Civil Rights Action Corporation

The End of the Spitzer Saga

2008-11-09T10:42:00.000-08:00

From Salon:

"Put this within the larger context that Spitzer saw prostitutes while actively seeking their imprisonment, and that Emperors was only attending to his requests, and the whole mess strikes me as a distortion of justice and a sickening waste of resources."

Also, a poignant description of Mr. Spitzer's prosecution efforts.

The Filip Memorandum: Does It Go Far Enough?

2008-09-11T05:23:00.000-07:00

With the McNulty memo finally dead, law.com asks if the new guidelines have gone far enough. Nope:

Beyond its treatment of privilege waivers, the other changes announced by
the Filip Memo are somewhat of a mixed bag. The memo clearly strengthens the
prohibition on prosecutors' consideration of a corporation's decision to
indemnify its employees. But other new protections it announces appear largely
illusory.For example, although the Filip Memo provides that prosecutors can no
longer consider a company's retention or discipline of culpable employees as a
factor affecting cooperation credit, it allows the government to continue to
consider retention or discipline as a factor affecting remediation. Since, under
the Filip Memo, both cooperation and remediation are factors affecting the
charging decision, it is unclear whether there is any significance to this
change. Similarly, although the Filip Memo generally prohibits the
government from considering whether a company entered into a joint defense
agreement, it also indicates that if a joint defense agreement prevents a
company from disclosing relevant facts, the failure to disclose will weigh
against the corporation receiving cooperation credit. Accordingly, companies
will either continue to be penalized for entering into joint defense agreements
or attempt to negotiate one-sided agreements that permit full disclosure by the
company while providing little protection to the individual employees who join
the agreement.

White Collar Justice

2008-08-29T19:07:00.000-07:00

We have blogged previously about this case and the misconduct of the DOJ. With this decision, the DoJ revised it's standards and the odious Thompson Memo. The WSJ Op/Ed has this to say:

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 their employees.

"...this does not mean that the Sentencing Guidelines for white-collar crimes should be a black stain on common sense."

2008-08-25T16:28:00.000-07:00

For these two brothers common sense prevailed:

Two brothers facing 30 years to life under federal sentencing guidelines for their roles in a securities fraud scheme received five-year sentences Thursday.
In departing downward from the minimum recommended sentence by 25 years, Eastern District of New York Judge Frederic Block issued a 21-page opinion -- the longest sentencing memorandum of the senior judge's career -- highly critical of the guidelines' "fetish with absolute arithmetic."

"[W]e now have an advisory guidelines regime where, as reflected by this case, any officer or director of virtually any public corporation who has committed securities fraud will be confronted with a guidelines calculation either calling for or approaching lifetime imprisonment," Block wrote in People v. Parris, 05-CR-636.

WSJ Blasts AGs

2008-07-31T20:34:00.000-07:00

Just like our post yesterday, the WSJ rails against the sleaze AGs we have in place. Nothing new here, but still worth a read:

Take one part ego, one part ambition and one part lawyer, mix it with an office that has few restraints on power, and you'll end up with the worst sort of state attorney general. Take Dan Greear, and you'll have a man at the front of a nascent electoral movement to change the formula.
...
His quest has become a case study in the opportunities, and pitfalls, of an upstart reformer challenging an incumbent attorney general who, like New York's
Eliot Spitzer, has cemented his position through populism and political patronage.
...
Mr. McGraw, in more than 14 years as West Virginia's attorney general, has been a pioneer in the practice of filing questionable lawsuits against big companies, secretly doling out the legal work to outside trial lawyer friends who reap millions in fees. Those lawyers then turn around and donate heavily to Mr. McGraw's re-election.

What is it with State AGs?

