Publications

06.12.19 | Articles

The International Encryption Debate: Privacy Versus Big Brother

New York Law Journal

Governments worldwide are attempting to restrict the use of encryption services like WhatsApp and Snapchat to allow a greater opportunity for surveillance. This Big-Brother-is-watching approach has met with resistance from public rights and civil liberty activists. In this article, we discuss the spectrum of the global response – including here in the United States – to the increased use of encrypted technologies and highlight encryption laws and policies of a number of countries. This digital tug-of-war has enormous implications for privacy and for our criminal justice system.  

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

06.05.19 | Blog Posts

Insiders Report on the State of the IRS

The Insider: White Collar Defense and Securities Enforcement

On May 28, the Commissioner of the Small Business/Self-Employed (“SB/SE”) Division, the National Taxpayer Advocate (“NTA”) and the Chief of IRS Criminal Investigation (“CI”) provided their insider perspectives on the current state of the IRS at a town hall held at the New York City Bar Association. Each of these executives gave insights into the challenges facing the Service. [...]

Related Lawyer: Jeremy H. Temkin

05.22.19 | Blog Posts

How Many Company Employees Can Fit Into a White-Collar Lawyer's Pool?

The Insider: White Collar Defense and Securities Enforcement

State and federal prosecutors often are suspicious and critical of efforts by a company under criminal investigation to control costs and centralize knowledge by establishing “pool counsel” to represent employees who may be called upon to be witnesses. As a result, government attorneys frequently attempt to dissuade potential witnesses (current/former employees, officers, or agents of the subject organization) from agreeing to be represented by an attorney hired by their company to concurrently represent a group of similarly situated individuals. A recent ethics opinion issued by the Committee on Professional Ethics of the Association of the Bar of the City of New York, chaired by renowned ethics expert Professor Bruce Green, makes clear that although pool counsel must evaluate a number of ethical considerations, such representation often is reasonable, practical, and desirable. Hopefully, at least in New York, the Committee’s thoughtful and insightful analysis will allay prosecutors’ undue concerns. [...]

Related Lawyer: Robert J. Anello

05.16.19 | Articles

Closed for Business: Shutting Down the U.S. as an Offshore Tax Haven

New York Law Journal

The United States is not the only country whose citizens use offshore vehicles to cheat on their taxes, and while U.S. taxpayers think of Switzerland and Caribbean islands as tax havens, many foreign nationals use U.S.-based vehicles to evade their own tax obligations. In this article, we discuss recent legislative and regulatory steps to increase transparency as well as the IRS’s use of John Doe summonses to help foreign countries investigate offshore tax evasion by their citizens.   

Related Lawyer: Jeremy H. Temkin

05.15.19 | Blog Posts

The Proper Treatment of Fraud Victims in Federal White Collar Prosecutions

The Insider: White Collar Defense and Securities Enforcement

In white collar cases, federal prosecutors around the country reflexively file—and district courts routinely grant—motions seeking to bar defense counsel from making arguments, introducing evidence, or pursuing cross-examination regarding a fraud victim’s carelessness in dealing with the defendant. Any such argument or evidence, prosecutors generally argue, should be precluded as irrelevant, under Rule 401 of the Federal Rules of Evidence, on the ground that a victim’s lack of caution and diligence is no defense to fraud. Although these motions find support in well-established precedent, there are several reasons why courts should view them with a bit of skepticism, and should give defense counsel more latitude in exploring, particularly through cross-examination, the behavior of fraud victims. [...]

Related Lawyer: Brian A. Jacobs

05.13.19 | Blog Posts

Will the Rise of Originalism Spell the End of Gay Rights Under Title VII?

The Insider: White Collar Defense and Securities Enforcement

With the arrival of Justices Neil Gorsuch and Brett Kavanaugh to the Supreme Court, almost half of the justices now subscribe to originalism—the view that vague constitutional provisions mean what they were originally understood to mean when they were enacted. While originalism figures prominently in debates about constitutional interpretation (for example, originalists claim that Roe v. Wade must be wrong because nobody alive in 1791 believed the Bill of Rights protected the right to have an abortion), originalism is seldom discussed in the context of statutory interpretation. That will likely change in the upcoming Supreme Court term, as the Court agreed on April 22 to review the Second Circuit’s en banc decision in Zarda v. Altitude Express—a decidedly non-originalist decision. In Zarda, notwithstanding that no one thought Title VII prohibited discrimination based on sexual orientation when the law passed in 1964, the Second Circuit held that Title VII prohibits just such discrimination. [...]

Related Lawyer: Catherine M. Foti

05.07.19 | Articles

Hub, Spokes and Rim: Revisiting Kotteakos

New York Law Journal

In Kotteakos v. United States, the Supreme Court imposed important limits on the scope of conspiracy under federal criminal law. Kotteakos held that in a single conspiracy, co-conspirators linked with a common individual must also be linked with one another. In the Supreme Court’s formulation, the “spokes” must be connected by a “rim,” and not merely with a common “hub.” In this article, we discuss the issue of single versus multiple conspiracies – an issue which recently surfaced in the indictment of 19 parents as part of an alleged “nationwide college admissions scam.”   

