Tuesday, February 11, 2014

Upcoming ABA Criminal Justice Section International White Collar Crime Conference

I am pleased to announce that registration is now open for the upcoming ABA Criminal Justice Section conference regarding "White Collar Crime and Regulatory Trends in the European Union and U.S."  The conference will occur in Amsterdam, Netherlands from May 15-16, 2014.  The first day will include a number of panel discussions examining important issues in the field.
This conference will bring together a cadre of international experts to examine the most current, pressing, and difficult issues in the European Union and United States regarding this rapidly changing field.

The panelists, emanating from numerous countries around the world, will address topics including: corporate espionage and cyber-crime; global internal investigations; securities laws and accompanying whistleblower programs; anti-corruption enforcement; money laundering and sanctions violations; and trends in enforcement and compliance.

This conference seeks to offer invaluable insights regarding white collar crime and regulatory trends to those of all levels of experience and those in various roles within and outside of corporations.
The first day will also include a luncheon keynote address by Rob Wainwright, Director of Europol.

On the second day of the conference, there will be an option day-trip to The Hague where participants will have the opportunity to network and tour the International Criminal Court and the International Court of Justice.

I will be moderating a panel regarding "Recent Trends Regarding the Globalization of Enforcement Actions and Cross-Border Internal Investigations in the EU and US."  The panel will include representatives from Allen & Overy LLP in New York, Alvarez & Marsal in Amsterdam, NautaDutilh in Amsterdam, and ZyLAB in Amsterdam.  I look forward to an informative exchange of ideas regarding this complex and critical topic.

The program materials and registration link is available here.

Exonerations Involving Pleas by Innocent Defendants Increasing

I was recently interviewed by the Houston Chronicle regarding the case of Corey Anthony Love.
It's more than likely that Corey Anthony Love has no earthly idea he has been found innocent of the crime to which he pleaded guilty seven years ago and for which he spent 105 days in state jail...

Love was one of 87 listed in the annual report of the National Register of Exonerations, a joint project of the University of Michigan Law School and the Center on Wrongful Convictions at Northwestern University School of Law. Texas led the nation with 13 exonerations.

His case was hardly the stuff of headlines and outrage. He did not spend decades in prison as an innocent man. He wasn't railroaded by an unscrupulous prosecutor or condemned to a life of hell by mistaken identity or shoddy forensic work.

His was a minor drug offense. He pleaded guilty to the crime. He served relatively little time behind bars.

But to the authors of the report, what makes Love's case, and the other six cases in Harris and Montgomery counties like his, significant is that they represent a growing number of exonerations in cases where no crimes were committed at all and in which the defendants had pleaded guilty.
During the interview, I discussed the prevalence of plea bargaining and the significant innocence issues that can result from the powerful incentives that exist to engage in bargained justice.
What is not known is precisely how many of those plea bargains involve people confessing to crimes they did not commit, said Lucian Dervan, a law professor at Southern Illinois University who has written extensively on plea bargains.

"Plea bargaining dominates the criminal justice system," he said. "In dealing with more minor offenses - offenses for which the individual is likely to receive time served (or probation) if they plead guilty - in those cases the incentive to confess to the crime even if you haven't committed it is extremely high. The reward for saying you had done something is to go home; the punishment for failing to say that is to stay in jail and wait to have an opportunity some point in the future to reveal innocence at trial."

No one except Love, who already had a previous conviction for marijuana possession, can say why he agreed to plead guilty. And there are myriad reasons why someone would confess to something he didn't do.

Inger Hampton, chief of the Harris County district attorney's conviction review section, thinks she has a partial answer.

"People plead guilty for a number of different reasons," she said. "They plead guilty because they are guilty. They plead guilty because they feel guilty about something else. They plead guilty because 'I thought I had cocaine and I don't even know that it's not cocaine.' There are a lot of thought processes that go into that decision."

One that doesn't, however, said Dervan, is any consideration for the "collateral consequences." Most people in custody are intensely focused on getting out of custody; they'll say anything if it means going home.
The entire Houston Chronicle article is available here.

