Some noteworthy white collar decisions from the federal circuits, published on 10-3-11:
U.S. v. Lee (7th Cir. 2011) (Post-prison MVRA seizure of retirement funds is limited by CCPA)
Category: Judicial Opinions
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The Third Circuit, in United States v. Richardson, discusses "proceeds" and "concealment" in an alleged drug money laundering case. The court finds insufficient evidence "to establish knowledge of a design to conceal" and vacated the money-laundering conviction. This case may be helpful in white collar cases involving money laundering charges.
The lawyer handling this appeal was Ellen C. Brotman.
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I get emails almost every day touting the latest FCPA seminars, webinars, panel discussions, compliance programs, and treatises. Many of these events are no doubt helpful to the white collar practitioner. But what really happens in the trenches for the few brave individuals who take the government to trial in FCPA cases? What do the final FCPA jury instructions look like? The following links are to selected portions of actual instructions given to juries by federal district courts in some recent prominent FCPA cases. Enjoy.
Bourke_Final_Jury_Charge Selected Instructions[1]
U.S. v. Green Selected Jury Instructions
Lindsey Manufacturing Selected Jury Instructions
Hat tip to Todd Foster for the Patel instructions.
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Hon. Ellen Segal Huvelle issued a 42 page memorandum opinion regarding the sentencing of Kevin Ring. It was accompanied by a two page chart that includes what were the government recommendations in other related cases (here). The court notes the sharp difference in recommendationbetween the government and defense in this case – a 17 year difference. The case comes from the Jack Abramoff lobbying scandal that caused several Greenberg Traurig lobbyists to "pled guilty to participating in an influence peddling and bribery scheme."
A key issue raised by the defense is "that the government is retaliating against him for exercising his Sixth Amendment right to trial." The court notes that "the government cannot retaliate against defendant for exercising his rights." The detailed sentencing methodology follows with the court's conclusion of a guidelines range of 46-57 months.
See also Doug Berman, Sentencing Law & Policy Blog here; Mary Jacoby, Main Justice, Judge Rejects Recommended Sentence for Ex-Abramoff Lobbyist
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One of the 2010 White Collar Crime Blog Awards went to the Sholom Rubashkin case. (see here). It gave it a "collar for the Case Most Needing Review – Sholom Rubashkin’s 27 year sentence."
The Eighth Circuit has now reviewed that case, but unfortunately for Rubashkin, with a result that does not change its prior outcome. The court held that "Rubashkin did not make a timely recusal motion . . " and that "[a]fter studying the lengthy record we find no evidence that the district court's decision to remain on the case prejudiced Rubashkin's verdict." The court also concluded "that Rubashkin's money laundering convictions were lawful and did not merge with any other of his crimes." Finally, the court upheld the sentence, saying that "the district court's loss calculation" was not error. The Eighth Circuit states, "[s]entences within the guideline range are presumed to be substantively reasonable."
And so for now, Rubashkin's 27 year sentence remains. Top law professors who are key sentencing experts wrote an amici brief in this case, in support of Rubashkin. Hopefully, the Supreme Court will re-examine this case.
Opinion here.
See Linda Friedman Ramirez, International Criminal, Extradition and Immigration Defense News, White Collar Crime: 8th Circuit Affirms Rubashkin's Conviction and Sentence (Agriprocessor Fraud Offenses)
See also Doug Berman, Sentencing Law & Policy, Eighth Circuit panel unanimously affirms Rubashkin federal convictions and lengthy prison sentence
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In United States v. Langford, the Eleventh Circuit Court of Appeals found sufficient evidence in reviewing a post-Skilling case. The court notes in this decision that "[w]e have not expressly explored at length what manner of concealment, if any, is necessary to prove honest services mail or wire fraud. However, we have said that honest services fraud 'may be proved through the defendant's non-action or non-disclosure of material facts intended to create a false and fraudulent representation."(citations omitted). There is also an interesting question of "in furtherance" here.
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As the double jeopardy decision in the Roger Clemens case, discussed in this blog previously here, here, and here, demonstrates, meaningful sanctions for prosecutorial misconduct are rarely imposed. Last week, the Eleventh Circuit, in overturning a district court order that the government reimburse approximately $600,000 in legal fees to an acquitted physician under the Hyde Amendment, (Pub. L. 105-119, 111 Stat. 2519, reprinted in 18 U.S.C. § 3006(A), Historical and Statutory Notes), re-emphasized that successful actions under that provision will be exceedingly rare. The Hyde Amendment provides that the court may award a defendant in a criminal case attorney’s fees and litigation expenses when the court finds that "the position of the United States was vexatious, frivolous, or in bad faith."
In United States v. Shaygan, 2011 WL 3795469 (11th Cir., August 29, 2011), the Court considered a government appeal of a district court Hyde Amendment sanction for prosecutorial misconduct by acting "vexatiously and in bad faith" in filing a superseding indictment after the defense vigorously pursued a motion to suppress despite a prosecutorial warning that such an attack would lead to a "seismic shift" in the government’s position, in conducting a witness tampering investigation involving surreptitiously recording conversations with a defense investigator and lawyer, and in violating discovery orders. The district court accepted that the initiation of the prosecution and the original indictment was in good faith.
The Circuit Court, seemingly determined to reinforce the "narrow scope" of the Amendment, started its opinion on a dramatic note:
The stakes in this appeal are high: they involve the sovereign immunity of the United States, the constitutional separation of powers, and the civil rights and professional reputations of two federal prosecutors.
The Court found that the district court abused its discretion and held that Hyde Act awards may be granted only when the government’s "overall litigating position" was vexatious, frivolous or in bad faith. Thus, discovery violations and collateral wrongdoing by the prosecutors are not subject to Hyde Act sanctions.
