Publications

04.07.21 | Articles, Books & Journals

Congress Poised to End Use of Acquitted Conduct at Sentencing

New York Law Journal

For years, the defense bar has criticized courts’ ability to sentence defendants based on conduct for which a jury of their peers has acquitted them. As we explain in our latest article, although the Supreme Court has hesitated to review this arguably unconstitutional practice, Congress has taken up the torch with a new bipartisan bill that would ban it. The jury is still “out” on whether the bill will become law, but its introduction is a welcome sign of Congressional interest in preserving the jury’s crucial role as a bulwark of liberty.

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

03.18.21 | Articles, Books & Journals

Civil FBAR Penalty Litigation: No Reprieve for Taxpayers

New York Law Journal

In the dozen years since the UBS Deferred Prosecution Agreement, the government has aggressively pursued taxpayers who maintained undisclosed offshore accounts. While over 56,000 taxpayers have cured their historical non-compliance through Offshore Voluntary Disclosure Programs or Initiatives offered by the IRS, approximately 100 have faced criminal investigation and prosecution, while others were subject to IRS audits, which carry the risk of substantial civil penalties. In this article, I explore recent decisions by the United States Court of Appeals for the Third Circuit in Bedrosian v. United States and the Fourth Circuit in United States v. Horowitz and conclude that these and other cases reflect judicial antagonism to taxpayers’ attempting to avoid or limit civil penalties.

Related Lawyer: Jeremy H. Temkin

03.08.21 | Articles, Books & Journals

Where’s the Quid? DOJ Tests the Limits of Public Corruption Law

New York Law Journal

Proof of a “quid pro quo” is central to federal public corruption prosecutions. Recent high-profile cases have tended to focus on the “quo” part of the equation – the official act taken by a public official. Two recent federal prosecutions, in Ohio and Illinois, have drawn attention to the “quid” – the thing of value a public official receives in return for a corrupt official act. In this article, we consider what these two prosecutions may say about the outer limits of federal public corruption law.

Related Lawyers: Elkan Abramowitz, Jonathan S. Sack

02.17.21 | Articles, Books & Journals

The Federal Arbitration Act Precludes New York from Exempting Claims from Arbitration

New York Law Journal

The Federal Arbitration Act sets forth a national policy favoring arbitration. Through the enactment of Section 7515 of the NY CPLR, however, New York sought to exempt certain types of claims from arbitration, including claims alleging sexual misconduct under the New York State Human Rights Law. In this article, “The Federal Arbitration Act Precludes New York from Exempting Claims from Arbitration,” we discuss Southern District Judge Lewis J. Liman’s recent decision in Gilbert v. Indeed, Inc., concluding that Section 7515 is preempted by the FAA, and thus cannot be used to exempt from arbitration claims that otherwise would be arbitrable under the FAA.

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

02.10.21 | Articles, Books & Journals

Congress’s Signing Bonus for Gensler: New Powers for His SEC

New York Law Journal

Not every incoming SEC Chair gets a welcome gift from Congress. While Wall Street has greeted Gary Gensler’s nomination with some trepidation, by contrast, as we describe in this article, “Congress’s Signing Bonus for Gensler: New Powers for His SEC,” legislators recently handed the SEC powerful new enforcement tools, in the form of longer statutes of limitations and new statutory disgorgement powers. Although defendants in SEC cases may challenge some applications of these new powers, the new law likely means a tougher road for those under SEC investigation as the Biden Administration takes charge in Washington.

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

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

12.15.20 | 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 | 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

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

10.08.20 | 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

09.04.20 | 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 | Articles, Books & Journals

FIFA Decision Confirms Long Arm of Honest Services Fraud

New York Law Journal

The government’s lead role in the prosecution of corruption within FIFA, the organization governing international soccer, may be a paradigmatic example of U.S. law enforcement acting as the world’s policeman, pursuing wrongdoing with little apparent connection to the land of baseball, hot dogs and apple pie. In this article, we analyze the Second Circuit’s recent decision in United States v. Napout, and discuss how its holding illustrates that the FCPA is not the only card the government can play to prosecute foreign bribery, with little regard to whether such conduct violates foreign law. 

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

08.04.20 | Articles, Books & Journals

Lessons from the Insider Trading Prohibition Act After Its Likely Demise In the Senate

Business Crimes Bulletin

After a long and winding road, the House voted to pass insider trading reform on December 5, 2019 with 410 yeas against only 13 nays. But the bill quickly vanished in the Senate after it was referred to the Committee on Banking, Housing, and Urban Affairs. By all accounts, insider trading reform is likely a dead letter for the foreseeable future. In this article, we highlight the strengths and weaknesses of the ITPA and conclude that those involved in drafting the next insider trading bill would do well to keep the lessons of the failed ITPA in mind when a new chance for reform comes around.

Related Lawyer: Telemachus P. Kasulis

07.17.20 | Articles, Books & Journals

Public and Private Honest Services Fraud: Are They Diverging?

New York Law Journal

Since the Supreme Court’s decision in McDonnell v. United States, 136 S. Ct. 2355 (2016), the “official act” has been a hotly contested issue in public corruption prosecutions. McDonnell has led defendants to argue that the “official act” requirement applies to other crimes – not simply honest services fraud and Hobbs Act violations – and to private, not just public, corruption. In this article, we discuss cases that have addressed this question, focusing on a recent decision from Chief Judge Colleen McMahon in the Southern District of New York.

Related Lawyers: Elkan Abramowitz, Jonathan S. Sack

07.16.20 | Articles, Books & Journals

Should a Client File an Amended Tax Return?

New York Law Journal

From time to time, tax professionals learn that a client previously filed a false return, either as a result of an innocent mistake or due to fraud. While a taxpayer is under is no legal obligation to correct a previously filed return, there are often good reasons to do so. In this article, we discuss factors to be considered in advising a client as to whether to amend a return, including the applicable standards of conduct and alternatives available when the initial return fraudulently underreported income or overstated deductions. We also highlight the care that must be taken in deciding whether the benefits of amending returns warrant the risk of making admissions that could color any subsequent criminal prosecution and conclude by noting that, because Form 1040-X requires a taxpayer to swear under penalties of perjury that the amended return is complete and accurate, a client cannot correct one error on the originally filed return without curing all such errors.

Related Lawyer: Jeremy H. Temkin


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