Publications

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

03.24.20 | Blog Posts

State and Federal Law Enforcement Officials Act Quickly to Combat COVID-19-Related Fraud

The Insider: White Collar Defense and Securities Enforcement

In just a few weeks COVID-19 has stopped most businesses in the United States in their tracks. The business of fraud, however, respects no boundaries and thrives in times of crisis. Understanding this to be the case, both federal and state law enforcement already have stepped up their responses to such schemes. [...]

Related Lawyer: Catherine M. Foti

03.22.20 | Blog Posts

COVID-19, Criminal Enforcement, and the Imperiled Fate of the Statute of Limitations

The Insider: White Collar Defense and Securities Enforcement

Just as the COVID-19 pandemic has devastated public and private life with alarming speed – with forced social distancing, widespread layoffs, stock market turmoil, and the nightmare scenario of hospitals being overrun – so too has it had a massive and tumultuous effect on the criminal justice system. Indeed, just as the elderly and those with underlying health conditions are particularly vulnerable to COVID-19 and its effects, so are those who have the extreme misfortune (whether through their own actions or otherwise) of finding themselves in the criminal justice system as the virus races through all corners of America, including its jails, prisons, and potentially its courthouses as well. [...]

Related Lawyer: Robert M. Radick

02.19.20 | Blog Posts

IRS Operational Alliance with Foreign Authorities Bodes Ill for Offshore Tax Evaders

The Insider: White Collar Defense and Securities Enforcement

For more than a decade the Internal Revenue Service has devoted substantial resources to pursuing individuals who use offshore vehicles to cheat on their U.S. tax obligations, as well as banks and professionals that facilitate their misconduct. As the IRS has struggled to tackle the challenges presented by foreign bank secrecy, the introduction of virtual currencies and the increasingly global nature of the economy have complicated its enforcement efforts. [...]

Related Lawyer: Jeremy H. Temkin

02.14.20 | Blog Posts

Missing Golden Opportunity: Trump's Tweeting Thumbs Upset Scale of Justice

The Insider: White Collar Defense and Securities Enforcement

On Monday the career prosecutors who handled the trial of the president’s friend and former campaign advisor, Roger Stone, recommended that the court sentence Stone, convicted in November of obstructing Congress and witness tampering, to 87 – 108 months in federal prison, the sentence called for by the federal sentencing guidelines. Less than twenty-four hours later, at 1:48 a.m., President Trump weighed in with a tweet about the recommendation: “This is a horrible and very unfair situation. The real crimes were on the other side, as nothing happens to them. Cannot allow this miscarriage of justice!” Putting aside, for a moment, the fact that the party on the “other side” in Mr. Stone’s case is none other than our own United States of America, with this tweet, the president attempted to put both thumbs on the scale in the criminal prosecution of his friend. What he missed unfortunately was the opportunity to focus legislators properly on the sometimes unduly harsh results of the sentencing guidelines in white collar cases. [...]

Related Lawyer: Robert J. Anello

01.21.20 | Blog Posts

Title Fight: Blaszczak (18) v. Dirks (15)

The Insider: White Collar Defense and Securities Enforcement

The day before New Year’s Eve, the Second Circuit issued a split decision in United States v. Blaszczak, ---F.3d ----, 2019 WL 7289753 (2d Cir. Dec. 30, 2019), holding, among other things, that the “personal benefit” test the Supreme Court announced in Dirks v. SEC, 463 U.S. 646 (1983) for insider trading cases charged under Title 15 does not apply to insider trading cases charged under the Title 18.* Much can and will be written about Blaszczak. This post, however, engages in a close reading of one important sentence in Blaszczak that purports to describe and to quote from Dirks, and assesses whether Dirks actually says what the Second Circuit suggests. To the extent Blaszczak misconstrues Dirks—a binding precedent—there is reason to question whether Blaszczak will withstand further scrutiny, or be followed by other courts. [...]