Related Lawyers: Elkan Abramowitz, Jonathan S. Sack

05.01.19 | Articles

Should Trump’s Foreign Policy Affect Criminal Prosecutions?

Business Crimes Bulletin

In connection with several recent high-profile international cases, the Trump administration has implied that it sees law enforcement — or the lack of it — as a tool in its foreign policy arsenal. In this article, we discuss why maneuvering criminal prosecutions of individuals to influence foreign relations raises due process concerns. On the other hand, with respect to corporate prosecutions, which at their core are regulatory in nature, different considerations apply.

Related Lawyers: Robert J. Anello, Kostya Lantsman

04.23.19 | Blog Posts

Top 10 Crimes Mueller’s Report Considers

The Insider: White Collar Defense and Securities Enforcement

The long-awaited Mueller Report provides a detailed picture of the wide variety of crimes investigated by the Special Counsel’s Office, many of which resulted in indictments or guilty pleas, and, in the case of President Trump, a suggestion that Congress may review the legality of obstructive acts. Although Mueller declined to make a final determination regarding President Trump’s criminal liability, contrary to assertions from the administration, the investigation did not exonerate Trump. Instead, the report identified multiple instances of what may be considered obstructive conduct by the President. Citing limitations on its role as an arm of the Justice Department, the Special Counsel’s Office referred determination of the question of whether Trump obstructed justice to Congress. [...]

Related Lawyer: Robert J. Anello

04.16.19 | Articles

When Misrepresentations During Settlement Conferences Become Sanctionable

New York Law Journal

In this article, we discuss Southern District Magistrate Judge James L. Cott’s recent decision in Otto v. Hearst Communications, addressing the potential for imposition of sanctions based upon misrepresentations during settlement conferences.

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

04.11.19 | Articles

Are DOJ’s F/X Prosecutions Ahead of the Law on “Trading Ahead”?

New York Law Journal

Two recent prosecutions in the foreign exchange (F/X) market raise questions about the use of general criminal statutes to regulate a trading practice that Congress, specialized regulators, and market rules have declined to prohibit. Both cases deal with a practice that bankers refer to as pre-positioning, which the government pejoratively labels “trading ahead” or “front running,” in the context of complex, multi-billion dollar F/X trades between sophisticated parties. In this article, we discuss the appeal of the conviction in one such case and the court’s dismissal of the charges in the other.

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

04.02.19 | Articles

“Spoofing” as Fraud: A Novel and Untested Theory of Prosecution

Business Crimes Bulletin

In the past few years, the government has brought several prosecutions targeting “spoofing” activity in the commodity futures markets, with mixed results at trial. In this article, we survey recent prosecutions in which the government has attempted to prosecute spoofing activity under traditional fraud statutes, including commodities fraud and wire fraud, which requires the government to prove that a defendant made a false statement or a material misrepresentation. To make that showing, the government has argued that spoofing—bidding or offering with the intent to cancel the bid or offer before execution—involves an implied misstatement to the market regarding supply and demand and a defendant’s willingness to trade. In response, defendants (joined by financial industry associations) have forcefully criticized the government’s novel theory as an overly expansive application of the wire-fraud statute. How the federal courts address the applicability of traditional fraud statutes to spoofing-related activity will have significant implications for market participants.

Related Lawyers: Jodi Misher Peikin, Justin Roller

03.15.19 | Articles

Does the Sixth Amendment Apply to Restitution? Two Justices Say the Answer May Be Yes

New York Law Journal

Beginning with Apprendi v. New Jersey in 2000, the U.S. Supreme Court has extended the Sixth Amendment to the imposition of terms of imprisonment and fines. In recent years, defendants have argued that the reasoning of Apprendi also applies to restitution – a mandatory and increasingly significant aspect of white-collar sentencing. While this argument has failed in the circuit courts, two justices of the Supreme Court, dissenting from a denial of certiorari, recently suggested that the high court should look closely at the issue. In this article, we discuss the brief dissent of Justice Gorsuch, joined by Justice Sotomayor, indicating that the Apprendi doctrine might appropriately be applied to restitution in criminal cases. 

Related Lawyers: Elkan Abramowitz, Jonathan S. Sack

03.14.19 | Articles

Is the IRS Whistleblower Program Finally Reaching Its Potential?

New York Law Journal

Whistleblowing has become big business, resulting in thousands of submissions each year and generating billions of dollars in recoveries by the IRS. Over the years, however, whistleblowers and their lawyers have lodged several complaints regarding the IRS’s management of the Whistleblower Program. In this article, we discuss the Whistleblower Program, highlight a recent statutory change, which has led to a banner year for awards, and conclude that, in order for the Whistleblower Program to reach its full potential, the IRS could benefit from additional resources to allow it to investigate worthwhile leads on a more timely basis.

