Publications

01.21.21 | Articles, Books & Journals

Tax Defendants Reaping The Benefit of Booker

New York Law Journal

In United States v. Booker, 543 U.S. 220 (2005), the Supreme Court held that mandatory application of the Sentencing Guidelines was unconstitutional and that judges must consider statutorily mandated factors in deciding an appropriate sentence for each offender. In this article, we analyze recent data from the United States Sentencing Commission demonstrating that judges have become increasingly likely to exercise their discretion to sentence defendants convicted of tax offenses below the applicable Guidelines, but are also more likely to impose some period of incarceration than in the past.  While sentencing advocacy has always been especially important in tax cases, the data reflects the significant impact defense counsel can have on the sentences imposed and the substantial benefits defendants have reaped under Booker

Related Lawyer: Jeremy H. Temkin

01.15.21 | Articles, Books & Journals

When Does Company Counsel Also Represent a Company Founder?

New York Law Journal

When does counsel for a company also represent a senior executive? This important question has come up recently in the government’s prosecution of Theranos founder Elizabeth Holmes. In this article, we address a dispute between the government and Holmes concerning the admissibility at trial of communications between Holmes and outside company counsel. As we explain, the legal standard makes it difficult for the individual to demonstrate a personal attorney-client relationship with company counsel. 

 

Related Lawyers: Elkan Abramowitz, Jonathan S. Sack

12.16.20 | Blog Posts

‘Achoo . . . so sue me!’: Criminal Liability for Spreading a Virus

The Insider: White Collar Defense and Securities Enforcement

Aside from worrying about being sued, individuals who spread the coronavirus also have to be concerned about being prosecuted. Dozens of Americans have been charged with coronavirus-related crimes since the beginning of the pandemic, ranging from people who have intentionally tried to infect others with Covid-19 to people who simply have disobeyed public health orders. Common criminal charges include making a terroristic threat, spreading a communicable disease, assault and battery, reckless endangerment, harassment, and disorderly conduct. [...]

Related Lawyers: Robert J. Anello, Chelsea L. Scism

12.15.20 | Articles, Books & Journals

Obtaining Discovery Relating To a Confidential Private Mediation

New York Law Journal

When parties engage in private mediation, they frequently assume that their mediation-related communications are not discoverable in litigation. In fact, while courts generally cloak court-sponsored mediation with a fair degree of confidentiality and permit discovery concerning the mediation only upon a heightened showing of need, there is conflicting caselaw whether the same rule applies to confidential private mediations. In our latest article, we discuss Southern District Judge Jesse M. Furman’s recent decision in Accent Delight International Ltd. v. Sotheby’s, concluding that the heightened standard of need should be applied to confidential private mediations.

Related Lawyers: Edward M. Spiro, Christopher B. Harwood

12.10.20 | Blog Posts

IRS-CI’s Annual Report And The State Of Enforcement

The Insider: White Collar Defense and Securities Enforcement

On November 16, the IRS Criminal Investigation division issued its annual report for the fiscal year ending September 30, 2020, which touts recent achievements and may foreshadow a rise in IRS enforcement. The report highlighted IRS-CI’s noteworthy achievements last year, including identifying over $2.3 billion in tax fraud, which represents an increase of $500 million (almost 28 percent) from fiscal year 2019. The report further noted that IRS-CI had initiated 1,598 investigations and recommended 945 prosecutions, up slightly from the previous year, when it initiated 1,500 investigations and recommended 942 prosecutions, but not quite returning to 2018 levels of 1,714 investigations and 1,050 recommended prosecutions. report noted that IRS-CI now has 2,030 Special Agents. While that represents a modest (1%) increase over the prior fiscal year, it is still below the 2,100 agents in place in May 2019, when IRS-CI was pushing to expand its ranks. [...]

