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Professor Dervan Testifies on Capitol Hill Regarding Overcriminalization, Regulatory Crimes, and Plea Bargaining

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I was pleased to have the opportunity to testify yesterday before the House Committee on the Judiciary, Overcriminalization Task Force.  The focus on the hearing was potential solutions to overcriminalization, particularly regulatory overcriminalization.  Below is a portion of my testimony: " I commend the Task Force for its work, shining a light on the issue of overcriminalization and working to correct this fundamental problem in our criminal justice system.      Before beginning a discussion of the possible solutions to the numerous problems associated with overcriminalization that have been identified by this Task Force during prior hearings, I think it is also important to consider once again the far reaching consequences stemming from the phenomenon of overcriminalization.   As reported by the American Bar Association in a 1998 study, forty-percent of the criminal laws passed since the Civil War were enacted after 1970.   Since the release of this ABA report,

Johnson & Johnson settles "kickback" charges with $2.2 billion penalty

It was a good day for the government.  Along with reports that SAC Capital will pay $1.8 billion in fines related to insider trading allegations, Johnson & Johnson has reportedly agreed to pay $2.2 billion to settle allegations regarding the marketing of drugs for unapproved uses and the payment of kickbacks to doctors and nursing homes. The penalties announced Monday involve fines and forfeiture to the federal government and several states. The settlement involves the schizophrenia drugs Risperdal and Invega, and the heart failure drug Natrecor, the company and Attorney General Eric Holder said... The penalty amounts to one of the country's largest health care-related settlements, the Justice Department said. It also results in what one plaintiff's attorney called the largest whistleblower payout in U.S. history. Whistleblowers in three states will collect $167.7 million under the False Claims Act... The settlement includes payments to the federal government and severa

SAC Capital to Plead Guilty to Charges of Insider Trading

According to CNN, SAC Capital has agreed to pay a $1.8 billion fine and plead guilty to criminal insider trading charges.  In addition, prosecutors say SAC will close its investment advisory business, meaning it will no longer manage money for outside investors. The deal still allows the firm to operate as a "family office," with Cohen and others at SAC investing their own money. Cohen is one of the country's most famous hedge fund managers, with a net worth estimated at $9.4 billion in September. He could still face criminal charges of his own since the agreement does not include any immunity for individuals at the firm. Prosecutors accused SAC in their indictment of fostering a culture of insider trading "that was substantial, pervasive, and on a scale without known precedent." The indictment excerpts a number of e-mails and instant messages from SAC traders suggesting they had illicit information from corporate insiders. "What SAC Capital's plea

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 per

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 Remarks – Mathias 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 Intern

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

U.S. Sentencing Commission Releases Policy Priorities for Amendment Cycle Ending May 1, 2014

The U.S. Sentencing Commission has released its policy priorities for the amendment cycle ending May 1, 2014.  A few of the highlights including the following: Pursuant to 28 U.S.C. 994(g), the Commission intends to consider the issue of reducing costs of incarceration and overcapacity of prisons, to the extent it is relevant to any identified priority... Continuation of its work with Congress and other interested parties on statutory mandatory minimum penalties to implement the recommendations set forth in the Commission’s 2011 report to Congress, titled Mandatory Minimum Penalties in the Federal Criminal Justice System, including its recommendations regarding the severity and scope of mandatory minimum penalties, consideration of expanding the ‘‘safety valve’’ at 18 U.S.C. 3553(f), and elimination of the mandatory ‘‘stacking’’ of penalties under 18 U.S.C. 924(c), and to develop appropriate guideline amendments in response to any related legislation... Possible consideration of amen

Modified Drug Charge Plea Deal in DC Area - Example of New Directive from AG Holder on Averting Mandatory Minimum Sentences for Low-Level Drug Offenders

The Washington Post is reporting that a man accused of drug running pleaded guilty in Alexandria, Virginia this week to a cocaine conspiracy charge that did not include a specific quantity of narcotics.  The Post believes this is the first case in the D.C. area to utilize Attorney General Eric Holder's new directive on mandatory minimum sentencing for minor drug offenders. From the Post: Marko Bukumirovic, 33, who lives in Severna Park, was charged in May with conspiracy to distribute five kilograms or more of cocaine, which carries a mandatory minimum sentence of 10 years in prison. But in an Alexandria court Tuesday, he pleaded guilty to essentially the same charge without the five-kilogram amount noted — an offense that has no mandatory minimum term. On paper, the case seems to be one of the first public applications of Attorney General Eric H. Holder Jr.’s directive on mandatory minimum sentencing — the centerpiece of a criminal-justice reform plan that aims to save tens of