Related Lawyer: Brian A. Jacobs

01.08.20 | Blog Posts

Blindfold Removed from Justice in State Criminal Cases in 2020

The Insider: White Collar Defense and Securities Enforcement

2020 heralds significant and welcome changes in state criminal practice in New York. On April 1, 2019, New York State legislators passed sweeping criminal justice reform legislation altering the landscape for defendants accused of a crime in New York. Of the reforms which went into effect in the new year, the most significant for the white-collar practitioner are changes to the discovery requirements compelling the government to share information with an accused well in advance of trial. Lessening restrictions imposed on suspects waiting for trial, also will have an impact on defendants charged with non-violent white-collar crimes. [...]

Related Lawyer: Robert J. Anello

11.26.19 | Blog Posts

Intimidation or Free Speech: Are Trump’s Tweets Witness Tampering?

The Insider: White Collar Defense and Securities Enforcement

President Trump’s use of Twitter to shape the narrative is notorious. True to form, he was tweeting fast and furious during the impeachment hearings. Negative testimony about the president’s interactions with Ukrainian leader Volodymyr Zelensky repeatedly incited his aggressive retorts, prompting speculation about whether his outbursts may be viewed as witness intimidation. Citing the First Amendment, Trump claims he is free to say what he pleases, including name-calling and denigrating witnesses. But is it criminal witness intimidation? [...]

Related Lawyer: Robert J. Anello

11.04.19 | Blog Posts

The Minuses of Bringing a Plus One to Meetings with Counsel

The Insider: White Collar Defense and Securities Enforcement

It’s a privilege to have a close family, but the presence of family members for conversations with counsel can waive privilege. Nowhere does this create more of a potential problem than in criminal prosecutions. In such cases, it is not uncommon for a client to want a spouse, parent, or even child on hand at counsel’s office to discuss, for example, general strategy, the risks of going to trial, or plea options. The desire to include family members in these conversations makes sense, because the choices an individual makes in a criminal matter can have wide-ranging consequences for loved ones. But including family members in conversations with counsel creates the risk that the conversation will not be treated as confidential, and that one of those family members could be called to testify to the contents of the conversation. It is important that counsel, clients, and family members alike understand those risks and how to minimize them. [...]

Related Lawyer: Brian A. Jacobs

10.18.19 | Blog Posts

Tax Gap Estimates Show That Compliance Rates Remain Unchanged

The Insider: White Collar Defense and Securities Enforcement

With the passing of the October 15 deadline for filing individual income tax returns on extension, the extent to which taxpayers voluntarily comply with their tax obligations is top of mind for many tax professionals and observers. For people concerned with such things, the Internal Revenue Service periodically issues reports measuring voluntary compliance with the tax laws by computing the so-called “tax gap”, which purports to represent the difference between taxes that are owed and taxes that are paid. [...]

Related Lawyer: Jeremy H. Temkin

09.22.19 | Blog Posts

Trump's Efforts to Quash Manhattan DA's Tax Subpoena: A Tortured Version of the Rule of Law

The Insider: White Collar Defense and Securities Enforcement

In January 2016, President Trump publicly announced that he would “absolutely” release his tax returns. Since that proclamation, Trump consistently has fought efforts to disclose those same returns. Continuing that trend, Trump has filed a federal complaint to enjoin a subpoena from Manhattan prosecutors that required Trump’s accountant to produce his tax returns. Through his lawsuit, Trump has staked out an unreasonably broad conception of presidential immunity that finds no support in the law—and contorts “policy” beyond recognition. Indeed, read literally, it could unreasonably suggest that even a President’s coconspirators could not be investigated, if to do so would touch on information about the President. [...]

Related Lawyer: Robert J. Anello

09.18.19 | Blog Posts

Employee Liability for Corporate Misconduct – Elizabeth Warren Style: Can Negligence Become Criminal?

The Insider: White Collar Defense and Securities Enforcement

Since the last financial crisis and the resulting increased scrutiny on business entities, companies involved in suspected corporate misconduct repeatedly have paid massive fines to resolve criminal charges. Alongside high-profile announcements by the government of multi-million- and billion-dollar recoveries has been a near constant refrain from politicians and commentators that prosecutors have been lax in pursuing individuals in connection with large corporate malfeasance. [...]

