Sunday, February 4, 2018

In the News & Around the Blogosphere

DOJ Press Release, Arkansas State Senator Pleads Guilty to Wire Fraud, Money Laundering and Bank Fraud 

John F. Savarese, Ralph M. Levene, Wayne M. Carlin, David B. Anders, Jonathan M. Moses, Marshall L. Miller, Louis J. Barash, & Carol Miller, White Collar and Regulatory Enforcement: What to Expect in 2018, Compliance & Enforcement


February 4, 2018 in Corruption, News | Permalink | Comments (0)

Friday, February 2, 2018

ABA sends letter to Senate Judiciary Committee Opposing Anti-Money Laundering Bill

"American Bar Association President Hilarie Bass sent a letter to the Senate Judiciary Committee expressing concerns over a proposed anti-money laundering bill that would undermine the attorney-client privilege and impose burdensome and intrusive regulations on millions of small businesses, their lawyers and other agents, and the states." See more here.


February 2, 2018 in Money Laundering, Statutes | Permalink | Comments (0)

Decision to Dismiss Case of Senator Robert Menendez

Hats off to the government for dismissing the case against Senator Robert Menendez.  Corruption cases are important, but it is also important to assure that the prosecution of these cases meet the law. Hats off also to Attorney Raymond Brown, who represented Menendez. See Nick Corasaniti, Justice Department Dismisses Corruption Case Against Menendez, NYTimes, Jan. 31, 2018


February 2, 2018 | Permalink | Comments (1)

Thursday, February 1, 2018

Environmental Prosecutions Continue to Decrease

Syracuse Trac just reported the number of environmental criminal prosecutions is continuing to drop.  (see here).  Based upon first quarter statistics, the "annual total [projected] prosecutions will be 220 for this fiscal year."  This would be down from 338 for FY 2017 and 393 for FY 2016. In 2007 the number was above 900 prosecutions for the year.

(esp) (w/ disclosure that she is a B.S. graduate of Syracuse U.- home of the Trac Reports). 

February 1, 2018 in Environment, Government Reports, Prosecutions | Permalink | Comments (0)

The Martin Act: A Tool for Reform or an Abuse of Power?

NYU Law School Center on the Administration of Criminal Law will be hosting a symposium titled, The Martin Act: A Tool for Reform or an Abuse of Power? On Monday, February 26, 2018 from 9:30 -2:00 p.m.  More information and to register, see here. The program is as follows:

Panel One: The Martin Act and the Need for State Action

  • Harlan Levy, partner at Boies Schiller Flexner LLP and former Chief Deputy Attorney General, New York Attorney General’s Office
  • Katherine Milgram, Chief, Investor Protection Bureau, New York Attorney General’s Office
  • Chad Johnson, partner at Quinn Emanuel Urquhart & Sullivan LLP and former Chief of the Investor Protection Bureau, New York Attorney General’s Office
  • Eric DiNallo, Executive Vice President/General Counsel at The Guardian Life Insurance Company of America, former Chief of the Investor Protection Bureau, New York Attorney General’s Office

Panel Two: Practitioners Speak: How to Handle a Martin Act Investigation

  • Charles Stillman, partner at Ballard Spahr LLP
  • David Zornow, partner at Skadden Arps Slate Meagher & Flom LLP
  • Jeffrey Scott, partner at Sullivan & Cromwell LLP
  • David Anders, partner at Wachtell Lipton Rosen & Katz LLP
  • Cynthia Hanawalt, Enforcement Section Chief, Investor Protection Bureau, New York Attorney General’s Office 

Panel Three: The Martin Act: An Abuse of Power?

  • James Park, Professor of Law at UCLA School of Law
  • Rachel Barkow, Segal Family Professor of Regulatory Law and Policy, Faculty Director of the Center on the Administration of Criminal Law at NYU Law School
  • Ellen Podgor, Gary R. Trombley Family White-Collar Crime Research Profesor, Stetson University College of Law
  • James Copland,Senior Fellow, Director of Legal Policy at The Manhattan Institute
  • John Gardiner, partner at Skadden Arps Slate Meagher & Flom LLP


February 1, 2018 in Conferences | Permalink | Comments (0)

Monday, January 29, 2018

Where's the Spaghetti?

