Saturday, July 2, 2022

Supreme Court Accepts Two Fraud Related Cases

The Supreme Court accepted two cases that provide questions related to how to interpret current fraud statutes, specifically mail and wire fraud.  

In Percoco v. United States, the question presented is "[d]oes a private citizen who holds no elected office or government employment, but has informal political or other influence over governmental decisionmaking, owe a fiduciary duty to the general public such that he can be convicted of honest-services fraud?" (see here).

In the second case, Ciminelli v. United States, the question presented is " "[w]hether the Second Circuit's "right to control" theory of fraud-which treats the deprivation of complete and accurate information bearing on a person's economic decision as a species of property fraud­ states a valid basis for liability under the federal wire fraud statute, 18 U.S.C. § 1343.  (see here)

These cases offer an opportunity to the Court to provide better clarity to "honest services" fraud and also to how the "right to control" theory may apply. The decisions could affect a wide range of cases, such as those that are part of the Varsity Blues prosecutions.  Leaving fraud as a "stop-gap device" until particularized legislation, is not the way to proceed with criminal prosecutions that could result in years of incarceration. It is time to provide clarity as to what is criminal and what is not when it comes to fraud related offenses. We don't need a statute for every imaginable type of fraud (e.g., we don't need a Beanie Baby fraud statute here).  But we do need clarity in the areas of honest services fraud and the right to control. Mail fraud was an 1872 statute and even with its 1909 amendment, more is clearly needed.   

See my prior article on Criminal Fraud here

(esp)(h/t Peter Goldberger)

July 2, 2022 in Fraud, Prosecutions | Permalink | Comments (0)

Monday, June 27, 2022

Massive Victory for Physicians and the White Collar Bar in the Government's War Against Doctors

We have posted several times over the past year about the consolidated cases of Ruan v. United States and Kahn v. United States, pending at the U.S. Supreme Court this term. The cases involved the level of scienter required to convict doctors of illegal distribution of Schedule II Narcotics under the Controlled Substances Act. The opinion in Ruan v. U.S. and Kahn v. U.S. is now out and it is even better than most of us thought it would be. "After 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." The ruling was 9-0 on the final outcome, but 6-3 on the majority's reasoning. Justice Alito, joined  by Justice Thomas and, far the most part, Justice Barrett, concurred in the result only. They did not join the majority's holding that, once the defendant meets the burden of production, the burden of proof beyond a reasonable doubt shifts back to the government. All nine Justices agreed that the jury instructions in the two trials were defective because they injected objective reasonableness requirements into their good faith instructions. Many issues remain to be resolved in these Pain Doctor cases, but the victory here is truly sweeping. Doctors have been convicted nationwide over the past several years under what amounts, in many circuits, to a civil malpractice/negligence standard. Those days now appear to be gone.

(wisenberg)

June 27, 2022 in Fraud, Judicial Opinions, Prosecutions | Permalink | Comments (0)

Monday, June 13, 2022

The Timothy Shea Mistrial: It's Tough To Dismiss An Obstinate Juror

SDNY Judge Analisa Torres granted a mistrial last week in the federal fraud trial against "We Build A Wall" Defendant Timothy Shea. On June 2, 11 of the jurors sent a note to the judge, asking that a 12th juror be dismissed because he allegedly refused to deliberate, based on what appeared to be his Trumpian political comments and bias.  The hold-out denied the charges, and accused his fellow jurors of liberal political bias. Judge Torres questioned the juror on the record, but in private away from the public and the other jurors. According to the New York Times account, "she asked whether the juror had 'biases or personal views' that would prevent him from being 'fair and impartial,' whether he could determine facts subject to her explanation of the law and whether he could consult with other jurors. The juror replied no to the first question and yes to the second two." Judge Torres declined to kick the hold-out off the jury, gave a modified Allen charge, and told the jury to continue deliberations. By Tuesday they were at a total impasse and a mistrial was declared. Shea's counsel, John Meringolo had already filed a motion for mistrial, based on Judge Torres' modification of the Allen charge and the 11 jurors' alleged breach of jury secrecy when the jury note revealed their numerical division. It doesn't look like Judge Torres ever ruled on that motion. She didn't need to, once the jury reached a total impasse. 

