Publications

04.15.21 | Blog Posts

The Man On The Street And The Layperson With Common Sense

The Insider: White Collar Defense and Securities Enforcement

For many years, purportedly to preserve its renowned sense of collegiality, the Second Circuit heard fewer cases en banc than any other circuit court. On March 2, 2021, however, the Second Circuit issued an en banc opinion that could prove to be a harbinger of a new era featuring more en bancs and potentially less collegiality. In United States v. Scott, the en banc Second Circuit overturned a prior panel decision and held that New York first-degree manslaughter is a categorial crime of violence under the federal Armed Career Criminal Act (“ACCA”), which can trigger significant mandatory minimum sentences. Others have summarized the opinion elsewhere, and the holding itself is not particularly surprising. What is surprising, however, is the unusually harsh language that jumps out at a handful of moments in the majority and dissenting opinions. [...]

Related Lawyers: Brian A. Jacobs, Bronwyn Roantree

03.08.21 | Blog Posts

Commissioner Rettig on the State of the IRS

The Insider: White Collar Defense and Securities Enforcement

In October 2018, after a long career representing taxpayers in civil and criminal tax controversies, Charles Rettig was sworn in as the 49th Commissioner of the Internal Revenue Service. Within 18 months of taking the helm, Commissioner Rettig faced a once in a lifetime pandemic that wreaked havoc on the entire country. [...]

Related Lawyer: Jeremy H. Temkin

02.24.21 | Blog Posts

“SPAC-tacular” Growth Means More Enforcement Ahead

The Insider: White Collar Defense and Securities Enforcement

A once-derided investment vehicle, the SPAC is surging as investors turn the traditional IPO process on its head to streamline the public offering process and leverage a booming stock market. A company’s decision to assume the sometimes substantial undertaking to make an initial public offering (“IPO”) opens the floodgates to a deluge of regulatory obligations and disclosures about the details of its business operations. The payoff, however, can be vast; once the Company hits public markets, it has unparalleled access to capital and a bump in prestige. [...]

Related Lawyers: Robert J. Anello, Anthony Sampson

01.27.21 | Blog Posts

The Masked Stinger

The Insider: White Collar Defense and Securities Enforcement

President Joe Biden’s Justice Department is widely expected “to ramp up white-collar crime” prosecutions, after former President Donald Trump’s Justice Department notched an “all-time low in white collar crime enforcement.” But how, exactly, will the Biden DOJ pursue such a goal? Under President Barack Obama, the DOJ garnered headlines (see here, here, and here) by investigating white-collar crimes using tactics—such as undercover officers and sting operations—that are usually reserved for street crime cases. If President Biden’s DOJ follows suit by stepping up the use of such tactics in white-collar cases, counsel and courts may find themselves revisiting the governing law. [...]

Related Lawyers: Brian A. Jacobs, Margaret Vasu

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

12.10.20 | 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

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

10.20.20 | 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

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

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

06.30.20 | Blog Posts

DOJ’s Updated Guidance for Evaluating Corporate Compliance Programs

The Insider: White Collar Defense and Securities Enforcement

In early June, the Department of Justice Criminal Division released without fanfare updated guidance to be used by federal prosecutors in the evaluation of corporate compliance programs. The new guidance, “Evaluation of Corporate Compliance Programs” (“2020 Guidance”), which revised guidance issued in 2017 and 2019, retains much of the substance of the 2019 document, and according to Assistant Attorney General Brian Benczkowski, “reflects additions based on our own experience and important feedback from the business and compliance communities.” [...]

Related Lawyer: Jonathan S. Sack

06.23.20 | Blog Posts

Have Friday Nights replaced Saturday for 'Massacres'? Trump's Stealthy Attempts to Undermine Justice

The Insider: White Collar Defense and Securities Enforcement

Some still remember waking to the news following one fateful evening – October 20, 1973, when then-President Richard Nixon, embroiled in the Watergate scandal, ordered the U.S. Attorney General Elliot Richardson to fire the special prosecutor appointed to investigate the events. Richardson refused and resigned in protest. Nixon then went to the Deputy Attorney General, William Ruckelshaus, who also refused and resigned. Nixon, having lost both of his Attorneys General, ordered the Solicitor General of the United States, Robert Bork, to fire the special prosecutor. After being sworn in as acting Attorney General, Bork did just that. This historic news, which broke the next day, quickly was dubbed the “Saturday Night Massacre” – and President Nixon’s popularity would never recover. Within a year, he would resign. [...]