For an "interesting" case of alleged corruption that focuses on "meatballs."  See Jess Bidgood, Testimony in Corruption  Case Hinges on the Meaning of  'Meatballs,' NYTimes, Jan. 27, 2018; Emily Opilo & Peter Hall, Pawlowski Attorney Introduces Meatball Theory Amid Contract-Rigging Testimony, The Morning Call, Jan. 29, 2018.


January 29, 2018 in Corruption, Prosecutions | Permalink | Comments (0)

Sunday, January 28, 2018

Peanut Company Officers Case Emanating From Salmonella Outbreak - Affirmed

The 11th Circuit affirmed the convictions of three defendants coming from a 2009 investigation of a peanut production plant that was identified as the source of a nationwide salmonella outbreak. The court in United States v. Parnell stated in an unpublished opinion:

"The jury found Stewart and Michael guilty of several counts of fraudulently introducing misbranded food into interstate commerce, interstate shipment and wire fraud, and conspiring to commit these offenses. The jury also found Stewart guilty of fraudulently introducing adulterated food into interstate commerce. The jury found Stewart and Wilkerson guilty of obstruction of justice. The district court sentenced Stewart to 336 months [28 years] in prison, to be followed by three years of supervised release; sentenced Michael to 240 months [20 years] in prison, to be followed by three years of supervised release; and sentenced Wilkerson to 60 months [5 years] in prison, to be followed by two years of supervised release."

The convictions were based on conduct related to food safety and conduct during the investigation. The appellants were found to have "not [been] forthcoming with the FDA during its investigation."

"The court rejected arguments related to "juror exposure to extrinsic evidence."  The court also rejected a discovery argument made by one of the defendants. This defendant objected to the government "producing a large hard drive of documents in late June 2014 when the trial was set to begin on July 14th." The defendant argued that this was "one of many untimely data dumps, where the Government produced hard drives containing hundreds of thousands of documents..." The court found that the district court had made a finding that the documents were searchable and that the government had provided a Bates index seven months prior to trial, and that "an IT consultant helped" the defendant and counsel "search and review the documents." The Court stated that "[g]iven that [the defendant] was able to search the documents, they were not suppressed for purposes of Brady."

See also opinion - here

R. Robin McDonald, 11th Circuit Upholds Convictions in One of Nation's Largest Criminal Food Safety Prosecutions, Daily Report, Jan. 26, 2018.


January 28, 2018 in Environment, Food and Drink, Judicial Opinions | Permalink | Comments (0)

Saturday, December 30, 2017

2017 White Collar Crime Awards

Each year this blog has honored individuals and organizations for their work in the white collar crime arena by bestowing "The Collar" on those who deserve praise, scorn, acknowledgment, blessing, curse, or whatever else might be appropriate. With the appropriate fanfare, and without further ado, The Collars for 2017:

The Collar for Best “Stand Your Ground Defense” – To Rod Rosenstein who continues to stand firmly on Mueller’s appointment.

The Collar for “The Apprentice” Sequel – To Donald Trump for telling U.S. Attorneys “you’re fired.”

The Collar for Dead Air – To Donald Trump for acting so quickly in firing U.S. Attorneys that he didn’t have replacements ready.

The Collar for a Telling Foul Ball – To Ty Cobb (the President’s lawyer, not the late baseball player) for discussing work at a restaurant within earshot of a NY Times reporter.

The Collar for Most in Need of Prevagen –To Jared Kushner for needing to amend his disclosure forms multiple times.

The Collar for Best Adapted Screenplay – To House Republicans, who are using the Clinton Playbook to call for Special Counsel Mueller’s resignation or firing. It was wrong when it was done to Ken Starr and it’s just as wrong now.

The Collar for Newest Pumped-Up Sports – To the Russian Teams for getting tossed out of the 2018 Winter Olympic Games (with a thank you from U.S. baseball for getting them off the front page).

The Collar for Kicking Back a Sport – To International FIFA Executives and others over bribery and kickbacks.