Related Lawyer: Jeremy H. Temkin

12.10.20 | Articles, Books & Journals

Days Seem Numbered for Circuit’s Controversial Insider Trading Decision

New York Law Journal

Days before Thanksgiving, in a notable about-face, the government agreed that the Supreme Court should vacate a Second Circuit panel’s controversial insider trading decision in United States v. Blaszczak, accepting that Blaszczak’s holding that a government regulatory agency’s confidential information can constitute protectible “property” had been undermined by the Supreme Court’s subsequent decision in the George Washington Bridge case. But vacating Blaszczak would also erase the panel’s more controversial holding that the “personal benefit” test for insider trading does not apply to cases brought under the Title 18 fraud statutes, which would have significantly broadened the reach of criminal insider trading laws. In our article, “Days Seem Numbered for Circuit’s Controversial Insider Trading Decision,” we analyze the defendants’ petitions for Supreme Court review in Blazsczak discuss the implications of the government’s change in position. 

Related Lawyers: Richard F. Albert, Robert J. Anello

11.19.20 | Articles, Books & Journals

Anticipating Justice Amy Coney Barrett’s Role in Tax Jurisprudence

New York Law Journal

On October 27, 2020, following a swift yet politically fraught confirmation, Amy Coney Barrett replaced the late Ruth Bader Ginsberg as the ninth sitting justice on the Supreme Court. In her brief tenure on the United States Court of Appeals for the Seventh Circuit, Justice Barrett wrote unanimous opinions in two civil tax cases. In my latest article, I discuss then-Judge Barrett’s decisions in A.F. Moore & Associates, Inc. v. Maria Pappas and VHC, Inc. v. Commissioner of Internal Revenue and conclude that, setting aside questions regarding the timing of Justice Barrett’s appointment and confirmation and concerns as to how she might impact high-profile, politically-charged cases, practitioners can look forward to Justice Barrett’s contributions to the development of tax jurisprudence for many years to come. 

Related Lawyer: Jeremy H. Temkin

11.10.20 | Articles, Books & Journals

The Supreme Court Will Interpret Another White-Collar Criminal Statute

New York Law Journal

Federal law prohibits obtaining information by “access[ing] a computer without authorization or exceed[ing] authorized access.” The meaning of the words “exceed[ing] authorized access” has led to a split in the Circuits which will be taken up by the Supreme Court in the present term. In our latest article, we discuss the split in the Circuits and conclude that the Supreme Court may take the opportunity in United States v. Van Buren to clarify how white-collar criminal statutes should be interpreted.

Related Lawyers: Elkan Abramowitz, Jonathan S. Sack

11.08.20 | Blog Posts

How A Supreme Court Case About The Affordable Care Act Could Change Federal Criminal Law

The Insider: White Collar Defense and Securities Enforcement

On Tuesday morning, the Supreme Court will hear oral arguments in the latest case challenging the Affordable Care Act (“ACA”), once again placing the Court at the center of a dispute affecting the healthcare of millions of people around the country. The Court’s ultimate decision will be important in its own right, but the case also bears scrutiny because it could potentially have unintended but lasting consequences for federal criminal law as well. [...]

Related Lawyers: Brian A. Jacobs, Chelsea L. Scism

10.27.20 | Blog Posts

How DOJ Shows It “Cares” About CARES Act Fraud

The Insider: White Collar Defense and Securities Enforcement

No good deed goes unpunished. The Coronavirus Aid, Relief, and Economic Security (CARES) Act, which endeavors to give struggling small businesses free money, reportedly has been rife with abuse. In a noble rush to put emergency funds in the hands of Americans in need, the U.S. Small Business Administration (SBA) relaxed many federal loan safeguards, giving the unscrupulous the perfect opportunity for fraud. The U.S. Department of Justice already has begun investigating and prosecuting individuals who have attempted to steal CARES Act funds and has relied on tips from major financial institutions to do so. As new evidence comes to light in the coming months, we can expect DOJ to continue escalating its enforcement efforts. [...]

