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March 28 2014

jerroldcnbu

High Court Deals Major Blow To Criminal Defendants

High Court Deals Major Blow To Criminal Defendants more+ more+ less- Embed To embed, copy and paste the code into your website or blog: The U.S. Supreme Court?s 6-3 decision in Kaley v. United States, 571 U.S. __, Case No. 12-464 (Feb. 25, 2014) essentially finds that the grand jury should have the last word. The Kaley case involved the right to counsel when there has been a pretrial seizure of assets. The criminal defendant suffered a major blow in Kaley. Not only did the Supreme Court undercut a criminal defendant?s right to counsel, the Supreme Court solidified the power of the grand jury. Brian and Kerri Kaley were indicted by a grand jury for their alleged involvement in a scheme to transport stolen medical devices across state lines to sell them for a profit and laundering the proceeds. Id. at 4. The accusations centered on the Kaleys' alleged theft of medical devices from a hospital (the Kaleys argued that they had merely taken old medical devices which were going to be replaced and thrown away by the hospital). To pay for the lawyer of their choice for representation at trial, the Kaleys obtained $500,000 from a home equity loan. Prosecutors obtained an ex parte order (invoking 21 U.S.C. § 853(e)(1), which authorizes courts to freeze an indicted person?s assets prior to trial if the assets would be subject to forfeiture upon conviction) freezing the money the Kaleys intended to use to pay their lawyer, leaving the Kaleys without the ability to fund their lawyer for the anticipated trial. The Kaleys unsuccessfully sought a hearing to challenge the asset freeze by arguing that the case against them was baseless. Id. at 5. The district court did not allow such a challenge, which would have been focused on whether the grand jury had probable cause to indict the Kaleys. The Eleventh Circuit Court of Appeals agreed. On appeal, the U.S. Supreme Court framed the issue as whether the district court?s refusal to hold a pretrial hearing challenging the grand jury?s determination of probable cause violated the Kaleys? Fifth Amendment right to due process and Sixth Amendment right to freedom of choice of counsel. The Supreme Court held that it did not, relying in substantial part on United States v. Monsanto, 491 U.S. 600 (1989). In Monsanto, the Supreme Court had held that prosecutors may seize assets before trial that a defendant intends to use to pay an attorney, so long as probable cause exists to believe that the properly will ultimately be proved forfeitable. Id. at 615. The decision functionally limits a criminal defendant?s constitutional right to freedom of choice of counsel when there has been a pretrial asset freeze under 21 U.S.C. § 853(e)(1). Specifically, the court held that a criminal defendant who challenges an asset freeze ordered under 21 U.S.C. § 853(e)(1) is not constitutionally entitled to contest that freeze by challenging the grand jury?s determination of probable cause to believe that the defendant committed http://www.dwicriminaldefenseattorneys.com/377-comedian-chris-kattan-charged-with-dui-5 the crime charged. The opinion is troubling. First, its practical effect and related constitutional peril ? it limits the ability of accused people to litigate pretrial seizure of their assets, even when those seized assets would be used to implement hiring counsel of one?s choice. The ?[r]ight to select counsel of one?s choice? is ?the root meaning of the constitutional guarantee? of the Sixth Amendment. Kaley thus stands to handicap accused people?s ability to prepare a defense and fight the charges at trial. And it limits the power of accused people to challenge prosecutors and the conclusions of grand juries ? grand juries, as courts and commentators have long noted, would ?indict a ham sandwich? if prosecutors asked. Chief Justice John Roberts, in his strongly worded dissent, found the majority?s decision troubling and stated ?few things could do more to ?undermine the criminal justice system?s integrity? ... than to allow the Government to initiate a prosecution and then, at its option, disarm its presumptively innocent opponent by depriving him of his counsel of choice ? without even an opportunity to be heard.? The decision is also concerning because of the majority?s suggestion that its ruling merely prevented accused persons from ?relitigating? ?a grand jury?s prior determination of probable cause to believe they committed the crimes charged.? Slip Op. at 1. Of course, an accused person has no ability to "litigate" probable cause before the grand jury (which is convened in secret) in the first instance. Interestingly, Chief Justice Roberts, in the dissent, stated that ?Common sense ? tells us that secret decisions based on only one side of the story will prove inaccurate more often than those made after hearing from both sides.? The majority, on the other hand, reinforced the power of the grand jury decision and referred to decisions of grand juries as ?inviolable grand jury finding? and ?the grand jury?s singular role.? The most concerning aspect of the opinion in Kaley is what effect it will have on bond hearings wherein the facts underlying the indictment are often challenged and the government?s likelihood of obtaining a conviction is addressed. An opinion solidifying the probable cause finding by a grand jury will likely have a detrimental effect on a defendant?s ability to obtain bond.
For the original version including any supplementary images or video, visit http://www.jdsupra.com/legalnews/high-court-deals-major-blow-to-criminal-28899/

March 27 2014

jerroldcnbu

Challenging Field Sobriety Tests

Challenging Field Sobriety Tests Embed To embed, copy and paste the code into your website or blog: Prosecutors often rely heavily on a defendant?s poor results on field sobriety tests to prove impairment in a case involving operating a vehicle under the influence (OVI). The field sobriety tests http://www.akduidefense.com/nba-suspends-new-jersey-nets-coach-jason-kidd-for-dui-arrest-19/ are supposed to evaluate whether the defendant was impaired. However, the results of the tests are often inaccurate, unreliable and inconclusive regarding the driver?s state of sobriety. Walk-and-turn One-leg stand The tests are administered on the roadway under a variety of conditions to people whose medical and personal histories are unknown to the officer. The horizontal gaze nystagmus (HGN) test analyzes nystagmus, the involuntary jerking that occurs naturally when you rotate your eyes to the peripheral edges of the sockets. Under the influence of alcohol and certain drugs, nystagmus often becomes more exaggerated and happens at lesser angles. To conduct the HGN test, the officer slowly moves a pen or flashlight horizontally in front of your face and asks you to track the object with your eyes. If the officer moves the object too fast or misjudges the angles of your eyes at the point that nystagmus occurs, the conclusions are flawed. In addition, a congenital birth condition, head injury or legal prescription, such as seizure drugs, may be responsible for pronounced nystagmus. The walk-and-turn and one-leg stand tests are designed to assess divided attention ? namely, that you can listen and follow directions while performing a physical task. The walk-and-turn test involves taking nine heel-to-toe steps along a straight line, turning on one foot and returning in the same way in the opposite direction. To perform the one-leg stand, you are told to stand while holding one foot about 6 inches off the ground and counting by thousands until the officer tells you to stop, after 30 seconds. Uneven, sloping, rocky or icy terrain can put you off-kilter. Your footwear ? such as high heels, flip-flops or uncomfortable shoes ? can affect your ability to walk and balance. You may have medical issues ? perhaps an inner ear infection, arthritis or a back injury ? that make walking and standing difficult. Traffic noise may make it hard to hear the officer?s instructions, and the stress of standing on a busy highway or a dark, deserted back road may distract you from satisfactorily following directions.
For the original version including any supplementary images or video, visit http://www.jdsupra.com/legalnews/challenging-field-sobriety-tests-51375/
jerroldcnbu

