Sunday, January 2, 2022
Attorney Joshua Treem and Investigator Sean Gordon Acquitted On All Federal Charges
Congratulations are in order for Bob Trout and Noah Cherry of DC's Schertler Onorato Mead & Sears and to Dan Goldstein on the 12-28-21 federal district court acquittal of their client, longtime Baltimore criminal defense attorney Joshua Treem. Treem had been accused of conspiracy to obstruct an official proceeding and related charges in connection with his representation of Baltimore attorney Kenneth Ravenell in a criminal case. Also acquitted of all charges was private investigator Sean Gordon who was the private investigator working with Treem on the Ravenell matter. Gordon was represented by Geremy Kamens and Rebecca LeGrand. Congratulations to them as well. Here is the Baltimore Sun's story on the acquittal. According to Trout: "The prosecution of Josh Treem was an utter failure of judgment by the U.S. Attorney’s Office in Maryland." Kamens commented that, "these people were defending a client; they were not committing a crime." Here are the respective judgments of acquittal: Joshua Treem Judgment of Acquittal and Sean Gordon Judgment of Acquittal.
January 2, 2022 in Defense Counsel | Permalink | Comments (0)
Saturday, January 1, 2022
Three New Opinions on the Meaning of Corrupt Obstruction
Three federal district court opinions on the meaning of "corruptly" obstructing, influencing, or impeding an official proceeding, under 18 U.S.C. Section 1512 (c)(2), have been issued in the past month. Each case is from a different federal district judge in the District of Columbia. Although each case pertains to the actions of alleged participants in the January 6, 2021 Capitol Riot, the cases also have significant implications for future white collar prosecutions--implications that should benefit white collar defendants. Here are the opinions in U.S. v. Nordean, U.S. v. Caldwell, and U.S. v. Sandlin. More to come on this issue in the next week.
January 1, 2022 in Current Affairs, Judicial Opinions | Permalink | Comments (0)
Tuesday, December 7, 2021
The Eastman Letter and the Fifth Amendment
Here is the Eastman Letter to January 6th Select Committee Chairman Bennie G. Thompson from Eastman's attorney Charles Burnham, invoking Eastman's Fifth Amendment Privilege Against Self-Incrimination and raising other issues as well. The letter is in response to a Committee subpoena for Eastman's testimony and documents. Burnham's letter leaves open the question of whether Eastman will appear at all, although that is clearly the proper course. As I noted here, in order to successfully invoke the Fifth Amendment Privilege Against Self-Incrimination the client must appear and invoke it on a question by question basis. This will be easy for Eastman to do, as Burnham's letter makes clear, because so many public figures and office-holders have expressed their belief that he has serious criminal exposure. Federal judges, most recently U.S. District Judge Amy Berman Jackson, have suggested that January 6 rally speakers have exposure as well. Chairman Thompson wants to "test" the assertions of witnesses invoking the privilege and Norm Eisen, E. Danya Perry, and Joshua Perry argue here in the Washington post that he should vigorously do so with witnesses such as Eastman and former DOJ Civil Division Chief Jeffrey Clark. But a Fifth Amendment assertion by either man is a no-brainer. All Burnham has to do is point to the public record, as he amply does in his letter. Almost any question after name, address, age, and current occupation could furnish a link in a potentially incriminatory chain. The Committee also demanded from Eastman a broad array of documents, and Burnham has invoked the Fifth Amendment "Act of Production" Privilege, a part of the Privilege Against Self-Incrimination, with respect to these documentary demands. Eastman arguably does not even have to provide a Privilege Log, because the very act of listing the documents might bring into play the "foregone conclusion" exception to the Act of Production Privilege. Of course, the Committee may be able demonstrate that the existence and possession of such documents by Eastman is a "foregone conclusion" based on testimony and documents it has received from other witnesses. Stay tuned.
