Letter of Apology » 2008 » April

More Wecht Jurors Speak Out; Judge Denies Dismissal Motion

Dave Westheimer — Wed, 30 Apr 2008 07:07:53 +0000

Five jurors from the mistrial of former Allegheny County Coroner Cyril Wecht held a news conference on Monday to speak about the trial and its aftermath (WTAE-TV raw video here). The bottom line: they believe the prosecution was politically motivated; they were disturbed by the actions of lead FBI investigator Brad Orsini; they felt demeaned when prosecutors immediately requested and Judge Schwab granted a retrial without even polling them and before they were even dismissed; they were treated well during the trial by Judge Schwab but felt he was biased against the defense; and they are opposed to a retrial (WTAE-TV text), Pittsburgh Post-Gazette).

On Tuesday Judge Schwab denied the defense’s motion for dismissal on double jeopardy grounds and refused to delay the retrial, which is scheduled for May 27 (Post-Gazette). Wecht’s attorneys immediately appealed that ruling to the US Court of Appeals for the Third Circuit and filed another motion asking Schwab to delay the retrial until the Third Circuit rules (Philly Inquirer).

Medical Supply Exec Guilty Of Medicare Fraud

Dave Westheimer — Wed, 30 Apr 2008 06:44:00 +0000

Angela Isley of Atlanta, former COO of medical supplier Orthoscript, Inc., was convicted on Monday by a federal trial jury in Atlanta on 52 counts including health care fraud, mail fraud and money laundering. Isley was indicted in February 2007 in connection with a three year scheme in which she allegedly submitted $600,000 in fraudulent claims to Medicare and embezzled $360,000 to pay her and her partner’s credit card bills. The Medicare billing fraud involved assigning incorrect product codes to certain products to obtain higher reimbursements.The embezzlement entailed coding company checks as legitimate business expenses while using them to pay her bills. Sentencing is scheduled for July 28 before US District Judge Charles Pannell (Atlanta Business Journal).

State Farm v. The Katrina Lawyers: An Update

Dave Westheimer — Tue, 29 Apr 2008 06:59:13 +0000

Developments in State Farm-related Katrina cases since US District Judge L.T. Senter’s momentous ruling earlier this month in McIntosh v. State Farm (here):

Yes, he really meant it: If there were any doubt that his ruling applied to any attorneys even peripherally related to Scruggs Katrina Group/Katrina Litigation Group cases, it was dispelled on April 16 when Judge Senter disqualified the Taylor-Martino law firm from representing McIntosh because the firm had provided assistance to one of the KLG firms.

Citing Judge Senter’s ruling, US District Judge Halil Ozerden on April 11 disqualified KLG, the Rigsby documents and the Rigsby sisters as witnesses from another Southern District of Mississippi case, Kreeger v. State Farm. US District Judge William Barbour on April 16 did likewise in Shows v. State Farm, the RICO case filed last year by SKG.

State Farm moved to dismiss ex rel. Rigsby (the qui tam case) for lack of jurisdiction, to disqualify the Rigsbys’ lawyers, and for summary judgment. The two Kansas City law firms representing the Rigsby sisters (Graves, Bartle & Marcus and Bartimus, Frickleton, Robertson & Gorny) filed an emergency motion to stay proceedings pending a ruling on the motion to disqualify. State Farm fired back immediately, pointing out among other things that the Kansas City firms are already disqualified under Judge Senter‘s ruling.

The motion to disqualify the Kansas City firms accuses several of the attorneys — including (fired US Attorney for Missouri) Todd Graves — of being present when the Rigsbys met with Dickie Scruggs in his trailer on the beach at Pascagoula in 2006 and illegally accessing password protected proprietary documents belonging to State Farm. This was based on Kerri Rigsby’s own deposition. Graves and Tony DeWitt (of BFR&G) went on the attack with a public hissy fit (here), specifically denying that they were ever on State Farm’s computer system. But that was a deliberate dodge, because that’s not what State Farm claims they did. They carefully avoided denying being present at the trailer meetings and accessing documents that the Rigsbys downloaded. Rossmiller has all the Rigsby depositions here.