Recall that the case concerned the alleged fraudulent diversion of funds solicited under the premise of finishing then-President Trump's wall between the U.S. and Mexico. Shea allegedly conspired with others, including former Trump advisor Steve Bannon who was pardoned by Trump. Venue could have been had in a number of jurisdictions, but the prosecutors chose SDNY. Gee. I wonder why. So did the 12th juror. Was the 12th juror truly refusing to deliberate or was he simply unconvinced of Shea's guilt beyond a reasonable doubt. According to the Times, the other jurors spoke of the hold-out's refusal, "to deliberate based on evidence." Hmmm. Does that mean the evidence as they saw it, but not the hold-out? You can see the danger in dismissing hold-outs in this context, particularly in a politically charged case. Any 11 could complain about the hold-out's recalcitrance and "refusal to deliberate." Was there truly a "refusal to deliberate" or 11 bullies ganging up on a principled hold-out? We'll never know of course. The Second Circuit law is very clear on this issue. Once the hold-out answered Judge Torres's questions in the manner he did, he could not be removed. Under United States v. Thomas, 116 F.3d 606, 608 (2nd. Cir. 1997), a juror can be dismissed "for a refusal to apply the law as instructed only where the record is clear beyond doubt that the juror is not, in fact, simply unpersuaded by the prosecution's case." That standard was simply not met in Shea's case. This was the right result under the case law. Meringolo's objection to the modified Allen charge was based on Judge Torres's additional admonition that the jurors not be swayed "by sympathy, emotion, or political views or opinions." (emphasis added).

Here is the New York Times story. Here is Meringolo's U.S. v. Timothy Shea Letter Motion for Mistrial.  

(wisenberg)

June 13, 2022 in Current Affairs, Defense Counsel, Fraud, Judicial Opinions, Prosecutions | Permalink | Comments (0)

Saturday, March 26, 2022

Not Guilty After Trial - Former Boeing Pilot

Many accused of crimes do not take the risk of going to trial - they take a plea agreement. Our legal system has become more and more a system of pleas, with fewer trials, especially in the white collar area. But occasionally someone takes that risk, and is found not guilty.  That happened this week in the case of a former Boeing pilot accused of four counts of wire fraud.  Hats off to attorneys David Gerger and  Jeff Kearney. See WSJ, here, NYTimes here

(esp)

March 26, 2022 in Prosecutions | Permalink | Comments (0)

Friday, March 18, 2022

DOJ Moves Toward Transparency - Will it Include Discovery?

AG Garland announced a new policy this week in a press release titled, Attorney General Merrick B. Garland Issues New FOIA Guidelines to Favor Disclosure and Transparency .  The actual policy that favors transparency in FOIA requests is located here.  The new guidance says that there is a presumption of openness. 

Years back the National Association of Criminal Defense Lawyers (NACDL) filed a FOIA request for DOJ's Blue Book on the discovery protocols used by the government. The DOJ argued the book was work-product and only a small portion was released following a lawsuit.  See Louis Virelli & Ellen S. Podgor, Secret Policies, 2019 Illinois Law Rev. 463 (2019).  Perhaps now is a good time for the government to think about transparency in discovery practices so that fewer discovery violations occur in criminal cases.

(esp)

March 18, 2022 in Prosecutions, Prosecutors | Permalink | Comments (0)

Wednesday, March 16, 2022

Oral Argument in Ruan and Kahn

Here is a transcript of the March 1, 2022, U.S. Supreme Court Argument in Ruan and Kahn. Ruan v. United States and Kahn v. United States are consolidated cases involving the kind of good faith instruction, if any, required when physicians are indicted and tried for illegally dispensing controlled substances. We have previously posted about these cases here, here, and here. More to come soon on these cases and the issues surrounding them.