The Collar for Increased Employment of White Collar Attorneys in Washington, D.C. – To Donald Trump and Robert Mueller, jointly, for keeping Washington, D.C., white collar attorneys busy.

The Collar for Clotheslines –To Donald Trump for hanging so many of his subordinates out to dry.

The Collar for Directional Impairment – To Donald Trump for demonstrating that loyalty is a one-way street.

The Collar for Worst Optics by a Prosecutor – To Manhattan DA Cyrus Vance for initially accepting campaign contributions from Donald Trump’s personal lawyer, before and after quashing a fraud investigation of the elder Trump and two of his children (with a thank you from former AG Loretta Lynch for outdoing her airport schmoozing with Bill Clinton).

The Collar for Worst Ghost Writing – To Trump Attorney John Dowd for claiming he authored an arguably incriminating tweet for the president.

The Collar for “But I Play One on TV” – To Donald Trump. Jr. for claiming before a Congressional committee that he did not have to disclose conversations with his father because of attorney-client privilege.

The Collar for Political Detours – To New Jersey Governor Chris Christie who may have lost out on becoming Attorney General because of a logjam on the George Washington Bridge.

The Collar for It’s About Time - To Donald Trump for finally doing what this blog called on someone to do in 2010-11 – granting a commutation to Sholom Rubashkin on his 27-year sentence.

The Collar for Best Dolphin (Flipper) – To Michael Flynn for cooperating in shark infested waters.

The Collar for Least Known Person at the Table – To George Papadopoulos for being the first known to plead guilty in the Russian investigation.

The Collar for Overweight Luggage – To Robert Mueller who may have hired a few too many assistants with excess Democratic Party baggage.

The Collar For Getting Two Bites of the Big Apple - To New York politicians Sheldon Silver and Dean Skelos for getting new trials because their respective trial courts' instructions were faulty under the Supreme Court's later-decided McDonnell decision.

The Collar for Best Game of Hide and Seek – To Donald Trump for continuing to refuse to disclose his tax returns (second year in a row).

The Collar for the Best Parent – Retired years ago and renamed the Bill Olis Best Parent Award – not awarded again this year since no one comes even close to Bill Olis, may he rest in peace.

(wisenberg), (goldman), (esp)

December 30, 2017 in About This Blog | Permalink | Comments (0)

Friday, December 29, 2017

Point of Personal Privilege: McCabe's No-Brainer

I was young once; a federal prosecutor investigating savings and loan ("S&L") fraud for the U.S. Attorney's Office in the Western District of Texas (San Antonio Division). About a year after the 1988 Presidential election, we got a new U.S. Attorney.  He was a politically active civil attorney from El Paso. During this time period, there arose a "person of interest" in one of my biggest S&L cases. This person of interest was a partner at a prominent San Antonio law firm. It so happened that a name partner at the same firm had played a significant role, perhaps the significant role, in securing the U.S. Attorney appointment for my new boss. The name partner called me one day and asked to come in and speak to me about the case. I went to my new boss. We immediately came to the conclusion that my new boss should completely recuse himself from the S&L case. Why? It was a no-brainer. The name partner had been instrumental to the new U.S. Attorney's appointment. The name partner's law partner was a subject in my case. It would create an appearance of impropriety if we declined to prosecute the "person of interest" partner while my new boss had any input or role whatsoever, even an oversight role, in the process. Did it matter that the support from the law firm had happened in the past? Of course not. The name partner's support constituted a big favor. Did it matter that the support came from the subject's partner and not the subject himself? No.