December 7, 2021 in Congress, Contempt, Current Affairs, Defense Counsel, Investigations, Legal Ethics, Privileges | Permalink | Comments (0)
Sunday, December 5, 2021
No One Will Be Prosecuted for Plausibly Invoking the Fifth Amendment Privilege Against Self-Incrimination at the January 6th Select Committee
Anyone who regularly practices white collar criminal defense knows how easy it is to successfully invoke the Fifth Amendment Privilege Against Self-Incrimination at the grand jury and trial stages of an investigation. Ohio v. Reiner, 532 U.S. 17 (2001) and a number of Supreme Court cases preceding it establish that the privilege protects the innocent as well as the guilty and applies to any statement even tending to incriminate the witness by furnishing "a link in the chain of evidence needed to prosecute the claimant for a...crime." Hoffman v. United States, 341 U.S. 479, 486-87 (1951). This is why, unless the Fifth Amendment invocation is obviously frivolous, prosecutors very rarely seek to challenge such an invocation in court.
The facts in Ohio v. Reiner, and how the Supreme Court applied them, show how broad the Privilege Against Self-Incrimination is. Matthew Reiner was charged with involuntary manslaughter for the death of his two-month old son Alex. Evidence established that the infant died from “shaken baby syndrome” resulting from child abuse and that the injury occurred minutes before Alex stopped breathing. Reiner was with the child during that time frame. (Evidence established that Alex’s twin brother Derek suffered injuries as well.) Reiner maintained that Alex died earlier while in the care of babysitter Susan Batt. Reiner’s experts testified that Alex may have been injured during the period that he was under Batt’s care. At trial, the State called Batt to the stand. Batt invoked her Fifth Amendment privilege against self-incrimination and refused to testify, whereupon she was given transactional immunity and ordered to testify pursuant to Ohio Rev. Code Ann. § 2945.44. Batt testified that she had only demanded immunity on the advice of counsel and had in fact done nothing wrong. She denied any involvement in Alex’s death and denied shaking him. She denied causing any of the injuries suffered by Alex or Derek. Reiner was convicted and appealed his conviction. The Supreme Court of Ohio reversed Reiner’s conviction on the ground that Batt had no valid Fifth Amendment privilege against self-incrimination. The court held that Batt’s testimony could not have incriminated her because she “denied any involvement in the abuse.” The wrongful grant of immunity “prejudiced [Reiner] because it effectively told the jury that Batt did not cause Alex’s injuries.” The United States Supreme Court reversed, reaffirming that the Fifth Amendment privilege against self-incrimination “protects the innocent as well as the guilty,” and that “the facts here are sufficient to sustain a claim of privilege.” Reiner, 121 S. Ct. at 1253.
In its per curiam opinion, the Court noted its longstanding precedent that the privilege extends not only “to answers that would in themselves support a conviction” but also to “those which would furnish a link in the chain of evidence needed to prosecute the claimant.” Quoting Hoffman, the Court stressed that a potential witness need only show “from the implications of the question, in the setting in which it is asked, that a responsive answer to the question or an explanation of why it cannot be answered might be dangerous because injurious disclosure could result.” Although the privilege extends to those witnesses who have “reasonable cause to apprehend danger from a direct answer,” rather than to those who fear a danger of “imaginary and insubstantial character,” and the inquiry on that issue is for the court, “we have never held, as the Supreme Court of Ohio did, that the privilege is unavailable to those who claim innocence. To the contrary, we have emphasized that one of the Fifth Amendment’s ‘basic functions . . . is to protect innocent men . . . who otherwise might be ensnared by ambiguous circumstances.’ Grunewald v. United States , 353 U.S. 391, 421.” (internal quotations omitted). Reiner, at 1254.
According to the Court, Batt had reasonable cause to fear danger from her truthful answers since she spent extended periods of time with Alex and his brother in the weeks prior to the discovery of their injuries and she was with Alex within one potential time frame of his death. The defense theory was that she caused the injuries and death. “In this setting it was reasonable for Batt to fear that answers to possible questions might tend to incriminate her.” Reiner, at 1255.
The January 6th Select Committee of the U.S. House of Representatives is poised to refer at least two "recalcitrant" witnesses to the Department of Justice for criminal contempt charges based in part on Fifth Amendment invocations that appear to be far from frivolous. Both former DOJ Acting Civil Division Chief Jeffrey Clark and unofficial Trump advisor John Eastman have indicated their intent to invoke the privilege. They have also raised other grounds other for refusing to appear or testify, but those grounds are not the subject of this post.