(wisenberg)

March 16, 2022 in Judicial Opinions, Prosecutions | Permalink | Comments (0)

Monday, February 21, 2022

Latest Filings in Ruan and Kahn Pain Management Physician Cases

We have posted previously, here and here, about the anticipated U.S. Supreme Court decision in the consolidated cases of Ruan v. United States and Kahn v. United States. The Supreme Court granted certiorari and consolidated the two cases last November. Oral argument is set for March 1, 2022. The cases involve the appropriate jury instruction to be given, and the required proof of scienter, when the government prosecutes pain management physicians for illegal distribution of Schedule II controlled substances under 21 U.S.C. § 841(a)(1). More precisely, as pointed out in the Joint Motion of Petitioners Ruan and Kahn for Divided Argument, the case "presents the question whether, and to what extent, a physician may assert a good faith defense to charges under the Controlled Substances Act (CSA)." There is a longstanding circuit split regarding the type of good faith instruction a defendant is entitled to in this type of case. Is the defendant entitled to the traditional subjective good faith instruction or can the government impose an objective component to good faith, such that the charged physician must act in accordance with what "a reasonable physician should believe" to be proper medical practice? The Petitioners wisely sought to divide their arguments, because the respective good faith instructions given in their trials differed and because they have different views on whether the two prongs of 21 C.F.R. § 1306.04(a) should be read and proven in the conjunctive or disjunctive--that is, whether the government must prove both that a physician lacked a legitimate medical purpose and was acting outside the usual course of professional practice, or whether the government must prove just one of those prongs. 

The larger issue lurking behind theses cases, which may or not be fully addressed by the Supreme Court's anticipated decision, is that pain management physicians are routinely convicted, at least in objective good faith circuits, under what amounts to a malpractice standard. Government experts testify that defendant physicians failed to meet the standard of care and missed/ignored various red flags. The "usual course of professional practice" is confused with the "standard of care" and an "objective"  good faith instruction often operates as the coup de grace against the charged physician.

Here is the Ruan v. U.S. and Kahn v. United States--Brief For the United States, filed on January 19. 

Here is the Xiulu Ruan Reply Brief, filed last week.

Here is the Shakeel Kahn Reply Brief, also filed last week.

(wisenberg)

February 21, 2022 in Judicial Opinions, Prosecutions, Statutes | Permalink | Comments (0)

Friday, February 18, 2022

Michael Sussman's Motion to Dismiss

Here is the Sussman Motion to Dismiss for Failure to State an Offense, filed in Special Counsel John Durham's 18 U.S.C. Section 1001 false statement prosecution against former Perkins Coie attorney Michael Sussman. Sussman's argument is that even if the facts laid out in Durham's Indictment are true, they fail, as a matter of law, to allege/establish the essential Section 1001 element of materiality or to establish a sufficient nexus between Sussman's alleged falsehood and the agency (FBI) decision purportedly capable of being affected. Keep in mind that Sussman's alleged false statement to FBI General Counsel James Baker was that he was not acting on behalf of any client in reporting the Alfa Bank tip to Baker, when, in truth and in fact, Sussman was there representing and acting on behalf of Tech-Executive 1 and the Clinton Campaign. The materiality portion of the Sussman Indictment has always struck me as weak, but very little is required of the government in order for it to prove materiality in a Section 1001 prosecution. Sussman's real problem in winning on this motion is decades of case law holding that an indictment setting out the statutory elements of the offense, along with minimal factual allegations, is sufficient to allege an offense as a matter of law.  In other words, the defendant is not allowed to go beyond the indictment's allegations in litigating whether it alleges an offense. There appears to be no recognition of this case law in the Sussman brief. Durham was not required to put much meat on the skeletal elements of the offense. But he chose to do so, presenting a 27-page speaking indictment to the grand jury. There is some scattered authority for the proposition that an indictment setting out in detail what appear to be the full  and undisputed facts behind the offense, in addition to the statutory elements, can be defeated by accepting those facts as true and arguing that the do not constitute the purported offense being charged. See for example, U.S. v. Ali, 557 F.3d 715, 719-20 (6th Cir. 2009). That's what Sussman is up to here. Durham's response will surely be that he has set out the required statutory elements plus additional contextual detail and that the Government must be allowed to show its full factual case to the jury in order to prove why, under said factual particulars, Sussman's alleged lie was material. 

