The NYTimes has the story here. Justice was done, unsurprisingly, by the jury. But the prosecution of Mitchell by County Attorney Scott Tidwell was: a disgrace, a gross abuse of prosecutorial power, and a black mark on Texas criminal jurisprudence. I will have more to say about this in a later post. For now, congratulations to Nurse Mitchell and her legal defense team.
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Beau Berman of CBS7News in West Texas reports here on the day two (yesterday) testimony in Nurse Anne Mitchell’s Texas criminal trial for misuse of official information. This is a truly disgraceful prosecution. The county attorney should have declined to bring it and the court should never have allowed it to get to a jury.
The New York Times reports here on the abusive Texas state criminal prosecution of nurse Anne Mitchell for doing the right thing. Mitchell properly and lawfully reported a doctor, who had privileges at the hospital where she worked, to the Texas Medical Board. When the Board informed the doctor, he promptly told his friend, the country sheriff, who helped to engineer Mitchell’s felony prosecution. You might think that somebody with a law license, say the county attorney or D.A., would step in and prevent such nonsense. You would be wrong.
Judge Ricardo Urbina today dismissed all charges against the five Blackwater defendants with prejudice. Here is the opinion. The dismissal was based on the Government’s multiple violations of Kastigar v. United States through its improper use of compelled statements and admissions (under Garrity v. New Jersey) made by the defendants to State Department investigators.
Lest you think that federal prosecutorial overreaching is confined to a few isolated cases, we hereby offer a story from R. Robin McDonald of the Fulton County Daily Report, carried via Law.com, about the government’s vendetta against Columbus, Georgia criminal defense attorney J. Mark Shelnutt. Shelnutt was prosecuted by the Southern District of Georgia on money laundering and drug conspiracy charges, but was acquitted on all counts. U.S. District Judge Clay D. Land has now blasted the U.S. Attorneys’ Offices in the Southern and Middle Districts of Georgia for their handling of the case. Land accused the offices of working in tandem to offer sweetheart deals to big-time drug dealers in an effort to bring down Shelnutt. Land refused to accept the stipulated drug quantity for one such drug dealer, Shawn Bunkley. Hat tip to Douglas Berman’s Sentencing Law and Policy Blog for bringing this to our attention.
Here also is Judge Land’s written order in U.S. v. Bunkley, which is well worth reading. This is a relatively rare example of a federal judge stepping in and challenging the plea bargaining power of the government through rejection of a stipulated drug quantity. The Order is interesting for the light it sheds on the Shelnutt case and for the methodology resorted to by Judge Land to impose a Booker-based upward variance in the face of Guidelines Section 1B1.8.
Here is the transcript of the hearing in which Judge Cormac Carney granted Defendant’s Motion to Dismiss in U.S. v. William Ruehle. Ruehle was Broadcom’s former CFO. The dismissal was based on prosecutorial misconduct (primarily witness intimidation by AUSA Andrew Stolper) and insufficient evidence. Carney also dismissed the Indictment against Broadcom’s co-founder and former CEO Henry Nicholas, who had not yet gone to trial. The Nicholas dismissal was based solely on prosecutorial misconduct involving witness intimidation. Carney had previously thrown out the guilty plea of Broadcom co-founder Henry Samueli and dismissed the felony information to which Samueli pled guilty.
There were stirring and memorable words spoken at the hearing, and the transcript is well worth reading in its entirety. Here is a portion of Judge Carney’s closing remarks:
NOW, I’M SURE THERE ARE GOING TO BE MANY PEOPLE WHO ARE GOING TO BE CRITICAL OF MY DECISION IN THIS CASE AND ARGUE THAT I’M BEING TOO HARD ON THE GOVERNMENT. I STRONGLY DISAGREE. I HAVE A SOLEMN OBLIGATION TO HOLD THE GOVERNMENT TO THE CONSTITUTION. I’M DOING NOTHING MORE AND NOTHING LESS. AND I ASK MY CRITICS TO PUT THEMSELVES IN THE SHOES OF THE ACCUSED.
YOU ARE CHARGED WITH SERIOUS CRIMES AND, IF CONVICTED ON THEM, YOU WILL SPEND THE REST OF YOUR LIFE IN PRISON. YOU ONLY HAVE THREE WITNESSES TO PROVE YOUR INNOCENCE AND GOVERNMENT HAS INTIMIDATED AND IMPROPERLY INFLUENCED EACH ONE OF THEM. IS THAT FAIR? IS THAT JUSTICE? I SAY ABSOLUTELY NOT.
Here is Judge Cormac Carney’s Dismissal Order in U.S. v. William J. Ruehle and U.S. v. Henry T. Nicholas. Most of the newspaper stories on the Broadcom debacle failed to note that Judge Carney dimissed the case against Ruehle for insufficiency of the evidence as well as prosecutorial misconduct. Ruehle’s Rule 29 Motion was granted after jeopardy attached, but before the jury began deliberating. Therefore, the government cannot appeal, and Ruehle cannot be re-tried. With respect to Nicholas, he wasn’t even on trial yet at the time of Carney’s order dismissing the Indictment with prejudice. The government can therefore appeal the dismissal in Nicholas’s case.