Tuesday, January 14, 2014

Incredible CLE/MCE Opportunity for Summer 2014 - Nuremberg's Legacy: Law, Medicine, & Ethics

I wanted to bring this incredible CLE/MCE opportunity to my readers' attention.  From May 31 through June 7, 2014, SIU School of Law will host a program in Germany entitled "Nuremberg's Legacy: Law, Medicine, & Ethics."

The program description is below.
During this week-long journey, travelers will visit Munich and Nuremberg to learn about the role of law, medicine, and ethics in Germany during and after WWII. Participants will have the opportunity to tour sites of legal and historical significance, including the courthouse in which the Nuremberg Trials occurred and the Dachau Concentration Camp Memorial, and receive lectures from international experts in their fields. Along with a rich educational program, there will be time for independent sightseeing, including a visit to the picturesque Bavarian town of Bamberg, a UNESCO World Heritage Site.
Registration is now open at this link.

More information about the program is available here.

Friday, January 10, 2014

ACLU Publishes Article Regarding the Growing Trend of Debtor's Prison

The ACLU has an interesting article regarding the growing trend in the United States of debtor's prison. 
The American Civil Liberties Union of Colorado accused three Front Range cities this morning of jailing people for failing to pay court-ordered fines that they are too poor to pay. Relying on state and federal court decisions, the ACLU sent letters to the cities demanding a prompt halt to the practice.

The ACLU conducted an in-depth investigation into the municipal courts of Westminster, Wheat Ridge, and Northglenn, which routinely issue "pay or serve" warrants without any consideration for or inquiry into a debtor’s ability to pay.

"Pay-or-serve" warrants authorize a debtor’s arrest. Once in custody, the debtor must either pay the full amount of the fine or "pay down" the fine by serving time in jail at a daily rate set by the court. Wheat Ridge and Northglenn set the rate at $50 per day, while Westminster converts all unpaid fines into ten-day sentences. None of the three cities has a process to determine whether the debtor has the ability to pay, as federal and state law require.

"These 'pay-or-serve' warrants return Colorado to the days of debtors’ prisons, which were abolished long ago," said Mark Silverstein, ACLU legal director. "Jailing poor people for fines they cannot pay violates the Constitution and punishes poor people just for being poor. It also wastes taxpayer resources, crowds the jails, and doesn’t get the fines paid."

The Jefferson County Jail imprisoned at least 154 people on pay-or-serve warrants during a five-month period from February to June of this year. During that time period, 973 days were served at a cost to taxpayers of more than $70 per day, for a total cost of more than $70,000. These 973 fine days cancelled out $40,000 of fines, making the total loss to the taxpayer $110,000.

"Jailing the poor for failure to pay a fine is not only unconstitutional, but also fundamentally unfair," says ACLU of Colorado staff attorney Rebecca T. Wallace. "This practice creates a two-tiered system of justice in which those who can afford to pay their legal debts avoid jail and can move on with their lives, and those unable to pay end up imprisoned."
The entire article is available here.  The April 2013 ACLU of Ohio report entitled "How Ohio's Debtor's Prisons are Ruining Lives and Costing Communities" is available here.

JPMorgan Chase, Bernard "Bernie" Madoff, Sub-Prime Mortgages, and the Prominence of Deferred Prosecution Agreements

The New York Times has an interesting discussion of the process by which JPMorgan Chase decided to accept a deferred prosecution agreement from the government with regard to allegations that the bank ignored warning signs regarding the conduct of infamous Pozi schemer Bernard Madoff.  The DPA, announced this week, will require the bank to pay over $2 billion in penalties. 
Two men who occupy coveted roles in Manhattan’s power elite, one the city’s top federal prosecutor and the other its top banker, sat down in early November to discuss a case that was weighing on them both.

Preet Bharara, the United States attorney in Manhattan, and Jamie Dimon, the chief executive of JPMorgan Chase, gathered in Lower Manhattan as Mr. Bharara’s prosecutors were considering criminal charges against Mr. Dimon’s bank for turning a blind eye to the Ponzi scheme run by Bernard L. Madoff. Mr. Dimon and his lawyers outlined the bank’s defense in the hopes of securing a lesser civil case, according to people briefed on the meeting.