When I learned that FBI Director Andrew McCabe's wife received almost $700k in campaign funds through the efforts of a long time, well-known Clinton crony, I was completely unimpressed that the campaign was over by the time Deputy Director McCabe assumed his oversight role in the Clinton email investigation. A big favor--and a recent favor--had been given to McCabe's wife by someone very close to the subject of the investigation. The favor was the bankrolling of a political campaign--funds that would never have to be repaid. I became even more concerned when I read that McCabe had oversight authority in the Clinton Foundation case and made decisions about what could and could not be investigated. And when CNN's Josh Rogin solemnly pronounced that there was "no evidence"  McCabe had done anything wrong, I begged to differ. It was wrong for McCabe to have any oversight role whatsoever in any investigation of Mrs. Clinton or Governor McAuliffe. It doesn't mean that McAuliffe was trying to bribe anyone or influence FBI decision-making. It doesn't mean that McCabe was improperly influenced in his own decision-making, or violated any law, or ethical rule. It doesn't matter whether any of McCabe's decisions were, standing alone, wise or unwise. It matters that his failure to recuse created an appearance of impropriety. Recusal should have been a no-brainer.

Based on everything I have heard about McCabe, he has been a dedicated career public servant and an honorable man. He obviously does not deserve some of the harsh things being said against him. Nor does he deserve to be fired or have his pension taken away--neither of which would be legal anyway. But FBI Director Wray should reassign McCabe. McCabe made a mistake and a significant one.


December 29, 2017 in Investigations, Prosecutions, Prosecutors | Permalink | Comments (0)

Saturday, December 23, 2017

Media Coverage of Friday’s International Soccer Convictions

On Friday, two international soccer executives were convicted in federal court in Brooklyn, New York, for their roles in a global bribery scandal. The defendants were alleged to have received bribes and kickbacks to influence decisions regarding media rights associated with significant FIFA soccer tournaments. The defendants were also alleged to have accepted payments to influence the selection of venues for the World Cup and other important tournaments.

Juan Angel Napout, former head of South America’s football governing body, was accused of accepting $10.5 million in bribes, and Jose Maria Marin, former president of Brazil’s Football Confederation, was accused of accepting $6.55 million in bribes. Napout was convicted of several counts, including racketeering conspiracy, wire fraud, and money laundering. Napout was convicted of racketeering conspiracy and wire fraud.

After the convictions, FIFA stated, “FIFA strongly supports and encourages the U.S. authorities’ efforts to hold accountable those individuals who abused their positions and corrupted international football for their own personal benefit.”

The jury was unable to reach a verdict regarding the third defendant in the case, Manuel Burga, former president of the Peru soccer federation. Jurors will return next week to continue deliberating in his matter.

Since the investigation into international soccer began in 2015, more than 20 defendants have pleaded guilty. Several news outlets have in-depth coverage of Friday’s convictions, including the New York Times, Sports Illustrated, the BBC and Bloomberg.


December 23, 2017 in Corruption, Current Affairs, International, Money Laundering, News, Prosecutions, Sports, Verdict | Permalink | Comments (0)

Monday, December 18, 2017

Unclean Hands

Judge Jeanine Pirro, Jesse Watters, and other Fox News all-stars are calling Bob Mueller's investigation an attempted coup, a deliberate attempt to overturn the results of the 2016 election. Liberal media commentators are outraged, as well they should be. I'm personally disgusted by such tactics. Mueller is a duly appointed Special Counsel, put in place by a longtime Republican conservative, and the need for a Special Counsel under the governing regulation is clear. If Trump ends up getting impeached, that too will be part of a legitimate constitutional procedure. We are a government of laws and we know how to handle such matters. But it is worth pointing out that the left-leaning media and their talking heads have unclean hands.

Hillary Clinton (First Lady at the time) and Clinton surrogates referred more than once to Ken Starr's investigation as an attempted coup. Nixon lackeys said exactly the same thing about Archibald Cox. This is what happens when Special Counsel or Independent Counsel investigations get too close to the target. There is nothing new about it. This is a historical fact. Spare me the hypocrisy.

You are no doubt outraged that Judge Pirro wants Mueller "led out in cuffs." Were you similarly outraged when Clinton friend and surrogate James Carville publicly warned Independent Counsel Ken Starr that he was "one mistake away from not having any kneecaps"?

Two wrongs don't make a right. But CNN, MSNBC, and the entire Democratic Party establishment (including their surrogates and retained attorneys) need to recognize the precedents they set during the Whitewater/Lewinsky investigation. Every night, for years, Judge Starr was nightly vilified in a ceaseless onslaught by Geraldo Rivera, Keith Oberman, Charles Grodin, and others too numerous to mention. So folks, please look in the mirror. You are the ones who opened the door.