(wisenberg)

February 18, 2022 in Current Affairs, Defense Counsel, Fraud, Government Reports, Grand Jury, Investigations, Judicial Opinions, Prosecutions, Prosecutors | Permalink | Comments (0)

Monday, February 7, 2022

Naming Conventions And Naming Convictions

What’s in a name? Several of the individuals indicted in connection with the January 6, 2021, assault on the U.S. Capitol have been charged under Title 18, United States Code, Section 1512(c)(2). Subsection (c) of 18 U.S.C. §1512 seeks to punish: “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.” 18 U.S.C. §1515 supplies definitions for some of the terms used in §1512 and defines “official proceeding” to include, among other things, “a proceeding before the Congress.” Many of the motions to dismiss filed by January 6 defendants, and judicial opinions denying these motions, center around whether  §1512(c)(2) was meant to be confined to proceedings that are quasi-judicial or evidentiary in nature, even if the proceedings take place in Congress. I previously posted three of these judicial opinions. That is not my focus here. 

18 U.S.C §1512, a lengthy statute with several subsections, has a title as well. The official title is: “Tampering with a witness, victim, or an informant.” That is the only title the statute has. None of the subsections of §1512 contains an additional or separate subtitle. Note, however, that none of the persons charged under 18 U.S.C. §1512(c)(2) has been literally charged in his or her Indictment, or in any press coverage that I have seen, with, “tampering with a witness, victim, or an informant,’ which, again, is the only title of §1512. To take one example, in U.S. v. Nordean et al., the defendants are charged in the First Superseding Indictment with “Obstruction of an Official Proceeding and Aiding and Abetting.” This makes sense. The facts alleged against the defendants appear to align with the literal language of §1512(c)(2) and do not involve witness tampering.

Fast forward to the recent indictment of Oath Keeper Elmer Steward Rhodes III and others for “Seditious conspiracy,” pursuant to 18 U.S.C. § 2384. The defendants are also charged with violating several other statutes, including 18 U.S.C. §1512(c)(2). While 18 U.S.C. § 2384, unlike §1512(c)(2), does not have separately numbered subsections, it clearly sets out several different ways in which the crime can be committed. For example, one cannot “conspire to overthrow, put down, or to destroy by force the Government of the United States, or to levy war against them.” I believe something like this formulation is what most people think of when they think of sedition. But Rhodes and his Oath Keepers were not charged under that "overthrow the Government" portion of the statute. They were charged with conspiring “by force to prevent, hinder, and delay the execution of any law of the United States.” (The laws allegedly being hindered were the Electoral Count Act and the Twelfth and Twentieth Amendments to the U.S. Constitution.) The caption in the Indictment could have set the charge out in this fashion, as a “conspiracy to by force prevent, hinder, and delay” particular laws of the United States, with a citation to 18 U.S.C. §2384. That is not what Department of Justice officials decided to do, however. They captioned the charge as “seditious conspiracy.” There was nothing improper about their decision, just as there was nothing improper about their decision to list §1512(c)(2) in the caption of Nordean as “obstruction of an official proceeding” rather than “witness-tampering.”

But the effect in the wider media culture was predictable. Several pro-Trump television commentators had been making the point that none of the January 6 defendants were seditionists, because none had been charged with seditious conspiracy. They could not say this anymore in light of the Rhodes Indictment and their prior comments were thrown back in their faces by progressive commentators. So be it. That’s politics. But, at least with respect to the indicted January 6 rioters, conspiring by force to prevent, hinder, and delay the execution of the Electoral Count Act (“seditious conspiracy”) is not substantially different than corruptly obstructing or conspiring to corruptly obstruct the very Congressional proceeding in which the Electoral Count Act is being executed. They are both serious charges that should be prosecuted vigorously if the facts so warrant. And if any Congressperson, Executive Branch official, or podcast host aided and abetted or joined a conspiracy to violate either statute, under traditional criminal law principles, he or she should be prosecuted as well.