Access To Cellular Phone Records By Defense Counsel

Access to Cellular Phone Records by Defense Counsel more+ Embed To embed, copy and paste the code into your website or blog: In many criminal cases, cellular telephone records are an invaluable resource.  These records may shed light on whether an alleged victim or witness communicated with someone of importance in a case, and when.  There are procedures and statutes in place that provide law enforcement officials a mechanism to obtain cellular phone records.  But how can defense counsel seek and obtain cellular phone records?  The answer is not an easy one. New Jersey?s broad discovery rules would seemingly require that criminal defendants be given http://50.28.63.141/~acc237/michaelhawkinsdui.com access to cellular phone records when they are relevant to the pending charges, or are essential for the defendant to be able to challenge the credibility of the allegations being made by the alleged victim. The New Jersey Supreme Court has spoken recently about the broad range of discovery available to the accused in a criminal case,  particularly observing that our discovery rule, R. 3:13-3 , is not the exclusive source of a defendant?s right to pre-trial discovery: Because of the meaningful role that the disclosure of evidence to a defendant has in promoting the search for truth, pretrial discovery in criminal trials has long received favorable treatment in this state.   To advance the goal of providing fair and just criminal trials, we have adopted an open-file approach to pretrial discovery in criminal matters post-indictment. As codified, the New Jersey Court Rules presently demand that the State will provide an indicted defendant with pretrial access to the evidence against him.  Indeed, consistent with the view that broad pretrial discovery beyond even that which the Court Rules require advances the quest for truth, it is well recognized that ?[i]n general, a defendant in a criminal case is entitled to broad discovery.? State v. D.R.H., 127 N.J. 249, 256 (1992) (citing R. 3:13-3) (acknowledging court?s ability to provide for discovery, beyond that required by court rule, as justice demands). State v. Scoles, 214 N.J. 236, 251-252 (2013)(emphasis added); see also State v. Marshall, 148 N.J. 89, 269 (?New Jersey courts have the inherent power to order discovery when justice so requires.?), cert. denied, 522 U.S. 850 (1997). Cellular phone records are clearly accessible to the State through a Communications Data Warrant (CDW) authorized by N.J.S.A. 2A:156A-29 .  However, CDW warrants are available only to law enforcement agencies.  If the State seeks to obtain cellular phone records, it would be required to demonstrate to an authorized CDW judge: "specific and articulable facts showing that there are reasonable grounds to believe that the record or other information pertaining to a subscriber or customer of an electronic communication service or remote computing service or communication common carrier is relevant and material to an ongoing criminal investigation [ N.J.S.A. 2C:156A-29(e) ]." Communications data warrants are not subject to the more restrictive procedures and enhanced protections of the New Jersey Wiretapping and Electronic Surveillance Control Act, which include a showing of necessity because normal investigative procedures have failed.  See N.J.S.A. 2A:156A-10 .  Instead, the standard for a CDW  pursuant to N.J.S.A. 2A:156A-29(e) requires only a showing of reasonable grounds to believe that the record or other information pertaining to a subscriber or customer of an electronic communications server is relevant and material to an ongoing criminal investigation.  State v. Finesmith, 408 N.J. Super. 206 (App. Div. 2009). When a criminal defendant satisfies the same legal standard that would entitle the State to obtain cellular records through a CDW warrant, defense attorneys should not hesitate in filing a motion with the Court seeking access to the necessary cellular records.  The Court can be presented with the option of proceeding in one or both of the following two manners: Issue an Order compelling the alleged victim to obtain her own cellular phone records for the dates in question from her carrier, and to provide true and accurate copies to counsel for the defendant, AND/OR Issue an Order compelling the State to file a proper application for a Communications Data Warrant, and to furnish true and accurate copies of all documents received in response to the CDW Warrant to counsel for the defendant. In the event the Court were to deny such a motion, a defendant may seek to interpose a constitutional attack on the CDW statute because of its failure to afford criminal defendants a mechanism to obtain the records it authorizes law enforcement agencies to obtain.
For the original version including any supplementary images or video, visit http://www.jdsupra.com/legalnews/access-to-cellular-phone-records-by-defe-95739/

March 26 2014

jerroldcnbu

The Destruction Of Arthur Andersen And The Use Of Dpas In Fcpa Enforcement

The Destruction Of Arthur Andersen And The Use Of DPAs In FCPA Enforcement more+ Embed To embed, copy and paste the code into your website or blog: The debate over the efficiencies of Deferred Prosecution Agreements (DPAs) continued this week with additional criticism of their use. I have argued that DPAs are in a corporation?s interest because they can bring certainty to the conclusion of an enforcement action and allow it to make remedial changes and move forward. However yesterday I came across an article by Larry Katzen, a former partner at Arthur Andersen and author of ?And You Thought Accountants were Boring ? My Life Inside Arthur Andersen.? Katzen?s piece is entitled ?A Business World Massacre ? What Can Happen ?When Government Needs a Scapegoat? and it details the destruction of the firm after it?s guilty verdict surrounding the Enron scandal. Katzen articulates the human costs for the total wipeout of the firm and sets out clearly what can happen when a company goes to trial and sustains a guilty verdict. I received permission to reprint his article in full, which is below: ============================================================================================================================================================================================================================== A Business World Massacre ? What Can Happen ?When Government Needs a Scapegoat  It remains one of the greatest travesties in the history of American business: In 2001, the 85,000 employees of one of the world?s largest accounting firms began losing their jobs in droves. Their employer had become tainted by its loose association with Enron Corp., a financial house of cards that was imploding and taking with it billions of dollars in employee pensions and shareholder investments. In 2002, accounting firm Arthur Andersen was convicted of charges related to Enron?s fraudulent practices. The charges had nothing to do with the quality of their auditing ? or any of Enron?s illicit practices. The conviction was appealed, and in 2005, the U.S. Supreme Court struck it down in a unanimous vote. But the damage had already been done. To date, despite millions of records being subpoenaed, there is no evidence Arthur Andersen ever did anything wrong. Still, perceptions are everything: Most people are not aware that the accounting firm, which led the industry in establishing strict, high standards, became a government scapegoat. When I speak to groups across the country, I ask the following questions. Below are the typical responses I receive ? and the actual facts. 1.     What do you remember about Arthur Andersen? Typical Response: They were the ones that helped facilitate the Enron fraud. They deserved what they got. Fact: Arthur Andersen was the largest and most prestigious firm in the country. It was considered the gold standard of the accounting profession by the business community. 2.     For what was Arthur Andersen indicted? Typical Response: They messed up the audit of Enron and signed off on false financial statements. Fact: They were indicted for shredding documents. These documents were drafts and other items that do not support the final product. All accounting firms establish policies for routinely shredding such documents. 3.     How long was it between the Enron blowup and when Arthur Andersen went out of business? Typical Response: One to three years. Fact: The largest accounting firm in the world was gone in 90 days. 4.     Was the indictment upheld? Typical Response: Yes, that is why they went out of business. Fact: No. The Supreme Court overruled the lower court in a 9-0 decision, and came to the conclusion within weeks, making it one of their quickest decisions ever. 5.     How many people lost their jobs as a result of the false accusations? Typical Response: Have no idea, but the partners got what they deserved. Fact: Eighty-five thousand people lost their jobs and only a few thousand were partners. Most were staff people and clericals who made modest sums of money. 6.     Who benefited from Arthur Andersen going out of business? Typical Response: Everyone ? we finally got rid of those crooks and made a statement to the rest of business http://dwicriminaldefenseattorneys.com to operate ethically. Facts: It was not the Arthur Andersen people; they lost their jobs. It was not the clients; they had to go through the stress and expense of finding a new auditing firm. It was not the business world in general: It now has fewer firms from which to choose and rates increased. It was their competitors who benefited ? they got Andersen?s best people and clients and were able to increase their rates and profitability. 7.     What accounting firms now have ex Arthur Andersen partners playing leadership roles in their firms? Typical Response: None Facts: The ?big four,? all the large middle-tier firms and many small firms have former Arthur Andersen partners in leadership positions. Finally, many members of the new Public Accounting oversight Board (PCAOB), which oversees these firms, now have former Arthur Andersen people involved in reviewing the quality of these firms. ============================================================================================================================================================================================================================== Was Arthur Andersen guilty of a crime? The jury said yes but the US Supreme Court said no. Were they a part of one of the biggest corporate frauds of all-time? Perhaps. Did Arthur Andersen make mistakes? Yes. Did the firm deserve to get wiped out as a result of document shredding? Are you kidding? The destruction of Arthur Andersen is foremost on the mind of every General Counsel (GC), Chief Executive Officer (CEO) and Board of Director whose company is facing the decision of whether or not to fight in court any charges related to Foreign Corrupt Practices Act (FCPA) violations. Some have argued that DPAs pervert the course of justice but from where I sit, having seen Arthur Andersen destroyed before our collective eyes, the better practice is to enter into a DPA. Was it really in the interest of the Department of Justice (DOJ), or even the People of the United States, who after all the DOJ represent, to throw 85,000 people out of work for the document shredding engaged in by the firm?s Houston office? Some commentators seem to argue that if a company violates the FCPA, they should get what they justly deserve. But does it serve any interest to wipeout an entire company? Finally, for those who want to tell company management to man up and go to trial, GCs, Chief Compliance Officer (CCO), Board members and others need to remember their legal obligations to their companies and shareholders and not be cowboys going to the last gunfight. Put another way, do you want to be the first GC, CCO, Board member or CEO who tells the DOJ that you are over-reaching and we are going to trial and lose everything like Arthur Andersen did?
For the original version including any supplementary images or video, visit http://www.jdsupra.com/legalnews/the-destruction-of-arthur-andersen-and-t-00941/
jerroldcnbu

Medical Research Fraud And Hhs's Office Of Research Integrity: Watching The Watchdog

