Wednesday, March 25, 2009

Supreme Court Rules Regarding Broken Plea Bargains

In a vote of 7-2 in the case of Puckett v. United States, the Supreme Court ruled on Wednesday that where federal prosecutors violated a plea bargain with an accused, the violation must be preserved at the trial court level to avoid the application of Rule 52(b).

James Puckett was indicted for bank robbery in July 2002. He later negotiated a plea agreement with the government in which he agreed to plead guilty in return for the government agreeing to a reduction in his guideline offense level for acceptance of responsibility and a sentence at the lowest end of the applicable guideline range. Prior to sentencing, however, Puckett assisted in a scheme to defraud the postal service. When sentencing took place, the government opposed any reductions in Puckett's offense level for acceptance of responsibility. The district court then determined that even if it could grant the reduction, it would not. At no time did Puckett's counsel object to the government's new position.

On appeal, the 5th Circuit applied the plain-error standard under Rule 52(b) for unpreserved claims of error. It then ruled that although the error occurred and was obvious, Puckett had not demonstrated that the error affected his substantial rights. The court of appeals affirmed the sentence.

The Supreme Court granted certiorari in 2008 to consider "a question that has divided the Federal Courts of Appeals: whether Rule 52(b)'s plain-error test applies to a forfeited claim, like Puckett's, that the Government failed to meet its obligations under a plea agreement." The Supreme Court concluded that Rule 52(b) does apply and that the decision of the lower court is affirmed.

The court stated:

In federal criminal cases, Rule 51(b) tells parties how to preserve claims of error: “by informing the court -- when the court ruling or order is made or sought -- of the action the party wishes the court to take, or the party's objection to the court's action and the grounds for that objection.” Failure to abide by this contemporaneous-objection rule ordinarily precludes the raising on appeal of the unpreserved claim of trial error. See United States v. Young, 470 U.S. 1, 15, and n. 12 (1985). Rule 52(b), however, recognizes a limited exception to that preclusion. The Rule provides, in full: “A plain error that affects substantial rights may be considered even though it was not brought to the court's attention.”

We explained in United States v. Olano, 507 U.S. 725 (1993), that Rule 52(b) review -- so-called “plain-error review” -- involves four steps, or prongs. First, there must be an error or defect -- some sort of “[d]eviation from a legal rule” -- that has not been intentionally relinquished or abandoned, i.e., affirmatively waived, by the appellant. Id., at 732-733. Second, the legal error must be clear or obvious, rather than subject to reasonable dispute. See id., at 734. Third, the error must have affected the appellant’s substantial rights, which in the ordinary case means he must demonstrate that it “affected the outcome of the district court proceedings.” Ibid. Fourth and finally, if the above three prongs are satisfied, the court of appeals has the discretion to remedy the error -- discretion which ought to be exercised only if the error “‘seriously affect[s] the fairness, integrity or public reputation of judicial proceedings.’” Id., at 736 (quoting United States v. Atkinson, 297 U.S. 157, 160 (1936)). Meeting all four prongs is difficult, “as it should be.” United States v. Dominguez Benitez, 542 U.S. 74, 83, n. 9 (2004).

We have repeatedly cautioned that “[a]ny unwarranted extension” of the authority granted by Rule 52(b) would disturb the careful balance it strikes between judicial efficiency and the redress of injustice, see Young, supra, at 15; and that the creation of an unjustified exception to the Rule would be “[e]ven less appropriate,” Johnson v. United States, 520 U.S. 461, 466 (1997). . .

Application of plain-error review in the present context is consistent with our cases, serves worthy purposes, has meaningful effects, and is in any event compelled by the Federal Rules. While we recognize that the Government's breach of a plea agreement is a serious matter, "the seriousness of the error claimed does not remove consideration of it from the ambit of the Federal Rules of Criminal Procedure." Johnson, 520 U.S., at 466.

Thursday, March 12, 2009

Breaking News! Madoff Pleads Guilty to Eleven Counts

Madoff has pleaded guilty to all eleven counts. Here is a description of the events by the New York Times.