But at the cordial meeting in Mr. Bharara’s windowless conference room lined with law books, the prosecutors would not budge. Mr. Bharara — flanked by his own lieutenants, including Richard B. Zabel and Lorin L. Reisner — made it clear that he thought the wrongdoing was significant enough to warrant a criminal case.

On Tuesday, Mr. Bharara announced the culmination of that case, imposing a $1.7 billion penalty stemming from two felony violations of the Bank Secrecy Act, a federal law that requires banks to alert authorities to suspicious activity. The prosecutors, calling the amount a record for violating that 1970 federal law, will direct the money to Mr. Madoff’s victims.

The outcome of the case and the tenor of the settlement talks underscore the significant leverage prosecutors wield when negotiating with Wall Street’s biggest firms. Even though JPMorgan had defeated a similar private lawsuit just months earlier, bank executives were unwilling to gamble against the government.

Within weeks of meeting Mr. Bharara and recognizing their limited bargaining power, JPMorgan’s lawyers accepted the $1.7 billion penalty, the people briefed on the meeting said, which was within the range that prosecutors initially proposed. The bank also agreed to pay $350 million to the Office of the Comptroller of the Currency, accepting the agency’s only offer, one of the people said.

It could have been worse for the bank. At one point, prosecutors were weighing whether to demand that the bank plead guilty to a criminal charge, a move that senior executives feared could have devastating ripple effects. Rather than extracting a guilty plea, prosecutors struck a so-called deferred-prosecution agreement, suspending an indictment for two years as long as JPMorgan overhauls its controls against money-laundering.
The entire New York Times article is available here.

ABC News also had an article discussing the recent DPA between the government and JPMorgan Chase.  The article asks whether the bank is "Too Big to Jail?" and references the November settlement by JPMorgan of allegations related to the sub-prime mortgage issue thought to have contributed to the financial crisis in 2008.
In another major victory for JPMorgan Chase and its CEO Jamie Dimon, prosecutors said today the bank will be able to avoid criminal charges under a deferred prosecution agreement despite having "turned a blind eye" to evidence of the Ponzi scheme of Bernie Madoff, whose principal accounts were held by the bank for 22 years and were central to his multi-billion dollar fraud.

Instead, prosecutors announced today that the bank will pay $1.7 billion to defer for two years criminal charges that the bank failed to report suspicious activity that might have tipped off investigators to Madoff's scheme years earlier, $350 million to cover civil money penalties for violations of the Bank Secrecy Act and another $543 million to settle civil suits filed by victims of the Ponzi scheme.

It was the second time in three months that the Obama administration Department of Justice declined to push JPMorgan Chase, the country's largest bank by assets, to trial on criminal charges. In November, the DOJ accepted a payment of $13 billion from the bank to avoid criminal charges growing out of the sub-prime mortgage scandal that helped drive the American economy into a recession.
The entire ABC News article is available here.
 
Given the prominence of deferred prosecution agreements today, it should not be surprising that the Bernard Madoff allegations resulted in such a settlement.  Below is a short excerpt from my upcoming article regarding Deferred Prosecution Agreements.  The article will be published in the American Bar Association Criminal Justice Section White Collar Crime Committee Newsletter. 
In the United States, DPAs have evolved over the last two decades into the dominant method of adjudicating corporate criminal investigations by the Department of Justice (“DOJ”). This is particularly true in the years since the collapse of Arthur Andersen in 2002. Andersen, which was under investigation for the alleged obstruction of justice by a handful of employees during the government’s investigation of Enron, did not enter into a deferred prosecution agreement. Instead, choosing to challenge the government’s case, Andersen proceeded to trial and lost. Though the accounting firm eventually won the case on appeal to the United States Supreme Court, the damage was done and the accounting firm wound up operations after almost a century in business. The collapse led to almost 85,000 employees around the world losing their jobs.

After Andersen, the DOJ’s power to convince corporations that the risks of proceeding to trial and challenging the government’s case are simply too onerous became exponentially greater. Today, it is an anomaly to see a corporate entity challenge the government at trial. While DPAs have traditionally been viewed as an American instrument of adjudication, it appears that the success of the DOJ in utilizing DPAs to secure significant fines and concessions from corporations has not gone unnoticed abroad.
The newsletter article, which goes on to examine the introduction of DPAs in the United Kingdom this year, will be available here later this spring.