Prosecutors Unhappy in Federal White Collar Cases: Supreme Court to Decide Whether There Can Be Second Trial for Defendant When First Jury Acquitted But Hung on Some Counts

November 17, 2008 by Paul Kish

Some prosecutors are a little like complaining children, they are never satisfied unless they get their way, and they will continue to whine for a long time until they do. This past Friday, in an appeal involving a white collar federal criminal prosecution the Supreme Court took a case to answer whether federal prosecutors can get a second bite at the apple when at the first trial the defendant was acquitted of the major counts, the jury hung on other counts, and in finding the defendant not guilty the jury must have resolved the facts in the defendant's favor. (Defendant's Petition here)

The defendant was involved in the Enron mess. He was charged with conspiracy, mail and wire fraud, securities violations, insider trading and for laundering the money related to the insider trading. The jury found him not guilty of everything except the insider trading and money laundering, and on these charges, they were unable to reach a verdict. The prosecutors tried to crank up a new set of charges based on the areas where the jury did not reach a verdict. The defendant pointed to the Double Jeopardy protection which includes what we call "collateral estoppel". This is the issue the Supreme Court will address in the case.

The collateral estoppel question is both a technical legal issue, along with being a common-sense concept that the average man or woman on the street can figure out (think "Joe the Plumber" gets prosecuted a second time when the first jury found him innocent on basically everything charged). Here's the technical description. Under the rule of collateral estoppel, when a first jury necessarily decides a certain fact against a party, that same party is prevented (or what as we lawyers say, is "estopped") from again trying to litigate that same fact at a later trial. However, what happens when a first jury rules for the defendant, but the jury for some reason is unable to reach a verdict on other charges that have the same basic factual underpinnings? Some of the federal courts say that the hung counts prevent the courts from being certain that the facts underlying the acquitted counts were necessarily found in the defendant's favor. Other federal courts rule in the complete opposite direction: saying that it makes no sense to even consider the charges where the jury was unable to reach a verdict when deciding whether certain facts were necessarily found in the defendant's favor. These inconsistent rulings were likely the major reason the Supreme Court agreed to take the case involving the Enron defendant.

As I said above, the question in this case is both highly technical, yet also something that non-lawyers can grasp. Most folks would understand that when you go through a trial and the jury finds you not guilty on basically everything, prosecutors should not get a second chance. Let's hope that the Supreme Court remembers to apply the Constitution that most of us live under, and not the version wanted by some whining prosecutors who will do anything to get their way.

White Collar Crime Prosecutions: Why do some cases simply wither away?

November 14, 2008 by Paul Kish

The Office of the Inspector General for the U.S. Department of Justice issued a massive report earlier this week concerning how the various federal prosecutors around the country are doing (or not doing) their jobs. While there's a lot of truth to the old saying about "lies, damn lies and statistics", the numbers in this report give some clues about why certain federal white collar criminal investigations simply wither away over time.

The Department of Justice is the mother ship for all of the various lawyers who work for the federal government. When it comes to prosecuting federal criminal cases, the 94 U.S. Attorneys offices around the country have front-line responsibility. The U.S. Attorney him or herself is a person appointed by the President to head up one of these 94 offices. However, the day-to-day operations usually are handled by prosecutors who have generally made a career of or have spent a long time as an Assistant U.S. Attorney (AUSA). The statistics in this new report show that there can be great variations between the 94 offices when it comes to how AUSA's handle white collar federal criminal cases.

Some of the statistics in this report are set out in Appendix XIV. This Appendix details how federal prosecutors have handled white collar criminal investigations over the past 5 years. The Appendix goes through each of the 94 U.S. Attorneys offices, and details how many such cases were referred to the prosecutors, provides numbers on how many were actually prosecuted, gives figures on how many were refused for prosecution, and sets out how many are still just hanging around with no decision.

Again, remember that statistics can often mislead. Nevertheless, this report shows that in some U.S. Attorneys' offices, the majority of white collar cases lead to formal criminal charges. In others, a relatively small percentage ever result in a criminal case. In many districts, the majority of white collar cases languish for many years before anyone makes a decision.

We represent many people who are investigated for federal white collar offenses such as mail or wire fraud, public corruption, money laundering and the like. The toll of such an investigation can weigh heavily on our clients and their families. These statistics show clearly that for some of our clients, they may have to wait many years before the case is either refused for prosecution or simply dies on the vine.