Letter of Apology » Government Overreaching

Kevin Howard’s Third Trial Scheduled

Dave Westheimer — Tue, 01 Jul 2008 06:56:16 +0000

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.

Scrushy Again Denied Bond Pending Appeal

Dave Westheimer — Fri, 27 Jun 2008 06:02:56 +0000

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).

Ex-Bear Stearns Duo Get Perp Walk

Solomon Wisenberg — Fri, 20 Jun 2008 11:14:44 +0000

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.

D.C. Circuit Reverses Safavian Convictions!

Solomon Wisenberg — Wed, 18 Jun 2008 12:04:12 +0000

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.

Brener Pleads Guilty In Emperors Club Case

Dave Westheimer — Fri, 13 Jun 2008 06:14:16 +0000

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).

Spitzer Update: Another Plea, Another Vulture?

Dave Westheimer — Thu, 12 Jun 2008 05:56:12 +0000

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.

Prosecutors Abandon Siegelman, Scrushy Sentence Length Cross-Appeal

Dave Westheimer — Fri, 06 Jun 2008 04:57:07 +0000

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.

Another Guilty Plea In Spitzer-Emperors Club Case

Dave Westheimer — Wed, 04 Jun 2008 16:36:41 +0000

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).

Scrushy Files Appellate Brief

Dave Westheimer — Wed, 04 Jun 2008 07:05:58 +0000

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.

Fieger Acquitted!

Solomon Wisenberg — Mon, 02 Jun 2008 21:50:09 +0000

Geoffrey Fieger has been acquitted of charges that he violated federal campaign finance laws. mlive.com has Jim Irwin’s AP story here.