2008-07-31T14:11:00.000-07:00

I recognize many of the names on this list of AGs from wiki, all of them for saying or doing something the average man would be too embarrassed to do. They are as out of touch as academics. Take (please) AG Blumenthal of Connecticut. Yesterday’s NY Post quoted a released statement saying, "We are holding the credit-rating agencies accountable for a secret Wall Street tax on Main Street." The gist of his complaint is that municipal bonds aren’t rated as high as corporate debt.

What puts this bureaucrat in a position to second guess the ratings experts? Nothing. But it’s a lot easier to bully around rating agencies than shore up a balance sheet. It’s classic Spitzer: Make the corporations the bad guys and himself the good guy. No matter what the outcome is, claim victory. Move on to the next shakedown.

While Spitzer the AG is no more, his tactics live on in the other wannabes. The grandstanding, the bullying, and the shameless pandering is all part of the job description. There is nothing noble about a public servant in the AG role. They all seem to be using it as a role to burnish their populist cred and move onto the next gig. So what is the solution? Recognizing that AGs are just like any other politician, but with too much power, is a good first step. The unfortunate catch-22 of AGs: The only people who would want the position aren’t the kind of people you would want to be in that position. The lap dog press doesn’t go any deeper into the AG phenomenon than cutesy grammar articles about Attorneys General. Disgraceful.

Trading Thought Crimes - Never Trust the Discretion of a Prosecutor

2008-07-10T06:16:00.001-07:00

It should be obvious by now: The kind of people who become prosecutors are not the kind of people who can be trusted to use their discretion. One of the few sensible business reporters, John Carney, explains why going after rumor spreaders, even if they are right, is a waste of time:

We think that this would be a terrible misuse of prosecutorial power. In
the first place, there's precious little evidence that the supposed market
manipulation even occurred. Instead of evidence there's just pure speculation.
"Where there's smoke, there's fire," might be a nice soundbite but its not
evidence. Before we unleash the hounds of war on rumor mongers, shouldn't we
require more than this?

What's more, the costs of such investigations would likely be worse
than the alleged wrong-doing. In order to catch wrong-doers, prosecutors would
have to subpoena the private emails, instant messages and testimony of lots of
people who did no wrong at all. Each of the investigated would face huge legal
bills and know that their lives could be ruined by a prosecutor or a judge who
misreads a bad intention into an innocent email.

Tax Subsidies for Drug Dealers, Gangsters, Bureaucrats, and Terrorists

2008-07-07T13:31:00.000-07:00

Is there anyone with a functioning brain who thinks this is a good use of money? Great article from the LA Times:

The United States has been spending $69 billion a year worldwide for the last 40 years, for a total of $2.5 trillion, on drug prohibition -- with little to show for it. Is anyone actually benefiting from this war? Six groups come to mind.

The first group are the drug lords in nations such as Colombia, Afghanistan and Mexico, as well as those in the United States. They are making billions of dollars every year -- tax free.

The second group are the street gangs that infest many of our cities and neighborhoods, whose main source of income is the sale of illegal drugs.

Third are those people in government who are paid well to fight the first two groups. Their powers and bureaucratic fiefdoms grow larger with each tax dollar spent to fund this massive program that has been proved not to work.

Fourth are the politicians who get elected and reelected by talking tough -- not smart, just tough -- about drugs and crime. But the tougher we get in prosecuting nonviolent drug crimes, the softer we get in the prosecution of everything else because of the limited resources to fund the criminal justice system.

The fifth group are people who make money from increased crime. They include those who build prisons and those who staff them. The prison guards union is one of the strongest lobbying groups in California today, and its ranks continue to grow.

And last are the terrorist groups worldwide that are principally financed by the sale of illegal drugs.

Who are the losers in this war? Literally everyone else, especially our children.

The Shameful Treatment of Dr. Hatfill

2008-07-01T10:41:00.000-07:00

Dr. Hatfill is now $5.8 million dollars richer thanks to FBI incompetence.

In business cases it’s much easier for a prosecutor to dodge responsibility for press leaks, since white collar crime is a matter of degrees not absolutes. Not so in this case. They tried to nail the wrong guy.