As I have said here before, Bob Mueller is a public official subject to criticism like any other public servant. He has been tone deaf and naïve in the selection of personnel on his team. But I see no credible evidence that his investigation has been tainted or compromised and no reason for him to step down. I won't hesitate to criticize Judge Jeannine, Jesse Watters, and their ilk when they unfairly attack him. It's nice to know that this time I won't be alone.   


December 18, 2017 in Investigations, Prosecutions, Prosecutors | Permalink | Comments (0)

Thursday, December 14, 2017

McCabe & Mr. Mueller: Where Are We Now?

With apologies to the memory of Robert Altman.

  1. FBI Deputy Director Andrew McCabe wouldn't know a conflict of interest if it jumped up and bit him in the butt. He had no business supervising the Clinton Email investigation or the Clinton Foundation investigation in any capacity whatsoever. Supervising those investigations after his wife's political campaign accepted a $600K plus donation from close Clinton ally Terry McAuliffe was a gross and obvious conflict of interest. Yet he persisted.
  2. McCabe did not recuse himself until after publication of a Wall Street Journal article detailing the McAuliffe donation. By that time, both investigations were closed. FBI Special Agents involved in the Clinton Foundation investigation were reportedly kept from pursuing certain avenues of investigation with McCabe's knowledge and/or participation.
  3. The Clinton email investigation and the Clinton Foundation investigation were both mishandled. Anybody even remotely familiar with how federal investigations work will tell you as much. You don't give limited use immunity to gain access to a witness's computer when you can get the same information through a search warrant. This is particularly true when the immunity grant impacts  a related investigation--which it almost certainly did in this instance. You don't let a small army of the subject's cronies attend her formal law enforcement interview. You don't allow a witness in the investigation to attend the subject's interview under the guise that said witness is also the subject's attorney.
  4. The FBI's Peter Strzok should never have been assigned to the Russian/Trump Collusion investigation by Comey and McCabe in August 2016. By this time, the Clinton Email investigation was being harshly criticized by GOP front-runner Trump and other Republican hopefuls. You don't assign the FBI agent whose work is being attacked to investigate the very person who is leading the attack. Accordingly, Mueller should have removed Strzok as one of his first official acts.  We now know that Strzok had a vitriolic hatred of all things Trump, which he freely exhibited during the course of the Russian/Trump Collusion investigation. It's not about Strzok's political views. Agents and prosecutors cannot be hired, passed over, or fired based on their political affiliation. It's about Strzok's ability to operate in an unbiased manner during the course of an investigation. To his credit, Mueller immediately fired Strzok upon learning ab0ut Strzok's incriminating texts. It now appears that McCabe almost certainly knew of Strzok's intemperate hatred of Trump before, or shortly after, Strzok was assigned to the Russian/Trump Collusion investigation. What a wonderful little stink bomb he left for Mueller.
  5. DAG Rod Rosenstein should order the DOJ to release the full contents of Bob Mueller's Conflicts Waiver, except for portions that must remain confidential to protect attorney-client confidences. The public has a right to know of any friendships that could potentially impact Mueller's work.
  6. Bob Mueller is an honorable man. He is also tone deaf and politically naïve. Mueller should have recognized that he and his team would be attacked by Trump World and put under a microscope. He should have taken greater care to assure himself that the team he assembled would not be subject to credible accusations of political bias. Special Counsels are hired in the first place to avoid conflicts of interest and the appearance of conflicts.
  7. Bob Mueller should not resign or be fired, because he has done nothing that would warrant resignation or firing. The calls for Mueller to quit or be sacked are coming for the most part from partisan ideological hacks. These are some of the same people falsely stating that Rosenstein is a liberal Democrat and a Mueller protégé. Rosenstein (my old friend and former colleague) is a mainstream conservative Republican and long-time play-it-by-the book professional. I guess that's not good enough for some people, who apparently want him to have a pin-up of Roy Moore in his bedroom.
  8. Bob Mueller should not demand the resignation of any staff members, based on our current state of knowledge. True, he should not have hired Andrew Weissman, who has more baggage than a Carnival Cruise ship, or Jeannie Rhee in the first place, due to the appearance of potential bias. But there is no evidence that they have let any biases affect their work.
  9. We don't need a Special Counsel to investigate Mueller or his people. A Special Counsel is for criminal investigations. Any credible claims of impropriety directed to Mueller or his team can and should be handled by DOJ's Office of Inspector General ("OIG").
  10. It is not enough to say that OIG is investigating the handling of the Clinton email investigation. We need to know more. Will OIG also look at the interplay between the Clinton Email Investigation and the Clinton Foundation investigation? Is OIG using its subpoena power? If not, why not? 