Here is the LATimes’ take on Judge Carney’s dismissal of criminal charges against former Broadcom execs William Ruehle and Henry T. Nicholas III, due to prosecutorial misconduct. It is safe to assume that the government will be appealing at least some of Carney’s rulings.
Judge Cormac Carney has just dismissed the criminal stock option backdating cases, against former Broadcom CFO William Ruehle and former CEO Henry T. Nicholas III, based on government misconduct. The Orange County Register story is here. Nicholas had not yet gone to trial. In Ruehle’s case, the prosecution and defense had closed, and jury arguments were set for Thursday. Needless to say, dismissals based on prosecutorial misconduct are exceedingly rare. AUSA Andrew Stolper was at the center of the misconduct allegations and findings.
Ian Urbina of the NYTimes has this excellent and sobering story on a recent District of Columbia internal investigation concerning the DC Police Department’s mass illegal arrests of protesters and innocent bystanders during the 2002 IMF/World Bank Meetings. The investigation, into missing records, was conducted by former federal judge Stanley Sporkin. Sporkin’s investigative report calls for further inquiry and suggests that pertinent documents were intentionally destroyed by city officials. The Times story also discusses the city’s problems litigating the case in front of U.S. District Judge Emmet G. Sullivan, who threatened the DC AG’s Office with sanctions before the case was settled. Particularly disturbing is this passage from Urbina’s article:
“In November, the city agreed to pay $450,000 to eight war protesters to settle a civil lawsuit in which they accused F.B.I. agents of detaining them in a Washington parking garage and interrogating them on videotape about their political and religious beliefs.
For years, the city police and the F.B.I. said that the interrogation had never happened and that they had no records of such an incident. The police also said no F.B.I. agents had been present when officers arrested the protesters for trespassing.
But as lawyers for the protesters were preparing for the trial, which was scheduled to begin in federal court Nov. 30, they unearthed police logs that confirmed the role of a secret F.B.I. intelligence unit in the incident.” (Emphasis added).
There they go again. This is unfortunately part of a longstanding pattern by elements within FBI headquarters of stonewalling and/or making misleading statements concerning the existence vel non of records sought by citizens and litigants.
I’ve said it before and I’ll say it again, the FBI street agent is, generally speaking, the crown jewel of federal law enforcement. He/she is often ill-served, however, by certain rogue elements within headquarters leadership.
The illegal mass arrests occurred on former Police Chief Charles H. Ramsey’s watch.
It should be a happy Thanksgiving in the Kuehne household this year. The U.S. Attorney’s Office for the Southern District of Florida dropped its misguided money-laundering prosecution of the prominent Miami attorney today, following a devastating opinion from the Eleventh Circuit Court of Appeals last month. The Miami Herald has the story here.
Adam Liptak has a decent piece here in today’s NYTimes about the alliance between certain conservative and liberal intellectuals against the overcriminalization of our society, primarily at the federal level. The article makes it appear that this particular left-right alignment is brand new, which is inaccurate. For example, Ed Meese, who is featured in the article, has long been in the forefront of the fight against overcriminalization at the federal level. Nor does the alignment cover the entire intellectual-political spectrum. If it did, Congress would presumably stop passing vague and overbroad criminal laws every time some scandal emerges.
In truth, this is an alliance between the criminal defense bar, civil libertarians with criminal defense bar ties, economic libertarians, the Chamber of Commerce, some traditional conservatives, certain segments of the Federalist Society, and former prosecutors who now represent white collar defendants. This doesn’t mean that the alliance is bad, or that its arguments are faulty. Far from it. In fact, the entire federal criminal justice system is heavily rigged, substantively and procedurally, in favor of the prosecution. Don’t expect this to change anytime soon. There is no constituency for being soft on white-collar crime.
The article mentions in passing the three honest services fraud cases that are currently before the U.S. Supreme Court. Justice Sotomayor, who is not mentioned in the article, is on the wrong side of the honest services issue if her Second Circuit jurisprudence is any indication. She appears to be part of the New Deal school of Supreme Court jurisprudence–generally strong on civil liberties, but weak on limiting the reach of draconian federal white collar criminal statutes. I don’t expect her to be receptive to most of the arguments against overcriminalization. Her writings and/or votes on the honest services cases will tell us a lot on this point.
Paula Reed Ward reports here in the post-gazette.com that the government’s attempt to retry former Allegheny Count Coroner Dr. Cyril Wecht, after an earlier hung jury, may have suffered a fatal blow. U.S. District Judge Sean McLaughlin has granted Wecht’s suppression motion and thrown out key evidence gathered in two government searches. The judge issued a 55 page opinion supporting his decision. The government is deciding whether to appeal.
Here, courtesy of the Washington Post, is the statement issued today by Williams & Connolly’s Brendan V. Sullivan, Jr. and Robert M. Cary, Senator Stevens’ attorneys. The statement excoriates the original prosecution team and praises the new DOJ review team, Judge Sullivan, and AG Holder. Here is the Motion of the United States to Set Aside the Verdict and Dismiss the Indictment With Prejudice.