In 2002, the FBI and then-Attorney General John Ashcroft described Hatfill, a former Army scientist, as a “person of interest” in the investigation into the post 9/11 anthrax attacks, which killed five people, sickened 17, and to this day remain unresolved. Hatfill sued the government for violating his privacy by leaking information to the press. In a statement Friday, his lawyers said: “As an innocent man, and as our fellow citizen, Steven Hatfill deserved far better.”

The political reasons the investigation focused on him should not be ignored. The WSJ Op/Ed page said he fit the profile of the perp they needed without offending of the interested groups:

The FBI's mad scientist theory also fit the agenda of the political left, which didn't want the trail of evidence to prove state-sponsorship of terror – particularly by Iraq. …But if anything, this fiasco shows the limits of bureaucratic law enforcement in fighting terror. True to form, Justice said in its statement that it "continues to deny all liability in connection with Dr. Hatfill's claims."

More Dirty Prosection Tricks - Faking Amnesty to Steal Incriminating Information

2008-06-23T13:14:00.001-07:00

After taking advantage of a Justice Department's Corporate Leniency Program, the shipping firm Stolt-Nielsen believed that the Feds would honor their end of the bargain. That meant there would be no prosecution of, “the company, its directors, officers, or employees for conduct prior to that date.” Instead, four months after the deal was done the Feds tried to back out and use the information they received during the leniency probe for prosecution.

Read the whole convoluted and sleazy story here.

Fortunately the company ended up “winning” - if you consider spending millions of dollars to get the Feds to follow their own agreement a victory:

But Indiana professor Roberts believes that corporations won an important victory in Stolt: "There are now some minimal standards that the government has to live up to, some expectation of due process and fairness."

Liebenberg, Wingfield's attorney, says the case sends a clear message to prosecutors. "By recognizing major contract and due process rights for any corporation that signs a deal," Liebenberg says, "this decision restores certainty to the program. It makes the government live up to the bargain that it strikes."

My question: why did it take a law suit to get the feds to follow the rules?

Criminalizing Failure - Bear Bigs Get Sherman McCoy Treatment

2008-06-20T13:26:00.000-07:00

A weak case indeed for the State and so they are giving both defendants the full Sherman McCoy treatment, including a full perp-walk with handcuffs. As is common with white-collar cases, the State plans on winning in the media and using the full resources of the taxpayer to crush the defendants into submission; no trial is planned.

The well-worn playbook for beating up white collar defendants is as follows: (1) toss everything but the kitchen sink into the indictment, not that the State plans on proving it; it’s just a bargaining tactic for the inevitable settlement, (2) details that were so flimsy (and these must be flimsy indeed if they were not included in the indictment) or unrelated to the case will be leaked to the media. It will be no surprise to see out of context email excerpts in the next few weeks related to affairs, high salaries, favoritism, etc., (3) If the defendants are rich or foolhardy enough not to settle, the State will certainly punish them for exercising their right to a trial. At this point both defendants’ careers on Wall Street are over, even if they are found not guilty. If they win they will be broke and unemployable – one way or another, the State always wins.

The Unindicted Co-conspirator Trick Pt. 2

2008-06-19T05:37:00.000-07:00

A prosecutor has many tools in his bag of dirty tricks. One we discussed in relation to Enron and AIG was the "unindicted co-conspirator trick” which allows the prosecution to block unfavorable witnesses from testifying for the defense. At the time we concluded, “The unindicted co-conspirator trick was so successful in the Enron, that we’re sure to see it used more frequently in the future.”

That didn’t take very long.