On Monday, the Kansas City lawyers responded to State Farm‘s disqualification motions, and both Graves and DeWitt filed affidavits. Graves acknowledges being present at one of the two trailer meetings, DeWitt at both. NMC at folo has an excellent analysis here.

Rossmiller notes here that Don Barrett of the Barrett Law Office, one of the now-disqualified KLG firms, advised clients in an April 18 letter that the Provost-Umphrey law firm has agreed to take their cases. A commenter notes: “The address for the Nashville Provost-Umphrey office is the same as that on Barrett Law Office letterhead for the Nashville office. Remarkable.”

We’ll have more on the Rigsby sister act shortly.

Former Bristol Myers-Squibb Exec Indicted For Lying About Plavix Deal

Dave Westheimer — Tue, 29 Apr 2008 06:41:24 +0000

Andrew Bodnar, a doctor and former senior vice president of Bristol Myers-Squibb, on Wednesday was indicted in US District Court in Washington on one count of violating of the Federal False Statements Act for allegedly lying to the FTC about a secret settlement of a challenge to the company’s Plavix patent. The indictment charges that in 2006, he negotiated a secret agreement between Bristol Myers-Squibb and the Canadian generic drug manufacturer Apotex Inc., failed to submit it to the FTC and later lied to the FTC by denying the existence of the agreement. Apotex had filed suit against Bristol Myers challenging the validity of its patent on Plavix and was threatening to market a generic equivalent. In the supposedly undisclosed deal, Bristol Myers allegedly agreed not launch a generic version of Plavix when its patent expires in 2011 if Apotex agreed not to launch its Plavix generic until 2011. The charge carries a maximum sentence of five years in prison. Bristol Myers pleaded guilty to related charges in the case last June and paid a $1 million fine (Reuters, NYT).

Government Seeks Convicted National Century Execs’ Assets

Dave Westheimer — Tue, 29 Apr 2008 06:13:28 +0000

Federal prosecutors in Columbus, Ohio on Monday moved to recoup some of the funds lost in the 2002 collapse of National Century Financial Enterprises: the government is seeking to “attach a $1.7 billion IOU” to each of the five National Century executives who were convicted in March (here and earlier) on multiple counts including conspiracy, wire fraud, securities fraud and money laundering. US District Judge Algenon Marbley is expected to rule on the motion in June (Columbus Dispatch).

“Financial Serial Killer” Sentenced To Nine Years In Prison

Dave Westheimer — Mon, 28 Apr 2008 06:53:37 +0000

In Sacramento on Friday, US District Judge Garland Burrell sentenced Joel Nathan Ward of Turlock, California to nine years in prison in connection with a fraudulent foreign currency exchange trading scheme in which about 100 investors lost $11.3 million. He pleaded guilty in August 2007 to wire fraud, mail fraud and money laundering. Although he had no financial training, Ward lured investors through trade shows, online columns and infomercials in which he represented himself as a skilled trader. His Joel Nathan Forex Fund took in $15 million from early 2003 to late 2006. He paid back $3.7 million to early investors in what essentially was a Ponzi scheme but he diverted 85% of the rest for personal use. He actually invested only $2 million and lost almost all of that. After Ward revealed to investors in late 2006 that all their money was gone, his personal journal became public, thanks to his now ex-wife. In it, he described himself as a “financial serial killer” and “just another scumbag con artist bilking old people out of their retirement money” (Modesto Bee, DOJ).

Wesley Snipes: Three Years For Three Misdemeanors

Dave Westheimer — Fri, 25 Apr 2008 07:08:12 +0000

Proscutors got what they wanted: In Ocala, Florida on Thursday, US District Judge William Terrell Hodges sentenced actor Wesley Snipes to three years in prison. Snipes was convicted February 1 on three misdemeanor counts of failure to file federal income tax returns for 1999-2001 but acquitted on two felony tax counts and three more failure to file misdemeanor counts. Hodges sentenced Snipes to the maximum of one year on each count, to be served consecutively. He said “these are serious crimes, albeit misdemeanors, because he has a history of contempt over time.” Hodges also sentenced Snipes’ co-defendants Douglas Rosile and Eddie Ray Kahn, both convicted on the felony counts. Rosile was sentenced to 4 years and six months in prison and Kahn was sentenced to ten years in prison. Judge Hodges was obviously not swayed by a large number of celebrities asking him to sentence Snipes to probation. Among them were Woody Harrelson, Judge Joe Brown and Judge Greg Mathis. It’s hard to believe any federal judge would be influenced by requests from the son of Charles Harrison and two TV show judges. Bloomberg, Orlando Sentinel, DOJ (via PR Newswire).