Related Lawyer: Robert J. Anello

08.14.19 | Blog Posts

All Defendants Are Created Equal Under The Bail Reform Act – or Are They?

The Insider: White Collar Defense and Securities Enforcement

On August 1, 2019, the Second Circuit Court of Appeals jumped into the fray of what has been a growing debate about the right under the federal Bail Reform Act for individuals facing indictment to create conditions for release that only the wealthiest of defendants can even contemplate, including paying for their own home detention service. In a highly unusual opinion, in the case of United States v. Boustani, the Circuit held that the Bail Reform Act “does not permit a two-tiered bail system in which defendants of lesser means are detained pending trial while wealthy defendants are released to self-funded private jails.” Although the Second Circuit’s “all created equal” pronouncement may be laudable, it is inconsistent with the plain meaning of the Act and unnecessary given the facts of Boustani. As I explain in my prior blog post, “Too Rich to Bail?,” the Bail Reform Act requires that, in each case, courts conduct an individualized assessment of the charges against the defendant as well as the weight of the evidence and the defendant’s underlying history and circumstances, to determine whether any conditions exist that would assure the defendant’s appearance in court. Thus, the Act is inequitable by its very terms. This blog discusses the Circuit’s Boustani opinion and whether the Circuit, in reaching the issue of equitable treatment, misconstrued the Act’s text. [...]

Related Lawyer: Catherine M. Foti

08.06.19 | Blog Posts

The Tax Man Taps the Brakes on Digital Currency Expansion

The Insider: White Collar Defense and Securities Enforcement

In June 2019, Facebook and a consortium of 28 founding members including Visa, Mastercard, PayPal, Uber Technologies, Inc., and eBay announced the launch in 2020 of a new digital currency called Libra, promoted as “a simple global currency and financial infrastructure that empowers billions of people.” In a White Paper introducing Libra, the consortium promises accessibility to the 1.7 billion adults globally who remain outside the financial system but who have access to mobile phones and the internet and pledges trustworthiness and support for “collaborating and innovating with the financial sector, including regulators.” Yet Libra’s global reach and potential for misuse has alarmed U.S. regulators and central bankers worldwide. At a July 11, 2019 Senate Banking Committee hearing, Federal Reserve Chair Jerome Powell expressed concern that no single regulator currently has authority to oversee Libra, stating that “Libra raises a lot of serious concerns, . . . [including] privacy, money laundering, consumer protection, [and] financial stability.” Treasury Secretary Steven Mnuchin, in a White House press briefing on July 15, 2019, acknowledged the great interest in Libra and other cryptocurrencies but voiced Treasury’s serious concern “regarding the growing misuse of virtual currencies by money launderers, terrorist financiers, and other bad players.” Concerns have also been articulated by private citizens. In an Opinion piece published by the Financial Times on June 21, 2019, Facebook co-founder Chris Hughes warned that Libra will permit companies that will put their private interests ahead of public ones to exercise monetary control and will “disrupt and weaken nation states by enabling people to move out of unstable local currencies and into a currency denominated in dollars and euros and managed by corporations.” [...]

Related Lawyer: Jeremy H. Temkin

07.19.19 | Blog Posts

The Vanishing of Federal Sentencing Decisions

The Insider: White Collar Defense and Securities Enforcement

In civil cases, the most important decisions that federal district judges make typically are recorded in the form of written opinions that are collected in the Federal Supplement, widely available for free online, and available in searchable databases on Westlaw and LexisNexis, among other places. In criminal cases, by contrast, some of the most important decisions that federal district judges make—regarding what sentences to impose—are, in the vast majority of cases, lost in the ether of PACER, where they are available only to those who know precisely where to look. This state of affairs is far from ideal for prosecutors, defense attorneys, and district judges, and it is patently unfair for criminal defendants themselves. [...]

Related Lawyer: Brian A. Jacobs

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


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