Neither Clark nor Eastman appear to have any criminal exposure connected to the January 6 assault on the U.S. Capitol. They were reportedly involved, however, in plans or efforts to convince various state and/or federal officials to take official actions with a view toward changing the results of the 2020 Presidential election. Clark reportedly pushed a plan to convince certain state officials to invalidate election results. Eastman wrote two memos explaining various scenarios under which Vice President Pence might refuse to certify the Presidential Electors from key states. He also met with Pence to discuss this topic. Numerous public commentators and/or Democratic Representatives suggested that these actions of Clark and Eastman might be violative of federal criminal law. I have seen very little information to suggest that anything approaching a crime was committed by either man, however reprehensible one believes their actions were. But my views are irrelevant for Fifth Amendment purposes. When multiple Democratic House Members are suggesting that you may have committed crimes in connection with the January 6, 2021 certification of Electoral College votes, and a House Select Committee charged with investigating January 6 demands that you testify about those acts, your decision to invoke the Fifth Amendment can hardly be described as frivolous. To make a criminal referral to DOJ under these circumstances would be appalling, and I don't see any way that AG Garland would go to the grand jury to seek an indictment. The case would be thrown out of court. Again, I am speaking only of the Fifth Amendment issue. For purposes of invoking the Fifth Amendment the witness must appear before the questioning body and cannot make a blanket invocation. The privilege must be invoked on a question by question basis.
December 5, 2021 | Permalink | Comments (0)
Saturday, December 4, 2021
Man Bites Dog. Hell Freezes Over. Third Circuit Reverses Section 1001 Conviction Based on Government's Failure to Prove Materiality.
Need I say more? It is a truism that materiality is an exceedingly easy element to prove in a prosecution brought under 18 U.S.C. Section 1001. It is even easier to sustain on appeal. But in U.S. v. Joseph Johnson, the Third Circuit held that the government failed to prove materiality under 18 U.S.C. Section 1001 (a) (2), which prohibits “knowingly and willfully... mak[ing] any materially false, fictitious, or fraudulent statement or representation” in a matter within the jurisdiction of the federal government. Joseph R. Johnson was a Bill Cosby supporter who filed a fraudulent pleading in a federal civil action brought by one of Cosby's alleged victims. Specifically, Johnson filed a praecipe that used the signature of the alleged victim's actual attorney, but which was filed without the attorney's knowledge and which contained unsupported allegations that Cosby's alleged victim had failed to report income. Almost immediately after the false pleading was discovered it was stricken from the record by the civil trial judge. Johnson was then indicted under Section 1001 for making a false material representation to the civil trial judge. Materiality requires evidence that the false statements were of the kind "capable of influencing the decisionmaker" and that "could have bearing on an actual decision entrusted to the decisionmaker." In Johnson, the only decisionmaker identified by the prosecution was the civil trial judge, who testified in general that he extracted information whenever he looked at the docket and then took action based on that information. But, according to the Third Circuit, "given the subject matter of the underlying litigation and posture of the case, there is no evidence that this false statement, even if considered by the Judge, could have been relevant, much less material, to any decision." In other words, the stricken meshugannah pleading would not have been relevant or admissible in the alleged victim's case. The only thing it was relevant to was the judge's decision to strike it from the docket, which was not enough. The Third Circuit, without explicitly saying so, seemed to believe that no proof the government might have offered would have sufficed to show materiality in this instance. Assistant Federal Defender Abigail Horn successfully argued the appeal for Johnson and congratulations are in order. I doubt there have been very many successful federal criminal defense appeals on the materiality issue.