Medical Research Fraud And HHS's Office Of Research Integrity: Watching The Watchdog more+ Embed To embed, copy and paste the code into your website or blog: Even for those who carefully follow legal developments in the health care fraud arena, the Department of Health and Human Service?s Office of Research Integrity (?ORI?) is an agency that rarely appears on the radar. According to its website, ORI ?oversees and directs Public Health Service (PHS) research integrity activities,? including the integrity of research projects funded by agencies such as the National Institutes of Health (?NIH?) and the Centers for Disease Control and Prevention . ORI?s primary functions include such tasks as ?monitoring? investigations that research institutions conduct when there are allegations of data falsification, and proposing administrative actions against medical researchers found to have fabricated the results of their studies. In a world in which massive civil and criminal health care fraud cases have become almost routine, ORI?s authority and role appear decidedly modest. In fact, although ORI?s website lists seemingly egregious ?case summaries? of research misconduct dating back to at least 2008, those same case summaries show that individual scientists who falsified critical research data have managed to settle with ORI by agreeing to exclusions from government contracting for limited periods of time, or, in some instances, through the still lesser penalty of having their research ?supervised? pursuant to ORI-approved plans. Against the backdrop of the decidedly more aggressive enforcement actions that have come to the fore in health care cases, it is hardly surprising that ORI?s regulatory role has thus far attracted little notice. Recently, however, ORI has become the focus of attention far exceeding anything it previously encountered.  In fact, two recent developments have cast a bright and valuable spotlight on ORI and its functions. The first indication of the heightened attention being given to ORI arose on February 10, 2014, when Senator Charles Grassley (R-Iowa) sent ORI a letter inquiring about a specific case of research misconduct at Iowa State University . The case involved research into experimental HIV vaccines, and in particular, the discovery that one of the project?s scientists improperly injected test animals with human antibodies to create the false appearance that the vaccines had created resistance to certain strains of HIV. Senator Grassley?s letter asserted that the HIV vaccine project had received NIH grants totaling $19 million, and that the researcher?s acts of misconduct had resulted in these substantial government awards. Senator Grassley further noted that in December 2013, ORI entered into a resolution with the researcher in which the penalties consisted of only a three-year ban on receiving federal contract funds and advising the Public Health Service. Observing that ?[t]his seems like a very light penalty for a doctor who purposely tampered with a research trial and directly caused millions of taxpayer dollars to be wasted on fraudulent studies,? Senator Grassley went on to ask a series of pointed questions about the HIV vaccine research project in particular, and ORI?s practices in general. Most notably, Senator Grassley inquired whether ORI had done anything to attempt to recoup the $19 million in federal grant money that had been used to fund the fraudulently-conducted research, and whether ORI had referred information about the research fraud to ?any other government agency for further inquiry? ? meaning, presumably, whether ORI had referred the matter for criminal prosecution. On March 5, 2014, the Acting Director of ORI responded to Senator Grassley?s letter with a six-page letter of his own.  With respect to the question of whether ORI had attempted to recoup the funds provided for the fraudulently-conducted study, ORI?s letter did not address whether any such recoupment efforts had been made. Instead, ORI explained that HHS ?may seek to recover. . . funds spent in support of activities that involved research misconduct,? but then indicated that because ORI actions are against researchers rather than institutional recipients of government funds, ORI?s role is limited to notifying the agencies that provided the funds in question (in this case, NIH) so that they can decide whether to seek recoupment. Regarding the question of whether ORI had referred its findings of fraudulent research to any other government agency, ORI?s letter indicated that notification had been made to NIH, but did not discuss whether there was also a criminal referral. Given the nature of these answers, it is perhaps not surprising that a spokesperson for Senator Grassley criticized ORI?s response , asserting that ORI had not answered many of Senator Grassley?s questions. The second recent development relating to ORI was in some ways even more striking than the first.  On February 25, 2014 ? just over two weeks after the date of Senator Grassley?s inquiry letter ? David Wright, who was then the Director of ORI, sent a remarkably caustic resignation letter to HHS?s Assistant Secretary for Health.  In that resignation letter, which was provided to Science magazine and published on March 12, 2014, Dr. Wright lambasted what he referred to as the ?remarkably dysfunctional HHS bureaucracy,? complained about a lack of resources, and labeled the Office of the Assistant Secretary for Health (under which ORI operates) as ?secretive, autocratic and unaccountable.? Dr. Wright?s resignation letter further questioned whether the structure of HHS causes ORI to operate in an ?intensely political environment? that undermines its proper functioning. Finally, as if his comments were not already dramatic enough, Dr. Wright concluded his letter by announcing his plan to publish a ?daily log? that reflects his ?experiences and observations? as the director of ORI. What, then, to make of all this sturm und drang surrounding ORI? The most obvious answer is that in the short term, the agency appears to be in turmoil, attacked from within and scrutinized from without in a way that can only make its functioning more challenging. But the larger question here is whether ORI will respond to the criticisms it has faced by adopting an increasing degree of aggressiveness, be it through more criminal referrals, heightened efforts to claw back research funds, or otherwise harsher penalties. For medical researchers accused of misconduct, the institutions for which they work, and the attorneys who represent them, the answers to these questions may well prove critical. (Photo credit: PAHO/WHO)
For the original version including any supplementary images or video, visit http://www.jdsupra.com/legalnews/medical-research-fraud-and-hhss-office-15141/

March 25 2014

jerroldcnbu

Sec Brings New Charges Against Sac Analyst, Highlighting Risks To Employees

SEC Brings New Charges Against SAC Analyst, Highlighting Risks to Employees more+ Embed To embed, copy and paste the code into your website or blog: On Thursday, the SEC announced another set of insider trading charges against an employee of CR Intrinsic, an affiliate of the now-infamous hedge fund advisor SAC Capital Advisors. According to the SEC complaint, CR Intrinsic analyst Ronald A. Dennis received multiple non-public tips about Dell, Inc. and Foundry Networks, Inc. from a friend, which he then passed along to two portfolio managers. The portfolio managers immediately placed trades based on this inside information, allowing CR Intrinsic to reap millions in improper gains and avoid significant losses. Pursuant to a settlement with the SEC, Dennis has been barred from working in the securities industry and forced to pay $200,000 in penalties (to learn more about insider trading violations and the penalties associated with them, please visit our Securities Law Primer ). While the SEC?s case against SAC founder Steve A. Cohen , and the criminal charges against SAC itself , have garnered far more attention than the case against Dennis, this case represents a wake-up call to employees that they may be subject to liability even if they are not headline-grabbing senior employees or the masterminds of a fraudulent scheme: as an analyst, Dennis was a relatively low-level employee with no direct trading authority, and many steps removed from Cohen or other SAC leaders. His case underscores that such employees face stark choices if their corporate culture encourages law-breaking: they can either ?go along? with that culture and face liability, or take a stand by refusing to participate in illegal activity, leaving the entity, and/or blowing the whistle either internally or externally. Too often, employees chose the former route, either because it represents the ?path of least resistance? or because there are financial incentives to engage in or condone wrongdoing. Our hope is that the advent of the SEC Whistleblower Program will help balance the playing field between these options by creating a financial incentive to do the right thing. It may be too late for Dennis, but it?s not too late for other employees in a similar position.
For the original version including any supplementary images or video, visit http://www.jdsupra.com/legalnews/sec-brings-new-charges-against-sac-analy-29344/
jerroldcnbu