Taken together these documents reveal that the results of an April 15, 2008 government interview with star witness Bill Allen were improperly withheld from the defense. The Motion states that two prosecutors took notes of the interview. The defense statement reveals that four prosecutors and one agent were present for the interview. The government’s opposition to Stevens’ new trial motion was also inaccurate, according to the government’s Motion to Set Aside.
Scott Horton of Harper’s gives this less than charitable take on former Attorney General Alberto Gonzales’ tenure, in light of Gonzales’ recent WSJ interview. The interview was covered/summarized here in yesterday’s WSJ. Gonzales’ basic complaint/defense is that he was not, as White House Counsel, the evil mastermind of the Bush administration’s War on Terror policies; he was one of several lawyers who had a willing hand in formulating those policies. Horton believes that Gonzales lacked a critical lawyering skill–the ability to say “no” to a client. It is hard to argue with this. Gonzales never seemed fully to grasp the critical distinction between the role of White House Counsel and the role of Attorney General. The Attorney General must be a loyal Executive Branch official, but he is not the President’s personal lawyer. He also has an independent duty to uphold the law, including the Constitution. Given the White House’s truly breathtaking claims of Executive Privilege, some of which apparently trumped explicit criminal sanctions contained in federal statutory law [see FISA], and given Gonzales’ role in formulating/defending those claims, his unsuccessful transition from White House Counsel to Attorney General was a foregone conceptual conclusion. This is particularly so, given Gonzales’ longstanding role as Governor and President Bush’s yes man.
Even today Gonzales seems clueless as he discusses his famous hospital visit to Attorney General Ashcroft’s side, where he stood off against Deputy AG Jim Comey and the FBI’s Bob Mueller. According to Gonzales, Ashcroft (who had temporarily ceded the AG’s powers to Comey during gallbladder surgery) was “as lucid as I’ve seen him at meetings in the White House.” Really? Was somebody secretly spiking Ashcroft’s punch during Cabinet meetings?
And in the believe it or not category, Gonzales is angry that Comey gave his famous congressional testimony about the hospital visit showdown without having had ”the decency to notify anyone” beforehand. I’m not making any of this up.
Former GSA Chief of Staff David Safavian was convicted on Friday for obstruction of justice and lying to federal officials concerning his dealings with disgraced former lobbyist Jack Abramoff. Safavian didn’t testify or call any witnesses. His original convictions were thrown out by the U.S. Court of Appeals for the D.C. Circuit. U.S. District Judge Paul Friedman presided at the trial and Lawrence Robbins was lead defense attorney. Justin Schur represented DOJ. Jesse Holland’s AP story is here. . . . For five years the FBI improperly instructed its agents in Iraq to over-report hours, resulting in at least $6 million dollars in improper overtime and Sunday payments, according to the DOJ Inspector General’s report. Ben Corey’s Washington Times story is here. The FBI has admitted wrongoing and says it has stopped these deceptive practices. Spencer Hsu’s Washington Post piece reports that six straight counter-terrorism chiefs condoned the false reporting. Apparently not one of these officials consulted with the FBI’s General Counsel’s Office. Agents were told, among other things, to report time spent at cocktail parties and doing laundry as overtime. One FBI employee took the position that, “When you’re in that environment, anything you do to survive is work for the FBI.” No doubt this is true in some sense. But I don’t see DOJ applying that principle to its various criminal investigations of contractor fraud in Iraq. Apparently there are special rules in Iraq for special people. . . . Meanwhile, Washington Post Personal Finance Columnist Jane Bryant Quinn here discusses two obvious red-flags that should have been apparent to Bernard Madoff’s victims: 1) His fund was audited by an obscure, allegedly rinky-dink, accounting firm with no website; and 2) The funds were held in Madoff’s own advisory firm rather than with “a large, independent financial institution that reports cash flows and trading activity to you directly.”
USAO Michael Garcia (Southern District of New York) said Thursday that his office will not seek criminal charges against former New York Governor Eliot Spitzer in the Emperors Club VIP case. Four people connected to the operation have pleaded guilty to prostitution and/or money laundering charges (earlier). From the press release (.pdf):
ELIOT SPITZER has acknowledged to this Office that he was a client of, and made payments to, the Emperors Club VIP. Our investigation has shown that on multiple occasions, Mr. SPITZER arranged for women to travel from one state to another state to engage in prostitution. After a thorough investigation, this Office has uncovered no evidence of misuse of public or campaign funds. In addition, we have determined that there is insufficient evidence to bring charges against Mr. SPITZER for any offense relating to the withdrawal of funds for, and his payments to, the Emperors Club VIP.
In light of the policy of the Department of Justice with respect to prostitution offenses and the longstanding practice of this Office, as well as Mr. SPITZER’s acceptance of responsibility for his conduct, we have concluded that the public interest would not be further advanced by filing criminal charges in this matter.
Spitzer issued a separate statement:
I appreciate the impartiality and thoroughness of the investigation by the U.S. Attorney’s Office. I acknowledge and accept responsibility for the conduct it disclosed.
Bloomberg has more.
The Houston Chronicle reports that convicted former Dynegy executive Jamie Olis on Monday filed suit in Delaware Chancery Court seeking more than $600,000 in defense costs. Is it coincidental that the filing comes less than two weeks after the Second Circuit affirmed Judge Kaplan’s rulings in US v. Stein?
