Author Archive

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. http://on.wsj.com/sAal3L

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.

Former Illinois Governor Rod Blagojevich convicted of just one of 24 counts

Posted on August 17th, 2010 by Sam Kauffman

A Northern District of Illinois federal jury, after fourteen days of deliberations, reached a decision on only one of twenty four counts brought against former Illinois Governor Rod Blagojevich.  The jury found Blagojevich guilty of count 24 which alleged that Blagojevich violated 18 U.S.C. §1001(a)(2) by telling the FBI on March 16, 2005 that: (i) he tried to maintain a firewall between politics and government; and (ii) he did not track, or want to know, who contributed to him or how much they were contributing to him.  (more…)

Supreme Court Rejects The Government’s Expansive Interpretation of ‘Honest Services’ Fraud Statute.

Posted on June 24th, 2010 by Sam Kauffman

In a major ruling, the United States Supreme Court, at least partially, eliminated a critical tool for white collar prosecutors: the ability to bring charges for “honest services fraud” pursuant to 18 USC §1346, based on the undisclosed self-dealing by a public official or private employee.

The United States Supreme Court vacated one of the convictions of former Enron executive Jeffrey Skilling for so-called “honest services fraud” (18 USC §1346).  Skilling v. United States, all nine Justices agreed that the “honest services” conviction should be reversed, but for different reasons.

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