December 4, 2021 in Fraud, Judicial Opinions | Permalink | Comments (0)
Tuesday, November 30, 2021
Supreme Court Takes Cases on Prescribing Doctors' Good Faith Defense
Guest Bloggers: Eugene V. Gorokhov & Jonathan Knowles of Burnham & Gorokhov, PLLC
The Supreme Court recently granted certiorari in two cases addressing criminal liability for doctors who prescribe controlled substances in good faith. It is also considering a similar petition from the Fourth Circuit, which includes Maryland and Virginia. The Court last addressed this issue nearly 50 years ago. United States v. Moore, 423 U.S. 122 (1975). Since then, the federal courts have drawn very different conclusions as to the level of wrongdoing required for prosecution. These cases present an opportunity for the Supreme Court to clarify whether physicians can become criminals for a simple mistake.
As two professors of health law point out, the potential for injustice goes far beyond those who are imprisoned. Fear of prosecution may inhibit other doctors from prescribing medicine, to the detriment of patients with legitimate medical needs. The easier it is to convict a medic, the more cautious one will be with medicine that many patients find necessary.
Too low a bar also risks interfering with traditional regulation of the medical profession. One of the defendants, Dr. Saheel Kahn, was twice investigated—and cleared—by the Arizona Medical Board. Nevertheless, he was found guilty of violating federal law.
Just the Facts
Saheel Kahn, who practiced in Arizona and Wyoming, failed to realize that some of his patients were selling their medication. Xiulu Ruan owned a pain clinic and pharmacy in Alabama, where he prescribed unusually large numbers of pain-killers. George Naum worked at an addiction clinic in West Virginia, where he signed prescriptions based on his nurse’s evaluations and reports. All were charged with distributing controlled substances.
Dr. Kahn, Dr. Ruan, and Dr. Naum maintained that they had their patients’ best interests at heart. The courts said, in effect, that it didn’t matter. All of the doctors were convicted. Two of them were sentenced to decades of imprisonment.
Is Legitimate Medical Purpose A Defense?
A physician violates the law when by distributing controlled substances “outside the usual course of professional practice.” Moore, 423 U.S. at 124. Thus, physicians can be prosecuted when they prescribed drugs “not for legitimate purposes” or their “conduct exceeded the bounds of ‘professional practice.’” Id. at 135, 142.
As a matter of common sense, to avoid criminalizing medical error, conviction should require a lack of legitimate purpose and treatment beyond the bounds of medical practice. The appropriate regulation arguably supports this requirement: “A prescription . . . must be issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice.” 21 C.F.R. § 1306.04(a). A few appellate courts have unambiguously adopted this position. U.S. v. Pellman, 668 F.3d 918, 923 (7th Cir. 2012); U.S. v. Feingold, 454 F.3d 1001, 1010 (9th Cir. 2006).
Many circuits, however, have taken the opposite approach. In the Fourth Circuit, for example, the government must prove that a doctor’s actions “were not for legitimate medical purposes in the usual course of his professional medical practice” or that they were “beyond the bounds of medical practice.” U.S. v. Singh, 54 F.3d 1182, 1187 (4th Cir. 1995). Thus, “malicious motive or the desire to make a profit” is not required to convict a physician. Id. at 1188.
This reasoning reached its logical conclusion in Dr. Naum’s trial. Dr. Naum tried to prove that his treatment was for a legitimate medical purpose. The judge did not let him. The court of appeals affirmed his conviction: because the government wasn’t required to prove the lack of any legitimate medical purpose, it wasn’t relevant whether Dr. Naum had one. U.S. v. Naum, 832 F. App’x 137, 142 (4th Cir. 2020).
Similarly, in the Tenth Circuit, a physician may be convicted “if she prescribes the substance either outside the usual course of medical practice or without a legitimate medical purpose.” U.S. v. Nelson, 383 F.3d 1227, 1232 (10th Cir. 2004). The Court of Appeals denied Dr. Kahn’s request to reconsider this rule. U.S. v. Khan [sic], 989 F.3d 806, 822 (10th Cir. 2021). Dr. Kahn then sought certiorari on this issue.
What Is “Good Faith”?
Formally, good faith is a defense throughout the nation. Its effectiveness, however, varies greatly from circuit to circuit. Practically, in some parts of the country, it is no defense at all.