December 14, 2017 in Investigations, Legal Ethics, Prosecutions, Prosecutors | Permalink | Comments (1)

Friday, December 8, 2017

The Next Potential Bombshell: Associate Deputy AG Ohr Met With Steele and Simpson.

James Rosen of Fox News reported last night that recently removed Associate Deputy Attorney General Bruce Ohr (an Obama holdover) met during the 2016 Presidential campaign with Steele Dossier author Christopher Steele and shortly after the election with Fusion GPS founder Glenn Simpson. The story is here. If these meetings happened, they would constitute extremely unusual behavior for a high-level DOJ official, even a political appointee. The meetings will further fuel speculation that the Steele Dossier, paid for by the Clinton campaign and the DNC, was used in whole or in part to obtain FISA warrants against Trump campaign officials. They will also add to the concern about politicization of federal law enforcement and intelligence agencies during the waning days of the Obama era. Stay tuned for more analysis as the story unfolds.


December 8, 2017 | Permalink | Comments (0)

Tuesday, December 5, 2017

"Follow the Money"? Or Maybe Not?

Reports now that President "Trump's lawyer denied any such subpoena had been issued."

Philip Ewing, NPR, Subpoena For Deutsche Bank May Put Mueller On Collision Course With Trump

Arno Schuetze, Nathan Layne, Reuters, Trump Lawyer Denies Deutsche Bank Got Subpoena on Trump Accounts


December 5, 2017 | Permalink | Comments (0)

Monday, December 4, 2017

Point of Personal Privilege: Can the President Obstruct Justice? Yes and No.

First, let's look at the precise words attributed to the President's outside counsel John Dowd in Axios: "The President cannot obstruct justice because he is the chief law enforcement officer under [the Constitution's Article II] and has every right to express his view of any case." Dowd does not appear to be speaking to the broad constitutional question of whether any sitting President can be indicted and tried while serving as President. He instead appears to be saying, as many of us have, that the President, as chief law enforcement officer, can express whatever the President's views of the Flynn investigation are to (former) FBI Director Comey. He can also ask Comey to go easy on Flynn. He can direct Comey to stop investigating Flynn. He can fire Comey if Comey refuses to stop the investigation. Trump can do this, not because he is above the law, but because he is the Chief Officer of the Executive Branch. It has nothing to do with whether Trump was trying to protect himself from prosecution or whether Trump already knew that Flynn had lied to government officials when Trump allegedly asked Comey to go easy on Flynn. As long as the statement ("Go easy on him; he's a good guy") or the act (firing) does not independently violate another constitutional provision (for example, the Equal Protection Clause) or a federal statute, it can never, in this view, constitute obstruction. It may be wrong. It may be impeachable. But it cannot be a criminal offense.

What the President cannot do, under federal criminal law, is instruct another person to lie to federal investigators/law enforcement officers, and the President cannot himself lie to such officers. That is classic obstructive conduct that violates the law, no matter who does it. In this instance, the President's title or position would not be not a defense.


December 4, 2017 | Permalink | Comments (1)

Friday, December 1, 2017

Michael Flynn To Plead Guilty: First Take--UPDATED!

Here is the Criminal Information. Here are Stay tuned for the Plea Agreement and Statement of the Offense which have now been yet to be filed.

Here is what we can tell so far.