Related Lawyers: Robert J. Anello, Chelsea L. Scism

10.22.20 | Blog Posts

Jury Trials in the Time of Covid

The Insider: White Collar Defense and Securities Enforcement

The mail arrived the other day and there it was, the blue, slightly larger than letter-size envelope with the words “JURY SUMMONS ENCLOSED” blazoned on the front. I was being called for jury duty at federal district court just as the upturn in the curve indicated an increase in Covid-19 cases. But, unlike in the past, where the envelope’s contents provided little guidance as to what the process of jury selection would entail, it now included a personal letter from the Chief Judge describing the steps the court is taking to protect jurors from Covid. It also contained a questionnaire aimed at determining whether I might be infected with Covid or might present a danger of infecting others – questions that now are all too familiar but are new to the process of jury service. [...]

Related Lawyer: Catherine M. Foti

10.21.20 | Articles, Books & Journals

Remote Depositions: The New Normal

New York Law Journal

With the COVID-19 pandemic, parties have had to adjust their approach to litigation—including by conducting depositions remotely. In some instances, parties have resisted remote depositions, claiming that the complex nature of certain litigation is ill-suited for remote depositions. In this article, we discuss Southern District Magistrate Judge Stewart D. Aaron’s recent decision in Rouviere v. DePuy Orthopaedics rejecting objections to a remote deposition. We also highlight several considerations for remote depositions.

Related Lawyers: Edward M. Spiro, Christopher B. Harwood

10.20.20 | Blog Posts

How Long Can President Trump Keep His Tax Returns From Prosecutors?

The Insider: White Collar Defense and Securities Enforcement

Late last month, the New York Times published the first in a series of exposés on President Trump’s compliance (or non-compliance) with his federal income tax obligations. While readers of the Times articles may or may not be troubled by the assertion that the President paid $750 in federal income taxes for both 2016 and 2017 and can reasonably ask whether doing so violated the Internal Revenue Code, prosecutors in the New York County District Attorney’s Office were almost certainly envious of the reporters who spent many hours reviewing the intimate details of the President’s finances. [...]

Related Lawyer: Jeremy H. Temkin

10.08.20 | Articles, Books & Journals

Implications of A More Conservative Supreme Court for White-Collar Practitioners

New York Law Journal

With the selection of Judge Amy Coney Barrett as the proposed replacement for liberal icon Justice Ruth Bader Ginsburg, a 6-3 conservative majority may shape the future direction of the Supreme Court’s jurisprudence. The generally accepted wisdom is that a more liberal Court equals a Court more protective of the rights of a criminal defendant. The color of the defendant’s “collar,” however, may make a significant difference. In this article, we discuss the Roberts Court and what has been described as the “White-Collar Paradox,” analyze Judge Amy Coney Barrett’s sparse record on the Seventh Circuit, and conclude that based on the prior voting habits of the conservative justices, white-collar criminal defendants may find the Court receptive to their arguments in ways that “blue-collar” defendants would not. 

Related Lawyers: Robert J. Anello, Richard F. Albert

09.17.20 | Articles, Books & Journals

IRS Summonses: No Reasonable Basis Required

New York Law Journal

The Internal Revenue Service has broad statutory authority to examine “any books, papers, records, or other data which may be relevant or material to [an] inquiry” and, as the Supreme Court has noted, “can investigate merely on suspicion that the law is being violated, or even just because it wants assurance that it is not.” The IRS exercises its authority by issuing summonses in the course of administrative investigations of taxpayers’ civil or criminal liability. In our latest article, we discuss Byers v. United States, a recent decision by the United States Court of Appeals for the Sixth Circuit that highlights the differences between the low threshold that courts apply in deciding motions to quash summonses addressed to third parties and the more rigorous standard applied in deciding whether to authorize the issuance of John Doe summonses through which the IRS obtains data on a class of otherwise unidentified persons. While the taxpayer in Byers was ultimately unsuccessful in quashing the summonses at issue, the case is a good reminder of the importance of counsel thinking creatively about potential objections that can be asserted on behalf of their clients. I hope you find this article of interest. Stay healthy and safe!