A few circuits have, with varying degrees of clarity, allowed a subjective test for good faith. That is, in some parts of the country, physicians may defend themselves by demonstrating that they were sincerely attempting to treat their patients.
By contrast, some circuits employ an objective standard. The Fourth Circuit is one of them. United States v. Hurwitz, 459 F.3d 463, 478-80 (4th Cir. 2006). Confusingly, some (non-binding) decisions arguably go further, suggesting that even an objectively reasonable belief is no defense. See United States v. Purpera, 844 F. App’x 614, 626-27 (4th Cir. 2021); United States v. Orta-Rosario, 469 F. App’x 140, 145-46 (4th Cir. 2012). In other words, it might not matter that a doctor believed he was following proper medical practice, only whether he should have believed it.
The Tenth Circuit leaves no doubt on this point: if a physician acted beyond professional boundaries, whatever her reasons, she cannot claim to have acted in good faith. Khan, 989 F.3d at 825-26. In the Eleventh Circuit, a defendant might not be entitled to a good faith instruction at all. U.S. v. Joseph, 709 F.3d 1082, 1097 (11th Cir. 2013). Effectively, there is no good faith defense within these circuits. It is on this issue that Dr. Ruan sought certiorari, as did Dr. Kahn.
These cases offer the Supreme Court an opportunity to correct the appellate courts’ error. The conflation of medical standards with legitimate purpose, and the absence of a good faith defense, mean that physicians can violate the law through a well-intentioned mistake. At best, this creates a crime out of what should be dealt with through professional discipline or malpractice lawsuits. At worst, it makes outlaws out of well-meaning doctors who trust their patients or employ unorthodox forms of treatment. In some cases, like Dr. Kahn’s, it can even lead to punishment where medical boards have investigated and found no wrongdoing.
Yet, a favorable decision alone will do little good for any individual defendant. An accused physician must understand precisely what the government will prove, how to convince the jury otherwise, and the necessary legal arguments. A small error, such as the failure to request the correct jury instructions, could ensure the conviction of even an innocent defendant. Therefore, as always, it remains important for wrongly-accused doctors to secure the representation of a skilled defense lawyer.
November 30, 2021 in Fraud, Prosecutors | Permalink | Comments (0)
Tuesday, November 2, 2021
Will It Be - DOJ v. Corporations?
Here's the DOJ's Memorandum on the creation of a internal corporate crime advisory group - Corporate Crime Advisory Group and Initial Revisions to Corporate Criminal Enforcement Policies.
This Memo talks about the internal advisory group to reinforce the forthcoming department changes regarding corporate prosecutions.
I am also announcing, through this Memorandum, the creation of a Corporate Crime
Advisory Group within the Department that will consider and, where necessary, recommend
additional guidance concerning the three revisions set forth herein. This group will also consider
additional revisions and reforms that will strengthen our approach to corporate crime and equip
our attorneys with the tools necessary to prosecute it when it occurs.
It is hoped that this new Corporate Crime Advisory Group will consider working with the corporate sector in eradicating criminality. Colloboration can be a key to success in stopping white collar crime.
November 2, 2021 | Permalink | Comments (0)
Friday, October 29, 2021
Corporate Executives - Beef Up Your Legal Teams
Deputy AG Lisa Monaco, speaking at the 36th ABA White Collar Crime Institute discussed three areas:
"I have three priorities for my time with you. First, I want to describe three new actions that the department is taking today to strengthen the way we respond to corporate crime. Second, I want to look forward and tell you about some areas we will be studying over the next months, with an eye to making additional changes to help further invigorate the department’s efforts to combat corporate crime. But before both of those, I want to set the scene by discussing trends, as well as the Attorney General’s and my enforcement priorities, when it comes to corporate crime."
Three very telling observations set the stage for the new enforcement policy and the challenges faced:
Corporate crime has an increasing national security dimension — from the new role of sanctions and export control cases to cyber vulnerabilities that open companies up to foreign attacks. Second, data analytics plays a larger and larger role in corporate criminal investigations, whether that be in healthcare fraud or insider trading or market manipulation. Third, criminals are taking advantage of emerging technological and financial industries to develop new schemes that exploit the investing public.
