Tuesday, October 29, 2013

The Wolf of Wall Street (Jordon Belfort) and Restitution Payments after Supervised Release

Many in the white collar criminal law community are looking forward to the upcoming movie from Martin Scorsese entitled "The Wolf of Wall Street."  The movie, staring Leonardo DiCaprio, is based on the true story of Jordon Belfort.  Belfort was sentenced to four years in prison in 2003 and ordered to pay $110.4 million in restitution for engaging in an alleged pump and dump stock scheme.

Of interest to readers of this blog is an issue that recently arose with regard to Belfort's restitution payments.  From CNN:
Despite Belfort's lucrative movie and book deals, and earnings from a new career as a motivational speaker, many of these victims are still waiting for restitution.

When Belfort was sentenced in 2003 to four years in prison, Judge John Gleeson ordered him to pay about $110.4 million to a victims fund, in installments equal to 50% of his monthly gross income, after his release from jail. If any major changes in his financial circumstances took place, the percentage Belfort had to pay could be adjusted up or down.

After I asked for an update on the fund in early October, lawyers in the office of Loretta E. Lynch, U.S. Attorney for the Eastern District of New York, replied that Belfort had only contributed about $11.6 million to the victims' fund so far -- about one-tenth of the required total.

In a court filing with many details about Belfort's current income whited out, Lynch's office asked Gleeson to find Belfort in default, saying that according to his tax returns and other available information, the payments he has been making are "insufficient." They said that in 2011, for instance, Belfort paid $21,000 in restitution, although he made more than $1 million for the motion picture rights to his memoir, as well as more income from a motivational speaking corporation he half-owns.

Belfort's attorneys responded that he doesn't deny he still owes money to victims, but that his position is his obligation to pay 50% of his income to them ended when his term of "supervised release" from prison expired in April 2009. They said that for the past two years, he's been trying to arrange a "forbearance" agreement with the government to "pay 100% of the profits of the movie and the two books," but that his offer has been turned down.

"Before you accuse me of anything, you should learn the facts," Belfort said in an e-mail last week. "I have been trying to settle this case forever and have been completely stonewalled. I can even show you the settlement offer from the government, on their letterhead, asking for only 50% of my books, after I offered 100%."

On Friday afternoon, the government asked to withdraw its pending motion to hold Belfort in default on his payments to victims. Oral argument in the case had been scheduled to begin Nov. 22. In a court document, Beth Schwartz, Assistant U.S. Attorney for the Eastern District of New York, said the delay would give both sides "an opportunity to explore a resolution" of certain issues, and that "Mr. Belfort joins in this request."
The issue of how the government should respond in such situations once supervised release has ended has come up several times in recent years.  It will be interesting to see what happens in this particular case as interest in the back story increases during the lead up to the Christmas Day movie release.
Read the entire CNN article here.  The is another article about the restitution issue here.
To watch a preview of "The Wolf of Wall Street," click here.

Tuesday, October 1, 2013

Upcoming ABA CJS International White Collar Crime Conference - London, October 7-8, 2013

Next week is the American Bar Association's second annual International White Collar Crime conference.  This year's event will take place in London, UK on October 7-8, 2013.  The program is below.  A link to the registration materials is here.

The ABA Criminal Justice Section and City of London Law Society’s

Corporate Crime & Corruption Committee

Present the

2013 International White Collar Crime Conference

October 7-8, 2013       London, United Kingdom 
Hosted at the Offices of
Berwin Leighton Paisner LLP
Adelaide House, London Bridge

Monday, October 7, 2013 – DAY 1

8:00 – 9:00 a.m.             Registration & Coffee/Tea - Meet and Greet

9:00 – 9:15 a.m.             Welcoming RemarksMathias Heck, Chair, ABA Criminal Justice Section and Michael Caplan, QC, Chair, CLLS Corporate Crime & Corruption Committee

9:15 – 10:15 a.m.           Session I – Plenary

Governmental Perspectives Regarding the Enforcement of International White Collar Criminal Laws – A Discussion with David Green CB QC, Director, UK Serious Fraud Office
10:15 -- 10:30 a.m.         Networking Break

10:30 – 11:30 a.m.          Session II – Plenary

The Evolving Challenges of Investigating and Preventing Corporate Espionage and Cyber-Crimes in the Twenty-First Century

As the issues of corporate espionage and cyber-crimes take center stage in the twenty-first century’s global business environment, this session will consider a broad range of issues, including techniques for preventing, detecting, and investigating this illicit behavior.

