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White Collar
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March 29, 2013
Texas Businessman Gets 15 Years For Biodiesel Scam
A Texas businessman was sentenced Friday to more than 15 years in federal prison for allegedly running a biofuel scam that defrauded the U.S. Environmental Protection Agency and his customers of $42 million he later used to buy cars, a military tank and basketball tickets.
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March 29, 2013
UPS To Fork Over $40M To End Online Pharmacy Probe
United Parcel Service Inc. on Friday agreed to forfeit $40 million over payments it received from illegal online pharmacies as part of a settlement with federal prosecutors that shields the shipping company from criminal charges.
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March 28, 2013
'Squawk Box' Squealers Cut Deal Over Plot To Sell Trading Info
A group of six former stockbrokers and day traders charged in an alleged scheme involving the sale of private trading information via internal “squawk boxes” have signed deferred prosecution agreements with the U.S. government, almost two years after the Second Circuit vacated their prior fraud convictions, an assistant U.S. attorney told a federal judge Wednesday.
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March 27, 2013
NJ Pol Can't Recoup Fees In Tossed Corruption Case: 3rd Circ.
The Third Circuit on Tuesday ruled that a former New Jersey assemblyman who was tried twice on corruption and bribery charges, both times unsuccessfully, cannot be reimbursed for his legal fees because he failed to prove the cases against him were frivolous.
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March 27, 2013
Jury Convicts BBC Equities Founder, Son Over $50M RE Scam
Michigan-based BBC Equities LLC founder John Bravata and his son were convicted Wednesday by a federal jury on charges that they conspired to bilk investors out of more than $50 million through a real estate scheme in which they allegedly used investor funds for personal expenses.
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March 27, 2013
Convicted Ex-Detroit Mayor Denied Bond
A Michigan federal judge on Wednesday declined to release convicted ex-Detroit Mayor Kwame Kilpatrick on bond as he awaits sentencing for public corruption convictions, saying he posed a flight risk.
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March 27, 2013
Lucchese Attys Can't Quash Billing Record Subpoenas
A New Jersey appeals court has ruled that six attorneys representing members of the Lucchese crime family indicted in connection with a $2.2 billion gambling enterprise must comply with grand jury subpoenas for their billing records, but not until their clients' underlying charges are resolved.
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March 27, 2013
Doc Gets 6 Years, To Pay $4.5M For Fen-Phen Settlement Fraud
A doctor convicted in Pennsylvania federal court of scamming money out of a massive Wyeth Pharmaceuticals Inc. class-action settlement fund set up to compensate users of fen-phen diet drugs was sentenced to six years in prison Tuesday.
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March 26, 2013
Real Estate Developer Escapes Wetland Dumping Charges
A New York federal judge on Tuesday threw out an indictment accusing a real estate developer of illegally building on wetland he owned in violation of the Clean Water Act, ruling that the government tampered with the independence of the grand jury.
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March 26, 2013
Citigroup To Step Up Money Laundering Controls
Citigroup Inc. has agreed to institute improved protections against money laundering across the entire company after its alleged failure to ensure adequate risk-control compliance at two of its banking units, regulators announced Tuesday.
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March 26, 2013
Brooke Astor's Son Loses Appeal Of Fraud Conviction
A New York state appeals court on Tuesday upheld the convictions of the son of deceased philanthropist Brooke Astor and a lawyer for their parts in a scheme to steal her fortune, which included diverting money away from charities and forging her signature.
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March 26, 2013
Chinese Engineer Gets 5 Years For Swiping Defense Secrets
A former engineer with a New Jersey-based defense contractor was sentenced Monday to more than five years in prison for illegally exporting U.S. military technology to China and stealing his employers' trade secrets.
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March 25, 2013
Texas Officials Lose Open Meetings Act Fight In High Court
The U.S. Supreme Court on Monday denied a challenge to the Texas Open Meetings Act by public officials who say their freedom of speech has been stifled through the imposition of criminal penalties upon private communications they say the law was not meant to target.
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March 25, 2013
Convicted Pa. High Court Justice To Step Down May 1
Convicted Pennsylvania Supreme Court Justice Joan Orie Melvin, who was found guilty in February of using her judicial staff to work on her political campaigns, announced her resignation in a letter Monday to Gov. Tom Corbett.
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March 22, 2013
Madoff Feeder Fund's $80M Class Settlement Approved
A New York federal judge on Friday approved an $80 million class action settlement between management at feeder fund Fairfield Greenwich Group and its investors, two days after rejecting a bid to block the deal from the bankruptcy trustee of convicted Ponzi schemer Bernard Madoff.
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March 22, 2013
Deutsche Broker Gets 3 1/2 Years In Jenkens Tax Fraud
A former Deutsche Bank AG broker was sentenced Friday in New York federal court to 42 months in prison for conspiring with lawyers at Jenkens & Gilchrist PC in a tax evasion fraud that prosecutors have labeled the largest in history.
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March 22, 2013
Boat Operator Can't Shift $25M Oil Spill Bill To Cleanup Cos.
A Louisiana federal judge on Wednesday denied American Commercial Lines LLC’s bid to pull two remediation companies into a U.S. suit over $24.8 million in cleanup costs from a 2008 Mississippi River oil spill that led to criminal charges.
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March 21, 2013
Jury Spat Leads To Partial Mistrial In Calif. Corruption Case
A day after five former Bell, Calif., councilmembers were convicted of stealing as much as $1.3 million from taxpayers, a judge on Thursday declared a mistrial on the 10 remaining counts against them, saying “all hell has broken loose” in the jury deliberations room.
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March 20, 2013
Ex-Hoboken IT Manager Cops To Harvesting Mayor's Emails
A former information technology manager with Hoboken, N.J., pled guilty Wednesday to intercepting emails meant for the town's mayor and other city officials and leaking those communications to others.
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March 20, 2013
Picard Can't Stop $80M Fairfield Investor Deal, Judge Says
Irving Picard, the bankruptcy trustee of Ponzi schemer Bernard Madoff's securities firm, can't block an $80 million settlement between Madoff feeder fund Fairfield Greenwich Group and its investors because they aren't creditors of the defunct firm, a New York federal judge ruled Wednesday.
Expert Analysis
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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.
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A Broad Reading Of FCPA's Jurisdiction Over Foreign Cos.
In a recent and rare court ruling regarding the Foreign Corrupt Practices Act, the Southern District of New York rejected several defenses commonly used by foreign nationals to lawsuits brought in the United States. If followed by other courts, the U.S. Securities and Exchange Commission v. Elek Straub decision clears the way for increased prosecutions of foreign nationals under the FCPA, say attorneys with Nixon Peabody LLP.