The Destruction Of Arthur Andersen And The Use Of Dpas In Fcpa Enforcement

The Destruction Of Arthur Andersen And The Use Of DPAs In FCPA Enforcement more+ Embed To embed, copy and paste the code into your website or blog: The debate over the efficiencies of Deferred Prosecution Agreements (DPAs) continued this week with additional criticism of their use. I have argued that DPAs are in a corporation?s interest because they can bring certainty to the conclusion of an enforcement action and allow it to make remedial changes and move forward. However yesterday I came across an article by Larry Katzen, a former partner at Arthur Andersen and author of ?And You Thought Accountants were Boring ? My Life Inside Arthur Andersen.? Katzen?s piece is entitled ?A Business World Massacre ? What Can Happen ?When Government Needs a Scapegoat? and it details the destruction of the firm after it?s guilty verdict surrounding the Enron scandal. Katzen articulates the human costs for the total wipeout of the firm and sets out clearly what can happen when a company goes to trial and sustains a guilty verdict. I received permission to reprint his article in full, which is below: ============================================================================================================================================================================================================================== A Business World Massacre ? What Can Happen ?When Government Needs a Scapegoat  It remains one of the greatest travesties in the history of American business: In 2001, the 85,000 employees of one of the world?s largest accounting firms began losing their jobs in droves. Their employer had become tainted by its loose association with Enron Corp., a financial house of cards that was imploding and taking with it billions of dollars in employee pensions and shareholder investments. In 2002, accounting firm Arthur Andersen was convicted of charges related to Enron?s fraudulent practices. The charges had nothing to do with the quality of their auditing ? or any of Enron?s illicit practices. The conviction was appealed, and in 2005, the U.S. Supreme Court struck it down in a unanimous vote. But the damage had already been done. To date, despite millions of records being subpoenaed, there is no evidence Arthur Andersen ever did anything wrong. Still, perceptions are everything: Most people are not aware that the accounting firm, which led the industry in establishing strict, high standards, became a government scapegoat. When I speak to groups across the country, I ask the following questions. Below are the typical responses I receive ? and the actual facts. 1.     What do you remember about Arthur Andersen? Typical Response: They were the ones that helped facilitate the Enron fraud. They deserved what they got. Fact: Arthur Andersen was the largest and most prestigious firm in the country. It was considered the gold standard of the accounting profession by the business community. 2.     For what was Arthur Andersen indicted? Typical Response: They messed up the audit of Enron and signed off on false financial statements. Fact: They were indicted for shredding documents. These documents were drafts and other items that do not support the final product. All accounting firms establish policies for routinely http://www.akduidefense.com shredding such documents. 3.     How long was it between the Enron blowup and when Arthur Andersen went out of business? Typical Response: One to three years. Fact: The largest accounting firm in the world was gone in 90 days. 4.     Was the indictment upheld? Typical Response: Yes, that is why they went out of business. Fact: No. The Supreme Court overruled the lower court in a 9-0 decision, and came to the conclusion within weeks, making it one of their quickest decisions ever. 5.     How many people lost their jobs as a result of the false accusations? Typical Response: Have no idea, but the partners got what they deserved. Fact: Eighty-five thousand people lost their jobs and only a few thousand were partners. Most were staff people and clericals who made modest sums of money. 6.     Who benefited from Arthur Andersen going out of business? Typical Response: Everyone ? we finally got rid of those crooks and made a statement to the rest of business to operate ethically. Facts: It was not the Arthur Andersen people; they lost their jobs. It was not the clients; they had to go through the stress and expense of finding a new auditing firm. It was not the business world in general: It now has fewer firms from which to choose and rates increased. It was their competitors who benefited ? they got Andersen?s best people and clients and were able to increase their rates and profitability. 7.     What accounting firms now have ex Arthur Andersen partners playing leadership roles in their firms? Typical Response: None Facts: The ?big four,? all the large middle-tier firms and many small firms have former Arthur Andersen partners in leadership positions. Finally, many members of the new Public Accounting oversight Board (PCAOB), which oversees these firms, now have former Arthur Andersen people involved in reviewing the quality of these firms. ============================================================================================================================================================================================================================== Was Arthur Andersen guilty of a crime? The jury said yes but the US Supreme Court said no. Were they a part of one of the biggest corporate frauds of all-time? Perhaps. Did Arthur Andersen make mistakes? Yes. Did the firm deserve to get wiped out as a result of document shredding? Are you kidding? The destruction of Arthur Andersen is foremost on the mind of every General Counsel (GC), Chief Executive Officer (CEO) and Board of Director whose company is facing the decision of whether or not to fight in court any charges related to Foreign Corrupt Practices Act (FCPA) violations. Some have argued that DPAs pervert the course of justice but from where I sit, having seen Arthur Andersen destroyed before our collective eyes, the better practice is to enter into a DPA. Was it really in the interest of the Department of Justice (DOJ), or even the People of the United States, who after all the DOJ represent, to throw 85,000 people out of work for the document shredding engaged in by the firm?s Houston office? Some commentators seem to argue that if a company violates the FCPA, they should get what they justly deserve. But does it serve any interest to wipeout an entire company? Finally, for those who want to tell company management to man up and go to trial, GCs, Chief Compliance Officer (CCO), Board members and others need to remember their legal obligations to their companies and shareholders and not be cowboys going to the last gunfight. Put another way, do you want to be the first GC, CCO, Board member or CEO who tells the DOJ that you are over-reaching and we are going to trial and lose everything like Arthur Andersen did?
For the original version including any supplementary images or video, visit http://www.jdsupra.com/legalnews/the-destruction-of-arthur-andersen-and-t-00941/

March 24 2014

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Amendments To Welfare & Institutions Code Section 8102 Change Petition And Disposition Procedure

Amendments to Welfare & Institutions Code Section 8102 Change Petition and Disposition Procedure more+ Embed To embed, copy and paste the code into your website or blog: Overview: Welfare and Institutions Code section 8102 requires a law enforcement agency to confiscate all firearms or other deadly weapons owned or controlled by someone who has been placed on a mental health hold under Welfare and Institutions Code section 5150. Recent amendments make important changes to the petition and disposition procedure. Upon release of a person placed on a mental health hold, the law enforcement agency has 30 days to petition the court for a hearing to determine whether the return of a firearm or other deadly weapon would likely endanger the person or others. Additionally, the law enforcement agency must inform the person that he or she has 30 days to respond to confirm his or her desire for a hearing, and that failure to respond will result in a default order forfeiting the weapons. Alternatively, if the person requests a hearing, and after the hearing the court determines that returning the weapons would likely endanger the detained individual or others, the agency may request an order forfeiting the deadly weapons and allowing the agency to dispose of them. The 2013 amendments to Welfare and Institutions Code section 8102 include: Under new subsections (e), (g) and (h): in the event of either an entry of a default order or after the court determines that the return of the weapon would likely endanger the detained person or others, the law enforcement agency is required to hold the weapon(s) for 180 days from the date of entry of default or grant of the petition, pursuant to Penal Code section 33875. Previously, Section 8102 was silent as to the amount of time the agency was required to hold the weapons before disposing of them. During the 180-day hold period, where the person is prohibited from possessing the weapons, they may contact the law enforcement agency to facilitate the sale or transfer of the weapon(s) to a licensed dealer pursuant to Penal Code section 33870 ? which prevents the destruction of the weapon(s). Upon confiscation, the peace officer or law enforcement agency is now required to provide notice to the detained person of the procedure for the return of the weapon(s), ANDmust also notify the individual of the procedure for sale, transfer or destruction of the firearm or other deadly weapon which has been confiscated. Training Points: Default orders and orders following grant of a petition should be updated to include a 180-day hold clause, during which time the person may contact the agency for a transfer or sale pursuant to Penal Code section 33870 to prevent the destruction of the weapon(s). Department policies and procedures should also be updated to reflect this change. Receipts/Notices of Rights with respect to confiscated firearms should be amended to comply with Section 8102 to notify the individual of the procedure for sale, transfer or destruction of the firearm or other deadly weapon which has been confiscated. Agencies should consider development and dissemination of training materials to inform all personnel of these important changes.
For the original version including any supplementary images or video, visit http://www.jdsupra.com/legalnews/amendments-to-welfare-institutions-cod-44462/
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Dea Raids And Other Tools For Illegal Dispensary Eradication

DEA Raids and Other Tools for Illegal Dispensary Eradication more+ Embed To embed, copy and paste the code into your website or blog: California cities that have chosen to ban or limit marijuana dispensaries seem to have found some common tools for ousting those dispensaries continuing to operate illegally. The first city actions seeking to force the removal of illegal dispensaries involved civil lawsuits seeking temporary restraining orders. Typically, the dispensaries would ignore the first court orders to close and force the cities to pursue contempt actions. Although the dispensaries would typically close once faced with potential jail time if convicted of contempt, this avenue proved unsatisfying for citizens seeking a quicker resolution to the drug sales in their neighborhoods. The City of San Bernardino was the first to publicly move away from the temporary restraining order/contempt path when it closed a number dispensaries using abatement warrants. Abatement warrants proved more satisfying to a city?s desire for quick closures. Executing these warrants, however, can require a large amount of staff time from multiple departments. Until recently, the DEA assisted some California cities with ?raids? that would close dispensaries. This assistance, however, seemed to all but disappear as Colorado and Washington passed their recreational use laws. Many California cities will be pleased to learn that the DEA has not disappeared entirely. According to this Los Angeles Times article , the DEA recently assisted the City of Los Angeles in closing dispensaries operating in violation of LA?s limitation on dispensaries. Another less known tool in the toolbox, and maybe one of the most effective, is a letter campaign to property owners in the city. Many property owners simply do not understand the state of California law when it comes to leasing to marijuana dispensaries. Many cities see a lower rate of illegal dispensaries if they take the preemptive measure of mailing informational letters out to commercial property owners explaining that using property in their city for the sale or distribution of marijuana is illegal and can result in severe sanctions.  
For the original version including any supplementary images or video, visit http://www.jdsupra.com/legalnews/dea-raids-and-other-tools-for-illegal-di-18607/

March 23 2014

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Sec May Have A New Weapon To Combat Insider Trading