Today the WSJ Blog has a story about the feds using this tactic without even the pretense of justification:

According to a memo, filed today in Texas district court on behalf of the Islamic Society of North America and the North American Islamic Trust — both of which were named as “unindicted co-conspirators and/or joint venturers” in an appendix that was attached to the brief — the government allegedly violated the Fifth Amendment in providing no explanation for its description of them as unindicted co-conspirators. The organizations, rep’d by ACLU lawyers, argue that, under Fifth Circuit law, “no legitimate governmental interest is served by an official public smear of an individual when that individual has not been provided a forum in which to vindicate his rights.”

The relief? They want a Fifth Amendment violation declared by the court, an order expunging their names from any public document filed that identifies them as unindicted co-conspirators and an order enjoining the government from identifying them as unindicted co-conspirators in another context other than that specifically permitted by the court.

"In a free country a government agency should not be able to destroy people without due process. "

2008-06-13T05:09:00.000-07:00

Unfortunately,initiating a civil suit in might as well be a guilty sentence for someone who works in the securities industry. Although, the SEC cannot bring criminal charges like the Justice Department, they have just as much discretion to destroy someone. Here is what an innocent man had to say after the fact:

Once the SEC initiated a Wells Notice process against Mr. Leighton it became impossible for John Leighton to work in the securities industry. The SEC drained his life savings by making it unbearably expensive to defend himself. It tried to force him out of the securities industry and put his firm out of business before he had a chance to defend himself. While we are very pleased that truth has prevailed, the sad fact is that John Leighton lost three years of his life defending himself that he can never recover. He lost three years of work that he can never recover. He spent large amounts on defense costs and supporting his family while unemployed that he can never recover. His family has suffered financially and emotionally and can never fully recover from that. His good name has been smeared and he can only hope that this decision will over time restore his name.

Under our current system, you are guilty of SEC charges until you prove yourself innocent. That is wrong.

Guilty before proven innocent, thuggish prosecution tactics by the feds

2008-05-30T06:07:00.000-07:00

The Kaleys simply want to use their own money to retain counsel of choice to defend them at trial," said one of their attorneys, Howard Srebnick of Black Srebnick Kornspan & Stumpf in Miami. "The government is interfering by freezing their assets, including the equity in the home they purchased more than a decade ago, without giving the Kaleys an opportunity pre-trial to confront witnesses and present evidence to establish they have committed no crime."
The Kaleys set aside about $1 million to pay attorneys by taking out a second home mortgage and cashing certificates of deposit. But prosecutors claimed the money was ill-gotten gains. They charged Kerri Kaley stored the medical equipment in the family's garage. Her husband was indicted after she refused a plea deal. Prosecutors said he knew about the conspiracy and managed the illegal profits.

On the face of it, this charge is absurd. As one commentator at the WSJ law blog asks, “he defendants make a good argument under the 5th and 6th. How can the government freeze assets BEFORE proving they were “ill-gotten”? That’s crazy!” In other words, in these cases, guilt is assumed.

Like many other corruptions of civil liberties, asset seizures got their start in drug cases:

Miami criminal defense lawyer Jane Moscowitz, who’s representing Miami criminal defense lawyer Ben Kuehne against money laundering charges, says that bad rulings in drug cases “eventually come and pollute the prosecution of white-collar cases.”

The linked article also touches on the cost of defending white collar charges. Just for document review alone costs are over one million dollars. We touched on how costs can affect the decision to settle in earlier posts. What chance does an individual stand against the resources of the state? Almost none, which is why no matter what the charge is, the only options for most people, is to cut a deal. Almost no one can afford justice; any win would be a pyrrhic one.

More DOJ Idiocy - Now They Attack Lawyers

2008-05-19T11:51:00.000-07:00

Is there any Shakespeare line used out of context more than Dick in Henry Vi’s “first thing we’ll do, let’s kill all the lawyer”? In the context of the play it is clear the line is used to express the yearnings of the ignorant masses as they mistake anarchy for freedom. Dick the butcher sees the rights of man and the legal process, as standing in the way of his glorious rebellion. The line is a warning against anarchy; it’s not a society that anyone would want to live in.