  1. Flynn is obviously co-operating. You don't get to plead to a Criminal Information unless you are cooperating.
  2. If even half of what has been reported about Flynn in the press is true, a one count Criminal Information with a five year statutory cap is an outstanding deal. It is an even better deal if Flynn bought a walk for his son. UPDATE: The Plea Agreement, which purports to be complete, contains no promises related to Flynn's son.
  3. This is a bare bones Criminal Information, but not as bare bones as the one charged against George Papadopoulos. We should know much more when we see the Plea Agreement and Statement of the Offense. The Statement of the Offense was the key document in the Papadopoulos case. But even though the Papadopoulos Statement of the Offense is detailed in some areas it is curiously silent in others. For example, it never reveals whether Papadopoulos specifically informed Trump campaign officials that the Russians had "dirt" on Mrs. Clinton. UPDATE: The Statement of the Offense reveals separate conversations Flynn had with "a senior official", "senior members", and "a very senior member" of the Presidential Transition Team ("PTT"). These conversations, if they occurred, are troubling, because they appear to reveal that  PTT officials were conducting foreign policy and undermining President Obama's foreign policy before President Trump took office.

Here is what to look for or ask.

  1. How detailed was Flynn's criminal conduct? The Statement of the Offense should tell us that. UPDATE: The Statement of the Offense tells us that in addition to the conduct charged in the Criminal Information, Flynn violated the Foreign Agents Registration Act ("FARA") by making several false statements and omissions related to his dealings with the Republic of Turkey.
  2. Will the Plea Agreement contain a provision promising not to charge Flynn for any crimes detailed in the Statement of the Offense, in exchange for Flynn's guilty plea? Such a provision is fairly standard and was included in the Papadopoulos Plea Agreement. UPDATE: It's in there.
  3. Will Flynn's son walk? This may be revealed in the Plea Agreement. UPDATE: Not included in the Plea Agreement. This could have been handled in a conversation between Mueller's prosecutors and Flynn and his attorneys. It might have gone something like this: "Look. We aren't promising anything. But based on our current state of knowledge we have no interest in going after your son." SECOND UPDATE: Alternatively, an Immunity Agreement for Flynn's son may have been wrapped up prior to, and as a pre-condition of, Flynn's deal.
  4. Will there be a sealed Supplemental Plea Agreement? We should be able to tell this by language inserted in the public plea agreement. It will say that the Plea Agreement, and any supplemental filings, are the complete agreement. UPDATE: There is not.
  5. Is there a separate sealed agreement promising Flynn a 5K1.1 reduction under the Sentencing Guidelines in exchange for cooperation? Again, this should be revealed in the public Plea Agreement. UPDATE: There is no separate sealed agreement. The 5K1.1 possibility (I shouldn't have said promise) in exchange for Flynn's substantial assistance is included in the public Plea Agreement. You may ask why Flynn even needs a 5K1.1 since his Guideline Range is 0-6 months--the lowest possible range. Two reasons. First, the sentencing judge may not agree with the Government's predicted Guideline Range. Second, a 5K1.1 motion for downward departure under the Guidelines will signal to the sentencing judge that Flynn has been, in Mueller's view, fully and truthfully cooperative, virtually insuring a probationary sentence. Continue to sStay tuned.


December 1, 2017 | Permalink | Comments (2)

Australia Launches Royal Commission to Examine Banking Sector

As detailed by The Sydney Morning Herald, the Australian government announced this week that it will convene a Royal Commission to examine potential misconduct by the Australian banking and financial services sector.  The announcement was made by Prime Minister Malcolm Turnbull after a letter was received from four banks asking that a commission be established.  The communication from Commonwealth Bank, Westpac, National Australian Bank, and ANZ Banking Group asked that a “properly constituted inquiry” be conducted.  The bank letter opened by saying,

We are writing to you as the leaders of Australia’s major banks.  In light of the latest wave of speculation about a parliamentary commission of inquiry into the banking and finance sector, we believe it is now imperative for the Australian Government to act decisively to deliver certainty to Australia’s financial services sector, our customers and the community. 

