- Interesting post from former FBI GC Jim Baker (“Mr. FISA, himself“) about the rarely used presidential power to make legal determinations that are binding on the entire executive branch and whether the current president’s twittering counts
- More interesting would be this newly posted job at the DOJ — Deputy Pardon Attorney, who will “assist the President in the exercise of the executive clemency power conferred to him by Article II, Section 2, of the Constitution”
- Even more interesting was that I looked in vain on Tuesday for a press release on the DOJ website about the Manafort conviction — nothing — apparently tax fraud by owners of a floral company in Pennsylvania was a much bigger deal
- Legal nerd fun — the Second Circuit, relying on legislative intent, ruled that a foreign person who does not reside in the United States cannot be liable for conspiracy under the FCPA if he is not in the category of persons covered by it
- Aaron one upped me in nerdom with this one regarding the False Claims Act — the Ninth Circuit ruled that the Supreme Court’s decision in Escobar — holding that even when a requirement is expressly designated a condition of payment, not every violation of that requirement gives rise to liability — did not overrule Ninth Circuit precedent and the question remains whether the false certification was relevant to the government’s decision to confer a benefit
- Finally, I love “experts say” articles — according to this one, “Getting defendants to ‘flip’ is key tool in going after the kingpin” — you don’t say?
Been a while — not sure “Roundup of White Collar News” is the catchy phrase we’re looking for after a month or so, but here we go:
- Interesting explanation of the Carter Page FISA application over at Lawfare
- The Attorney General announced the publication of the Cyber-Digital Task Force Report — Question: does anyone actually read a bureaucratic monstrosity like this?
- Good for the DOJ — firing reservists because they’re performing military duty is awful, not just illegal
- Good for the DOJ again — I can never get enough of health car fraudsters getting caught and being made to pay
- Blows my mind that we’re even having a debate as to whether a president’s conduct amounts to treason
- Very sad day for L.A. — Jonathan Gold, the man who informed me it was ok, even right, to put yellow mustard on my pastrami sandwich died today
Some highlights from recent weeks:
- Finally word that the Senate has confirmed a new AAG for the Criminal Division. But as this Financial Times piece points out, the Criminal fraud section still has seven out of its nine leadership positions unfilled.
- An announcement this past week of a new inter-agency task force focused on market integrity and consumer fraud
- An indictment last week in Seattle alleging a scheme to defraud food and beverage manufacturers by representing that a business would destroy unsaleable items or convert it into agricultural feed, but instead resell the products to discount grocery stores and other consumers
- Sentences in Alaska for members of a mail theft ring
Back on May 9, I suggested that a future post on whether the Fifth Amendment’s guarantee against self-incrimination applies to non-citizens abroad was forthcoming. Though I’ve been a bit distracted by trial the last few weeks, I have not forgotten that commitment.
As a general matter, foreign nationals outside the United States are not entitled to constitutional protections, including due process protections. This limitation might extend to non-citizens interrogated abroad by U.S. law enforcement, or non-citizens without status in the United States giving interviews to U.S. consular officials in an effort to obtain a visa. But there’s a good case for arguing that the right against self-incrimination embedded within the Fifth Amendment’s text would preclude the use of any incriminating statements given without procedural warnings in a subsequent criminal prosecution. Such an argument would not depend on an extraterritorial application of the Fifth Amendment, but rather a domestic one.
A few weeks ago, Justin flagged an Oregon case alleging money laundering through the Black Market Peso Exchange, one of the most successful and efficient laundering schemes in the world. The Black Market Peso Exchange is a trade-based money laundering technique commonly used by narcotics traffickers based in Colombia and Mexico. The central feature is the use of a money trader to ensure that the revenue from drug sales in the U.S. doesn’t actually cross any borders. Instead, those dollars are used to purchase any number of legitimate commodities from unsuspecting businesses on behalf of legitimate South American businesspersons whose legitimate imports are used to obtain pesos for the drug cartels.
This system involves several key advantages for the trafficker:
- Avoiding the risk of having large quantities of cash detected at international borders
- Avoiding the type of large cash deposits that trigger reporting requirements for financial institutions in many jurisdictions
- Achieving quick access to pesos
- Ron Rockwell Hansen, a former Defense Intelligence Agency case officer, was arrested in Seattle for spying on behalf of China — here’s the arrest warrant and complaint
- So many ways to commit fraud — here’s gift card fraud complete with reverse engineering, algorithms, and other techy Seattle things that lawyers don’t understand, as exemplified by the indictment
- Apparently, embezzling from a tribe is its own separate crime
- I love the Washington Post but they get this story about civil asset forfeiture completely wrong and in the most lazy way by simply repeating an attorney’s allegations — a post to follow about how asset forfeiture really works
- Another laugher from the Washington Post about the possible end of legalese — legalese will never die and we’ll have a future post on why
- The SEC is going after a lawyer here in Seattle who specializes in sham IPOs
- A new dawn for data privacy as the European General Data Protection Regulation (GDPR) went into effect yesterday — of course no one’s really ready for it, including the regulators
- This former Tennessee judge would make other criminals blush — sexual favors for favorable judicial treatment, paying off a witness, planting drugs in another witness’s car, and embezzling cash from the court’s drug treatment program
- Watch your mailboxes — these guys allegedly stole mail with personally identifiable info and then opened credit cards in the victims’ names
- Black Market Peso Exchange (BMPE) scheme in Oregon — the CEO of a company called Beauty Plus Global allegedly accepted deposits of laundered money from drug traffickers (an in-depth explanation of the BMPE can be found here on page 29)
- Lastly, Pfizer agreed to pay $24 million to resolve charges that it used an independent charity to pay illegal kickbacks to Medicare patients
- Pretend you’re an investment adviser for the second time and you’ll really, really go to jail
- Don’t claim Chinese furniture is Italian and post it on Craigslist — the Feds will find you, even in Alaska
- This money laundering defendant in the Eastern District of Washington allegedly posed as the victim’s brother over email
- A KeyBank employee in Tacoma allegedly kept customers’ deposits for himself
- One more time: you can’t sell bitcoin without a money transmitting license
- Lastly, Brian Moran was nominated last week as the new US Attorney for the Western District of Washington, drawing bipartisan support — how did this show fail?
Last week, I teased the continuation of a series of posts about the Fifth Amendment. That’s still coming, but I had to return to another common theme first. My preview came at the end of a post about both the Fifth Amendment and parallel proceedings, which I’d also written about before. The Inception-ing of the blog continues with yet another brief comment on parallel proceedings, this time inspired by a news item that Justin flagged in last week’s roundup: Deputy Attorney General Rosenstein gave a speech before the New York City Bar Association’s annual white collar crime conference. The whole speech is worth watching or reading, but the highlight of the address was DAG Rosenstein’s announcement of “a new Department policy that encourages coordination among Department components and other enforcement agencies when imposing multiple penalties for the same conduct.”
- Local, artisanal, illegal
- Someone’s looking for a new job — the DAG continued his speaking tour this week, with remarks at an FCPA conference and keynote speech at the 7th Annual White Collar Crime Institute
- Follow Paul Manafort’s example and register as a foreign agent, especially if your client is the Pakistani government
- Volunteering doesn’t pay — the treasurer for a youth hockey league in Alaska pled guilty to writing checks to herself
- The good part of the end of the Iran deal — more work for lawyers as foreign subsidiaries of U.S. companies have six months to leave Iran