What a coincidence. On the same day that the Second Circuit publishes its landmark Stein decision, upholding Judge Kaplan’s dismissal of the KPMG indictments based on DOJ’s interference with the Sixth Amendment right to counsel, Deputy AG Mark Filip (recently installed) announces DOJ’s total repudiation of the Holder/Thompson/McNulty Memos’ infringement on attorney client privilege and work product. The remarks can be found here. As Comrade Lenin would say, this is no accident. DOJ’s long overdue and supine surrender comes in the face of Senator Arlen “Single Bullet” Specter’s proposed federal legislation aimed at ending DOJ’s unconstitutional practices.
Here, from Filip’s remarks, are the highlights of the new policy:
“First, credit for cooperation will not depend on whether a corporation has waived attorney-client privilege or work product protection, or produced materials protected by attorney-client or work-product protections. It will depend on the disclosure of facts. Corporations that timely disclose relevant facts may receive due credit for cooperation, regardless of whether they waive attorney-client privilege or work product protection in the process. Corporations that do not disclose relevant facts typically may not receive such credit, just like any other defendant”
“Second, prior Department policy allowed federal prosecutors to request, under certain conditions, that a corporation disclose non-factual attorney-client privileged communications and work product, such as legal advice. This is what the old guidelines designated “Category II” information, and it lies at the core of the attorney-client privilege and work product protection. The new policy forbids prosecutors from asking for such information, with only two exceptions, both of which are well-recognized in existing law.”
“Third, the new policy instructs prosecutors not to consider whether a corporation has advanced attorneys’ fees to its employees, officers, or directors when evaluating cooperativeness. Under the earlier guidance, the Department reserved the right to consider such payments negatively in deciding whether to assign cooperation credit to a corporation. That is no longer the case. A corporation’s payment of or advancement of attorneys’ fees to its employees will be relevant only in the rare situation where it, combined with other circumstances, would rise to the level of criminal obstruction of justice. This of course will generally not be the case.”
“Fourth, under the new policy, federal prosecutors may not consider whether the corporation has entered into a joint defense agreement in evaluating whether to give the corporation credit for cooperating. There are legitimate reasons why a business would choose to enter, or not enter, that kind of agreement. The government may, of course, ask that a corporation refrain from taking information the government provided it and disclosing that information to third parties. But the mere participation in a joint defense agreement by a corporation will not be taken into account for the purpose of evaluating cooperation.”
“Fifth, prior guidance allowed prosecutors to consider whether a corporation disciplined or terminated employees for the purpose of evaluating cooperation. That is now disallowed. Prosecutors may only consider whether a corporation has disciplined employees that the corporation identifies as culpable, and only for the purpose of evaluating the corporation’s remedial measures or compliance program.”
Chief Judge Dennis Jacobs, writing for a unanimous three-judge panel of the US Court of Appeals for the Second Circuit, today affirmed (.pdf) US District Judge Lewis Kaplan’s July 2007 dismissal of the indictments of 13 out of an original 19 defendants in US v. Stein et al. The case was was once the largest criminal tax shelter prosecution in US history. Kaplan had ruled that the defendants were deprived of their Sixth Amendment right to counsel as a result of KPMG’s decision to stop paying the defendants’ legal costs (despite contractual obligations to pay) after the government threatened to indict the firm. In affirming the dismisal, the appellate court ruled that no other remedy would return the defendants to the status quo.
As expected (earlier), Emperors Club VIP booking agent Tanya Hollander on Monday pleaded guilty before US District Judge Deborah Batts in Manhattan to one count of conspiracy to commit prostitution offenses. Hollander is the fourth and final defendant connected with the club to plead guilty in the prostitution ring case that ensnared former New York Governor Eliot Spitzer. She will be sentenced on November 25 and faces an estimated six to 10 months in prison under federal sentencing guidelines (Reuters, DOJ).
The Chronicle’s Mary Flood reported Friday that US District Judge Sim Lake has denied Jamie Olis’ recusal motion (earlier here and here ), which was requested because Lake and the late USA Mike Shelby went to the same schools, served in the military and worked at the same law firm (all at different times) and that Lake swore in Shelby. In denying the motion, Lake ruled that the request was filed too late and wrote, “Olis does not point to any evidence showing that any of the court’s prior rulings in this case are based on an extrajudicial source or that they exhibit the degree of favoritism or antagonism required to warrant recusal.”
Emperors Club VIP booking agent Tanya Hollander will become the fourth and final defendant connected with the club to plead guilty in the prostitution ring case that ensnared Eliot Spitzer. Although she pleaded not guilty in US District Court in Manhattan on Monday, her attorney said she would plead guilty to to one count of conspiracy to violate the federal Travel Act at a hearing scheduled for August 25. The other three defendants, Mark Brener, Cecil “Katie” Suwal and Temeka Lewis, pleaded guilty to money laundering conspiracy in addition to prostitution-related conspiracy, indicating that Hollander is likely to receive a lighter sentence. There’s still no word from prosecutors about any possible charges against Spitzer (Reuters).