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

06.03.20 | Blog Posts

Can Tax Amnesty Programs Cure State Budget Woes?

The Insider: White Collar Defense and Securities Enforcement

Beyond the horrific human toll, the COVID-19 pandemic has wreaked havoc on state finances and created massive budget gaps. The National Conference of State Legislatures reports that more than half of states are projecting revenue shortfalls as high as 30%. Because the vast majority of states have constitutionally or statutorily mandated balanced budget provisions, governors and state legislatures are searching for ways to fill their deficits, with the most likely source of additional revenues – increased tax rates – being especially unpalatable and unproductive during a severe economic downturn. [...]     

Related Lawyer: Jeremy H. Temkin

05.31.20 | Blog Posts

Quorum-tine: How COVID-19 Affects the Validity of Federal Grand Jury Document Subpoenas

The Insider: White Collar Defense and Securities Enforcement

Since COVID-19 began to spread across the United States, federal grand juries in districts around the country have stopped meeting, but prosecutors have continued to issue grand jury subpoenas, including in high-profile investigations. Without sitting grand juries, however, do prosecutors still retain the subpoena power? The answer is unclear, and anyone who receives a subpoena these days should take a close look at its validity. [...]

Related Lawyer: Brian A. Jacobs

05.26.20 | Blog Posts

How Senators May Have Avoided Insider Trading Charges

The Insider: White Collar Defense and Securities Enforcement

Yesterday, reporters revealed the Department of Justice had discontinued the investigations into coronavirus-related trading by Senators Kelly Loeffler, James Inhofe, and Dianne Feinstein (whose holdings are in a blind trust). The three Senators each had sold—and in Senator Loeffler’s case, bought—large amounts of stock the same day or soon after a confidential senatorial briefing on January 24 by the CDC’s Director and Dr. Anthony Fauci. Prosecutors’ apparent direct communication of this result to the senators is somewhat unusual; ordinary defendants rarely get the security of knowing so promptly that the government has declined a case. The news also comes on the heels of reports that Department of Justice recently took control over these investigations from the Southern District of New York, raising the specter that this quick decision indicates further politicization of DOJ’s mission, or at minimum indicates continued erosion of Main Justice’s traditional deference to local U.S. Attorneys’ Offices. [...]

Related Lawyers: Robert J. Anello, A. Dennis Dillon

04.14.20 | Blog Posts

A New Discovery Tool in Arbitration

The Insider: White Collar Defense and Securities Enforcement

Arbitration has advantages in many disputes. It is typically less formal, less expensive and less time-consuming than litigation in court. But arbitration also has limitations, including generally fewer opportunities for discovery from the opposing party and third-parties. A recent ruling of England’s highest court changes this landscape in a discrete, but noteworthy, way -- holding that judicial process may be invoked to order third-parties in England to give evidence in support of a New York arbitration. [...]

Related Lawyer: Jonathan S. Sack

04.02.20 | Blog Posts

Doing Even More With Relatively Less

The Insider: White Collar Defense and Securities Enforcement

Over the past decade, the IRS suffered a series of deep budget cuts that, by 2018, left the agency with fewer agents conducting audits and criminal investigations than it had 20 years earlier. The budget cuts also resulted in fewer employees responding to taxpayer inquiries and fewer representatives in the Office of the Taxpayer Advocate helping taxpayers resolve issues with the IRS. Notwithstanding the severe budget cuts, Congress expected the IRS to maintain its civil and criminal enforcement programs, provide resources to the vast majority of taxpayers who strive to comply with their tax obligations and implement key provisions of the Affordable Care Act, the Tax Cuts and Jobs Act and the Taxpayer First Act. [...]

Related Lawyer: Jeremy H. Temkin


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