Showing posts from September, 2008

When Not Guilty Can Mean More Prison Time

ABC News recently had an interesting article discussing one of the most widely debated aspects of the current U.S. federal sentencing regime - receiving an increased sentence for acquitted conduct. The story begins by discussing the story of Roger White. When Roger White helped his brother and his brother's girlfriend rob a bank in Maysville, Ky., he led police on a high-speed, 17-mile chase down country roads before he finally crashed his car and was caught. At his 2003 trial, White, the getaway driver, was convicted of aiding the bank robbery, but the jury acquitted him of several other charges involving the use of a gun during the robbery and escape. Nevertheless, a judge found that there was sufficient evidence that shots were fired during the robbery and subsequent police chase to add nearly 14 years onto White's prison sentence, more than doubling it even though a jury found White not guilty of most of the gun charges. White's case, now pending before the Sixth Circu

Former British Airways Executive Pleads Guilty - Nine Companies and Two Other Individuals Have Already Pleaded Guilty

According to a DOJ Press release , a British citizen and former British Airways Executive has agreed to plead guilty, serve eight months in jail and pay a criminal fine for participating in a conspiracy to fix rates for international air cargo shipments. According to the charges filed in U.S. District Court in the District of Columbia, Keith Packer, former Commercial General Manager for British Airways World Cargo, and his co-conspirators engaged in a conspiracy to fix the air cargo rates charged to customers for international air shipments, including to and from the U.S., in violation of the Sherman Act. Under the plea agreement, which is subject to court approval, Packer has agreed to serve eight months in jail, pay a $20,000 criminal fine and cooperate with the Department’s ongoing investigation. Packer is the first foreign national and third individual charged as part of the Antitrust Division’s ongoing investigation into price fixing in the air transportation industry. Additionall

Ex-CIA Official Pleads Guilty in Virginia

The Washington Post has a nice article detailing the events leading to today's guilty plea by former top CIA administrator Kyle "Dusty" Foggo. The CIA's former top administrator pleaded guilty today to steering agency contracts to a defense contractor and concealing their relationship, making Kyle "Dusty" Foggo the highest-ranking member of a federal intelligence or law enforcement agency to be convicted of a crime, officials said. Foggo admitted in U.S. District Court in Alexandria that he conspired to defraud the United States in his relationship with Brent R. Wilkes, a California businessman. Prosecutors say Wilkes subsidized meals and vacations for Foggo and his family, and that Foggo helped Wilkes get lucrative contracts, including one in which the CIA was bilked when it paid 60 percent more than it should have for water supplied by a Wilkes-affiliated company to CIA outposts in Afghanistan and Iraq. Foggo, a longtime logistics officer, was the CIA'

Don't Throw Away the Benefits of Your Bargain

The WSJ Law Blog is reporting that Bill Lerach , the plaintiffs lawyer who is serving a two-year prison sentence after pleading guilty to participating in a scheme to pay kickbacks to lead plaintiffs, was recently transferred from a prison camp to a medium security prison. The transfer stemmed from his having offered his San Diego Chargers season tickets to a guard at the camp outside Santa Barbara earlier this year. Lerach's new home will be in Phoenix and will likely include double fences with electronic detection systems and cell-type housing rather than dormitories. No one is going to argue that a prison camp is nice, but it is certainly more comfortable and safer than a medium security facility. Further, the move takes Lerach further from his home and medium security facilities typically have more restrictive visitation policies. One must assume that his placement in a prison camp in California was one of the factors he considered when deciding whether to accept a plea deal.

Plea in Case of Largest Data Theft in History

On September 11, 2008, Damon Patrick Toey entered a plea of guilty to charges including wire fraud, credit card fraud, and aggravated identity theft stemming from the largest data theft in history. Toey and others stole information on tens of millions of customers from TJX Cos. and BJ's Wholesale Club. According to federal prosecutors, the group also breached the security of many other companies.  The Boston Globe had extensive coverage of the hearing. At a hearing in federal District Court in Boston yesterday afternoon, Damon Patrick Toey, 23, of Miami, pleaded guilty to multiple charges, including wire fraud, credit card fraud, and aggravated identity theft. Prosecutors alleged he helped the accused ringleader, Albert Gonzalez, to break through the computer security of a number of retail stores in the Miami area. Gonzalez himself appeared at a second hearing later in the day and pleaded not guilty to a set of similar charges. Prosecutors said both men were key players in a loose

