• 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?

I’m assuming there weren’t any big legal news items that we missed in our absence . . .

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

I was thinking about double jeopardy yesterday. Not the Trebek kind, though that is my favorite tv show. Instead, I was thinking about the somewhat enigmatic statement in the Fifth Amendment to the U.S. Constitution that no person “be subject for the same offence to be twice put in jeopardy of life or limb.” My musings were prompted by yesterday’s news that New York Attorney General Eric Schneiderman has asked New York’s legislature to amend the state’s double jeopardy law to ensure that state prosecutors can go after persons whose conduct violates both federal and state law but who may be pardoned by the President after being prosecuted for federal crimes. I’ll provide some context below, but I don’t want to leave you in suspense about my view: I’m troubled by this.

Continue Reading Dual Sovereignty for $1200, Alex

Did you know that, as of 2008, there’s a good chance the federal government can prosecute you for fraud against the U.S. whenever it wants to, regardless of the statute of limitations? Does that seem alarming to you?

Same here.

The government can do this because of a federal statute called the Wartime Suspension of Limitations Act. The Act says that when the U.S. is at war or “Congress has enacted a specific authorization for the use of the Armed Forces,” the statute of limitations for any offense involving fraud or attempted fraud against the U.S. or one of its agencies is suspended until five years after the termination of hostilities.

Continue Reading Frightening Facts about Fraud and the Forever War

  • This month’s issue of the Federal Lawyer focuses on white collar crime, and includes this helpful article on subpoenas.
  • Deputy Attorney General Rod Rosenstein visited Seattle this week for a press conference stressing DOJ’s continued commitment to catching the killer of a federal prosecutor tragically murdered here in 2001. One month to the day after 9/11, Assistant U.S. Attorney Tom Wales was working at his computer at about 10:40 p.m. Someone familiar with his home and work habits evaded the motion-sensor-based floodlights in his yard and shot him through the window. Over almost 17 years of active investigation, the government has pursued a variety of theories. If the murder was related to his work, Mr. Wales would be the first federal prosecutor killed in the line of duty in American history.
  • A new podcast investigating the murder, Somebody Somewhere, launched on January 30th.
  • If you’re thinking about the Supreme Court’s decision to leave in place a D.C. Circuit decision about standing in data breach cases, there’s a nice discussion of it on this week’s episode of the National Security Podcast.
  • Just a week after Valentine’s Day, the U.S. Attorney’s Office in Portland indicted a dating site fraudster for stealing, and then laundering, money from would-be dates with the help of some catfish co-conspirators.

 

John Roberts and Elena Kagan
John Roberts and Elena Kagan

You’re relieved. After a long investigation concerning some troubling conduct throughout the Pacific Northwest that may have led to the United States being defrauded by one of its contractors, you’ve brought this stressful period to a close. You’ve entered a Non-Prosecution Agreement with the U.S. Attorney’s Office for the Western District of Washington. Perhaps the agreement even includes a civil settlement as well, resolving several parallel investigations.

But not two weeks later, an Assistant U.S. Attorney (“AUSA”) for the District of Oregon informs you that you’re the target of a criminal probe concerning the exact same conduct. How is this possible? As unfair as it seems, it has long been the position of federal agencies and DOJ components that other DOJ components are not bound by an agreement unless the agreement provides as much.

Consider the case of Prime Partners, a Swiss asset management firm accused of aiding U.S. taxpayers in New York and elsewhere of evading their federal income taxes. In August, the U.S. Attorney’s Office for the Southern District of New York entered a Non-Prosecution Agreement with Prime Partners in exchange for extraordinary cooperation with the Office’s investigation and the firm’s institution of substantial changes to its practices. The agreement states:

It is further understood that this Agreement does not bind any other federal, state, or local prosecuting authorities other than this Office and the [DOJ] Tax Division. If requested by Prime Partners, this Office and the Tax Division will, however, bring the cooperation of Prime Partners to the attention of such other prosecuting offices or regulatory agencies.

Parties caught up in such a situation should consider a few things:

  • Beware of the kind of limiting language in the Prime Partners agreement, which is common in government settlements.
  • Insist on language in any plea or other settlement agreement that to the effect that it binds other federal agencies, or at least all other components of the Department of Justice.
  • If you find yourself caught up in the kind of bind I describe at the beginning, consider an appellate challenge.

Continue Reading *Absolutely Startling*: Settlements With the Government

Upjohn's Friable Pills photoOn January 13, 1981, the Supreme Court decided Upjohn Co. v. United States. Thirty-seven years later, it’s hard to think of a judicial decision that has had a more significant effect on internal investigations. The Court’s opinion made no mention of any particular warning procedure, instead focusing on the application of the attorney–client privilege to corporate clients. But it prompted the near-universal practice of lawyers who are conducting internal investigations advising corporate employees that they represent the company, rather than the employee, and that the company may waive the privilege at any time. There are countless articles highlighting the importance of providing the Upjohn warning while conducting internal investigations. I won’t rehash those points here. Instead I want to introduce a few fun factoids about the case itself, and the players involved in litigating it.

Continue Reading This Day in White Collar History: The Supreme Court Decides <em>Upjohn</em>