Sloppy language, however, invites sloppy thinking and prosecuting someone for aiding and abetting a violent mob intent on forcefully stopping a critical Congressional proceeding or the execution of a statute, is quite different than prosecuting someone for seditious conspiracy because he told a crowd that the election was stolen, invited them to peacefully protest the vote count, or tried to convince Mike Pence that he had the power to refuse to certify certain slates of electors. (I wrote about John Eastman's potential criminal exposure, in the context of the Fifth Amendment's Privilege Against Self-Incrimination, here.) Likewise, prosecuting anyone for delaying the vote count by using the procedures set out in the Electoral Count Act, is without more, doomed to fail under rather basic constitutional and criminal law tests. The devil is always in the details of the purportedly criminal acts under examination.

The people intent on federally prosecuting Trump and his cohorts for the events on and surrounding January 6, 2021, need to think small and in terms of traditional criminal law principles. We witnessed a riot. We witnessed criminal assaults. We witnessed people invading Congressional offices and threatening to “Hang Mike Pence.” Some of the people who committed these acts were attempting to prevent the peaceful transfer of power to Joe Biden. There are statutes in place that appear to criminalize this conduct. The quest to use the criminal law to “go after the higher-ups” should focus on who, if anybody, aided, abetted, counseled, commanded, induced or procured the commission of these specific criminal offenses--not on people engaged in protected First Amendment political activity. In the words of the standard pattern aiding and abetting instruction, “whoever intentionally associated himself in some way with the crime and intentionally participated in it as he would in something he wished to bring about,” is punishable as a principal. My guess is that some pretty well-known people are sleeping uneasily these days. My further guess, and it is no more than a guess, is that the DOJ has been looking at these people for some time. But I seriously doubt, based on currently known information, it will go much beyond these folks.

(wisenberg)

February 7, 2022 in Congress, Current Affairs, Government Reports, Investigations, Media, Obstruction, Prosecutions, Prosecutors | 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.

(wisenberg)

 

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 Brief for the Petitioner

Ruan - Amicus Brief of Due Process Institute

National Pain Adv Ctr Amicus Brief

Amicus Brief of NACDL

(wisenberg)

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.

(wisenberg)

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.

(wisenberg)

January 3, 2022 in Current Affairs, Fraud, News, Prosecutions, SEC, Securities, Sentencing, Settlement, Verdict | 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."

(wisenberg)

April 3, 2021 in Computer Crime, Defense Counsel, Fraud, Judicial Opinions, Prosecutions, Prosecutors, Sentencing | Permalink | Comments (0)

Thursday, February 4, 2021

Health Care Related Prosecution Settled With Qui Tam

DOJ Press Release reports, "Florida Businesswoman Pleads Guilty to Criminal Health Care and Tax Fraud Charges and Agrees to $20.3 Million Civil False Claims Act Settlement." (see here). The government notes that along with the criminal matter being resolved (although sentencing as not occurred yet), the settlement of the civil false claims case "includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act." The settlement can be found here.

(esp)

February 4, 2021 in Prosecutions | Permalink | Comments (0)

Friday, August 28, 2020

COVID19 & Jury Trial

Judge Gary R. Brown issued a Memorandum & Order in U.S. v. Cohn allowing for a waiver of a jury trial despite government objection. In this unusual move, in these unusual times, he is allowing for a securities fraud related case to proceed to a bench trial with the defendant's consent, but without the government's approval. See here.

(esp)

August 28, 2020 in Judicial Opinions, Prosecutions | Permalink | Comments (0)

Tuesday, August 11, 2020

What A Durham Report May Look Like: Hasn't Anyone Heard of Speaking Indictments?