Standing before Judge Denny Chin in United States District Court in Manhattan, Mr. Madoff was asked, “How do you now plead to the information, guilty or not guilty?”
“Guilty,” he responded.

The hearing on Thursday marks the first time since he was arrested by federal agents on Dec. 11 that Mr. Madoff has spoken publicly about how he ran what was perhaps the largest fraud in Wall Street history, a global scheme that ensnared hedge funds, nonprofit groups and celebrities, and devastated the life savings of thousands of people.

Dressed in a gray suit, Mr. Madoff, 70, stood up in a courtroom packed with journalists, lawyers and some of his victims and pleaded guilty to 11 counts of fraud,money laundering, perjury and theft — charges whose maximum sentences total 150 years. Mr. Madoff then answered questions about how he sustained a 20-year fraud whose collapse erased as much as $65 billion that his customers thought they had in their accounts.

His immediate fate remained in the balance. The is expected to rule later Thursday on whether Mr. Madoff will remain free on bail and return to his apartment on Manhattan’s Upper East Side, or whether he will be immediately jailed as he awaits sentencing.

Some of Mr. Madoff’s victims are also expected to speak on whether the judge should accept Mr. Madoff’s guilty plea, and whether his $10 million bail should be revoked.

Tuesday, March 10, 2009

Madoff to Plead Guilty to Eleven Charges in Ponzi Scheme

Bloomberg has gathered some of the details regarding the plea agreement Madoff will enter on Thursday.  According to the reports, Madoff will plead guilty to eleven criminal charges related to a fraud that prosecutors state began in the 1980s. 

By last November, Madoff told 4,800 investors their accounts held $64.8 billion, according to court papers filed in Manhattan federal court. Prosecutors will seek forfeiture from Madoff of as much as $170 billion. Madoff, free on $10 million bail, faces 150 years in prison.

“There is no plea agreement,” Assistant U.S. Attorney Marc Litt said at hearing today before U.S. District Judge Denny Chin.

Madoff, originally charged with a sole count of securities fraud, will plead guilty to that charge and an additional 10 counts filed today in a so-called criminal information, defense attorney Ira Sorkin said. The new charges are investment adviser fraud, mail fraud, wire fraud, three counts of money laundering, false statements, perjury, false filings with the U.S. Securities and Exchange Commission and theft from an employee benefit plan.

Sorkin disclosed Madoff’s plans at a hearing where Madoff waived his attorney’s possible conflicts of interest in the case. The lawyer said he disagreed with the amount of loss alleged by the government, arguing that some victims received more in returns than they invested with Madoff.

At the hearing, Madoff gave brief answers to more than 50 questions posed by the judge.

“We have been unable to review a vast amount of documents, reflecting money going in and going on,” Sorkin said in court. “It’s difficult at this point to identify real victims.”

Friday, March 6, 2009

Madoff Plea Deal May Be In The Works

According to MSNBC, prosecutors have filed a motion that indicates Bernard Madoff may be preparing to plead guilty to charges related to one of the largest frauds in history. The indication came in a brief filed with the court that stated Madoff is waiving indictment, a potential sign that a deal is in the works.

NBC's Pete Williams, citing an unnamed law enforcement official, said Madoff may plead guilty next week. The official said under the terms of the deal, Madoff will serve prison time and be required to help the government put together a full accounting of what happened.

The filing was the latest sign pointing toward a possible plea deal with Madoff, who has been confined to his Manhattan penthouse since his arrest in December. Madoff has never contested the allegations and recently surrendered millions of dollars in major assets, actions that typically precede plea deals.

Investigators have spent the last three months trying to untangle Madoff's complicated financial operation while attempting to return what is left of his assets to investors who lost billions. Madoff's cooperation could be key to explaining the mysteries and intricacies of his business, and also explain if others were involved in the fraud. Daniel J. Horwitz, a Madoff defense lawyer, would only say that "we've waived the right to indictment and the case will proceed by information."

Typically, a defendant is brought before a judge, waives indictment and enters a guilty plea the same day to a charging document known as an "information." It resembles an indictment but is brought by prosecutors rather than a grand jury.