Moderator: Scott L. Marrah, Kilpatrick Townsend, Atlanta

11:30 – 11:45 p.m.         Networking Break

11:45 – 12:45 p.m.         Session III – Breakouts

A.      Anti-Corruption Enforcement Trends: What Every Global Company Needs to Know

This session will examine the FCPA, the UK Bribery Act, and other similar statutory regimes to provide a detailed and sophisticated overview of these laws and provide a blueprint for protecting corporations and employees from the risks of corruption.  This discussion will include a review of recent enforcement actions and guidance, examination of risk factors in emerging markets (third parties, gifts/entertainment, and travel), analysis of the rise in Chinese anti-corruption enforcement, and consideration of strategies for developing and implementing an effective global anti-corruption compliance program.

Moderator: Z Scott, Kaye Scholer, Chicago

B.      Aggressive Enforcement of Tax Laws by the US, UK, and Other EU Members against Bank Secrecy Jurisdictions – The Impact of FATCA and Other legislation

As authorities with various institutions in the U.S., U.K (FCA), and around the globe increase scrutiny of corporate tax strategy and regulatory framework, this session will consider recent trends in this field.  This discussion will include review of recent enforcement actions and guidance, examination of emerging risk areas, and consideration of strategies for developing and implementing an effective tax compliance program 

12:45 – 2:30 p.m.           Luncheon at Fishmonger’s Banqueting Hall (on London Bridge, directly across from Adelaide House) Featuring a Keynote Address by Caroline Binham, Legal Correspondent for the Financial Times, London

2:30 – 3:30 p.m.             Session IV -- Breakouts

A.     Anti-Trust/Anti-Cartel – Competition Law Across the Globe

This session will explore the choices companies and individuals make when confronted with cartel enforcement in multi-jurisdictional investigations and actions.  In particular, this session will discuss how resolutions are impacted by internal investigations, first-in amnesty programs, non- prosecution agreements, and the intended and unintended effect of carve outs.  Specific cases discussed will include the marine hose cases and the air cargo cases, and how determinations are made in multi-jurisdictional investigations as to what constitutes “anti competitive” versus what constitutes “business as usual,” as exemplified by the Google/Motorola Mobility matter, and other similar matters.

Moderator:  Nina Marino, Kaplan Marino, Beverly Hills, Calif.

B.     The Globalization of Enforcement Actions and Internal Investigations 

This session will consider the challenges presented by the globalization of enforcement actions and internal investigations.  In particular, this session will consider recent trends in the field, including analysis of current global enforcement actions, enforcement initiatives, and internal investigations, discussion of best practices when structuring and executing international internal investigations, and the challenges of privilege issues in the international setting. 

Moderator: Professor Lucian E. Dervan, Southern Illinois University School of Law

3:30 – 3:45 p.m.             Networking Break

3:45 -- 4:45 p.m.            Session V - Breakouts

A.     Money Laundering & Sanctions Violations in the Context of a Diverse and Globalized Economy

This session will consider how to identify high-risk individuals and organizations among suppliers, vendors and clients.  Further, this session will consider pressing issues in the field, including subsidiaries, the inventory rule, and conflicts between the U.S., E.U, and U.K. law.

Moderator: Elizabeth Robertson, K & L Gates, London
B.           The Challenges of Document Collection, Data Dissemination, and Employee Contacts During International Internal Investigations

This session will consider the challenges of collecting, reviewing, and transferring documents during international internal investigations.  In particular, the session will examine strategies for dealing with documents and the impact of data privacy laws and other restrictions. Further, this session will explore the complexities of interacting with various individuals during international internal investigations, including consideration of labor laws in various jurisdictions, some of which include stringent requirements regarding notification to employees under investigation and the timing and procedures for employee sanctions.           

Moderator: Karen Popp, Sidley Austin, LLP, Washington, D.C.