Speculation is rampant about indictments that may result from Connecticut U.S. Attorney John Durham's probe into the FBI's handling of the Crossfire Hurricane investigation, and the Bureau's four materially false FISA Applications submitted to the FISA Court. Fans of the President, expecting or demanding a rash of indictments, are likely to be as disappointed as Trump haters were when Robert Mueller's investigation of Trump-Russia criminal collusion turned out to be a dud. Rumors also abound that, indictments or not, Durham will issue a Report, naming names and detailing the FBI's multiple misdeeds. Opponents of such a Report point out that the Department of Justice ("DOJ"), except in the unusual circumstance of a Special Counsel's Report, does not typically smear people when the grand jury fails to return indictments. You know some folks are getting worried when Mueller Pit Bull Andrew Weissmann pens a New York Times Op-Ed all but urging career DOJ officials to refuse to cooperate with the highly respected Durham if he asks the grand jury to return indictments within 90 days of the the 2020 election.

Attorney General William Barr has already made it clear (sending a not very subtle hint to the faithful) that not all governmental abuses of power, even serious abuses, constitute crimes. To take an obvious example, I consider the set-up of Trump's first National Security Advisor Michael Flynn, by the FBI's Comey-McCabe Cabal, to be one of the most significant abuses of law enforcement power in recent American history. But I don't see any federal criminal statute that was violated in the process of the set-up. 

So, we are likely to see a small handful of indictments at most, based on the currently available public record. Were the Flynn-Kislyak phone calls feloniously leaked? Almost certainly so, absent Presidential declassification, but good luck proving who did it. The only known individual publicly referred for possible prosecution as a result of Michael Horowitz's OIG investigation into FISA abuse was former FBI Office of General Counsel Attorney Kevin Clinesmith. Clinesmith gave false information to  FBI Supervisory Special Agent #2, who served as the FBI's affiant on all three FISA Renewal Applications. Clinesmith also altered a key email from a CIA liaison, materially changing its meaning, and forwarded it to the same affiant. Of course it is possible that Clinesmith is cooperating and naming other people, but that is pure speculation at this point. More information may also come out explaining whether the predicate for Crossfire Hurricane, the Alexander Downer conversation with George Papadopoulos, was itself some kind of an intelligence agency set-up, but, again, turning that into an actionable crime is another matter. 

So how will the story be told by Durham? The easiest way will be through a lengthy speaking indictment against one person, or a handful of conspirators, that tells the prosecution's story of the case. Speaking indictments which have been common for decades in federal criminal cases, tell the tale of the prosecution's case in as many chapters as the prosecutors need or want to take. These speaking indictments can be broad enough to include manner and means and overt acts, criminal and non-criminal, as part of the mosaic. In other words, in telling the story, the government can include non-criminal conduct, or conduct that it could not prove beyond a reasonable doubt to a jury, as long as long as the conduct is rationally related to the charged crime. Mueller himself did this, through some of his indictments or informations (Manafort, Gates, and the Russian hacking and troll farm cases) and through the Statement of the Offense in cases where defendants pled guilty. in fact, it was through careful examination of the Special Counsel's charging instruments that knowledgeable observers were able to determine fairly early on that that Mueller had no criminal collusion case.

So, that's what I think we will see from John Durham. A small handful of defendants and at least one significant, story-telling, speaking indictment.

(wisenberg)

August 11, 2020 in Corruption, Current Affairs, Fraud, Government Reports, Grand Jury, Investigations, Legal Ethics, Obstruction, Perjury, Prosecutions, Prosecutors | Permalink | Comments (0)

Wednesday, August 5, 2020

Michael Flynn Update: D.C. Circuit Sets Argument Times and Asks Parties to Address Judge Sullivan's Possible Disqualification

The U.S. Court of Appeals for the D.C. Circuit today announced the allocation of oral argument time in the Michael Flynn Mandamus case, In re Flynn. This was expected. Twenty minutes each were allotted to General Flynn, the Department of Justice, and Judge Emmet Sullivan. The Court "FURTHER ORDERED that, in addition to the issue set forth in the court's order filed July 30, 2020, the parties be prepared to address at oral argument the effect, if any, of 28 U.S.C. §§ 455(a) and 455(b)(5)(i) on the District Court judge's Fed. R. App. P. 35(b) petition for en banc review." This was unexpected. The Court further Ordered "One counsel per side to argue."