Perhaps more importantly, said the court, the subjective ill-will of the prosecutor, while relevant, is not determinative of whether the government acted in bad faith. "Bad faith is an objective standard that is satisfied when an attorney knowingly or recklessly pursues a frivolous claim." Essentially, the Court, relying on the use in United States v. Gilbert, 198 F.3d 1293 (11th Cir. 1999) of Black’s Law Dictionary definitions of the three key terms in the Amendment – "vexatious, frivolous or in bad faith" – conflated them so that each required that the action be groundless or without reasonable or probable cause. (Compare United States v. Heavrin, 330 F.3d 723 (2003)), which, citing Webster’s Third International, noted that "vexatious" included "the concept of being brought for the purpose of irritating, annoying, or tormenting the opposite party." Id. at 729).
Thus, as long as the prosecution is not objectively baseless or frivolous (or does not violate a constitutional restraint, such as a prosecution because of a defendant’s race), under Shaygan no matter how vindictive or political the prosecutor’s motivation in bringing it or how outrageous his or her conduct in litigating it, the court may not make a discretionary award under the Hyde Amendment to a prevailing defendant. Compare Whren v. United States, 517 U.S. 806 (1996) (subjective intention of officer no basis to invalidate traffic stop which is supported by objective probable cause).
Legal fees for representation in white-collar criminal cases are often astronomical. Sometimes, these fees are reimbursed by an employer or insurance company, but, often, they are borne entirely by the individual defendant. Thus, even defendants whose cases result in dismissal or acquittal are often in a financial sense (among others) punished severely. The Shaygan case reinforces the view that any hope for reimbursement from the government is remote.
(Goldman)
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Coram nobis is without doubt an extraordinary remedy and one that has limited application. That said, the Eastern District of Pennsylvania granted such a petition in the case of United States v. Lynch and Campenella. The court found that "where an indictment fails to allege any criminal conduct, a petitioner is excused from the showing of actual innocence."
The smoking gun in this case came from the government when "during both change-of-plea hearings the Government corrected the Court by clarifying that the crime at issue was an undisclosed conflict of interest, rather than bribery." Further the court notes that "[a]t no point during the change-of-plea hearings or in its guilty plea memoranda did the Government mention a quid pro quo bribery theory."
Enter the Supreme Court's opinion in Skilling and without the bribery, there is problem in the case. Lynch gets a grant of the petition for coram nobis and Campenella a 2255 motion to vacate the conviction and sentence.
The bottom line – if you have no crime, relief needs to be granted.
Defense counsel on this case was Lisa A. Mathewson (Lynch) and Angie Halim of Ahmed and Zaffarese (Campanella).
Court's Opinion – Download Opinion granting coram nobis
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Addendum – See also Joseph Tanfani, Philly.com, Fraud convictions overturned for Philly assessor and developer
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The Fifth Circuit Court of Appeals affirmed the James A Brown case (U.S. v. Brown), in which a "managing director at Merrill Lynch and the head of its Strategic Asset and Lease Finance group" had been indicted in the Nigerian Barge case coming from the Enron events. The indictment was for "short-cut" offenses of perjury and obstruction of justice and the convictions had previously been affirmed by a three judge panel. Brown was now challenging his conviction on the basis that "the government violated his rights to due process by withholding materially favorable evidence that it possessed pre-trial."Specifically that it failed to disclose three pieces of evidence which included "1) The FBI notes of its interview with Fastow, 2) Senate investigators' notes of their interview with McMahon, and 3) transcripts of Zrike's pretrial testimony before the grand jury and the SEC." Although some of this evidence was shown to the court in camera before Brown's trial, the government admitted "that it did not submit the Fastow notes to the district court for in camera review." The Court takes the position that the government "did not suppress favorable evidence and that, even if it did, it was not material."
As noted by the defense in its en banc petition request and rehearing request, the court uses a standard other than de novo in reviewing part of this Brady violation claim. This presents an interesting question for an en banc or later Supreme Court to examine.
Brown En Banc Petition –Download 10-20621 Brown En Banc Petition FILED COPY
Brown Rehearing Petition –Download 10-20621 Brown Panel Rehearing FILED COPY
These events are also a perfect reason why there needs to be a statutory change in the discovery rules. NACDL has a proposal that would assist in making certain that favorable evidence is provided to the defense (see here) and hopefully Congress will take up this issue. Examining these issues after the fact only creates added issues.
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U.S. v. Bryant is a third circuit decision where the court affirmed the convictions finding no defect in the jury instructions for honest services or bribery. The court found that the "government presented substantial evidence of a quid pro quo bribery scheme to defraud the citizens of New Jersey of Bryant's honest services, including circumstantial evidence of the requisite mens rea…" The court stated that the Skilling case did not "undermine[] the viability of the stream-of-benefits theory." And further is was stated that "[i]ndeed, Skilling did not eliminate from the definition of honest services fraud any particular type of bribery, but simply eliminated honest services fraud theories that go beyond bribery and kickbacks."
The court also looked at a claim of prosecutorial misconduct made by appellants that alleged that prosecutors improperly interfered with the defense's access to witnesses. The court noted that "[i]f the prosecution impermissibly interferes with the defense's access to a witness during a criminal trial, that conduct violates due process insofar as it undermines the fundamental fairness of the proceeding." In this case, the "District Court took measures to clarify" any "misunderstanding well before trial. In response to Appellants' motion to dismiss, the Court instructed the Government to send a letter to all subpoena recipients five months before the start of trial, stating that the witness had an 'absolute right to speak to anyone…about anything [they] know about any of the matters under investigation, including the fact that [they] were subpoenaed and ….testified before the grant jury."
Opinion – Download BryantGallagher Opinion
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Addendum – See also Beldini – Download Beldini NPO
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