Only In Minnesota: Carp Caper Under Investigation

Dave Westheimer — Fri, 25 Apr 2008 06:35:14 +0000

It sounds like the plot for a yet-to-be-written Coen Brothers’ movie: according to a search warrant unsealed earlier this week in US District Court in Minneapolis, a St. Paul area man named Michael Anthony Powell is under investigation for allegedly swindling investors who were told he had contracts to deliver containerloads of carp worldwide for humanitarian purposes. The search warrant affidavit indicates that more than 40 people have invested in “fraudulent humanitarian carp proposals” with Powell since 1992, and six people have invested $694,000 into Powell’s ventures from 2000 through 2005. No one has been repaid, and Powell has allegedly converted the money to personal use. He has operated under a number of different company names. Among the ventures:

[The affidavit] said Powell allegedly told some investors in 2004 that he had a $1.2 million contract to deliver container loads of carp fillets to China; persuaded some business associates in 2005 to buy a fish plant in Pepin, Wis., where they were going to process carp for buyers he had supposedly lined up in Serbia, and pitched a deal as recently as last December to haul carp from Utah Lake that would be shipped as “humanitarian aid to countries around the globe.”

Minnesota is perhaps the only state where a bottom-dwelling sand-sucking primitive life form (the carp, not Powell) could generate such interest from investors (Star Tribune).

Former DOJ Official Pleads Guilty In Abramoff-Related Case

Dave Westheimer — Thu, 24 Apr 2008 07:32:09 +0000

Robert E. Coughlin II, former deputy chief of staff of the DOJ’s criminal division, on Tuesday pleaded guilty to a single count of violating federal conflict-of-interest laws in connection with the Jack Abramoff public corruption scandal. His plea was entered before before US District Judge Ellen Segal Huvelle in the District of Columbia. Coughlin admitted accepting meals, concert tickets and luxury seats at sporting events from a lobbyist who has been identified by sources as Kevin Ring, a key lobbyist for Abramoff, while helping Ring and Abramoff’s clients by leaking inside information, attempting to influence department colleagues and providing other help. Coughlin accepted the gifts from 2001 to 2003 while he was working on legislative affairs for the DOJ. Under a plea agreement with the government, he faces up to 10 months in prison and is actively cooperating with prosecutors who are investigating Ring. Court papers also refer to at least two other unnamed DOJ officials who accepted meals from Ring. Rep. John Doolittle (R-Calif.) and his wife Julie are known to be still under investigation in the Abramoff scandal and have been linked to Ring, who once worked for Doolittle, so Coughlin may also provide information in that matter (AP, Washington Post).

NatWest Three Receive Prison Assignments And Orders To Surrender

Dave Westheimer — Thu, 24 Apr 2008 06:48:18 +0000

David Bermingham, Giles Darby and Gary Mulgrew, three British investment bankers known as the NatWest Three, were each ordered on Tuesday by US District Judge Ewing Werlein to report to prison within the next three weeks, each at a different prison. Mulgrew was ordered to surrender to the facility in Big Spring, Texas, on April 30; Darby to the Allenwood facility in White Deer, Pennsylvania, on May 7; and Bermingham to the prison in Lompoc, California on May 9. They all asked for Allenwood at their sentencing hearing and Judge Werlein recommend it, but the Bureau of Prisons has final authority(Bloomberg).

The former Greenwich NatWest bankers were indicted on seven counts of wire fraud in 2002 in connection with a scheme devised by former Enron CFO Andrew Fastow and his right-hand man Michael Kopper. They pleaded guilty in 2007 to one count of wire fraud and were sentenced to 37 months in prison plus restitution by Judge Werlein on February 22, 2008 (earlier). Their plea agreements call for them to be eligible for transfer to the UK after several months imprisonment in the US, and under the UK system they will be eligible for parole after serving half of their sentences.