Under the Federal Rules of Appellate procedure, only a party may petition a full appellate court for a rehearing en banc. Judge Sullivan is the person who filed the petition in In re Flynn. Both the Department of Justice and General Flynn argued in response to Judge Sullivan's Petition for En Banc Rehearing that he had no standing to even file such a Petition, because he was not a party to the Petition for Mandamus. But the full Court had not indicated, until yesterday, that it wanted to hear about that issue.

Under 28 U.S.C. § 455(a) "Any justice, judge, or magistrate judge of the United States shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned." 

Under 28 U.S.C. § 455(b)(5)(i), a judge "shall also disqualify himself" if "He...is a party to the proceeding."

What is going on here? As noted above, originally, the full court only wanted to hear oral argument on whether Mandamus was the appropriate remedy under the facts of the case.

Judge Sullivan has not disqualified himself from the underlying case of U.S. v. Flynn.

Does the full Court simply want the parties to now be prepared to argue whether Judge Sullivan had standing to file the Petition for Mandamus? Are they saying, in effect, "We know Judge Sullivan would not make himself a party without disqualifying himself. Since he hasn't disqualified himself, is this further proof that he isn't a party and does not have standing in our Court?" Do they even want to hear from Sullivan on the 11th if he is not a party? If so, why did they grant his counsel 20 minutes to argue the case? Are they signaling Judge Sullivan to reassign the case below prior to the 11th?

Or does the Court merely want to hear argument on whether, in the event that Mandamus is denied, the case should be assigned to another judge because Judge Sullivan's "impartiality might reasonably be questioned" or, more likely,  because he has made himself a "party to the proceeding" ?  (General Flynn has already argued for reassignment to another judge. DOJ did not ask for this.) In other words, is the Court basically saying to Judge Sullivan" "Since we voted to grant your Petition for Rehearing, haven't we implicitly accepted your status as a party? And if we have accepted your status as a party, how can you remain as the trial judge in Flynn's case, even if we deny the Mandamus Petition?"

I would think that the Court really wants to hear the reassignment issue, but the wording of the order leaves this open to question. Here is In re Flynn 8-5-20 Order re Oral Argument and 28 U.S.C. 455(a) and (b)(5)(1)

(wisenberg)

 

August 5, 2020 in Current Affairs, Investigations, Judicial Opinions, Legal Ethics, Prosecutions, Prosecutors | Permalink | Comments (0)

Friday, July 31, 2020

Where We Are Now In The Michael Flynn Case

           The full United States Court of Appeals for the D.C. Circuit yesterday granted Judge Emmet Sullivan’s Motion for Rehearing En Banc, vacating a decision by one its three-judge panels, and will soon decide whether to grant General Michael Flynn’s Petition for a Writ of Mandamus against Judge Sullivan. Flynn seeks the Writ of Mandamus in order to force Judge Sullivan to immediately grant the Department of Justice’s May 7, 2020 Motion to Dismiss the criminal case against him, a motion consented to by Flynn. Regardless of the full Court’s ultimate ruling on the mandamus issue, DOJ’s Motion to Dismiss will have to be granted sooner or later under governing legal precedents. No federal appellate court has ever sustained a district court’s refusal to grant an unopposed government motion to dismiss an indictment.

        There are two separate but related legal issues at stake before the Court of Appeals. First, does the law require Judge Sullivan to grant DOJ’s Motion to Dismiss in the absence of a grave constitutional issue, reducing Sullivan’s function to a ministerial one? Federal Rule of Criminal Procedure 48(a) requires “leave of court” when the government moves to dismiss an indictment, but an abundance of federal case law holds that the district court’s role is in fact quite limited when the government moves to dismiss a criminal case and the defendant consents. Second, is mandamus the appropriate remedy for Flynn given that Judge Sullivan has yet to rule on DOJ’s Motion to Dismiss? Mandamus is an extraordinary remedy, typically reserved for situations where the remedy provided at law is inadequate. Judge Sullivan had not yet ruled on DOJ’s Motion to Dismiss when Flynn filed his Petition for a Writ of Mandamus. Why didn’t Flynn just wait for Judge Sullivan to rule and for DOJ to appeal Sullivan’s order if he denied the motion?