But she notes that these changes have been "changes of degree and not of kind."
DOJ clearly intends to focus on individuals ("Accountability starts with the individuals responsible for criminal conduct."). And they intend to put money there ("We are also going to find ways to surge resources to the department’s prosecutors. As one example, a new squad of FBI agents will be embedded in the Department’s Criminal Fraud Section.")
The three changes will be:
- "companies must provide the department with all non-privileged information about individuals involved in or responsible for the misconduct at issue" & "no longer be sufficient for companies to limit disclosures to those they assess to be “substantially involved” in the misconduct"
- "all prior misconduct needs to be evaluated when it comes to decisions about the proper resolution with a company, whether or not that misconduct is similar to the conduct at issue in a particular investigation." - companies who have veered from a DPA or NPA may have issues here
- Monitors are back in
And finally - there will be a Corporate Crime Advisory Group - so it looks like the implementation of these changes are forthcoming.
With recidivism a focus on the prosecution of corporate crime, we may be seeing a lot more scrutiny of prior DPAs and NPAs.
October 29, 2021 in Conferences, Deferred Prosecution Agreements | Permalink | Comments (0)
Tuesday, October 12, 2021
"Imagining a World Without Corporate Criminal Law"
"Imagining a World Without Corporate Criminal Law" is a symposium that will generate new ideas about the value of applying criminal sanctions to collective entities. Leading scholars representing diverse viewpoints will imagine criminal law without corporate liability and trace the possible implications of such a development. Symposiasts will address whatever aspects of the question they believe to be most salient, including what would be lost or gained from successful abolition, whether civil and/or administrative sanctions can replace criminal punishment, and how to compare the experience of other countries that regulate corporations without the threat of criminal liability. Original symposium essays will be published in the Journal of Corporation Law.
The symposiasts will be hosted by Georgetown Law, with audience members participating via Zoom. To join virtually, please register at www.tinyurl.com/CorpCrimeEvent/. Co-sponsors for the event include the Georgetown Institute for the Study of Market Ethics and Wharton's Zicklin Center for Business Ethics Research.
Georgetown Law School in Washington, D.C. October 22 and 23.
October 12, 2021 in Conferences | Permalink | Comments (0)
Thursday, June 3, 2021
What Does the Supreme Court's Interpretation of the Computer Fraud Statute Mean for Cybersecurity
The Supreme Court issued the Van Buren case this morning, providing a strict interpretation to the words "intentionally accesses a computer without authorization or exceeds authorized access." It's a 6-3 decision with an odd mix of the players. Writing the majority opinion is Justice Barrett, joined by Justices Breyer, Sotomayor, Kagan, Gorsuch, and Kavanaugh. On the dissent writing the opinion is Justice Thomas, joined by Chief Justice Roberts and Justice Alito. In summary, the opinion holds:
"In sum, an individual 'exceeds authorized access' when he accesses a computer with authorization but then obtains information located in particular areas of the computer - such as files, folders, or databases - that are off limits to him. The parties agree that Van Buren accessed the law enforcement database system with authorization. The only question is whether Van Buren could use the system to retrieve license-plate information. Both sides agree that he could. Van Buren accordingly did not 'excee[d] authorized access' to the database, as the CFAA defines the phrase, even though he obtained information from the database for an improper purpose. We therefore reverse the contrary judgment of the Eleventh Circuit and remand the case for further proceedings consistent with this opinion."
So the question will be asked whether the Computer Fraud and Abuse Act should be rewritten to cover this conduct? Or perhaps civil remedies may be more appropriate here? Or should this be left to employment law?
With the importance of cybersecurity today, and the importance of focusing on those breaking into crucial computer systems, it seems like both the government and private industry need to be important gatekeepers in protecting information. This decision lets everyone know what is criminal under the statute and what is not, and now it needs to be determined how to better manage computer security.