CNN.com reports here on Karl Rove’s refusal to appear before the House Judiciary Committee in response to a subpoena. The subpoena was issued in connection with the Committee’s investigation of alleged political firings and prosecutions in the Department of Justice. The striking thing about this latest episode of Bush Administration arrogance is not that Rove is claiming executive privilege; it is that Rove refused to even appear before the House Juiciary Committee. Under law, when a witness claims a privilege not to testify before a judicial or legislative body he still, unless excused by the entity issuing the subpoena or a court of law, must appear and invoke whatever privilege he is claiming on a question by question basis. Rove and his attorney Robert Luskin have rejected this approach. The only question left is whether Judiciary Committee Chairman John Conyers and the Democratic majority will have the guts to hold Rove in contempt. Don’t hold your breath.
Former Enron Broadband CFO Kevin Howard will be tried for a third time; US District Judge Vanessa Gilmore on Monday scheduled his trial to begin March 24, 2009. Howard’s first trial in 2005 resulted in a hung jury. His second trial in 2006 resulted in his conviction on five counts including conspiracy, falsifying books and records and three counts of wire fraud. However, Judge Gilmore dismissed the conviction in January 2007 after the Fifth Circuit ruled in a separate Enron case that the government’s “honest services fraud” theory was improper. In February 2008, prosecutors lost their appeal of her dismissal of one of the counts (earlier). Now AUSA Jonathan Lopez says Howard will be retried on all five counts without seeking a new indictment; the government will instead edit the indictment used in his second trial to erase all references to honest services. The Houston Chronicle has Kristen Hays’ story here.
In a decision filed on Tuesday and released on Wednesday, the US Court of Appeals for the Eleventh Circuit for the third time denied former HealthSouth CEO Richard Scrushy’s motion for bail pending appeal. Scrushy had asked for reconsideration because the court in March granted his co-defendant, former Alabama Governor Don Siegelman, release on bond pending appeal (earlier). However, the court ruled that Scrushy still “had not met his initial burden…of demonstrating by clear and convincing evidence that he is unlikely to flee if he is released pending resolution of this appeal.” The court made it clear that this is a separate issue from whether his appeal has a substantial chance of success (AP).
We incorrectly reported yesterday, based on the original AP story, that former Bear Stearns hedge fund traders Ralph Cioffi and Matthew Tannin were in the process of surrendering themselves to authorities. Instead, they were arrested by the FBI and hauled off to court, perp-walk style, with the full panoply of press coverage. This is a despicable practice in white-collar cases unless defendants pose a flight risk. But where non-violent offenders, innocent until proven guilty, are sure to be released, the practice of arresting and parading them in front of the press so FBI agents and prosecutors can get their jollies is pathetic. Tom Hays’s AP story is here in today’s Washington Post. Somebody needs put to put an end to this practice.
A panel of the U.S. Court of Appeals for the D.C. Circuit has reversed all counts of conviction against Jack Abramoff ’s friend, and former GSA Chief of Staff, David Safavian. Safavian had been convicted of Title 18 U.S.C. Section 1001 false statements to the GSA and obstructing a GSA investigation. The GSA was investigating Safavian’s attendance at an Abramoff-sponsored golf outing to Scotland. The Safavian Opinion was written by Judge Raymond Randolph. The Section 1001 concealment counts were reversed based on insufficient evidence. The Court ruled that Safavian had no duty to disclose all the details of Abramoff’s relationship to the GSA when Safavian sought a GSA ethics opinion prior to the trip and when he later spoke to a GSA agent investigating the trip. The Court firmly rejected the government’s argument that, once Safavian started talking about the trip, he was under a duty to disclose all relevant facts about it. The Court reaffirmed that a person cannot be guilty of a Section 1001 concealment offense unless he is under a duty to disclose the concealed fact. Three other counts, dealing with allegedly affirmatively false statements by Safavian, were thrown out because the District Court failed to allow expert testimony profferred by the defense on the meaning of “doing business” within the government contracts field. Safavian argued that he told the truth in informing GSA that Abramoff was not doing business with the agency at the time of the Scotland trip. Although Abramoff had informally inquired about two GSA properties to Safavian, he did not bid or recieve contracts on those or any other GSA properties. The expert would have testified that in the government contracts field, such informal inquiries do not constitute doing business. The Court ruled that this testimony would have been relevant to Safavian’s state of mind and to whether he intended to mislead the GSA. Congratulations to Lawrence Robbins who argued the case on appeal.
As expected, Emperors Club VIP operator Mark Brener pleaded guilty on Thursday, becoming the third defendant to reach a plea agreement in the case which snared Eliot Spitzer. Brener pleaded guilty to conspiracy to commit prostitution offenses and conspiracy to commit money laundering before US District Judge John Sprizzo in Manhattan. The plea agreement calls for Brener to serve 24 to 30 months in prison but does not stipulate any requirement to cooperate with prosecutors. Sentencing is scheduled for September 16 (Reuters).