SEC May Have a New Weapon to Combat Insider Trading more+ Embed To embed, copy and paste the code into your website or blog: The Second Circuit may have granted the Securities and Exchange Commission (SEC) a new weapon against insider trading. In SEC v. Contorinis, the court endorsed an expansive theory of disgorgement, allowing the SEC to require the defendant to disgorge funds over which he never had ownership or control. Joseph Contorinis is a former Jeffries & Company, Inc. portfolio manager currently serving a six-year prison term for securities fraud and conspiracy related to his use of confidential information about an upcoming corporate acquisition. Using his investment control over Jeffries' Paragon Fund, Contorinis engaged in insider training on behalf of the Paragon Fund. In securities enforcement, the SEC may seek monetary penalties, injunctions, an officer-and-director (or other) bar and/or disgorgement. The purpose of the equitable remedy of disgorgement is to deter violations of federal securities law and deprive wrongdoers of their ill-gotten gains. Historically, disgorgement is generally restricted to amounts actually received by defendants through their own wrongdoing. Contorinis, however, was ordered to disgorge not only the approximately $400,000 in personal gains made from his alleged insider trading activities, but the $7.2 million in insider trading profits made by the Paragon Fund. In affirming the penalty, the majority opinion held that an insider trader may be required to disgorge the full measure of profits secured by his or her illegal actions. The court likened the situation to a defendant who may be required to disgorge the gains realized by a tippee who profited by insider information received from the defendant. Therefore, because Contorinis secured a benefit through his fraud and directed where those profits were to go, he was also required to disgorge the gains of his favorite beneficiary, the Paragon Fund. Dissenting Judge Denny Chin asserted that the application of disgorgement in the case was improper and fundamentally inconsistent with the basic principle of the remedy. He also suggested that the majority's opinion moves disgorgement from its remedial purpose to create a fundamentally punitive ? and limitless ? remedy. The potential for this case to affect the application of future disgorgements ? including cases outside the context of insider trading ? remains to be seen. No other circuit has yet addressed this precise question, and related issues have resulted in a mix of vague decisions in other federal courts. Disgorgement is not the only remedy available to the SEC. The agency has a vast arsenal of other equitable and punitive remedies available to enforce securities laws. Violators also face criminal prosecution, as well as private lawsuits. Organizations must therefore ensure their employees understand that trading on or sharing material information before it is available to the general public is against the law. WeComply's online course on Avoiding Insider Training explains what insider trading entails and how to comply with the law's requirements.
For the original version including any supplementary images or video, visit http://azure1.jdsupra.com/legalnews/sec-may-have-a-new-weapon-to-combat-insi-16641/
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Bolivian Anti-corruption Chief's Extortion Conviction Shows How Interpol Red Notice Abuse Can Arise

Bolivian Anti-corruption Chief's Extortion Conviction Shows How INTERPOL Red Notice Abuse Can Arise more+ Embed To embed, copy and paste the code into your website or blog: Humberto Roca's story may seem unusual to Western minds, but it is all too familiar in the world of INTERPOL abuse.  Roca was the owner of a Bolivian airline company called Aerosur Airlines, and as a wealthy business owner who was critical of Bolivia's government, was charged with "unjust enrichment" as his business was expropriated by the Bolivian government.   Roca fled Bolivia and in 2012, he was granted asylum in the United States. As of today's date, Roca's name is not published on INTERPOL's wanted list (a majority of Red Notice subjects' names are also not made public).  However, numerous media outlets reported that he was, in fact, wanted by INTERPOL for the charges. Roca's case satisfies the formula that has been established by those countries seeking to nationalize their economies: Target an industry for nationalization,  expropriate the assets of the most successful private businesses,  charge the owners and/or board of directors with financial crimes,  issue arrest warrants against those individuals,  obtain INTERPOL Red Notices against them;  force the individuals to remain focused on their own defenses rather than challenging government action, repeat.  As reported here by Jay Weaver of the Miami Herald, Roca was later targeted by Bolivian National Police Col. Mario Fabricio Ormachea Aliaga for extortion.  U.S. officials brought federal charges against Ormachea, who offered to have the Bolivian charges against Roca dropped in exchange for $30,000.  Ormachea actually came to the U.S. and was caught accepting $10,000 in initial payments from Roca in an FBI-led sting. Ormachea was convicted by a Miami jury last week on two counts of extortion.  That's great for Roca, who no doubt feels vindicated.  Although the extortion conviction does not compel a dismissal of Bolivia's charges against Roca, it certainly provides solid ground for a Red Notice challenge, if one remains outstanding. But you have to wonder what would have happened if Ormachea had never come to the U.S. in furtherance of his extortion plan?  And what if Roca's only redress would have been in the Bolivian http://www.akduidefense.com court system? Or if Roca had fled to another country with a more corrupt law enforcement or judicial system?  Roca's vindication would have been a long time coming, if it ever arrived at all, and that is the position in which many Red Notice subjects find themselves.  
For the original version including any supplementary images or video, visit http://www.jdsupra.com/legalnews/bolivian-anti-corruption-chiefs-extorti-90106/

March 22 2014

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Halifax Reportedly Settles Landmark Stark Case

Halifax Reportedly Settles Landmark Stark Case more+ Embed To embed, copy and paste the code into your website or blog: According to minutes filed in the U.S. District Court for the Middle District of Florida, Halifax Hospital Medical Center (Halifax) and the U.S. Department of Justice (DOJ) have reached a settlement in the pending False Claims Act case in which Halifax is accused of entering into financial relationships with medical oncologists and neurosurgeons in violation of the Stark Law. You can read more about the Halifax case in our December 12, 2013 , and January 23, 2014 , issues of the Health Law Update. While neither party has officially commented on the settlement, a number of sources are reporting the settlement amount will be around $85 million. The settlement in the Halifax case, which was originally brought by a whistleblower on behalf of the government, will follow on the heels of the judgment against Tuomey Healthcare System, Inc. (Tuomey) for Stark violations that exceeded $230 million in September. See the October 3, 2013 , issue of the Health Law Update. The Halifax court granted partial summary judgment in favor of the DOJ in November, finding that the incentive bonuses paid to medical oncologists took into account the volume or value of the physician?s referrals to the hospital for designated health services (DHS) because fees for DHS were included in the bonus pool. The jury trial set to begin this week would have decided three things: (1) whether Halifax?s employment agreements with three neurosurgeons violated the Stark Law on fair market value and commercial reasonableness grounds; (2) the amount of damages under the Stark Law related to the prohibited financial relationships with the medical oncologists and the neurosurgeons, if applicable; and (3) whether Halifax had the requisite intent to establish a False Claims Act violation. The settlement likely will not resolve another set of allegations raised by the relator against Halifax relating to unnecessary inpatient admissions. The DOJ did not intervene in this portion of the relator?s case, which is set for a jury trial in July. Hospitals across the country have wisely been taking note of the new high-stakes world of False Claims Act cases predicted on the Stark Law in light of Tuomey.
For the original version including any supplementary images or video, visit http://www.jdsupra.com/legalnews/halifax-reportedly-settles-landmark-star-40506/

March 21 2014

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Red Notice Newsletter - March 2014

