Investigator Finds ‘Systemic Concealment’ by Stevens Prosecutors

Posted on November 21st, 2011 by Sam Kauffman

On April 7, 2009, after granting the government’s motion to dismiss and vacate the conviction of former Senator Ted Stevens for making false statements, by failing to disclose gifts he received on his Senate Financial Disclosure, US District Court Judge Emmet G. Sullivan appointed a special investigator to ”investigate and prosecute such criminal contempt proceedings as may be appropriate against the six Department of Justice attorneys responsible for the prosecution of Senator Stevens.” 

Today the investigator appointed by Judge Sullivan issued in camera a 500 page report.  Although the report will remain under seal pending review by the Department of Justice and the lawyers for the late Senator, Judge Sullivan disclosed the gist:  “the investigation and prosecution of Senator Stevens were ‘permeated by the systematic concealment of significant exculpatory evidence which would have independently corroborated his defense and his testimony, and seriously damaged the testimony and credibility of the government’s key witness.’”  The investigators further concluded that “ at least some of the concealment was willful and intentional” and found evidence of concealment and the investigators found “serious misconduct that was previously unknown and almost certainly would never have been revealed – at least to the Court and to the public – but for their exhaustive investigation.” 

Judge Sullivan’s order can be found here.  See also White Collar Crime Prof Blog.    

US Sentencing Commission Critical of Federal Mandatory Minimum Sentences in New Report

Posted on November 14th, 2011 by Sam Kauffman

A 645-page report from the United States Sentencing Commission found that federal mandatory minimum sentences are often “excessively severe,” not “narrowly tailored to apply only to those offenders who warrant such punishment,” and not “applied consistently.” That is especially so for sentences of people convicted of drug-trafficking offenses, who make up more than 75 percent of those given federal mandatory minimum sentences.  A Blue Ribbon Indictment

Glaxo Settles Off-label Marketing and Medicare Fraud Cases with U.S. for $3 Billion

Posted on November 3rd, 2011 by Sam Kauffman

GlaxoSmithKline PLC said it will pay the U.S. government $3 billion to settle several long-running criminal and civil investigations into the company, including allegations that Glaxo marketed some drugs illegally and defrauded the Medicaid program.

Dual SEC and DOJ Agreements in FCPA Settlement

Posted on May 17th, 2011 by Eryn Karpinski Hoerster

Tenaris, S.A., a publicly traded corporation headquartered in Luxembourg with operations in 12 countries through 17 subsidiaries, today entered into separate agreements with the SEC Division of Enforcement and the DOJ’s Criminal Division for alleged violations of the Foreign Corrupt Practices Act (FCPA) and the Securities Exchange Act of 1934.  Although it must have been a bitter pill to swallow (totaling $9.9 million in disgorgement and criminal penalties), the company has agreed to provide full cooperation to the U.S. government in exchange for no criminal or civil sanctions.  From the attorney’s perspective, this case highlights the enormous tool-kit available to federal prosecutors across agencies, and the challenges facing companies who must negotiate with each of them in order to achieve the finality of a global settlement.     Read the rest of this entry »

Update on Stevens Dismissal: Questions on Discovery Rulings

Posted on May 11th, 2011 by Eryn Karpinski Hoerster

One of the remarkable things about the Stevens criminal indictment was the volume of attorney-client privileged material that comprised the evidence presented at trial.  While Judge Titus qualified his criticism of a District of Massachusetts Magistrate Judge’s order requiring these documents to be produced by noting that his opinion was “with the 20/20 vision of hindsight,” he found himself resolving that Crime-Fraud Exception was erroneously applied.   This left us wondering, why did the Magistrate Judge have the last word on the production of documents that eventually led to the indictment of Lauren Stevens?  Could this entire trial have been avoided had the discovery order been overturned? Read the rest of this entry »

District of Maryland Judge Dismisses Charges Against Glaxo Lawyer Lauren Stevens

Posted on May 10th, 2011 by Eryn Karpinski Hoerster

On Tuesday, Hon. Roger W. Titus of the District of Maryland granted defendant Lauren Stevens’ Rule 29 Motion for Judgment, acquitting her of all six charges  brought against her.  The opinion is notable as a hindsight analysis of the crime-fraud exception to the attorney-client privilege, the statutory safe harbor for advice of counsel in obstruction cases, and yet another example of good faith winning the day.  For attorneys, the opinion is also a ringing endorsement for zealous advocacy.  Read the rest of this entry »

Ninth Circuit Upholds a Post-Skilling Honest Services Fraud Case

Posted on May 4th, 2011 by Sam Kauffman

On April 13, 2011, the Ninth Circuit Court of Appeals upheld an “honest services” fraud conviction where the government also argued and submitted an alternative theory that the defendant had deprived the victims of “money and property.” In U.S. v. Pelisamen the defendant was accused, along with his former lawyer, of removing funds from his grandmother’s estate, of which he was the administrator.  The government charged both Pelisamen and the former lawyer with, among other things, wire fraud in violation of 18 U.S.C. § 1343.  The indictment specified that such wire fraud was for the purposes of “obtaining money and property.” The indictment did not mention 18 U.S.C. § 1346, which provides that the behavior punishable under § 1343 includes a scheme or artifice “to deprive another of the intangible right of honest services” (at issue in Skilling).  The district judge however instructed the jury that it could convict Pelisamen if it found that he had either (1) “defrauded the heirs of the Estate of Rita Kaipat,” or (2) “deprived the heirs . . . of their right to honest services,” or (3) done both.

Because Pelisamen did not object to the jury instruction (Skillingwas decided after the trial), the Court engaged in a plain error analysis.  The panel concluded that because there were no bribes or kickbacks alleged, the incorporation of honest-services fraud into the jury instructions and jury verdict form was plainly erroneous under Skilling. However, the Court held that Pelisman was not prejudiced by the error because the jury had convicted on both of the government’s alternative theories. Therefore, the conviction was based on a valid “money or property” theory of wire fraud.

Recent U.S. Sentencing Guideline Changes of Interest to Corporations, their Directors and Officers

Posted on November 12th, 2010 by David Smith

The United States Sentencing Commission (USSC) recently passed several amendments to the advisory Sentencing Guidelines (effective November 1, 2010), some of which are relevant to the sentencing of organizations.  Significantly, the USSC amended the guidelines that define  for awarding organizations credit at sentencing based on an effective compliance and ethics program. Read the rest of this entry »

Internal Investigations: Branded a Corporate Criminal. Part 2 – The risk of talking to law enforcement

Posted on August 20th, 2010 by David Smith

Many business executives believe if they have done nothing wrong, they should agree to be interviewed by law enforcement if requested to do so as part of an internal or criminal investigation.  Experienced white collar attorneys know better; even the truly innocent have much more to lose than they can gain by agreeing to be interviewed without the assistance of counsel.  The risks business executives face during law enforcement interviews increased this June when the United States Supreme Court effectively expanded law enforcement officers’ rights to obtain incriminating evidence through custodial interviews. Read the rest of this entry »

H-P CEO Case Highlights Role of Internal Investigations

Posted on August 19th, 2010 by admin

The road from hero to villain can be short.  Mark Hurd, the highly successful CEO of the world’s biggest computer manufacturer, was forced to resign earlier this month following an internal investigation of his relationship with a Hewlett-Packard marketing consultant.  According to reports, H-P’s internal investigation found no evidence that Mr. Hurd harassed an actress the company hired to work at corporate marketing events.  It did, however, find that Mr. Hurd had filed inaccurate expense claims relating to meals with the woman, travel and, in one case, fees for a corporate appearance by the actress. Read the rest of this entry »