Related Lawyer: Jeremy H. Temkin

03.06.19 | Blog Posts

From Teapot Dome to Trump: How Congress Investigates Criminal Scandals

The Insider: White Collar Defense and Securities Enforcement

Since the House passed a resolution in 1792 to investigate the defeat of the United States Army at the hands of American Indians in Ohio (known as St. Clair’s Defeat), Congress has investigated hundreds of instances of possible misconduct by members of the executive branch. Today’s news is rife with reports of congressional investigations into potential obstruction of justice and more serious substantive crimes by President Trump and his immediate circle. Inevitably, the paths of congressional and criminal investigations into this type of misconduct overlap. History shows that this intersection can be fruitful, frustrating, and fraught with pitfalls. [...]

Related Lawyer: Robert J. Anello

02.20.19 | Blog Posts

Too Rich To Bail?

The Insider: White Collar Defense and Securities Enforcement

Recently, a federal judge in Brooklyn questioned whether the Bail Reform Act permits “disparate treatment based on wealth,” and denied bail to a high-net worth defendant who proposed a package that included home detention secured by privately-funded guards. In United States v. Boustani, U.S. District Judge William F. Kuntz II rejected the bail package proposed by Jean Boustani, an international businessman at the center of a $2 billion alleged fraud, bribery, and money laundering scheme that the government claims caused “staggering” losses to foreign and American investors and “devastated” the economy of Mozambique. In addition to what courts have called the “private prison” concept, Boustani’s proposed bail package included a $20 million personal recognizance bond secured by $1 million cash, and the surrender of travel documents by Boustani and his wife. [...]

Related Lawyer: Catherine M. Foti

02.19.19 | Articles

Sanctions Stick Even After Settlement

New York Law Journal

An order imposing sanctions catches the attention of litigants, sometimes even encouraging the parties to settle. When they do, the sanctioned party often will seek to have the sanctions award vacated as part of the settlement. Increasingly, judges are resistant to vacating sanctions orders. In this article, we discuss Southern District Judge Victor Marrero’s recent decision in Rogue Wave Software v. BTI Systems, which highlights the trend away from courts vacating sanctions orders just because the parties’ settlement agreement provides for it, and concludes that going forward, the more egregious the conduct leading to a sanctions order, the less likely it is that a court will vacate it.

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

02.15.19 | Blog Posts

Peremptories And Prejudice: The Striking Role Of Employment Status In Jury Selection

The Insider: White Collar Defense and Securities Enforcement

It is a truth universally acknowledged, that a trial lawyer in possession of limited information about prospective jurors, may exercise strikes based on a juror’s employment status. Criminal prosecutors may strike jurors who are unemployed, in the belief that such jurors may be less socially connected, less accustomed to following rules, less experienced in making serious decisions (such as voting for conviction), and thereby potentially biased against the government and in favor of the defendant. Criminal defense lawyers, meanwhile, may strike jurors who are employed, for the inverse reasons. And in civil cases, as one commentator wrote, “[j]ury consultants consistently report that,” among other things, “long-term, unemployed people . . . tend to favor the plaintiff’s position.” Employment status can be an entirely reasonable reason for a trial lawyer to strike a prospective juror. At the same time, however, employment status can at times be misused by trial lawyers as a pretext to strike a juror when the real reason is the juror’s membership in a so-called cognizable group, such as a racial minority. In order to distinguish between a permissible and impermissible strike, judges should engage in extraordinarily careful fact-finding and analysis, as the stakes for both the lawyers and the parties run high. [...]

Related Lawyer: Brian A. Jacobs

02.14.19 | Articles

White-Collar Enforcement After Two Years of Trump

New York Law Journal

The halfway point of President Trump’s term offers an opportunity to examine and assess the impact of his administration on business-related prosecutions. In this article, we discuss the government’s shift in enforcement priorities, which focus on violent crimes, opioid cases, and most notably, immigration violations. We also highlight the decline not only in the number of traditional white-collar cases brought, but also in the amounts of fines and penalties imposed. Despite these numbers, however, the Trump Justice Department has remained aggressive and creative in its pursuit of individual wrongdoers in certain business-related areas, particularly in international corruption and foreign bribery.

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

01.23.19 | Blog Posts

The Harmless Error Standard on a Silver Platter

The Insider: White Collar Defense and Securities Enforcement

In United States v. Stewart, in a 2-1 decision, the Second Circuit vacated defendant Sean Stewart’s insider-trading conviction, holding that the district court erroneously excluded a key piece of impeachment evidence and that this error could not be excused as harmless. Although the opinion focused on the admissibility of evidence that impeaches hearsay statements, the majority’s defense-friendly application of the harmless error standard could have a greater impact in future criminal appeals. [...]

Related Lawyer: Brian A. Jacobs


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