What would happen if lawyers were not able to vigorously represent their client? If the State turned from prosecution suspected criminals to going after their lawyers? When the legal process is subverted for expediency then justice is perverted.

This is the case with Miami lawyer Ben Kuehne who has been indicted on money laundering charges by the DOJ. Since they can’t kill the lawyers, throwing them in jail must be their next best alternative:

Taking the podium, Kuehne waited for the rousing applause to die down, and then began his acceptance speech with a brief discourse on the importance of justice. “The U.S. is fortunate that our system of justice is premised on the ability of the people to rely upon the advocacy of lawyers,” he said. “Our constitution guarantees that right, a right that is at the core of our system of justice.”

Kuehne spoke not only to his audience of criminal defense lawyers, but also to his case, which some say sends a discouraging message to lawyers who take large fees for defending drug dealers. Roy Black, the lawyer who represented Ochoa Vasquez in the underlying drug case, made $5.2 million; Kuehne, hired by Black to vet the funds used to pay Black’s fee, made $200,000.

Kuehne went on to allude to John Adams, “a patriot who was called a traitor” for defending British soldiers who were charged after the Boston Massacre, and former Supreme Court Justice, Hugo Black, who said that a democratic society requires lawyers who will defend unpopular clients and causes. “We live in a time that is not kind to the justice system,” said Kuehne, “when the right to counsel is under attack, when those who oppose government overreaching are viewed as trouble. Today, it’s a recurring problem that, within government circles, lawyers are the problem.”

DNA is Not Infallible

2008-05-05T06:57:00.000-07:00

DNA is portrayed in movies and real life as the gold standard of evidence. DNA found at a crime scene is incontrovertible proof that the persons whose DNA matches the sample was there. But, what if the odds for certain DNA matches were really only 1 in 3?

This was the case in a recent California rape conviction of a 70-year old man for a crime committed over 30 years ago. Without an eyewitness, without a medical examiners testimony, without the other likely suspect having his DNA tested, and without the victim herself identifying John Puckett as her rapist, he was convicted based solely on flimsy evidence acquired through DNA data mining.

How could that happen? Simply, the prosecution suppressed the real odds and the jury was told the odds of a false match were considerably smaller than 1 in 3. They were told it was 1 in 1.1 million.

The LA Times summaries the semantic tap dancing the prosecution had to go through to secure a conviction:

The chance that two unrelated people will share the same 13 markers can be as remote as 1 in a quadrillion -- a number with 15 zeros. Because the match in Puckett's case involved only 5 1/2 genetic locations, the chance it was coincidental was higher but still remote: 1 in 1.1 million.

But Barlow thought this figure vastly exaggerated the strength of the evidence. It did not take into account how Puckett had been identified: through a search of a large database.

The general-population figures used by prosecutors portray the odds of matching crime-scene DNA to a single, randomly selected person.

But because database searches involve hundreds of thousands or millions of comparisons, experts say using the general-population statistic can be misleading.

Think of a lottery. If you buy a single ticket, your chances of hitting the jackpot are remote. If you buy many tickets, your odds improve with each purchase. In Barlow's view, the prosecution in effect bought hundreds of thousands of lottery tickets to find the match with Puckett. She contended that this greatly increased the odds of a match to an innocent person.

Barlow argued during pretrial hearings that the jury should be told about the recommendation of two leading panels of scientific experts, one convened by the National Research Council and the other by the FBI. Both committees settled upon a statistical remedy to adjust for the many individual comparisons made during a database search. It has been widely but not universally embraced by scientists.

In every cold hit case, the panels advised, police and prosecutors should multiply the Random Match Probability (1 in 1.1 million in Puckett's case) by the number of profiles in the database (338,000). That's the same as dividing 1.1 million by 338,000.

…

Through dueling experts, the prosecution and defense offered jurors a dizzying array of numbers to consider in weighing the DNA match.