June 3, 2021 in Computer Crime | Permalink | Comments (0)
Tuesday, May 4, 2021
It Is All In the Emails - Mueller Report Review
Judge Amy Berman Jackson issued an order today that dissects two claims raised in Citizens for Responsibility & Ethics in Washinton v. U.S. Dept. of Justice related to the Mueller Report. It notes that "CREW brought this action under the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, against the United States Department of Justice (“DOJ”), seeking the production of documents that Attorney General Barr reviewed in advance of his public announcement concerning the report transmitted to him by Special Counsel Mueller." Key to this analysis was looking at applicable exemptions under FOIA.
The Court found Document 6 properly withheld, but Document 15 did not have a like finding. The agency attempted to use the deliberative process provilege and the attorney-client privilege under exemption 5. The court stated:
As noted above, summary judgment may be granted on the basis of agency affidavits in FOIA cases, when “they are not called into question by contradictory evidence in the record or by evidence of agency bad faith.” Judicial Watch, Inc., 726 F.3d at 215, quoting Consumer Fed’n, 455 F.3d at 287. But here, we have both.
The court stated:
The review of the unredacted document in camera reveals that the suspicions voiced by the judge in EPIC and the plaintiff here were well-founded, and that not only was the Attorney General being disingenuous then, but DOJ has been disingenuous to this Court with respect to the existence of a decision-making process that should be shielded by the deliberative process privilege. The agency’s redactions and incomplete explanations obfuscate the true purpose of the memorandum, and the excised portions belie the notion that it fell to the Attorney General to make a prosecution decision or that any such decision was on the table at any time.
Perhaps a deeper investigation is needed here. Examining prosecutorial discretion on when obstruction of justice is proper and when it is not, is something that needs review. In my recent Article, "Obstruction of Justice: Redesigning the Shortcut," I argue that there needs to be a consistent framework for obstruction of justice and not one that can be rearranged dependent upon the Attorney General or others.
May 4, 2021 in Investigations, Judicial Opinions, Obstruction | Permalink | Comments (0)
Saturday, April 3, 2021
Be Careful What You Ask For: Third Circuit Vacates Two Sentences For Defense Breaches Of Plea Agreement
In two cases consolidated for appeal, U.S. v. Yusuf and U.S. v. Campbell, the Third Circuit reversed downward variances based on defense breaches of the plea agreement. Both cases came out of the District of New Jersey and both involved plea agreements that recognized the sentencing court's ability to downwardly vary, but forbade the defense from arguing for a departure or variance below the recommended Guidelines range. The agreements also forbade the government from arguing for a departure or variance above the recommended range. Yusuf pled guilty to aggravate identity theft and conspiracy to commit bank fraud. Campbell pled guilty to felon in possession. Both cases involved mitigating circumstances that typically garner downward variances. Both cases involved sympathetic judges who all but encouraged defense breaches based on their searching inquiries during sentencing. Both cases stand for the proposition that there is a difference between defense counsel presenting the sentencing judge with all relevant facts about the defendant and the offense, including mitigating facts, and defense counsel asking for a downward variance, either directly or through questions to the client. This distinction is critical for defense counsel to keep in mind, even in response to questions for the court. In Campbell, defense counsel had the client ask the court for no jail time. In Yusuf, a much closer case in the Third Circuit's view, defense counsel suggested a sentence below the recommended Guidelines range. The Court distinguished defense counsel's sentencing hearing arguments in Yusuf from those of counsel for Yusuf's co-defendant Adekunle. (Adekunle's case was not on appeal and he had been sentenced by a different judge.) Adekunle's lawyer had reminded the sentencing court of its duty to consider proportionality, and the sentences handed down to co-defendants, but never asked for a downward variance and reminded the court twice that she was bound by the plea agreement: "I am constrained from arguing a below guideline sentence." The government also argued in Campbell that presenting character letters to the court asking for probation violated the plea agreement. The Third Circuit declined to reach this issue, which had not been preserved at sentencing, based on its finding that counsel's arguments alone constituted a breach. The Court cautioned district court judges at sentencing, "to be particularly mindful of the strictures on counsel when plea agreement provisions like the ones here are in place."