Red Notice Newsletter - March 2014 more+ more+ less- Embed To embed, copy and paste the code into your website or blog: Welcome to the March 2014 edition of Red Notice, a publication of Akin Gump Strauss Hauer & Feld LLP. This month on the anticorruption front, a New York court orders two former Siemens executives to pay record civil penalties in a bribery case involving the company?s Argentina business; Canada prosecutes former executives from an engineering giant for bribery in Libya; and a European chemical company pays nearly USD 50 million to settle bribery charges in Norway, only to face a follow-on investigation in India.  In export control and sanctions enforcement news, two international banks reach settlements with the U.S. government to settle allegations that they violated U.S. sanctions; a California computer parts manufacturer illegally exports technology to a Russian national, leading to a USD 115,000 fine; and the government nabs, respectively, a dual U.S.-Iranian citizen who attempted to smuggle military information to Iran and a Chinese national who tried to illegally transport U.S.-controlled electronic devices to China. In developments in export control and sanctions law, the U.S. Office of Foreign Assets Control (OFAC) had a busy month, implementing both the Foreign Sanctions Evaders List and announcing Iran General License D-1 regarding access to internet services and equipment. Thank you as always for reading Red Notice. ANTICORRUPTION DEVLEOPMENTS - Former Siemens Executives Agree to Pay USD 1.5 Million to Settle FCPA Case In February 2014, two former senior executives of Siemens AG (?Siemens?), the European engineering conglomerate based in Germany, were ordered to pay record fines for participating in a decade long USD one billion contract bribery scheme with the Argentine government. A New York federal court entered a default judgment against Stephan Signer and Ulrick Bock, both German nationals, ordering them to pay a civil penalty of USD 524,000 each, the largest amount assessed to an individual for a Foreign Corrupt Practices Act (FCPA) violation. Bock was further ordered to pay USD 413,957 in disgorgement of profits that resulted from the illegal activities. The combined total of civil penalties and disgorgement levied against Signer and Bock is approximately USD 1.46 million. The second highest FCPA civil penalty levied against an individual was imposed upon former Siemens board member Uriel Sharef in April 2013 for his role in the scheme. Prosecutors allege that Signer, Block and other Siemens executives paid Argentine government officials roughly USD 100 million in bribes for more than a decade (1996-2007) to secure a contract to produce Argentine national identification cards in a scheme that was worth nearly USD one billion. In 2008, Siemens, along with three of its subsidiaries, agreed to a settlement with the U.S. Department of Justice (DOJ) and U.S. Securities and Exchange Commission (SEC) to pay a USD 450 million criminal penalty and disgorge USD 350 million in wrongful profits. Siemens also settled with German prosecutors, agreeing to pay a total of ?596 million (USD 854 million). In total, Siemens paid nearly USD 1.6 billion to U.S. and German authorities to settle charges related to the Argentine contract scheme and other bribery schemes. Read the SEC?s release on the executives? penalties, and coverage at Law360. Canadian Prosecutors Charge Two Former Engineering Executives with Bribery Related to Gadhafi In late January 2014, Canadian authorities announced charges against the former executive vice president and the former comptroller of Montreal-based engineering firm SNC-Lavalin Group Inc. (?SNC?) for allegedly bribing members of Moammar Gadhafi?s late regime in Libya. According to the Royal Canadian Mounted Police, former SNC vice president and head of the international construction division Sami Bebawi funneled CAN 118 million to a British Virgin Islands-based company in order to make bribe payments to Saadi Gadhafi, the former Libyan leader?s son. Stephane Roy, SNC?s former comptroller, is alleged to have maintained a Toronto apartment for Saadi Gadhafi. Both Bebawi and Roy are charged with bribery of a foreign official and fraud under Canadian law. Bebawi was considered an important hire for SNC when he joined the company in 1998, touring the Middle East and North Africa shortly after his arrival on a promotional tour with SNC?s chief executive officer. During Bebawi?s tenure with SNC, the company won contracts in Libya and Algeria worth upwards of several hundred million Canadian dollars. Read more about the charges at The Globe and Mail. European Regulators Fine Chemical Company USD 48 Million for Bribery Scheme in India, Libya and Russia; India Initiates Follow-on Investigation In January 2014, Norwegian chemical company Yara International ASA (?Yara?) was fined USD 48 million by Norwegian officials for participating in a scheme to bribe government officials in India, Libya and Russia over five years. Yara admitted that a Swiss subsidiary facilitated nearly USD 12 million in bribes to government officials, including to a Libyan oil minister from the Gaddafi regime. Yara also admitted to making corrupt payments to suppliers in Russia, and Yara allegedly paid a former senior Indian government official to secure business in India. The company uncovered the scheme and reported it to the Norwegian authorities in 2011. Norwegian authorities have also indicted three former executives in the scheme. Indian authorities continue to investigate the bribery scheme and its potential connection to a joint venture. Read the coverage at India?s Business Standard. EXPORT CONTROL AND SANCTIONS ENFORCEMENT - Luxembourg Financial Institution Pays USD 152 Million to Settle Allegations that It Allowed Iranian Entities to Avoid U.S. Sanctions Clearstream Banking SA (?Clearstream?), Luxembourg, agreed to a settlement of USD 152 million with the OFAC in late January 2014 regarding allegations that it violated the Iranian Transaction and Sanctions Regulations by exporting financial services to the Central Bank of Iran (CBI). Clearstream held an account with a U.S. financial institution through which CBI held a beneficial ownership interest in 26 securities within the United States, valued at over USD 2.8 billion. Clearstream had informed U.S. regulators in late 2007 and early 2008 that it had ended all business with Iranian clients, but in fact it merely altered the way in which it held accounts for CBI, obscuring CBI?s financial interest in the securities. The total base penalty amount for the apparent violations was USD 5.626 billion. Read the OFAC enforcement action , the U.S. Department of the Treasury press release and coverage by The Wall Street Journal. Russian Bank Fined Over USD 9 Million for Alleged Illegal Fund Transfers In 2008 and 2009, Joint-Stock Commercial Bank ?Bank of Moscow? of Moscow, Russian Federation, engaged in numerous funds transfers processed to or through the United States?totaling over USD 41 million?for or on behalf of Bank Melli Iran ZAO of Moscow Russia (?BMI Russia?). In 2007, OFAC designated BMI Russia as a Specially Designated National (SDN) pursuant to Executive Order 13382 , which blocks the assets of proliferators of weapons of mass destruction and their supporters. Bank of Moscow?s funds transfers in question failed to specifically identify BMI Russia, Iran or any other red flag indicators. OFAC alleged Bank of Moscow committed 69 violations of the Weapons of Mass Destruction Proliferations Sanctions Regulations and Executive Order 13382 and set the base penalty amount at over USD 14 million. Bank of Moscow agreed to a settlement of the charges totaling almost USD 9.5 million. Read the OFAC enforcement action and Law360 coverage . Illegal Export of Technology to Russian Engineer Leads to USD 115,000 Fine for California Computer Parts Manufacturer On February 24, 2014, the Bureau of Industry and Security (BIS) announced that it had reached a settlement of USD 115,000 with California computer parts manufacturer Intevac, Inc. (?Intevac?) over allegations that the company illegally released export-controlled manufacturing technology (drawings and blueprints) to a Russian national who was employed as an engineer by the company. Intervac had applied for a deemed export license upon discovering the initial release of sensitive information to the employee, but failed to stop additional releases of information while the application was pending. BIS considered Intervac?s knowledge of these continued violations as an aggravating factor in determining the amount of the penalty. Intervac was also charged with an unauthorized transfer of controlled technology to its subsidiary in China. Read the BIS press release . Dual U.S.-Iranian Citizen Indicted for Attempting to Ship Sensitive Military Information to Iran Mozaffar Khazee, a dual U.S.-Iranian citizen, was indicted on January 21, 2014 for attempting to ship proprietary information regarding military jet engines and the U.S. Air Force?s F35 Joint Strike Fighter program to Iran. Khazee had stolen the information from a defense contractor that employed him as an engineer. U.S. Customs and Border Protection (CBP) discovered the scheme in November, 2013 when it inspected a package intended to be shipped by Khazee from the United States to Iran. Khazee claimed that the package contained household goods, but it actually included sensitive technical manuals, specification sheets and other similar information. The indictment charges Khazee with two counts of interstate transportation of stolen property. Each charge carries a maximum term of imprisonment of 10 years and a fine of up to USD 250,000. Read the DOJ press release and CNN coverage . Chinese National Indicted for Attempt to Smuggle U.S. Controlled Electric Devices See Kee Chin, aka Alfred Chin, a Chinese national, was indicted on February 19, 2014 for attempting to smuggle accelerometers?electromechanical equipment used in smartphones, laptops and aircraft?to China. The items are designated on the United States Munitions List and controlled for export under the International Traffic in Arms Regulations. Chin conspired with a Canadian buyer to purchase the devices in the United States and to transport them from Canada to China, where they would likely be used to build combat aircraft. Chin and the Canadian buyer had been in contact with undercover federal agents to make the purchase; those agents repeatedly warned them that the transport of the devices to China was illegal. Nonetheless, Chin went forward with the USD 85,000 purchase of the equipment in Seattle on February 8, 2014 and booked an international flight for the following day. Federal agents arrested Chin immediately after the purchase. Read the DOJ press release and press coverage . EXPORT CONTROL AND SANCTIONS DEVELOPMENTS - OFAC Implements the Foreign Sanctions Evaders List In early February 2014, OFAC introduced the Foreign Sanctions Evaders List to identify persons sanctioned under Executive Order 3608 because they have engaged in conduct related to the evasion of U.S. sanctions against Iran and Syria. OFAC first established the list in 2012, but was not actively engaged in adding parties until recently. In addition to the single entity that comprised the original list, eleven additional parties have now been added. As a result of these listings, U.S. persons are generally prohibited from all transactions or dealings, whether direct or indirect, with designated persons. However, there is no requirement to block the property or interests of persons on the Foreign Sanctions Evaders List, although certain listed persons may also be on  OFAC?s List of Specially Designated Nationals and Blocked Persons  (the ?SDN List) pursuant to other OFAC sanctions programs. The Foreign Sanctions Evaders List is not currently incorporated into OFAC?s SDN List or the  ?Consolidated Screening List?  on the Export.gov website, so it must be screened separately. Some of the major screening providers appear not to have incorporated the new list into their services yet. Read the  OFAC press release  and the full  Foreign Sanctions Evaders List . In addition, Akin Gump recently published a client alert on this topic. The alert can be viewed here . OFAC Announces Iran General License D-1 Regarding Access to Internet Services and Equipment The U.S. Department of the Treasury, together with the U.S. departments of State and Commerce, published on February 7, 2014 the amended Iranian General License D-1, which clarifies certain elements of General License D and adds new authorizations on providing hardware, software and personal communications services to Iran. Among the major changes in the General License are (1) a new authorization for non-U.S. persons located outside the United States to export to Iran certain eligible hardware and software that are subject to the EAR (instead of limiting such authorization to exports by U.S. persons) and (2) a new authorization for U.S. persons located outside the United States to export to Iran certain eligible hardware and software that is not subject to the EAR. The amended general license aims to foster Iran?s access to Internet services, including email, social networking, web browsing and blogging. Read the OFAC press release and General License D-1 .  
For the original version including any supplementary images or video, visit http://www.jdsupra.com/legalnews/red-notice-newsletter-march-2014-27798/
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[video] Zimmermann: Dewey Charges Send 'warning' To Struggling Law Firms

