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White Collar
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May 7, 2013
9th Circ. Grants Smuggling Retrial Over Destroyed Evidence
Criminal defendants who are prejudiced by the government's destruction of evidence are entitled to a remedial jury instruction but not necessarily an outright dismissal of their case, the Ninth Circuit ruled Tuesday, ordering a retrial for a convicted Mexican man accused of drug smuggling.
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May 7, 2013
11th Circ. Pushes For New Plain Error Standard
The Eleventh Circuit on Tuesday recommended a rule change in civil cases that would impose legal consequences on a party who fails to object to either factual findings or legal conclusions in a magistrate judge's report and recommendation.
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May 7, 2013
Ex-BP Engineer Wants Evidence In Deepwater Case Excluded
The former BP PLC engineer accused of intentionally destroying evidence related to the Deepwater Horizon oil spill urged a Louisiana federal judge on Monday to exclude evidence the government plans to introduce at trial, claiming that several exhibits aren't relevant or are inadmissible hearsay.
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May 7, 2013
Traders Accused Of Bribing Venezuelan Bank Official
Two employees of New York broker-dealer Direct Access Partners LLC and an official of Venezuela's economic development bank have been charged with taking part in a multimillion-dollar kickback scheme in violation of the Foreign Corrupt Practices Act, the U.S. Department of Justice said Tuesday.
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May 7, 2013
PSU Administrators Stalling Criminal Case, Pa. Judge Says
A state judge chided two former Pennsylvania State University administrators Monday for filing a series of motions and appeals he characterized as attempts to stall their prosecutions for allegedly orchestrating a conspiracy to cover up the crimes of assistant football coach and convicted child molester Jerry Sandusky.
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May 7, 2013
Chase Sued Over Workers' ID Theft In $77M Medicare Scam
A JPMorgan Chase Bank NA customer on Monday hit the financial giant with a $10 million lawsuit alleging some of its employees stole her identity and used it to further a $77 million Medicare money laundering scheme.
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May 7, 2013
Health Clinic Therapist Cops To $63M Medicare Fraud
A former Health Care Solutions Network Inc. director and psychologist on Tuesday pled guilty to conspiring in a $63 million Medicare and Medicaid scheme in which the mental health care provider allegedly paid kickbacks in exchange for unnecessary patient referrals.
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May 7, 2013
Ex-Pa. Justice Must Apologize As Part Of Corruption Sentence
Judges across the state can look forward to receiving autographed portraits of former Pennsylvania Supreme Court Justice Joan Orie Melvin, as the disgraced jurist was sentenced Tuesday to send notes of apology following her February conviction on charges she ordered her public staff to work on her political campaigns.
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May 7, 2013
Feds Want Level Global Co-Founder Locked Up For 10 Years
U.S. Attorney Preet Bharara said Monday that Anthony Chiasson, co-founder of hedge fund Level Global Investors LP, should be put behind bars for up to 10 years for his insider trading conviction, nearly five times the prison time Chiasson's attorneys are seeking.
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May 7, 2013
Expert Wouldn't Have Aided Convicted Dow Engineer: 5th Circ.
A Louisiana judge should not have excluded a chemical engineer's expert testimony during the trade secrets trial of a former Dow Chemical Co. employee, but the testimony wouldn't have prevented the employee's conviction, the Fifth Circuit said Monday.
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May 7, 2013
CFPB's 1st Criminal Referral Targets $2M Debt Relief Scam
Federal prosecutors on Tuesday charged a New York debt settlement firm with defrauding over 1,200 customers hobbled by credit card debt in a $2.2 million scheme that also marked the first criminal referral from the Consumer Financial Protection Bureau.
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May 7, 2013
Q&A With Faegre Baker's David Stark
The Second Circuit in U.S. v. Agrawal is about to consider a question not decided in Aleynikov — can a defendant can be convicted of violating the National Stolen Property Act by taking intangible property. This seems to be an arbitrary distinction that Congress should consider, says David Stark, a partner in Faegre Baker Daniels LLP's white collar practice.
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May 6, 2013
Lionsgate Vendor Pleads Guilty To $2M Kickback Scheme
A vendor accused of conspiring with a Lionsgate Entertainment Inc. media buyer to defraud the studio of more than $2 million by submitting inflated purchase orders for DVD and Blu-ray displays entered a guilty plea in California federal court Monday, according to a prosecutor.
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May 6, 2013
Sky Bell Funds Sued Over Ponzi Investments
Seven limited partnership units operated by Sky Bell Asset Management LLC were hit with a proposed class action in Delaware federal court Monday by the limited partnerships’ owners, who say they lost millions when the funds’ money went into the Madoff and Petters Ponzi schemes.
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May 6, 2013
Lauryn Hill Gets 3 Months For Ducking $1M In Taxes
A New Jersey federal judge on Monday sentenced Grammy-winning R&B singer Lauryn Hill to three months in prison for failing to file tax returns and report more than $2.3 million in income, rejecting the prosecution's call for a longer jail term.
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May 6, 2013
Ex-KPMG Partner's Friend To Admit To Insider Trading
A California jeweler accused of receiving illicit stock tips from the former head of KPMG LLP’s Los Angeles office agreed to plead guilty Monday to insider trading and forfeit approximately $1.27 million in illegal profits.
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May 6, 2013
Prominent NY Democrat Held For Foreclosure Embezzlement
Brooklyn Democratic Sen. John L. Sampson, a lawyer and former top party leader in Albany who was placed at the heart of a casino bid-rigging scandal three years ago, was arrested Monday and charged with embezzling $440,000 in proceeds from property foreclosure sales to fund his political ambitions.
