Georgia Federal Criminal Lawyer Blog

In previous posts on this blog, Paul Kish and I have both discussed the important federal criminal appeal that is currently pending here in Atlanta, Georgia before the Eleventh Circuit, the federal court that hears appeals from cases in Georgia, Alabama and Florida. As previously discussed here and here, later this year, the Eleventh Circuit will decide whether the pattern jury instruction that courts typically utilize in federal fraud cases accurately defines what the government must prove in order to convict an individual who is charged under the federal mail fraud statute.

Specifically, the Court will decide "whether the district court erred when it gave the pattern jury instruction about mail fraud . . . and declined to instruct the jury that the government must prove that the defendants devised or participated in a scheme reasonably calculated to deceive persons of ordinary prudence and comprehension." In addition, the Court will also address whether it should overrule the decision that established the rule which now requires the Government to prove that a defendant participated in a scheme reasonably calculated to deceive persons of ordinary prudence and comprehension.

As discussed by Ellen Podgor over at the White Collar Crime Prof Blog, the attorneys representing the defendant in this important federal criminal case recently filed their initial brief. In addition, the National Association of Criminal Defense Attorneys also recently filed an amicus brief in support of the positions asserted by the defendant. The defendant's brief can be found here, and the brief filed on behalf of NACDL can be found here. The importance of this case cannot be overstated, and we will be sure to follow this case until it concludes.

Posted by Carl Lietz | Permalink | Email This Post

Posted In: White Collar Crime

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The right to have a lawyer defend a person against federal criminal charges was affirmed yesterday in a major ruling issued by the United States Court of Appeals for the Second Circuit. The case, United States v. Stein, affirmed a decision by a District Judge who dismissed all charges because the prosecutors violated the Sixth Amendment rights of company employees who wanted the company to pay their legal fees. This case is a major development, in that it assures both companies and their employees that it is appropriate to have the employer pay the worker's attorneys.

It has been a standard practice for many years for large companies to pay the defense fees for its high ranking employees. Many companies are regularly investigated, and operate in areas where the law is not always clear. Few people would agree to take high-ranking positions in such companies if they anticipated having to pay huge legal fees every time the company comes under scrutiny. As a result, most companies agree to indemnify the defense expenses for their employees. This is important in that getting qualified counsel is a very expensive proposition, especially when the investigation is far-flung and results in the defense attorney having to cull through millions of documents in order to properly advise his or her client.

About 7 years ago the Department of Justice (DOJ) began taking the position that companies which pay the legal fees for their employees are less deserving of a break when it came to resolving potential criminal charges. In 2004, the massive accounting firm KPMG was under investigation. The company then worked out its own deal through which no charges would be brought (although KPMG agreed to pay over $450 million in fines, etc.) but DOJ then indicted 13 employees.Under pressure from DOJ, the company restricted its usual practice of paying the legal fees for its employees under investigation who actually got indicted. The case was massive, and the attorneys for the defendants pointed out there was no way they could ever get paid unless the company adhered to its usual practice of indemnifying legal expenses.

The District Judge agreed with the defendants. He found that DOJ pressure was the reason the company changed its usual practice of paying legal fees. He determined that there was no way to put the clients back into their previous status, and that dismissing the indictment was the only remedy. The prosecutors appealed, and yesterday the Court of Appeals agreed that the dismissal was appropriate.

This case is based on the idea under the Sixth Amendment that a person is entitled to get the lawyer of his or her choosing in order to defend against criminal charges. When the government forces a company to change its usual practice of indemnifying for legal expenses, that is the same as government action that infringes on the constitutional right to counsel of one's own choice.

Posted by Paul Kish | Permalink | Email This Post

Posted In: Federal Criminal Trials , White Collar Crime

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The United States Court of Appeals for the Tenth Circuit recently issued a very lengthy opinion that covers a variety of sentencing issues we see quite often in federal white collar cases. Although this case came out of the appellate court that covers Denver, we see similar issues in cases here in Atlanta, the rest of Georgia, as well as in Alabama and Florida.