Another plea is expected to be entered today in connection with the Emperors Club VIP escort service patronized by Eliot “Client 9″ Spitzer: Mark Brener, the man who operated the service, will plead guilty to money laundering, prostitution and conspiracy. His will be the third guilty plea, follwing booker Temeka Lewis and operations manager Cecil “Katie” Suwal, who apparently is Brener’s girlfriend. CBS reports that Brener was not offered a plea deal and speculates that Spitzer will be charged, while AP says Brener negotiated a plea agreement similar to Suwal’s.
Meanwhile, Reuters and other sources report that Spitzer is courting investors for his next career: operating a vulture fund targeting distressed real estate. A self-proclaimed fighter for the people would seek his fortune off the misfortune of former constituents? How predictable.
The heat from the OPR and congressional investigations into the Siegelman/Scrushy case may be having some effect. The puppets prosecutors who were appealing the 88 month prison sentence for former Alabama Governor Don Siegelman and the 82 month sentence for former HealthSouth CEO Richard Scrushy as too lenient have suddenly decided to drop their cross-appeal. The motion filed with the Eleventh Circuit earlier this week gives no expanation, simply saying “the government has elected not to proceed with its cross-appeal as to either defendant.” Unfortunately, they will still be opposing the defendants’ appeals (AP). Scott Horton at Harper’s has an overview of recent events in the case here.
Cecil “Katie” Suwal, who ran the daily operations of the Emperors Club VIP escort service patronized by Eliot “Client 9″ Spitzer, pleaded guilty yesterday to a two-count federal information charging her with conspiracy to commit money laundering and conspiracy to promote prostitution. The former charge is based on her admission that she opened a series of bank accounts to launder proceeds from the club. Suwal entered her plea before US District Judge Barbara S. Jones in Manhattan. She remains free on bond until her sentencing in September. The plea agreement calls for her to receive 21 to 27 months in prison and does not mention a requirement for her to cooperate with prosecutors. Suwal’s plea follows booking agent Temeka Lewis’ guilty plea last month (earlier); still no word on possible charges against Spitzer (AP).
In all the much-needed publicity surrounding the politically motivated prosecution of former Alabama Governor Don Siegelman, little attention has been paid to the other defendant: former HealthSouth CEO Richard Scrushy, whose prosecution in this case can easily be seen as payback for his 2005 acquittal on all counts in his accounting fraud case. Although Siegelman was granted bond in late March pending his appeal, Scrushy remains in prison serving a term of 6 years and 10 months; like Siegelman, he was taken into custody immediately after his sentencing last June.
However, late Monday afternoon attorneys for Scrushy filed an apellate brief with the US Court of Appeals for the Eleventh Circuit in Atlanta, asking the court to reverse his conviction or order a new trial. The appeal covers six claims: the government’s failure to establish a quid pro quo, juror misconduct, failure of US District Judge Mark Fuller to disclose conflict of interest, improper denial of Scrushy’s jury composition challenge, admission of erroneous and prejudicial hearsay from a non-witness and the barring of the bribery counts by the statute of limitations. An AP article has more here.
Geoffrey Fieger has been acquitted of charges that he violated federal campaign finance laws. mlive.com has Jim Irwin’s AP story here.
When white-collar defendants are on trial for fraud-related charges, they often assert the defense of attorney reliance. This defense holds that if a person reasonably relied upon the advice of his attorney in committing the charged conduct, he cannot have formed an intent to defraud. Like everything else in law and life, there are exceptions to this defense. For one, the defendant must have disclosed all relevant information to his attorney before receiving and relying upon the advice. And if the advice was patently ridiculous, no jury is likely to buy it. Prosecutors like to argue to the jury that no attorney can advise a client to commit fraud.
As a practical matter, what do prosecutors do when investigating a case where the target has asserted the attorney-reliance defense before the indictment is returned? Often, the prosecutor will be able to satisfy (or convince) himself ahead of time that the attorney was not told the whole story by his client or that the attorney did not give the advice asserted by the target. But some prosecutors solve the problem by indicting the attorney along with the client. This is obviously unfair and improper if the attorney was sincere in giving advice–even mistaken advice. On the other hand, there are definitely occasions in which an attorney knowingly aids and abets a crime by providing “advice” to the principal that is really nothing more than a cover for fraud. This seems to happen a lot in connection with alleged tax shelter schemes.
Why am I even thinking and talking about this stuff? The whole attorney reliance issue came to mind yesterday when I read the Washington Post story on the latest John C. Yoo memo to surface. Yoo is the former Deputy Assistant Attorney General in DOJ’s Office of Legal Counsel, infamous for writing a memo providing legal cover for the mistreatment and/or torture of enemy combatants.
The government has now declassified a sentence from another Yoo memo, penned in 2001. This memo relates to the Foreign Intelligence Surveillance Act (”FISA”). FISA states that FISA is the “exclusive means by which electronic surveillance . . . and the interception of domestic wire, oral and electronic communications may be conducted.” The Bush Administration wanted to conduct warrantless electronic surveillance without even post-surveillance judicial authorization in certain situations, which is prohibited by FISA. FISA allows emergency warrantless eavesdropping, but requires the government to obtain post-surveillance judicial approval withinn 72 hours of the electronic surveillance. That wasn’t good enough for the Bush Administration. Yoo’s declassified sentence states that: “Unless Congress made a clear statement in the Foreign Intelligence Surveillance Act that it sought to restrict presidential authority to conduct warrantless searches in the national security area — which it has not — then the statute must be construed to avoid [such] a reading.”
