Here is the Reuters story. Nothing posted yet on PACER. WSJ Law Blog also has coverage. This will be a much tougher case than Rajaratnam was for the government to prove. This morning's WSJ has a decent background piece (subscription required) on the case.
Category: Prosecutions
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Surprise, surprise, surprise. According to Joe Palazzolo at WSJ's Law Blog, DOJ's Office of Professional Responsibility has cleared Brenda Morris of any wrongdoing whatsoever in the Ted Stevens case. The story is here.
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A few weeks ago an assistant U.S. attorney told David Finn, a Dallas criminal defense lawyer, that the government lacked funds to pay for copies of the documents it had requested as reciprocal discovery, even though the government had earlier charged Mr. Finn approximately $1,000 at 22 cents per page for copies of the discovery documents it had provided.
The cost of discovery has generally been borne by the party from whom the documents are requested. Occasionally, and much more frequently recently, as in Mr. Finn's case, the government has charged defendants or their lawyers for copies of documents provided in discovery.
Generally, these charges are of little significance to the defendant since either the documents are relatively few, the defendant has deep pockets and can easily afford to pay for them, or the defendant is legally indigent and the costs are borne by the government under the Criminal Justice Act. However, when the defendant is a middle-class person with private counsel and the documents are voluminous, as they often are in white collar cases, the cost to the defendant (or his attorney) can be substantial.
The Federal Rules of Criminal Procedure are silent on costs of providing discovery. In fact, the Rules (most likely drafted with the garden variety non-white collar criminal case in mind) actually provide not for the turning over of documents but for their disclosure and availability to the defendant "for inspection, copying or photocopying." Rule 16(E). One federal appellate court has held that in the absence of an explicit requirement in the Rules that the government bear the cost of providing documents, it is an abuse of discretion for a district court to require it do so. United States v. Freedman, 688 F.2d 1364 (11th Cir. 1982). Since the costs of litigation would almost always be greater than the cost of the documents, there understandably have been few reported cases in this area.
In my view, in a criminal case, the government should provide without cost those documents required to be disclosed under the discovery provision of the Federal Rules. One should not be required to pay the government for the privilege of being prosecuted. The cost of production, of course, can be considerably reduced by providing the documents in electronic form. Further, the expense — in the event of a conviction — could be recovered as a cost of prosecution (see 28 U.S.C. 1918(b)).
In any case, the cost of 22 cents per page, while perhaps not out of line with what some lawyers charge clients for copies, appears excessive, but perhaps not so excessive in view of some of the expenses paid by the Department of Justice. In a report of otherwise minimal import to the criminal justice community, the DOJ Inspector General two weeks ago noted that expenses at DOJ conferences "appear to be extravagant." The IG highlighted a $53 per person luncheon, a $5 Swedish meatball, an $8.32 cup of coffee and a $16 muffin. Perhaps if DOJ paid less for food, it would charge less for discovery and be able to pay for reciprocal discovery. (To be fair, "extravagant" refreshment costs are often required by a hotel or conference center as part of the conference package; there is no such excuse for "extravagant" costs for producing discovery.)
(goldman)
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Is it my imagination, or has the DOJ been picking up its numbers in prosecutions and resolutions in white collar cases? Or is it just an increase in DOJ Press Releases? -
DOJ Press Release, Australian Man Pleads Guilty to Accepting Payment as Reward for Steering $15 Million in U.S.-Funded Contracts in Afghanistan
DOJ Press Release, Former EPA-CID Special Agent in Texas Pleads Guilty to Perjury and Obstruction of Justice
DOJ Press Release, SAIC and Others to Pay U.S. More Than $22.6 Million to Resolve False Claims Allegations
DOJ Press Release, Houston-based Principals of A&O Entities Sentenced in Virginia for $100 Million Fraud Scheme
DOJ Press Release, Trident Seafoods Corp. to Pay $2.5 Million to Resolve Clean Water Act Violations and Spend More Than $30 Million to Upgrade Processing Plants
DOJ Press Release, Superseding Indictment Filed in $670 Million Fraud Scheme
DOJ Press Release, Johnson & Johnson Subsidiary Scios Pleads Guilty to Misbranding Heart Failure Drug Natrecor – California-Based Company Will Pay $85 Million Criminal Fine
(esp)
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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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The Lindsey Manufacturing Reply Brief was filed Sunday night by Defendants Lindsey Manufacturing Company, Keith E. Lindsey, and Steve K, Lee. This is a reply to the Government's Opposition to Defendants' Supplemental Brief in Support of Their Motion to Dismiss the Indictment With Prejudice Due to Repeated and Intentional Government Misconduct. The case is in front of U.S. District Judge Howard Matz in the Central District of California.
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A DOJ Press Release here reports that "Saudi Arabia-based Tamimi Global Company Ltd (TAFGA) has agreed to pay the United States $13 million to resolve criminal and civil allegations that the company paid kickbacks to a Kellogg Brown & Root Inc. (KBR) employee and illegal gratuities to a former U.S. Army sergeant, in connection with contracts in support of the Army’s operations in Iraq and Kuwait." The press release states:
"Under the terms of that agreement, TAFGA will pay the United States $5.6 million as part of a deferred prosecution and institute a strict compliance program to ensure that the company and its employees will abide by the legal and ethical standards required for government contracts. If TAFGA meets its obligations under the agreement without violation for 18 months, the United States will dismiss the criminal charges."
(esp)
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A DOJ Press Release here states that "Maxim Healthcare Services Inc., one of the nation’s leading providers of home healthcare services, has entered into a settlement to resolve criminal and civil charges relating to a nationwide scheme to defraud Medicaid programs and the Veterans Affairs program of more than $61 million." The Deferred Prosecution Agreement (DPA) provides that Maxim will pay "a criminal penalty of $20 million and to pay approximately $130 million in civil settlements in the matter." The DPA, which requires the company to meet reform and compliance measures, lasts for two years.
As with many companies who enter into DPAs, there are also individuals being prosecuted. In this case the press release notes that "[t]o date, nine individuals – eight former Maxim employees, including three senior managers and the parent of a former Maxim patient – have pleaded guilty to felony charges arising out of the submission of fraudulent billings to government health care programs, the creation of fraudulent documentation associated with government program billings, or false statements to government health care program officials regarding Maxim’s activities."
The press release also states that "[t]he government’s willingness to enter into a DPA with Maxim is due, in significant part, to the company’s cooperation and the reforms and remedial actions the company has taken – beginning particularly in May 2009 – including significant personnel changes: terminating senior executives and other employees the company identified as responsible for the misconduct; establishing and filling of positions of chief executive officer, chief compliance officer, chief operations officer/chief clinical officer, chief quality officer/chief medical officer, chief culture officer, chief financial and strategy officer, and vice president of human resources; and hiring a new general counsel."
(esp)
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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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Here is William Roger Clemens' Reply Memorandum supporting his Motion to Prohibit Retrial and Dismiss the Indictment, which was filed on Friday. Like the original defense Motion and the Government's Response, it is well written. I was surprised, however, by the defense's failure to spend more time on a particularly disingenous aspect of the Government's Response, relating to the prosecution's violation of a court order during opening argument. I'll have some commentary on this issue in a few days.
MattBray.net 