Zimmermann: Dewey Charges Send 'Warning' To Struggling Law Firms more+ more+ less- Embed To embed, copy and paste the code into your website or blog: Mar. 12, 2014 (Mimesis Law) -- Kent Zimmermann, consultant at the Zeughauser Group, talks with Lee Pacchia about the recent spate of charges filed against former leaders of defunct law firm Dewey & LeBoeuf and what they mean for the rest of BigLaw. Dewey & LeBoeuf filed for bankruptcy in May, 2012, marking the largest law firm failure to date. Three former top executives from the firm stand accused of misleading lenders and other lawyers on the true financial condition of the organization. Embed Video
For the original version including any supplementary images or video, visit http://www.jdsupra.com/legalnews/zimmermann-dewey-charges-send-warning-09501/

March 20 2014

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Ontario Securities Commission Willing To Accept ?no-contest? Settlements

Ontario Securities Commission Willing To Accept ?No-Contest? Settlements more+ Embed To embed, copy and paste the code into your website or blog: On March 11, 2014, the Ontario Securities Commission (the ?OSC?) adopted the following enforcement initiatives aimed at encouraging cooperation from market participants and streamlining its dispute resolution process: A new program to facilitate the settlement of appropriate enforcement cases in circumstances where the respondent does not make formal admissions respecting its misconduct (sometimes referred to as no-contest settlements); A new program for explicit no-enforcement action agreements; A clarified process for self-reporting under Staff?s credit for cooperation program; and Enhanced public disclosure by Staff of credit granted to persons for their cooperation during enforcement investigations.[1] Perhaps most noteworthy among these four new initiatives, which are set out in OSC Staff Notice 15-702, is that the OSC is now willing to resolve certain enforcement matters on the basis of a settlement agreement in which the respondent does not make formal admissions regarding its alleged misconduct or contravention of Ontario securities law. [2] Historically, the OSC, and other regulatory organizations, refused to enter into settlement agreements without an acknowledgment of wrongdoing. This approach often stymied settlement discussions as formal admissions could (and likely would) be admissible in any related civil proceeding. This new policy to accept no-contest settlements fosters the efficient resolution of regulatory disputes and is ultimately a positive development. It enables market participants to enter into settlement agreements, in proper circumstances, without the risk of admissions against interest (a constant feature of all settlement agreements in the old regime) being used against them in subsequent civil proceedings. However, the OSC indicated that no-contest settlement agreements would not be appropriate in serious cases where: the person has engaged in abusive, fraudulent or criminal conduct; the person?s misconduct has resulted in investor harm which has not been addressed in a satisfactory manner; and the person has misled or obstructed Staff during its investigation. [3] In http://www.akduidefense.com the United States, the Securities and Exchange Commission has entered into no-contest settlements for many years. Yet, this approach has been controversial. In U.S. Securities and Exchange Commission v. Citigroup Global Markets Inc., for example, Judge Rakoff refused to approve a $285 million no-contest settlement agreement as it was ?neither reasonable, nor fair, nor adequate, nor in the public interest.? [4] One hopes that the OSC?s adoption of no-contest settlement agreements reflects a trend among regulatory bodies. It remains to be seen whether other provincial securities regulators and/or the Investment Industry Regulatory Organization of Canada?the national, self-regulatory organization charged with the oversight of investment advisors and trading activity on Canada?s debt and equity marketplaces?will follow suit.
For the original version including any supplementary images or video, visit http://www.jdsupra.com/legalnews/ontario-securities-commission-willing-to-38305/
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Avoid The Anti-corruption ?blacklist:? Chinese Agency Guidance

Avoid the Anti-Corruption ?Blacklist:? Chinese Agency Guidance more+ Embed To embed, copy and paste the code into your website or blog: On March 1, 2014, Circular No. 50 , which the Chinese National Health and Family Planning Commission (NHFPC) recently promulgated to regulate the conduct of pharmaceutical and medical device companies that do business in China, went into effect.  Circular No. 50, together with Circular No. 49 , which a NHFPC sub-agency issued in December 2013 to regulate the compliance conduct of hospitals in China, follow closely on the heels of the Chinese government?s recent investigation into GlaxoSmithKline ?s sales and marketing practices.  Although the extent to which these new circulars will be enforced remains to be seen, pharmaceutical, medical device, and other healthcare companies doing business in China should ensure that their global compliance programs conform to the latest local requirements. Circular No. 50 updates the NHFPC?s ?Rules on the Establishment of Commercial Bribery Blacklists for Purchase and Distribution in the Health Care Industry,? originally released in 2007.  The new circular establishes a revised ?blacklist? system for punishing pharmaceutical and medical device companies that engage in bribery, whether or not criminal liability is pursued or any individual is actually convicted of bribery.  A company or its personnel may be blacklisted for any of the following reasons: Being convicted for bribery under criminal or administrative law; Committing ?minor? acts of bribery that Chinese Criminal Law prosecutors decide not to charge; Being investigated and disciplined by Communist Party authorities for acts of bribery; Being punished/penalized by administrative authorities for bribery; or Other factors determined by laws and regulation. Prior to being blacklisted, companies will have an opportunity to defend themselves at a hearing.  Once a company is blacklisted, however, the consequences are crippling:  public hospitals and other state-funded medical institutions in the Chinese province where the bribery occurred will be prohibited from purchasing any goods or services from the blacklisted company for two years.  If a company is blacklisted two or more times within a five-year period, the company will be prohibited from selling its goods or services to any public hospital or medical institution nationwide. Whereas Circular No. 50 regulates pharmaceutical and medical device companies in the offering of bribes, Circular No. 49, which translates to a ?Notice on ?Nine Prohibitions? to Strengthen Health Care Industry Compliance,? regulates the conduct of hospitals, medical institutions, and their personnel (including physicians) in China, and prohibits the acceptance of bribes, kickbacks or other improper payments.  The ?Nine Prohibitions? roughly translate to the following prohibitions:   A violation of the ?Nine Prohibitions? may result in a variety of disciplinary actions, from a simple warning to the suspension or cancellation of a physician?s license. China?s anti-corruption enforcement efforts have been steadily ramping up since June 2010, when the Chinese Ministry of Health (MOH) launched its own nationwide campaign against pharmaceutical industry corruption and established its own ?blacklist? of companies accused of paying commercial bribes in connection with the purchase and sale of pharmaceutical products. These efforts escalated dramatically in summer 2013, as evidenced by reports about high-level managers detained in various cities as part of an investigation into potential ?economic crimes,? and the Chinese State Food and Drug Administration?s six-month crackdown on misconduct in its drug market.  As we have previously reported , GlaxoSmithKline has already implemented compliance policy changes to its sales and marketing practices, likely as a response to China?s strengthened enforcement posture against bribery and corruption in the health care industry. In reality, if a pharmaceutical or medical device company doing business in China has robust U.S. Foreign Corrupt Practices Act or U.K. Bribery Act compliance policies in place, the prohibited activities under Circular Nos. 49 and 50 should already be covered.  Nevertheless, the crippling threat of being blacklisted should prompt such companies to reevaluate and, if necessary, revise their compliance policies, and to ensure that the proper ?tone at the top? is conveyed globally.  
For the original version including any supplementary images or video, visit http://www.jdsupra.com/legalnews/avoid-the-anti-corruption-blacklist-c-28579/