Related Lawyer: Jeremy H. Temkin

09.15.20 | Blog Posts

Zooming In On The Flaws Of Virtual Court

The Insider: White Collar Defense and Securities Enforcement

During the Covid-19 pandemic, with some notable exceptions, the bar has generally applauded the efforts of courts around the country to suspend in-person appearances and make court “virtual” to the extent possible. In video-courtrooms throughout the United States, courts now conduct status conferences, oral arguments, and even trials on video-conferencing platforms like Zoom. Some commentators have even called for court appearances to remain virtual post-pandemic. Although this new adjudicative medium may provide a certain ease of access for attorneys and litigants in many areas of the law, not to mention some cost savings, criminal defendants should remain wary. Previous studies in the bail and immigration contexts in particular suggest that virtual court can prejudice defendants the most. [...]

Related Lawyers: Brian A. Jacobs, Ryan McMenamin

09.08.20 | Blog Posts

Who Watches The Store? Drastic Decline Of Corporate Monitors Under Trump

The Insider: White Collar Defense and Securities Enforcement

The recent settlement by Herbalife Nutrition Ltd. with the Securities and Exchange Commission, the U.S. Department of Justice, and the U.S. Attorney’s Office for the Southern District of New York totaling over $123 million is the latest in a string of enforcement actions under the Trump Administration that identified violations of the Foreign Corrupt Practices Act but noticeably did not also impose an independent corporate compliance monitor. Herbalife neatly illustrates the recent paradigm shift inside the DOJ, as the stipulated facts and extensive nature of the illicit scheme outlined in the deferred prosecution agreement are of the caliber that in previous days likely would have led to the imposition of an independent monitor. The decision not to impose one here was said to be due in part to the company’s cooperation and remedial efforts by the time of resolution. Even if the company’s cooperation and remedial efforts contributed to the government’s decision not to insist on a monitor, that decision likely was also part of a concerted effort by the current administration to sideline the use of monitorships generally. [...]

Related Lawyers: Robert J. Anello, Thaddeus R. Kleckley

09.04.20 | Articles, Books & Journals

Recent Guidance Reinforces DOJ Approach to Corporate White-Collar Investigations

New York Law Journal

Over the summer, the Department of Justice issued two important documents for white-collar prosecutors and defense counsel. The first, in June, updated prior guidance on how federal prosecutors should analyze an organization’s compliance programs. The second, in July, updated the “Resource Guide to the US Foreign Corrupt Practices Act” originally issued in 2012. In this article, we discuss key takeaways from these documents and conclude that the two documents mark the continuity in recent years in DOJ’s policies toward corporate white-collar enforcement.

Related Lawyers: Elkan Abramowitz, Jonathan S. Sack

08.18.20 | Articles, Books & Journals

Discovery of Absent Class Members Prior to Class Certification

New York Law Journal

The named plaintiffs in a putative class action must offer affirmative evidence—beyond just the allegations in their complaint—sufficient to satisfy each of the elements of Federal Rule of Civil Procedure 23, and the defendants often will seek to rebut that evidence at the class certification stage. In our latest article, we analyze Southern District Judge Lewis J. Liman’s recent decision in Fishon v. Peloton Interactive, permitting the defendant to depose putative class members who are not named plaintiffs for purposes of developing its defense to class certification.

Related Lawyers: Edward M. Spiro, Christopher B. Harwood

08.13.20 | Blog Posts

IRS Takes Aim At High-Income Non-Filers. Will It Cut The ‘Tax Gap’?

The Insider: White Collar Defense and Securities Enforcement

Even before the deficit exploded as a result of the Covid-19 pandemic, the federal government was running annual deficits approaching a trillion dollars due to substantial increases in spending that were not offset by additional tax revenue. One perpetual cause of shortfalls in tax revenues is the so-called tax gap, which purports to represent the difference between taxes that are owed and taxes that are paid. Last fall, I wrote about a September 2019 report in which the IRS concluded that the tax gap for 2011 through 2013 was $441 billion per year. In that report, the IRS attributed $39 billion of that shortfall to non-filers, and the IRS is now targeting that source of incremental revenue by pursuing high-income non-filers. [...]

Related Lawyer: Jeremy H. Temkin


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