Bradley Manning Sentenced to 35 Years in Prison

According to CNN, Bradley Manning has been sentenced to 35 years in prison by a military judge.  Manning will also have his rank reduced to private, will forfeit his pay and benefits, and will be dishonorably discharged from the military.  From CNN: Lind convicted Manning in July of stealing 750,000 pages of classified documents and videos and disseminating them to WikiLeaks. He was found guilty of 20 of the 22 charges against him, including violations of the U.S. Espionage Act. Prosecutors have said Manning acted as a "determined insider" in leaking classified information about the wars in Iraq and Afghanistan and should be locked up for at least 60 years. Manning's lawyer contends he can be rehabilitated and should not "rot in jail." "There may not be a soldier in the history of the Army who displayed such an extreme disregard" for his mission, Capt. Joe Morrow, the prosecutor, said Monday during final sentencing arguments. The entire CNN story

Jesse Jackson Jr. Sentenced to 30 Months in Prison

Jesse Jackson Jr. has been sentenced to 30 months in prison for his misuse of campaign funds. According to CNN, Jackson's wife, Sandi Jackson, received 12 months in prison. "I misled the American people," Jackson, 48, said before U.S. District Judge Amy Berman Jackson imposed the term, which she said should be served in Alabama. The ex-Illinois lawmaker's wife, Sandi, received a 12-month sentence for her role in her husband's misuse of roughly $750,000 in campaign funds over several years. As the judge read her sentence, Sandi Jackson wept. The pair pleaded guilty in February to various charges -- Jackson to one count of conspiracy to commit wire and mail fraud, and false statements; and his wife to filing false tax returns. A smooth politician and the son of Jesse Jackson Sr., a civil rights leader and one-time political heavyweight, the younger Jackson admitted to years of using campaign money to pay for things such as vacations, furs and Michael Jackson memor

US Prison Populations Decline

The New York Times has an interesting piece regarding the continued decrease in the U.S. prison population. The prison population in the United States dropped in 2012 for the third consecutive year, according to federal statistics released on Thursday, in what criminal justice experts said was the biggest decline in the nation’s recent history, signaling a shift away from an almost four-decade policy of mass imprisonment. The number of inmates in state and federal prisons decreased by 1.7 percent, to an estimated 1,571,013 in 2012 from 1,598,783 in 2011, according to figures released by the Bureau of Justice Statistics, an arm of the Justice Department. Although the percentage decline appeared small, the fact that it followed decreases in 2011 and 2010 offers persuasive evidence of what some experts say is a “sea change” in America’s approach to criminal punishment. “This is the beginning of the end of mass incarceration,” said Natasha Frost, associate dean of Northeastern Universit

Bradley Manning Verdict - Not Guilty of Aiding the Enemy

Bradley Manning, accused of being the largest leaker of classified information in American history, has been found not guilty of aiding the enemy by the judge in his court-martial.  This charge carried a sentence of up to life in prison.  He previously pleaded guilty to other lesser charges that carry a sentence of up to 20 years in prison. From a New York Magazine article regarding Manning. Manning shipped out to Iraq with a top security clearance, his multiple identities held close inside him. There was abundant evidence that Manning was having trouble keeping it together psychologically, but the Army brushed aside doubts—it desperately needed intel analysts with Manning’s computer skills. After all, the Army was wired; in fact, the whole government had never been more networked, a development that had been pushed partly by the desire to improve information-sharing and shorten reaction time after 9/11. Much of the war was fought remotely; triggers were pulled by people in Langley

Should corporations be permitted to plead guilty?

Doug Berman has an interesting post over at the Sentencing Law & Policy Blog regarding a recent case from Judge Young of the District Court of Massachusetts.  According to Berman, the Judge's opinion in United States v. Orthofix , No. 12-10169 (D. Mass. July 26, 2013), indicates the Judge may not believe the public interest is served by corporate plea deals. From the opinion: This memorandum sets out the Court’s reasons for rejecting each of the (C) pleas from these two corporate criminal defendants. In many ways, the Court’s decision to reject Orthofix’s (C) plea stands as the better subject for elucidation of the Court’s principled objection toward accepting (C) pleas from corporate criminals. This is because, in contrast with the wholly unsatisfactory settlement proffered by APTx, see APTx’s Plea Hr’g 18:13 (“[T]his is a strikingly below guidelines sentence . . . .”), Orthofix’s plea was tendered as part of what was, substantially, “a fair and appropriate settlement,” T