In other words, even though FISA says on its face that it is the “exclusive means by which electronic surveillance . . . and the interception of domestic wire, oral and electronic communications may be conducted,” Congress really meant to carve out an exception for the inherent Presidential authority to conduct such surveillance and interception. Not only is this analysis false and Orwellian–it doesn’t even make sense as a matter of Constitutional Law. If the President has this inherent authority, it is Constitutional in nature, and cannot be restricted by Congressional enactment.
Predictably, Senator Diane Feinstein is outraged and calls for new FISA legislation with even stronger exclusivity language. But respect for the English language, including the plain language of statutes, has never been a strong suit of the Bush Administration. Senator, and former federal prosecutor, Sheldon Whitehouse, is more to the point: “I cannot reconcile the plain language of FISA that it is the exclusive procedure for electronic surveillance of Americans with the OLC opinion saying Congress didn’t say that. Once again, behind the veil of secrecy, OLC appears to have cooked up extravagant or misguided legal theories which would never survive the light of day.” Translation: Yoo is no better than a tax attorney handing out phony opinion letters to justify a fraudulent off-shore tax fraud scheme.
Brian A. Benczkowski, DOJ’s Deputy Assistant Attorney General in the Office of Legislative Affairs, said that the government no longer relies on the 2001 Yoo memo to justify its warrantless electronic surveillance. Benczkowski, like former Attorney General Alberto Gonzales before him, believes that when Congress approved the September 18, 2001, Authorization for Use of Military Force, it “confirmed and supplemented the President’s Article II authority to conduct warrantless surveillance to prevent catastrophic attacks on the United States.” Almost nobody in Washington involved in the passage of the Authorization really believes this.
So here is my question: If the Obama Administration decides to criminally prosecute members of the Bush Administration for their knowing violation of FISA, will Yoo be a witness for the government, a witness for the defense, or a co-defendant?
As expected (earlier), Emperor’s Club booking agent Temeka Lewis pleaded guilty on Wednesday to conspiracy relating to prostitution and money laundering, in connection with the prostitution ring operated out of the club which serviced Eliot “Client 9″ Spitzer. Her plea was entered in Manhattan before US Magistrate Judge Theodore Katz; she read a prepared statement admitting that prostitutes traveled across state lines to meet with clients. Her plea agreement calls for cooperation with prosecutors; her attorney said that she has not yet testified before a grand jury and is “ready to receive direction from the government.” She could be sentenced to as much as 25 years in prison but under sentencing guidelines she could serve 16 months or less depending on the level of her cooperation. It is still not known if Spitzer will be charged, but as the NYT notes, with her co-defendants apparently close to plea deals, Lewis’ cooperation could very well take the form of testimony against Spitzer or others not yet indicted. More here from Reuters.
Temeka Lewis, primary booking agent for the Emperor’s Club, reportedly will plead guilty in US District Court in Manhattan this week to charges of money laundering conspiracy and conspiracy to commit interstate travel in aid of racketeering, in connection with the prostitution ring operated out of the club. Three others have been charged and two of them are also said to be near plea deals. The fate of favorite customer Eliot “Hoist by His Own Petard” Spitzer apparently has not yet been decided (NYT).
Since US District Judge Sim Lake refused to answer last week’s private letter from attorney Lloyd Kelley asking him to recuse himself and gave the letter to the USAO instead (earlier), attorneys for convicted former Dynegy executive Jamie Olis on Tuesday filed a recusal motion in US District Court in Houston.
The Houston Chronicle/AP story notes that Olis is scheduled for release in August 2009. Due to the repeated and obstinate delays by the both the USAO and Lake, we would be surprised if the appeals process is completed by then.
Attorneys for convicted former Dynegy executive Jamie Olis on Friday filed a Response to the government’s answer to his §2255 Motion To Vacate. From the Introduction:
The government’s Answer starts with the cynical assertion that Olis should suffer a procedural default because the United States Attorney’s Office (“USAO”) successfully deceived Olis and his attorneys by concealing its interference with Olis’s lawful access to defense funding. From there, the Answer devolves downward. Contrary to the government’s contentions, the record establishes that (1) the USAO violated Olis’ fundamental rights by interfering with his access to defense funding; (2) the government constructively and impermissibly amended the indictment; (3) the government presented false testimony from Jeffrey Heil, a key government witness; (4) the petit jury included an admittedly biased and unrehabilitated juror; (5) the jury instructions erroneously defined the elements of wire fraud and mail fraud; and (6) Olis received ineffective assistance of counsel.
The response also asks for reconsideration of his motion for discovery in connection with the §2255 motion; US District Judge Sim Lake denied the motion for discovery in March. Also pending is last week’s request by Olis’ attorney Lloyd Kelley that Lake recuse himself.
