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I Recognize That Name
An otherwise mundane fraud case out of the Southern District of Florida caught my eye because of the name of the prosecutor. The case involves a rather straightforward check-kiting type scheme involving multiple accounts at a brokerage firm resulting in a loss of over $200,000. What I noticed was the following sentence near the end…
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Counsel Caught Between a Rock and a Hard Place
The role of lawyers involved in corporate crime investigations just keeps getting more treacherous. The Thompson Memo puts the issue of waiver of the attorney-client privilege and work product protection front and center in every investigation, and raises questions about whether the company should pay for outside counsel to represent employees and directors involved in…
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Illegal, Incompetent, or Ignorant
Which of these three "I’s" apply to Ken Lay? Were his actions illegal as the prosecution seeks to prove, just basic incompetent, or ignorant – did Fastow keep him in the dark about the improprieties going on in the company? The key may not rest on the technical items presented to the jury, but more…
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Survey
Bob Weninger, a law professor at Texas Tech University School of Law, is surveying lawyer reaction to a proposed amendment to Federal Rule of Evidence 408. The proposal is now before the Supreme Court and may soon be before Congress. Under the amendment, statements made in settlement talks in civil cases brought by public agencies…
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GAO Report on the Use of Shell Companies
The Government Accountability Office (GAO) issued a report (link below) to the Senate Permanent Investigations Subcommittee on the use of shell companies to facilitate criminal activity, and assessing whether greater disclosure requirements would assist law enforcement. Corporations and Limited Liability Companies (LLC) can be formed quite easily in all states, often on-line, and the disclosure…
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Vinson & Elkins LLP and Enron
Attorneys at the law firm of Vinson & Elkins LLP are probably watching the events at the trial of Ken Lay and Jeff Skilling, as the two defendants on trial have claimed that they received advice from individuals associated with this law firm. As stated by co-blogger Peter Henning, "I would not want to be…
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Former CEO of Computer Associates Pleads
It is not common for the CEO of a company to plead guilty, as the government often takes the pleas from the lower ranks of the company as they move up the chain. The CEOs are usually left to stand trial with others testifying against them. But that is not the case in the Computer…
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The Prosecution Side in the KPMG Defendants’ Case
The government response to Judge Lewis Kaplan’s Order in the KPMG Defendants’ case is a nine (9) page letter. (see New York Times here)The Government was asked to provide a Bill of Particulars, specifically answering "[w]ith respect to each of the tax shelters as to which the government intends to offer proof, does the government…
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Ken Lay Blames Others
Ken Lay blamed Fastow, short-sellers, and journalists in his opening testimony yesterday. (see Houston Chronicle here) The defense is – "no knowledge." The argument will be that he is a busy CEO who did not know everything of what might be going on within the company. He called what happened a "classic run on the…
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Ken Lay – Next to Bat?
Ken Lay is expected to be the witness on the stand this morning in his trial along with co-defendant Jeff Skilling. And it is anticipated that he will be a very different witness than co-defendant Jeff Skilling. See NYTimes here, Washington Post here, Houston Chronicle here. The lessons from this witness may prove to be…
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