Five Years Later and Few Charges re 2008 Financial Crisis

NPR has an interesting story regarding the lack of prosecutions related to the financial collapse in 2008 in the United States.  According to the story, part of the reason for the lack of prosecutions might be the lack of investigatory resources targeting the issue. In the latest in a string of insider trading cases, federal prosecutors this week indicted SAC Capital, one of the most prominent and profitable hedge funds in the world. But when it comes to the 2008 financial crisis that sent the economy into a tailspin, criminal prosecutions have been few and far between. "The folks responsible for this incredibly painful economic damage that struck our economy have gone free," says Neil Barofsky, a former federal prosecutor who also served as special inspector general overseeing the big Troubled Asset Relief Program bank bailout, signed into law by President Bush in 2008... The article goes on to describe the allocation of resources by the government.  According to the arti

Breaking News - Ariel Castro to Plead Guilty - Avoid Death Penalty - Life Plus 1,000 Years

CNN is reporting that Ariel Castro agreed today to plead guilty in return for the government taking the death penalty off the table.  Reportedly, Castro will receive life plus 1,000 years. From CNN: Ariel Castro agreed Friday in an Ohio courtroom to a plea deal in one of the most sensational kidnapping cases in recent memory. The deal, reached with prosecutors, would let him avoid the possibility of a death sentence and spare his alleged victims from having to testify at a trial. The plea deal recommends that he be sentenced to life in prison without parole -- that he never get a parole hearing. It could also mean that a trial Castro was facing on August 5 will not happen and he will not face the possibility of being sentenced to death. Judge Michael J. Russo went over the deal with Castro, and told him that he would be labeled as a sexual predator. Castro replied that he understood. At one point, he interjected that he was "also a victim as a child ..." to which Russo re

Halliburton Agrees to Plead Guilty to Destruction of Evidence in Connection with Deepwater Horizon Tragedy

The Department of Justice announced this week that Halliburton Energy Services, Inc. has agreed to plead guilty to charges related to the Deepwater Horizon investigation. According to the DOJ: Halliburton has signed a cooperation and guilty plea agreement with the government in which Halliburton has agreed to plead guilty and admit its criminal conduct. As part of the plea agreement, Halliburton has further agreed, subject to the court’s approval, to pay the maximum-available statutory fine, to be subject to three years of probation and to continue its cooperation in the government’s ongoing criminal investigation. Separately, Halliburton made a voluntary contribution of $55 million to the National Fish and Wildlife Foundation that was not conditioned on the court’s acceptance of its plea agreement. According to court documents, on April 20, 2010, while stationed at the Macondo well site in the Gulf of Mexico, the Deepwater Horizon rig experienced an uncontrolled blowout and rela

Bicyclist Pleads Guilty to Manslaughter

In what is being reported as a first in U.S. legal history, a bicyclist who hit and killed a pedestrian after riding recklessly has pleaded guilty to manslaughter in San Francisco. The Washington Post reports: Under the unusual plea deal last week, Chris Bucchere, 37, would not serve any jail time and instead would be sentenced to three years of probation and sentenced to 1,000 hours of community service in the death of Sutchi Hui of San Bruno, District Attorney George Gascon said. “Our goal is to send a message to cyclists about safety,” Gasc√≥n said. “Just because you are riding a bicycle doesn’t mean all bets are off. All of the rules of the road that apply to everyone else apply to you, too.” A software engineer from San Francisco, Bucchere had been riding recklessly and had run three red lights when he struck Hui as he and his wife crossed a street in the Castro District on March 29, 2012, prosecutors said. Hui died four days later of injuries from the collision. His wif

The Militarization of America's Police Forces - Part III

In this third and final post regarding recent stories focusing on the militarization of America's police forces and the resulting consequences, I look at an article that appeared in the Wall Street Journal this week. The story is entitled, "Rise of the Warrior Cop: Is it time to reconsider the militarization of American policing?" and is written by Radley Balko.  Mr. Balko is the author of "Rise of the Warrior Cop," published this month by PublicAffairs (Mr. Balko is also the author of the first article discussed in this three part blog series).  Below are a few excerpts from his Wall Street Journal piece. The number of raids conducted by SWAT-like police units has grown accordingly. In the 1970s, there were just a few hundred a year; by the early 1980s, there were some 3,000 a year. In 2005 (the last year for which Dr. Kraska collected data), there were approximately 50,000 raids. A number of federal agencies also now have their own SWAT teams, inc