A "likelihood ratio" presented by a prosecution expert placed the chance of a coincidental match at 1 in 1.7 million. A "combined probability of inclusion" put it at 1 in 152 billion.

The numbers all pointed to the virtual certainty that the DNA at the crime scene was Puckett's.

In an interview after the trial, Ranajit Chakraborty, the prosecution's DNA expert, told The Times that he generally favors giving jurors the database adjustment. He did not present an adjustment in this case because the judge, like most others, would not allow it.

The full article is well worth reading since it shows the danger of making convictions solely on DNA.

High-tech methods of crime scene analysis will make it important to be increasingly skeptical of the proof presented. It’s only a matter of time before DNA will be taken from every crime scene and analyzed. Around that time it will be the MO of the smart criminal classes to leave someone else’s DNA at the scene to throw the investigators off. The odds may be several million to one that DNA matches, but that shouldn’t mean guilt is certain.

Third Time's the Charm for Fake Terrorism Case?

2008-04-24T12:12:00.000-07:00

Way back in June of 2006 we reported that the Sears Tower terrorism case was a joke. This was pure entrapment by the feds as these guys were about as threatening as the Apple Dumpling gang. Here is what we said in 2006:

Despite the indictment mentioning Al Qaeda several times and Bin Laden for some reason, neither were involved in this alleged plot. There was a law entrapment, errr…enforcement officer who somehow convinced these boneheads they he was really part of Al Qaeda. He got them to swear allegiance to Al Qaeda and even got them to believe they would have a chance to blow up the Sears Tower.

They are so laughable inept that the idea they could be a threat to the Sears Tower is absurd. By the end of the indictment it is clear that this group has probably seen too many movies (just look at their materials list) and that even getting boots was a multi–step process that they could barely accomplish.

Unable to admit defeat, the US is dragging these guys to court for a third time, according to today’s New York Times. The story is here, and the best quote from it is below:

“These are the types of prosecutors Las Vegas is built on,” Mr. Turley said. “They keep returning to the table with the same losing hand.”

Sleaze in LA Federal Prosecutors Office

2008-04-22T10:02:00.000-07:00

Since bureaucracies do not operate with free market incentives, there is no objective way to measure their success or failure. Instead of being measured by profits, bureaucracies measure success by their size and reach. Unlike a profit maximizing business, a bureaucracy wants bloat. Efficiency is a dirty word to a bureaucracy. If they get too efficient they might cease to matter, or, even worse, they might not get to suck up as many tax dollars as before.

So a bureaucracy – any bureaucracy - will rely on proxies for efficiency and end up with workers gaming the measured metrics.

In this case, the prosecutors office concentrated on easy cases to hit their numbers. It remains unclear how many weak cases were pushed through for the sake of quotas:

U.S. Atty. Thomas P. O'Brien is facing sharp criticism from prosecutors within his office who say he is pressuring them to file relatively insignificant criminal cases to drive up statistics that make the office eligible for increased federal funding.

The prosecutors said O'Brien's effort to increase filings amounts to a quota system in which lawyers face possible discipline and other career consequences if they fail to achieve their numbers.
...
The disgruntled prosecutors in Los Angeles say they are now spending an exorbitant amount of time working on less significant cases -- mail theft, smaller drug offenses and illegal immigration -- to reach quotas. They cited the recent disbanding of the office's public integrity and environmental crimes section, a unit with a history of working on complex police corruption and political corruption cases, as evidence of a shift toward high-volume, low-quality prosecutions.

"It's all about the numbers," one prosecutor said.

One former supervisor put it this way: "I can't remember how they sugarcoated it, but the feeling around the office was, if you got your quota, then you could work on your real cases without being hassled."

"Lawsuit challenges prosecutors' immunity"

2008-04-14T13:26:00.000-07:00

The Supreme Court has ruled that "absolute immunity" is needed so that prosecutors -- and judges -- can do their jobs without fear of legal retaliation.