4:45 p.m.                       Reception at Fishmonger’s Court Room (on London Bridge, directly across from Adelaide House)

Tuesday, October 8, 2013 – DAY 2

8:30 – 9:30 a.m.             Coffee/Tea & Networking

9:30 – 10:30 a.m.           Session I – Plenary

                                    Global Trends in Whistleblowing: Best Practices for International Corporations Facing Whistleblowers Armed with New Legal Incentives & Technologies 

                                    As the United States and others begin increasing the monetary incentives for whistleblowing and whistleblowers become more technologically sophisticated, corporations must prepare for this new global environment.  This session will examine recent whistleblowing laws, including the Dodd-Frank Act and subsequent regulations, best practices for encouraging internal whistleblowing, and strategies for responding to external whistleblowing.

                                                Moderator: Aaron Stephens, Berwin Leighton, Paisner LLP, London

10:30 -- 10:45 a.m.         Networking Break

10:45 – 11:45 a.m.          Session II – Plenary

The Global Expansion of Deferred and Non-Prosecution Agreements - Lessons Learned from the U.S. and Strategies for Avoiding Collateral Consequences of Settlement

As the U.K. and other jurisdictions prepare to implement deferred and non-prosecution agreements as potential settlement tools in white collar criminal investigations, corporations and their counsel must prepare for these new enforcement mechanisms.  This session will explore the lessons learned from the utilization of these tools in the United States, including strategies for anticipating and avoiding the collateral consequences that such settlements might bring.

Moderator: Raymond Banoun, Cadwalader, Wickersham & Taft LLP
11:45 – 12:00 p.m.         Closing Remarks – Lord Ken McDonald, QC – AARON TO INVITE


**Bonus Women’s Leadership Luncheon Event at K & L Gates to Follow**

The ABA Criminal Justice Section’s Women In White Collar Subcommittee


Women Leaders in White Collar & the Global Corporate Community

Hosted by Elizabeth Robertson

at the Offices of

K & L Gates LLP

Please join white collar practitioners and corporate general counsel from around the globe at this first-ever event organized for women-to-women networking, appreciation, and mutual support.
The panel discussion will inspire, educate, and empower. This event is not to be missed.
1:15 p.m.                       Networking/Meet & Greet
1:15 – 2:30 p.m.             Luncheon & Panel Presentation         
Moderator:  Nina Marino, Kaplan Marino, Beverly Hills, Calif.

Interesting Story About Former Qwest CEO Nacchio's Prison Experience

The Wall Street Journal has an interesting article about the prison experience of former Qwest CEO Joseph Nacchio.  Nacchio spent 54 months in federal prison after being convicted by a jury of selling $52 million in stock as Qwest's prospects began to deteriorate.
Mr. Nacchio spent most of his sentence in two Pennsylvania facilities called camps, the lowest level of security offered by the Bureau of Prisons.

There are no bars and no walls around the perimeter. Camp inmates can send emails.

But they are awakened in the night for security checks. Phone calls are limited to about 10 minutes a day. Visitors are allowed but only every other weekend and some holidays.

Prison experts and former inmates say conditions are less comfortable for white-collar criminals than they were in the 1980s, when media stories about leafy prison camps with sparkling athletic facilities surfaced during the savings-and-loan crisis. They say authorities took down tennis nets in at least one camp and cut off inmate access to golf courses and swimming pools.

A Bureau of Prisons spokesman said federal camps do not have pools and said the agency doesn't keep records of past amenities.

"There is no such thing as a Club Fed," said prison consultant Alan Ellis, who advises white-collar convicts about life in prison.

Mr. Nacchio's fellow inmates included former Galleon Group trader Zvi Goffer and his brother Emanuel Goffer, both serving time for an insider-trading scheme. Mr. Nacchio got to know both of them.

But the two prison camps where Mr. Nacchio served, named Schuylkill and Lewisburg, were in large part populated with drug offenders, Mr. Nacchio said—men with muscular builds, covered in tattoos, and often two decades younger than him. Two of them became his guardian angels.

"Joe was right down to earth," said Spoonie, who asked that his real name not be used because of the stigma his drug-conspiracy conviction carries.

Spoonie, 45, said other white-collar offenders were "just all full of themselves," and stereotyped inmates such as himself and Juice, another drug offender, because of their tattoos and crimes.

"We are like best friends now," he said, adding that Mr. Nacchio's prison nickname was "Joe-ski-luv," because he's been married to the same woman for more than 30 years. "If he ever needs a lung or a bone, I'm there."
The entire article is available here.