Detroit May Get a Trial After All

According to the NYTs , Christine Beatty, the former chief of staff to Detroit Mayor Kwame Kilpatrick, has rejected a plea deal and will go to trial on perjury and other felony charges. The aide, Christine Beatty, whose racy text message exchanges with Mr. Kilpatrick began the scandal that led to his resignation, refused proposals from prosecutors that called for her to serve two to five months in prison and pay $125,000 in restitution to the city. Ms. Beatty’s lawyer, Mayer Morganroth, dismissed a five-month sentence as “unreasonable” and said she would rather fight the charges before a jury. A conviction on all charges could result in a sentence of 19 to 30 months. For months, Ms. Beatty, who is charged with lying under oath when she swore that she had not had a sexual relationship with her married boss, had been widely expected to make a deal with prosecutors that would secure her freedom in exchange for testifying against Mr. Kilpatrick. But instead it appears that Mr. Kilpatrick,

Real Estate Developer Closes Big Deal

T he Wall Street Journal  is reporting that Raffaello Follieri , the Italian real estate developer, has entered into a deal with prosecutors in New York in relation to his alleged involvement in a real estate investment scheme. In the indictment, prosecutors accused Mr. Follieri , the chairman and chief executive of the Follieri Group, of getting millions of dollars from investors by claiming that his connections with the Vatican allowed him to buy church properties at below-market prices and redevelop them for “socially responsible” purposes. Mr. Follieri had no special rights in terms of buying properties but was simply competing against other bidders, the indictment said. Instead, the government said, he used money he received from investors to finance a lavish lifestyle including a $37,000-a-month apartment, meals and clothing. The charges accused him of misusing more than $2 million. According to the WSJ , the deal includes four to five years in prison. Interestingly, the deal i

Broadcom Co-Founder Plea Deal Rejected by Judge

We discussed a while ago the plea bargain entered into by Henry Samueli, co-founder of Broadcom. The deal would have allowed for probation for Samueli's alleged role in a stock-options backdating scandal. Last week, however, Judge Cormac J. Carney rejected the bargain, stating that the proposed punishment would not be sufficient.  He stated, "The court is not alone in concluding that a five-year probationary sentence does not capture the seriousness of Dr. Samueli's alleged misconduct."  The Wall Street Journal Law Blog had a nice discussion of what happens next.  What are the options for prosecutors and Samueli in the wake of Carney’s ruling? They asked the judge for time to renegotiate their plea deal to address the court’s concerns, including the fact that Samueli didn’t agree to cooperate with prosecutors in cases against other former executives, such as former CFO, William J. Ruehle, or co-founder Henry T. Nicholas III, who were charged earlier this year with se

New DOJ Guidelines for Corporate Prosecutions in Response to KPMG Case

The Wall Street Journal had a nice editorial a couple of weeks ago regarding the events leading to the removal of the 2006 "McNulty Memorandum" in favor of revised corporate guidelines that expressly bar prosecutors from forcing organizations and their employees to waive numerous fundamental rights, including the attorney-client privilege, work product doctrine, and the constitutional right to counsel.  Congratulations to Lewis D. Kaplan, the federal judge whose withering critique of prosecutorial abuse in the KPMG tax-shelter case was vindicated yesterday by the Second Circuit Court of Appeals. In fact, you can double that applause, because yesterday the Justice Department went further and once again rewrote its white-collar prosecution guidelines to accommodate Judge Kaplan's demolition. Whether Justice anticipated its legal defeat before the surrender is less important than the fact that it has now restored a measure of due process fairness to corporate defendants and

Detroit's Mayor Pleads Guilty - Agrees Not to Run for Office

Detroit's Mayor, Kwame Kilpatrick, has pleaded guilty to two felony counts of obstruction of justice related to a scandal involving text messages between Kilpatrick and his former chief of staff that contradicted previous sworn testimony by the two. Under the terms of the agreement, Kilpatrick will remain in office for only 14 more days, at which time he will resignation and begin serving a 120 day sentence. Interestingly, the agreement also includes a provision prohibiting him from seeking public office during a five year probation period. Reading from a prepared statement, Kilpatrick stated, "I lied under oath in the case of Gary Brown and Harold Nelthrop versus the city of Detroit. . . I did so with the intent to mislead the court and jury and to impede and obstruct the fair administration of justice." As for the related charges of assault stemming from an altercation with authorities who were attempting to serve one of Kilpatrick's friends in the perjury case, the