Our banks have consistently argued the view that further inquiries into the sector, including a Royal Commission, are unwarranted. They are costly and unnecessary distractions at a time when the finance sector faces significant challenges and disruption from technology and growing global macroeconomic uncertainty.

However, it is now in the national interest for the political uncertainty to end.  It is hurting confidence in our financial services system, including in offshore markets, and has diminished trust and respect for our sector and people.  It also risks undermining the critical perception that our banks are unquestionably strong.

The establishment of the Royal Commission comes after several scandals involving financial institutions, including regulatory actions regarding rate rigging, money laundering, and misuse of client funds. 

According to the draft terms of the reference, the Royal Commission inquiry will be broader than simply investigating alleged criminal activity.  The reference includes instructions to examine:

  • “[T]he nature, extent and effect of misconduct by a financial services entity (including by its directors, officers or employees, or by anyone acting on its behalf)”  
  • “[A]ny conduct, practices, behaviour or business activity by a financial services entity that falls below community standards and expectations”
  • [T]he use by a financial services entity of superannuation members' retirement savings for any purpose that does not meet community standards and expectations or is otherwise not in the best interest of members”

The Royal Commission will last for twelve months and a final report is expected by February 2019.  Given the breadth of the inquiry, however, it would not be surprising to see the work of the commission continue on longer.


December 1, 2017 in Current Affairs, Government Reports, International, Investigations, Money Laundering | Permalink | Comments (0)

Thursday, November 30, 2017

DOJ Issues New Guidelines on FCPA

Rod Rosenstein announced new guidelines for FCPA cases. (here)  In his remarks he stated:

I want to highlight a few of the policy’s enhancements.

First, the FCPA Corporate Enforcement Policy states that when a company satisfies the standards of voluntary self-disclosure, full cooperation, and timely and appropriate remediation, there will be a presumption that the Department will resolve the company’s case through a declination. That presumption may be overcome only if there are aggravating circumstances related to the nature and seriousness of the offense, or if the offender is a criminal recidivist.

It makes sense to treat corporations differently than individuals, because corporate liability is vicarious; it is only derivative of individual liability.

Second, if a company voluntarily discloses wrongdoing and satisfies all other requirements, but aggravating circumstances compel an enforcement action, the Department will recommend a 50% reduction off the low end of the Sentencing Guidelines fine range. Here again, criminal recidivists may not be eligible for such credit. We want to provide an incentive for good conduct. And scrutiny of repeat visitors.

Third, the Policy provides details about how the Department evaluates an appropriate compliance program, which will vary depending on the size and resources of a business.

The Policy therefore specifies some of the hallmarks of an effective compliance and ethics program. Examples include fostering a culture of compliance; dedicating sufficient resources to compliance activities; and ensuring that experienced compliance personnel have appropriate access to management and to the board.

We expect that these adjustments, along with adding the FCPA Corporate Enforcement Policy to the U.S. Attorneys’ Manual, will incentivize responsible corporate behavior and reduce cynicism about enforcement.


November 30, 2017 in FCPA | Permalink | Comments (0)

Tuesday, November 28, 2017

Drugs or White Collar Crime? - What Was Russia's Role "in the massive sports fraud?"

Thursday, November 16, 2017

Senator Robert Menendez Jury Hangs: Mistrial Declared

Here is a story from Max Greenwood of The Hill and another from Bill Wichert of Law 360. Make no mistake about it, this was a great and hard-fought victory for Menendez's lead defense attorneys Abbe Lowell and Raymond Brown and for the entire defense teams of Bob Menendez and Salomon Melgen. Despite all of the speculation concerning the impact of the Supreme Court's McDonnell decision, I doubt that it materially impacted the jury's work. It is obvious that Senator Menendez performed official acts on behalf of his co-defendant Salomon Melgen. It appears instead that some of the jurors bought the defense's theory that the Senator's actions were taken based on his close and long-time friendship with Melgen. This bodes well for Senators who accept expensive gifts and do political favors for old friends. The key here is to make friends with the right solons earlier in their careers. Then you can become an old friend. 


November 16, 2017 in Current Affairs, Defense Counsel, Prosecutions | Permalink | Comments (0)