March 19 2014

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Will A Red Notice Subject Be Caught When Traveling? Malaysia Airlines Flight 370 Illustrates Why The Answer Is Elusive

Will a Red Notice Subject be Caught When Traveling? Malaysia Airlines Flight 370 Illustrates Why the Answer is Elusive more+ Embed To embed, copy and paste the code into your website or blog: A good number of Red Notice subjects who seek to remove their notices from INTERPOL's files are legitimate businessmen and women who need to travel to maintain their livelihoods.  Many of them find themselves forced to challenge a Red Notice that was improperly issued based on political grounds or business disputes. The fact that they are in the midst of fighting a Red Notice does nothing to change the reality that they must continue to operated their businesses and, very frequently, to travel for business purposes. Accordingly, one of the most frequently asked questions posed by Red Notice subjects is, "What will happen if I travel? Is it safe?"  And the very unnerving answer to the question is, it depends. Whether a Red Notice subject is detained while traveling internationally depends in part on: Which countries they choose as temporary ports and destinations; Whether those countries have systems in place to check travelers' identifications against INTERPOL's databases; and Whether the employees on duty at the time of the travel actually run the checks on the travelers' identities If no system is in place, or if a system is not followed, then a Red Notice subject may travel undetected. INTERPOL's databases also include other types of information, such as missing persons, stolen travel documents, and a member country's failure to check INTERPOL's databases will also result in that country's inability to make a "hit" even when the opportunity presents itself.  A perfect example of such a failure is provided by Malaysia's apparent failure to check passenger passports against INTERPOL's databases, which resulted in two passengers boarding a flight with stolen passports.  That aircraft is now missing. INTERPOL issued a public statement today regarding what is now known about those passports. According to INTERPOL, two of the passengers on Malaysia Airlines flight 370 boarded the flight using stolen passports issued by Italy and Austria.   The passports both had been stolen from Thailand in previous years. If Malaysian authorities had checked its passengers' passports against INTERPOL's databases, the use of the two stolen passports would have been discovered.  Whether the stolen passports were related to the apparent demise of the plane is yet unknown.  INTERPOL's Secretary General, Ronald Noble, was quoted in what must have been an extremely frustrating statement to have to issue: ?This is a situation we had hoped never to see. For years INTERPOL has asked why should countries wait for a tragedy to put prudent security measures in place at borders and boarding gates.  Now, we have a real case where the world is speculating whether the stolen passport holders were terrorists, while INTERPOL is asking why only a handful of countries worldwide are taking care to make sure that persons possessing stolen passports are not boarding international flights.? Mr. Noble also highlighted the need for member countries to utilize the stolen and lost passport database http://michaelhawkinsdui.com in a speech last month in the U.A.E.  INTERPOL has reported that the U.K., the U.S., and the U.A.E. run frequent checks on passports through INTERPOL's databases, but many other member countries with access to INTERPOL's files did not. As for whether it's safe to travel as a Red Notice subject, of course the answer should be that detention is always a possibility.  Flight 370 illustrates that such travel often goes completely undetected. After this weekend, however, it's probably safe to say that Malaysia will up its game.  
For the original version including any supplementary images or video, visit http://www.jdsupra.com/legalnews/will-a-red-notice-subject-be-caught-when-43997/
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Short Wins - The Aggravated Identity Theft, 18 U.s.c. § 1028a, And Stacking Edition

Short Wins - The Aggravated Identity Theft, 18 U.S.C. § 1028A, And Stacking Edition more+ Embed To embed, copy and paste the code into your website or blog: Aggravated identity theft - charged under 1028A - seems like it's getting more and more popular among federal prosecutors. It does come with massive leverage in plea negotiations; a conviction for a violation of 18 U.S.C. § 1028A carries a mandatory 2 years in prison, consecutive to any other count of conviction. I'm starting to see these in cases beyond the garden variety identity fraud gift card cases - like tax and health care fraud. The statute says that for subsequent 1028A convictions, a district court has discretion whether to stack them. And United States v. Chibuko addresses exactly that issue and the importance of reading a statute. To the victories! 1. United States v. Chibuko , Second Circuit: Appellant was convicted of various fraud crimes, including three counts of aggravated identity theft under 18 U.S.C. § 1028A. Although sentences under § 1028A usually carry a two-year sentence, each to run consecutive to each other, Appellant's charges are part of the same scheme involving the same victim. Because the district court did not appreciate its ability to have those sentences run concurrently, the case is remanded for resentencing. 2. United States v. Taylor , Second Circuit: Appellants' convictions for robbery of a pharmacy were vacated. Statements from Taylor were used during trial against all appellants, but those statements were found to be involuntary because Taylor had ingested a large number of pills as he was arrested. Admitting those statements against each of the Appellants was not harmless error, so their convictions were vacated and the cases remanded for new trials. Defense Attorneys: Kelley J. Sharkey, Jillian S. Harington, and Colleen P. Cassidy 3. United States v. Strayhorn , Fourth Circuit: Appellants were convicted on a number of robbery charges. On appeal, the Fourth Circuit held that a partial fingerprint found on duct tape was insufficient evidence to convict Janson Strayhorn of robbery. The court also held that Jimmy Strayhorn's sentence must be vacated because the district court failed to instruct the jurors, for the brandishing charge, that they needed to find Jimmy Strayhorn had brandished a gun. Defense Attorneys: James B. Craven III and Tony E. Rollman, 4. United States v. Debenedetto , Seventh Circuit: After being arrested, Appellant was found mentally incompetent and was committed for further evaluation, including an order for involuntary treatment with psychotropic medications. The Seventh Circuit vacated the commitment order because the hearing and written findings of the district court failed to comply with Sell v. United States by not considering less intrusive measures. 5. United States v. Poulin , Seventh Circuit: Appellant pled guilty and received 115 months' imprisonment for possession of child pornography. The sentence was vacated and remanded because the court made not harmless procedural errors, imposing both a sentence and special conditions without providing adequate reasons. 6. United States v. Woodard , Seventh Circuit: Appellant was charged with health care fraud and sentenced to 80 months' imprisonment after pleading guilty. This sentence violated the ex post facto clause because she was sentenced under the wrong version of the sentencing guidelines. 7. United States v. Burrage , Eighth Circuit: On remand from the Supreme Court, the Eighth Circuit reversed Appellant's conviction of distribution of heroin resulting in death. The jury instruction was improper because it did not require the jury to find that the heroin was the proximate cause of the death. 8. Clabourne v. Ryan , Ninth Circuit: The district court denied Appellant's habeas corpus petition which claimed ineffective assistance of counsel at resentencing. The Ninth Circuit issued a certificate of appealability and vacated the denial of relief because there was potential merit to the claim that counsel was ineffective for failing to object to the sentencing court's consideration of a 1982 confession. 9. United States v. Tanke , Ninth Circuit: The Ninth Circuit held that it was plain error to include restitution amounts that were not part of the offenses of conviction and therefore vacated and remanded for resentencing.
For the original version including any supplementary images or video, visit http://www.jdsupra.com/legalnews/short-wins-the-aggravated-identity-the-98639/

March 18 2014

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Script Newsletter: March 2014

Script Newsletter: March 2014 Embed To embed, copy and paste the code into your website or blog: http://50.28.63.141/~acc237/dwicriminaldefenseattorneys-com frameborder="0" style="border: 2px solid #ccc;" scrolling="no"> In this issue: - A Look Behind the OIG?s Work Plan - Do You Need an Estate Plan? - Same-Gender Marriage Implications for Employee Benefit Plans - New Child Abuse Reporting Law Gets Tough - Excerpt from New Child Abuse Reporting Law Gets Tough: ?Any person who has cause to suspect that any juvenile is abused, neglected, or dependent, . . . , or has died as the result of maltreatment, shall report the case of the juvenile to the director of the department of social services.? Please see full newsletter below for more information.
For the original version including any supplementary images or video, visit http://www.jdsupra.com/legalnews/script-newsletter-march-2014-46884/
jerroldcnbu

Script Newsletter: March 2014

Script Newsletter: March 2014 Embed To embed, copy and paste the code into your website or blog: In this issue: - A Look Behind the OIG?s Work Plan - Do You Need an Estate Plan? - Same-Gender Marriage Implications for Employee Benefit Plans - New Child Abuse Reporting Law Gets Tough - Excerpt from New Child Abuse Reporting Law Gets Tough: ?Any person who has cause to suspect that any juvenile is abused, neglected, or dependent, . . . , or has died as the result of maltreatment, shall report the case of the juvenile to the director of the department of social services.? Please see full newsletter below for more information.
For the original version including any supplementary images or video, visit http://www.jdsupra.com/legalnews/script-newsletter-march-2014-46884/
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