April 3, 2021 in Computer Crime, Defense Counsel, Fraud, Judicial Opinions, Prosecutions, Prosecutors, Sentencing | Permalink | Comments (0)
Thursday, March 18, 2021
Gideon Day & The Role of Public Defenders In White Collar Cases
Today, March 18, 2021, is the 68th birthday of the Supreme Court decision in Gideon v. Wainwright. Although Gideon marks the recognition of the Sixth Amendment right to counsel as a fundamental right applicable in state cases, it reinforces the Court's prior decision in Johnson v. Zerbst, holding the right to counsel in federal cases. More importantly, the progeny of cases coming from Gideon has allowed court's to use the holding to include the importance of expenses of experts (e.g. Ake v. Oklahoma) as part of that fundamental right. Many of these cases play an important role in white collar cases, especially ones that require experts such as forensic accountants.
In the context of white collar crime, many believe that these cases are handled by private counsel and the role of the public defender is minimal. That may not have been the case, and more importantly it is likely not to be the case as many of the fraud cases on the horizon will be COVID fraud related matters. Whether it be the improper acceptance of money, or the improper use of money, public defenders are likely to be handling some of these cases. So, on Gideon Day it is important to note the key role that public defenders play in white collar cases.
March 18, 2021 in Defense Counsel | Permalink | Comments (0)
Tuesday, March 9, 2021
Re-evaluating DOJ's Special Matters Unit
In 2020, the Fraud Section of the DOJ created the Special Matters Unit (SMU). The naming of this unit was somewhat interesting in that in the early years of white collar crime, larger law firms used the term "special matters" for their section handling white collar criminal activity. Initially, many large firms did not handle any criminal matters and preferred to refer these cases to outside law firms. Gradually, the business of handling white collar criminal matters became too profitable to send elsewhere, and the firms created sections called "special matters" to handle these cases. Today, more firms in an effort to attract this business now openly advertise their white collar and government investigations sections. So, to see in late 2020 the DOJ Fraud Division creating a new unit and calling it "special matters" was fascinating.
But there is a big difference between the defense and government side of "special matters." The government unit was created to deal with:
"issues related to privilege and legal ethics, including evidence collection and processing, pre-and post-indictment litigation, and advising and assisting Fraud Section prosecutors on related matters. The SMU: (1) conducts filter reviews to ensure that prosecutors are not exposed to potentially privileged material, (2) litigates privilege-related issues in connection with Fraud Section cases, and (3) provides training and guidance to Fraud Section prosecutors." (see here)
It appears that this unit was created in response to the 4th Circuit decision, U.S. v. Under Seal, 942 F.3d 159 (4th Cir. 2019), that found the government's use of a taint or filter team improper.
It certainly can be argued that the better process is to appoint a "special master" as was done in Michael Cohen's case. But the question is whether taint teams should continue to be allowed. With continual discovery violations being noticed, this is a time to re-evaluate whether outsiders may be a better way to proceed when issues of attorney-client privilege arise resulting especially from government searches of law offices.
March 9, 2021 in Privileges | Permalink | Comments (0)
Sunday, March 7, 2021
Prohibiting Punishment of Acquitted Conduct Act of 2021
Perhaps one of the most difficult issues to explain to students is that acquitted conduct may be used by a court in sentencing someone convicted of a crime. And it should be difficult to explain this, as it goes against the grain of fundamental constitutional rights at the core of our democracy. It is therefore good to see that US Senators Dick Durbin and Chuck Grassley have "introduced the bipartisan, bicameral Prohibiting Punishment of Acquitted Conduct Act of 2021." " This legislation would end the unjust practice of judges increasing sentences based on conduct for which a defendant has been acquitted by a jury." (see here). Due process demands that this be passed. As noted in Senator Durbin's press release, Justice Scalia in a dissent to a petition for certiorari wrote, "not only did no jury convict these defendants of the offense the sentencing judge thought them guilty of, but a jury acquitted them of that offense." Justices Ginsburg and Thomas had joined in this dissent. This is a strong bipartisan issue that needs correction. (proposed bill here).
See also Cara Salvatore, Law360, Sens. Revive Push to Ban Sentencing for Acquitted Conduct
March 7, 2021 in Sentencing | Permalink | Comments (0)