        The DOJ has argued that Judge Sullivan’s: 1) appointment of retired federal judge John Gleeson as an amicus, or friend of the court, for the specific purpose of opposing DOJ’s Motion to Dismiss; and 2) Judge Sullivan’s indication that he intends to examine closely DOJ’s motives in filing the Motion to Dismiss, will themselves be an improper intrusion into Executive Branch functions, in violation of Separation of Powers. Flynn has argued that these same factors, along with Sullivan’s setting of a drawn out briefing schedule, harms him financially and reputationally by delaying the immediate relief he is entitled to.

        What is likely to happen next?

        Argument before the Court sitting En Banc has been set for August 11, but the Court wants no further briefing. The Court’s Order states that the parties “should be prepared to address whether there are ‘no other adequate means to attain the relief’ desired. Cheney v. U.S. Dist. Court for D.C., 542 U.S. 367, 380 (2004).” Cheney is a key Supreme Court case involving the intersection of Separation of Powers and Mandamus case law. In other words, the key issue before the full D.C. Circuit is whether mandamus is premature. Should Judge Sullivan have been allowed to hold a hearing and make a ruling before Flynn went to a higher court seeking mandamus relief or did the very mechanisms set in place by Sullivan create an improper intrusion into Executive Branch matters and a harmful delay in the relief to which Flynn was entitled?

        Even if the Court of Appeals ultimately holds that mandamus is premature, expect the full Court to set clear standards as to what Judge Sullivan can and cannot do (and how long he can take) in ruling on DOJ’s Motion to Dismiss. And make no mistake about it. The DOJ’s Motion will ultimately be granted.

(wisenberg)

July 31, 2020 in Current Affairs, Defense Counsel, Government Reports, Investigations, Judicial Opinions, Legal Ethics, News, Obstruction, Perjury, Prosecutions, Prosecutors | Permalink | Comments (0)

Monday, July 20, 2020

New Filings in Flynn Mandamus Action

Michael T. Flynn's Opposition to Rehearing En Banc has been filed today in the United States Court of Appeals for the D.C. Circuit. This is in opposition to Judge Emmet G. Sullivan's Petition for Rehearing En Banc, filed on July 9. The Department of Justice was invited by the Court to respond and did so today in the United States' Response to the Petition for Rehearing En Banc.

Both Flynn and DOJ argue that Sullivan lacked standing to file the Petition for Rehearing, as he is not a party and there is no longer a case or controversy. Apparently only one federal judge in history has filed such a petition and it was denied. DOJ's brief also argues in detail, quite effectively I think, that the panel's decision granting mandamus does not conflict with: D.C. Circuit precedent; precedent in other circuits; or Supreme Court precedent. 

DOJ also responds directly and succinctly to Judge Sullivan's argument that mandamus was premature, because he had not yet held a hearing or made a ruling on DOJ's Motion to Dismiss. Flynn therefore had an effective remedy on appeal from any adverse ruling. This argument ignores the continuing harm to the Executive Branch's interests occasioned by the judge's dilatory behavior:

"That objection misses the point: at stake is not mere consideration of a pending motion, but a full-scale adversarial procedure spearheaded by a court-appointed amicus hostile to the government’s position raising factual questions, relying on extra-record materials, probing the government’s internal deliberations, and second-guessing core prosecutorial judgments.... Accordingly, while the panel specifically recognized that '[a] hearing may sometimes be appropriate before granting leave of court under Rule 48,' it determined that the hearing contemplated by the district court here would 'be used as an occasion to superintend the prosecution’s charging decisions' and would cause 'specific harms.' "

My prediction is that Judge Sullivan's Petition for Rehearing En Banc will be denied.

(wisenberg)

July 20, 2020 in Current Affairs, Defense Counsel, Government Reports, Investigations, Judicial Opinions, Legal Ethics, Obstruction, Perjury, Prosecutions, Prosecutors | Permalink | Comments (0)