But a California case that the high court is considering taking could open a back door for such lawsuits.

It’s about time!

These are the same people who will not hesitate to aggressively prosecute a questionable case for their own ends. This is the same group who will rail against the integrity of their targets in the press to try and force a settlement before trial. These vindictive people will go out of their way punish those who exercise their right to a trial by jury or who refuse to become an agent of the state.

And they do this with immunity that only rewards and encourages this behavior.

It’s about time they are held accountable for their actions, just like they demand of everyone else.

"We need to be more skeptical."

2008-04-10T05:16:00.000-07:00

A great interview with Dallas DA Craig Watkins in Reason. Read the whole thing, but the best quotes are below:

We need to guard against being a rubber stamp for every case the police department sends our way. We need to be more skeptical. We also need to train prosecutors to think about their jobs in a different way. We shouldn’t be judging young prosecutors by how many convictions they win, or by how many people they put in jail.
...
But take eyewitness identification. It’s been proven time and time again in studies that eyewitness identification is extremely unreliable. Yet police, prosecutors, and juries still tend to put a lot of faith in them. And these same studies show there are some basic steps you can take make eyewitness identifications more reliable, but that also would result in fewer identifications, and fewer prosecutions. But if there are procedures available to increase the validity of a form of evidence, and police and prosecutors aren’t using it, then they’re deliberately increasing the chances of a wrongful conviction in order to get more convictions. And defendants aren’t getting a fair trial.

Judge Weinstein Supports Informed Juries

2008-04-08T05:30:00.000-07:00

This post and a mess of others on Volokh discuss the new trial granted in US v. Polizzi due to the fact that the jury was not informed of the penalties of the crime. Good.

As we have argued in the past, ignorance is not a basis for law. If a conviction can only be made by keeping juries in the dark then the law is probably not a good one.

(“[M]any disagreements [between judges and juries] are explained by the fact that compared to judges, juries appear to require a stronger case by the prosecution to convict the defendant; or by the fact that juries infuse community notions of justice into their verdicts.” (citing, inter alia, Kalven and Zeisel, supra)). Above all, the experience of trial judges is that the jury is among our most conservative institutions. When in doubt we should trust its judgment, as did those who adopted the Sixth Amendment.

The Fed’s Sleazy Tactics– The unindicted co-conspirator trick

2008-03-28T10:40:00.000-07:00

This dirty tactic was on full display during the Enron trial when the prosecution named nearly 100 co-conspirators. Normally, these are people who the prosecution believes are involved with a crime but has not yet charted them. However, during in the Enron trial the prosecution named everyone who might have exonerating evidence as a co-conspirator, which kept the witnesses in limbo and prevented them from testifying for the defense.

The unindicted co-conspirator trick was so successful in the Enron, that we’re sure to see it used more frequently in the future. Most recently it was used in the trail of Robert Graham, formerly of General Re. The charged lawyer says that the one man who can clear him has been named as an unindicted co-conspirator and cannot testify. Unsurprisingly the prosecutors will not give him immunity to get the full story. Something is rotten when the referees have a dog in the fight:

"It is absolutely clear that Rob was acting in good faith, trying to do the right thing, sharing his concern with the No. 1 lawyer in the entire company, a man who Rob had every reason to trust and to respect," Vinegrad told jurors.

McCaffrey, who left Gen Re in 2005, was named by the government as an unindicted co-conspirator. McCaffrey says that he would have testified as a defense witness if he had been granted immunity. But prosecutors denied the request.

Innocent Until Proven Guilty? Not to the Feds

2008-03-26T05:32:00.000-07:00

Banks, brokerages, casinos, and other finance institutions are required to file Suspicious Activity Reports on their clients for ”…known or suspected criminal offenses, at specified thresholds, or transactions over $5,000 that they suspect involve money laundering or violate the Bank Secrecy Act“. With harsh penalties for failure to file, these financial institutions rat on their customers at the drop of a hat.