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May 6, 2013
Ex-BP Engineer Must Hand Over Atty Emails In Deepwater Case
The former BP PLC engineer accused of intentionally destroying evidence related to the Deepwater Horizon oil spill must provide the U.S. Department of Justice with emails he sent to his lawyer and attorney notes from a meeting with BP officials, a Louisiana federal judge said Friday.
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May 6, 2013
Q&A With Day Pitney's Jim DeVita
The U.S. Supreme Court’s decision in United States v. Booker struck a significant blow to judicial independence and has started to restore some measure of sanity to the sentencing system in federal courts, says James DeVita, a partner with Day Pitney LLP and former federal prosecutor.
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May 6, 2013
DOJ Veteran Joins Steptoe's White Collar Team
Steptoe & Johnson LLP has added muscle to its white collar and privacy and data security practices by adding a former deputy assistant attorney general of the U.S. Department of Justice's Criminal Division, it said Monday.
Expert Analysis
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How PE Firms Can Avoid Getting Blindsided By The FCPA
The U.S. Department of Justice and the U.S. Securities and Exchange Commission are now training their attention on how private equity firms exert oversight and control over their portfolios, with a particular emphasis on Foreign Corrupt Practices Act issues. PE firms should consider compliance strategies that reflect the specific anti-corruption risks of each part of the deal's life cycle, say attorneys with Pillsbury Winthrop Shaw Pittman LLP.
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The Most Unlikely Financial Crisis Fall Guy
Abacus Federal Savings Bank — a small family-owned bank in New York City's Chinatown — is the only bank in the U.S. to be criminally indicted as an institution for mortgage fraud in the wake of the financial crisis. The mere indictment builds political capital, regardless of whether there’s any factual basis for the claims, says Rosalie Valentino of Goetz Fitzpatrick LLP.
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6 Areas Often Underestimated In Law Firm Mergers
While mergers in other industries are driven by cost efficiencies or economies of scale, law firm mergers are typically focused on the potential to leverage clients and the overall quality of the attorney population, branding and market position. As a result, full disclosure of third-party vendor or support function operating costs can be a secondary concern until after the deal closes. Firms need to hit the ground running the moment the merger is inked, says Matthew Sunderman of HBR Consulting LLC.
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Rare Guidance On FCPA’s Reach Over Foreign Nationals
Two recent district court decisions — U.S. Securities and Exchange Commission v. Straub and SEC v. Sharef — have shed light on the reach and scope of the U.S. Foreign Corrupt Practices Act over foreign nationals. For companies and individuals operating abroad, these cases provide rare judicial guidance on the reach of the FCPA’s anti-bribery and record-keeping provisions, say James Dowden and Nick Berg of Ropes & Gray LLP.
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Gabelli Could Kickstart The 'Civil' Prosecution Debate
The U.S. Supreme Court has unanimously ruled against the U.S. Securities and Exchange Commission in Gabelli v. SEC. While this important statute of limitations issue did not require the court to discuss our increasingly prosecutorial administrative state, the mere fact that the issue was openly acknowledged during oral argument is encouraging for future targets of civil administrative prosecution, and ominous for the SEC and other agencies that benefit from a lopsided playing field, says Russell Ryan of King & Spalding LLP.
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The Next Big Thing In Securities Litigation
The New York Times recently reported that a Chinese military unit had hacked more than 140 organizations over the last several years, stealing valuable intellectual property such as technology blueprints, proprietary manufacturing processes, business plans and pricing documents. The revelation raises the possibility of a new wave of U.S. Securities and Exchange Commission enforcement actions, class actions and derivative lawsuits related to cybersecurity, say attorneys with King & Spalding LLP.
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Plumbing The Murky Depths Of Chinese State Secrecy Law
China's definition of "state secrets" is notoriously vague, and Chinese authorities have been known to bring prosecutions for violation of the nation's state secrecy laws even when the protected nature of the information is highly questionable. The outcome of a recent securities dispute against Ernst & Young will have important implications on the issue of the extra-jurisdictional effects of these laws, say Nick Cherryman and Katherine Raimondo of Fried Frank Harris Shriver & Jacobson LLP.
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‘Honey Laundering’ Signals A New Enforcement Era
On Feb. 20, the government announced charges against two heavyweight domestic honey processing companies and five individuals in connection with a global “honey laundering” sting. This case is double-billed as the largest anti-dumping case in U.S. history and the nation’s largest food-fraud case. But the real story may be what it signals about regulators’ amplified focus on supply chain compliance — and how far they'll go to make their charges stick, say T. Markus Funk and Jean-Jacques Cabou of Perkins Coie LLP.
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Private Sector's Role In White House Trade Secrets Plan
On Feb. 20, the White House announced a multipronged approach to combating external and internal threats to trade secret theft — an important effort to address a growing economic and national security issue. The strategy recognizes the government’s own limitations and places considerable emphasis on the private sector’s role in protecting trade secrets, say attorneys with Covington & Burling LLP.
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Aggressive Wiretap Affirmed With Little Fanfare
In a surprisingly quiet summary order in U.S. v. Fleishman, the Second Circuit recently upheld the conviction of James Fleishman for conspiracy to commit securities fraud and wire fraud based in part on a “trunk line” wiretap. The hurdle in the case was not legal, but logistical, and principally a result of trying to adapt the use of wiretaps — a tool that has predominantly been used in drug trafficking cases — to securities cases, says Michael Rosensaft, a partner with Katten Muchin Rosenman LLP and former federal prosecutor.