The case out in Denver involved charges of fraud against some bankers. They were convicted, and on appeal both the defendants and the prosecutors argued that the trial judge made mistakes when imposing the sentences.

The main sentencing issue on appeal involved the question of "loss" under the Federal Sentencing Guidelines. I have written at length on the Guidelines in other posts. The "loss" calculation is especially tricky. The defendants in the Denver case, through their very able lawyers, made the rather sensical argument that what they got out of the crime is the same as the "loss." Unfortunately, a lot of lawyers who do not get into federal court all that often mistakenly believe that this is the law. It is not. The concept of "loss" under the Sentencing Guidelines is far greater than what a person gets. It also covers "intended loss", along with losses caused by other people who did the same thing.

The court in the Denver case sent it back for a new sentencing hearing. The defendants' attorneys did a good job for their clients the first time. They will have a rougher road the second time around.

Posted by Paul Kish | Permalink | Email This Post

Posted In: Federal Criminal Trials , Fraud , White Collar Crime

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Recently, the Eleventh Circuit (which is headquartered here in Atlanta, Georgia) identified the issues that it will address in a federal criminal appeal involving the federal mail fraud statute. As both Paul Kish and I have discussed here and here, one of the main issues in the case is whether the pattern jury instruction that courts typically utilize in federal fraud cases accurately defines what the government must prove in order to convict an individual who is charged under the federal mail fraud statute.

In Paul's previous post, he noted that, initially, the court of appeals concluded that the pattern jury instruction is deficient in that it failed to require the government to prove that the defendant participated in a scheme that was "reasonably calculated to deceive persons of ordinary prudence and comprehension." Therefore, since the pattern instruction failed to include this important language, the Eleventh Circuit reversed the fraud convictions in the Svete case.

Svete's victory, however, was short lived. As I previously discussed, not long after this ruling, the Eleventh Circuit vacated its opinion and ordered that the case be heard by the entire court, rather than just the three judges that sat on the panel. I also noted that although the opinion vacating the initial ruling did not identify the issues that the Court will focus on in the en banc sitting, it is safe to assume that the jury instruction issue would in fact be the focus.

Recently, the Court confirmed that it will indeed focus on the jury instruction issue when the case is heard by the entire court. According to a letter recently sent to the parties in the case, the Court will focus on "whether the district court erred when it gave the pattern jury instruction about mail fraud . . . and declined to instruct the jury that the government must prove that the defendants devised or participated in a scheme reasonably calculated to deceive persons of ordinary prudence and comprehension." In addition, however, the Court will also address whether it should overrule the decision that established the rule which now requires the Government to prove that a defendant participated in a scheme reasonably calculated to deceive persons of ordinary prudence and comprehension. As noted previously, this is an important case, and one that should be followed closely by attorneys that defend individuals charged with white collar crimes.

Posted by Carl Lietz | Permalink | Email This Post

Posted In: Appeals , Fraud , White Collar Crime

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We are defending a client here in Atlanta against federal money laundering charges. The indictment seems to be confusing and unclear, so we filed several motions asking that the prosecutors explain more about what our client supposedly did wrong. Recently, a federal judge here in Atlanta granted our request. The judge entered an Order directing the prosecutors to give us what we call a "bill of particulars." Here is why that is so important.

Federal money laundering charges are amazingly complicated. The federal statutes on this cover far more than what most people think of as money laundering. One part of the federal money laundering laws makes it a crime to take money from just about any crime, and then use that money in a "financial transaction" over $10,000 with a "financial institution." Here is where it gets tricky.

The indictment in our case never made it clear which "financial institution" was involved. The business that employed our client (a used car dealership) is a "financial institution" under the law, even though most people would never consider it to be such. In other words, when a used car dealer sells a car for more than $10,000, that is a "financial transaction" with a "financial institution." Furthermore, the business, like most companies, took its daily receipts and deposited them into the bank, which of course is yet another "financial institution."

The problem is that the prosecutors would never tell us which "financial transaction" we need to defend against. Was it the point when the business accepted money from a customer, or was it the point when an employee took the money to the bank for deposit? This could turn out to be very important down the road.