This had led to a proliferation of SAR filings, especially since 9/11.

Eliot Spitzer, the former NY Governor, is the higher profile victim so far of the Suspicious Activity Report flood. A cash deposit greater than $10,000 requires filing a “currency transaction report” so, as anyone with a brain would suspect, people try to avoid that hassle by depositing smaller amounts. Unfortunately, banks consider deposits under this amount “structuring,” as in, the deposit is designed to be under the limit and is suspicious. In other words, damned if you do and damned if you don’t. In practice, the majority of SARs are filed for this reason. The consequences are borne by the banks customers.

Since nearly anything can trigger an SAR filing, the Feds can pick and choose who to go after. Moreover, there doesn’t have to be any proof of criminal activity for the Feds to go in and snatch the funds. Aren’t you innocent until proven guilty? Not when it comes to your own money. But remember, it’s for your own good citizen!

Forbes magazine has two great articles on SARs and some example cases:

The young couple hauled in $40,000 in cash at their Greek wedding. They knew if they deposited $10,000 or more at once, the bank would have to file a "currency transaction report" and they'd have to wait in line to provide information. So they deposited their loot in smaller lumps. Soon, they were being investigated by Internal Revenue Service criminal agents and paying Chicago attorney Robert E. McKenzie $500-plus an hour to help them avoid seizure of their cash or worse. Carving up deposits to avoid a currency report is "structuring." Structuring is a felony. "It's scary. If you know of the $10,000 requirement and attempt to avoid it, you've committed a crime," says McKenzie, who convinced the irs to let the newlyweds go.

You don't have to be dealing drugs, cheating on your taxes or paying prostitutes to run afoul of the structuring law. Even if the money is from a legal source and used legally, the government can charge you with a crime and/or demand you forfeit cash. By contrast, with money laundering, the cash has to be related to an underlying crime.

A 'Wire' war vs. the drug war

2008-03-20T20:34:00.001-07:00

An excellent and sensible Op/Ed by the creators of HBO's "The Wire."

If enough members of the public signal their disapproval of a law by refusing to enforce it, they might bring about its repeal. That's a happy thought, as long as it is not taken too far. As a rule, it still is better to pass laws in legislatures than in courtrooms.

It is also a good idea, before releasing people for non-violent offenses, to check to see whether they have histories as violent offenders and tendencies to do it again. Many do.

Yet, there is much that we should do to help today's at-risk youth and small-time criminals avoid becoming big-time criminals. For example, we can support neighborhood programs, many of which are church-based, that do a good job of putting kids on the right road. After all, the one thing that is so unsettling about the wasted lives portrayed on "The Wire" is our knowledge that they're not all fiction.

HL Mencken on Police

2008-02-26T20:29:00.000-08:00

From Notes on Democracy:

What the common man longs for in this world, before and above all his other longings, is the simplest and most ignominious sort of peace: the peace of a trusty in a well-managed penitentiary. He is willing to sacrifice everything else to it. He puts it above his dignity and he puts it above his pride. Above all, he puts it above his liberty. The fact, perhaps, explains his veneration for policemen, in all the forms they take—his belief that there is a mysterious sanctity in law, however absurd it may be in fact.

A policeman is a charlatan who offers, in return for obedience, to protect him ( a ) from his superiors, ( b ) from his equals, and ( c ) from himself. This last service, under democracy, is commonly the most esteemed of them all. In the United States, at least theoretically, it is the only thing that keeps ice-wagon drivers, Y. M. C. A. secretaries, insurance collectors and other such human camels from smoking opium, ruining themselves in the night clubs, and going to Palm Beach with Follies girls…Here, though the common man is deceived, he starts from a sound premise: to wit, that liberty is something too hot for his hands---or, as Nietzsche put it, too cold for his spine.