Convicted former Dynegy executive Jamie Olis’ §2255 Motion to Vacate is pending before US District Judge Sim Lake (earlier). The Houston Chronicle’s Legal Trade blog reports that Olis’ attorney Lloyd Kelley has written Lake a seven-page private letter asking him to recuse himself:
Kelley’s basic argument seems to be that Lake was too close to the late Mike Shelby, who was the local U.S. Attorney when Olis was prosecuted. Shelby suffered greatly with cancer and eventually took his own life. Kelley notes that Lake and Shelby went to the same schools, served in the military and worked at the same law firm (all at different times) and that Lake swore in Shelby. Kelley argues that Shelby’s demise must cloud Lake’s judgment on the Olis case.
Kelley had requested that Lake respond by Friday (Olis’ reply to the government’s response to his motion is due Monday), but Lake on Thursday filed an order giving the letter to the US Attorney’s office and asking for a response within 20 days.
Just hours after the House Judiciary Committee asked the DOJ to release former Alabama Governor Don Siegelman under guard to allow him to testify before Congress in May (Montgomery Advertiser, AP) — a move brought about by the DOJ’s refusal to cooperate with the HJC — the US Court of Appeals for the Eleventh Circuit on Thursday granted Siegelman’s motion for release on bond pending appeal, finding that his appeal raises substantial questions of law or fact. Since this issue had twice before been remanded to district court, the decision can be viewed as a direct repudiation of US District Court Judge Mark Fuller’s actions. Siegelman may be released as early as today (NYT (with link to order), AP). Scott Horton at Harper’s has editorial commentary here. In related news, the 11th Circuit has has given attorneys for Siegelman and HealthSouth founder Richard Scrushy until May 23 to file appellate briefs. Siegelman’s attorney Vince Kilborn estimated oral arguments on the case could be heard in late 2008 (AP).
The US Court of Appeals for the Eleventh Circuit on Thursday granted former Alabama Governor Don Siegelman’s request to be released from prison pending the outcome of his appeal (Birmingham News).
Friday’s Miami Herald reports here that longtime GOP operative Roger Stone alerted the FBI to Eliot Spitzer’s call girl habit last year. In November of 2007, Stone’s Cosa Mesa, CA attorney sent a letter to the FBI declining an interview request but reporting Stone’s admittedly second-hand information about New York’s then-Governor. Stone had learned from Miami Velvet, an acquaintance, that Spitzer once used the services of a high-priced call girl in Miami. Stone, in the letter, reported what he knew and stressed that the information was second hand. Stone’s Florida lawyer released the letter last week in an effort to counter Internet-based conspiracy theories about his purported role in bringing down Spitzer, a long-time nemesis. Hat tip to TalkLeft for alerting us to this story.
File this one under Department of Ho-Hum. Even if the snoopers revealed passport contents to outsiders, they have only committed misdemeanors. The Washington Post story, here, does suggest, somehwat murkily, that State Department employees and contractors accessing passport files must first represent (by touching a “Yes” button on a computer monitor) that they are authorized to view the contents. Will a zealous prosecutor claim that such a representation by an unauthorized person constitutes a false statement to the government under 18 U.S.C. Section 1001? Your guess is as good as mine. The Post says that the State Department’s OIG will investigate, but may ask for assistance from DOJ.
Kimberly Strassel, in WSJ’s Opinion Journal, analyzes Spitzer’s Media Enablers. WSJ’s Review & Outlook discusses the use and abuse of old statutes in prosecuting current crimes in Of Martin and Mann. The reference is to New York’s Martin Act, which Spitzer used as Attorney General as part of his effort to intimidate Wall Street, and the Mann Act, the old federal prostitution statute, which may be used against Spitzer himself. The Washington Post has the resignation story. One thing is clear as the fog begins to lift in this scandal; for the SDNY U.S. Attorney’s Office to be even contemplating charging Spitzer under the Mann Act is unprecedented and appalling. It is virtually unheard of for a call-girl customer to be prosecuted at the federal level. This would constitute a clear abuse of prosecutorial discretion.
The sad ordeal of former Dynegy executive Jamie Olis is no longer news, but we learn via White Collar Crime Prof Blog that US District Judge Sim Lake on Tuesday denied three pending motions by or on behalf of Olis: Olis’ motion for release on bond pending appeal, Olis’ motion for discovery in connection with his §2255 motion to set aside the conviction, and Professor Robert Weisberg’s motion for leave to file an amicus brief in support of Olis’ motion to set aside the conviction. However, Lake did order the government to respond to Olis’ §2255 motion on or before April 4, 2008, and he set a May 5 deadline for Olis’ reply. Olis Motions Ruling
Today’s Washington Post reports here on Lyglenson Lemorin, one of the “Liberty City Seven.” Indicted in Miami federal court for plotting to blow up the Sears Tower, Lemorin was acquitted. (The jury deadlocked on the other defendants. ) Over two months after the acquittal, Lemorin is still incarcerated, because the government wants to deport him back to Haiti. Lemorin, age 33, is a permanent legal resident who has lived in the U.S. for over 20 years. The government is seeking to deport Lemorin based upon the same charges the jury acquitted him on. Yes, the standard of proof is lower in immigration cases. Yes, the government does this kind of thing all the time. Yes, the government has the right to do it. But that doesn’t make it the right thing to do–particularly here where the evidence against Lemorin was so thin. Come January, certain segments within DOJ are due a major housecleaning.