Posted by Paul Kish | Permalink | Email This Post

Posted In: White Collar Crime

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A federal conviction in a white collar fraud prosecution out of Alabama was recently reversed by the United States Court of Appeals for the Eleventh Circuit. This case could be a very important decision for many people who have faced federal fraud charges. The decision in United States v. Svete might even impact some cases where the defendant was convicted years ago.

Here's what happened. Mr. Svete and another man were prosecuted for a supposed fraud involving the "viaticals" component of the insurance business. One of the charges alleged that the defendants committed federal mail fraud, which requires proof of "a scheme to defraud." About ten years ago, the Eleventh Circuit Court of Appeals issued a very sensible ruling, pointing out that not all people who lose money in an investment are victims of mail fraud. Instead, this earlier decision explained that before a person could be convicted of federal fraud charges, there had to be proof that the defendant concocted a scheme "reasonably calculated to deceive persons of ordinary prudence and comprehension." In other words, just because some people lose money does not make the person who got their money a criminal, if the victims did not use "ordinary prudence and comprehension."

Now, here's the important part of the Svete case. Like most courts, the Eleventh Circuit puts out a standard set of Pattern Jury Instructions that judges and lawyers can use during a trial. A judge who decides to use one of these Pattern Instructions to tell a jury about a particular point of law will rarely get reversed on appeal. However, the Pattern Instruction in the Eleventh Circuit does not include the language about the need for the prosecutor to prove that a scheme was "reasonably calculated to deceive persons of ordinary prudence and comprehension." Because this language is good law, and because the Pattern Instruction does not have such language, the Court reversed the fraud convictions in the Svete case.

This might be an important ruling, for several reasons. First, there are several other Pattern Instructions used in the Eleventh Circuit dealing with other varieties of fraud, and none of these other instructions contain the crucial language that led to the reversal in the Svete decision. Also, this problem might even affect cases that have already been decided. Careful lawyers who handle federal fraud cases need to look over their current and previous cases to see if this recent decision might help their clients.

At our firm, we do quite a few federal appeals. This case is yet one more example showing why lawyers need to try and keep current with recent changes in the law.

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The high profile prosecution of actor Wesley Snipes in Orlando, Florida seems to be an example of the "perfect storm" phenomenon. The combination of publicity, taxes and race has led to a variety of interesting rulings and tactics in this federal criminal tax case. These factors are a lesson to other potential high profile targets who fall into the sights of aggressive federal prosecutors. The main lesson: get good accounting, legal and public relations advice very early on.

Mr. Snipes was indicted in federal court in Orlando, and charged with two other men with a complicated scheme to avoid paying taxes, and also with improperly requesting a $12 million dollar refund. Prosecutors claim that Mr. Snipes asked for a refund, and then later stopped filing tax returns altogether based on a legal theory created by the other two defendants.

Criminal tax cases are in some sense very complicated, yet in other ways, they are simple. Too many people believe they need a lawyer well-schooled in the intricacies of the Internal Revenue Code when the feds bring a criminal tax case. While the lawyer obviously needs to understand the tax law, it is very important to remember that it still is a criminal case, the sort of legal proceeding best handled by experienced criminal defense attorneys. It appears that some of this confusion between the two types of lawyers has come up in the Snipes case. For example, Mr. Snipes asked the trial judge to let him switch lawyers on the eve of trial, supposedly because the first lawyer simply did not understand what was going on in a criminal case. The trial judge believed this tactic was merely a ploy, but later delayed the trial because an insurmountable conflict developed between Snipes and the attorney.

In another development, Mr. Snipes claims that race played a role in which charges were brought against him. He contended that he was indicted on more charges than his white co-defendants, and that prosecutors used his race as a reason for charging him more harshly than the others.

The defense team also tried to get a change of venue, to remove the case from Orlando, a request rejected by the trial judge. Mr. Snipes's lawyers then tried to raise this issue to a higher court right away, what we call an "interlocutory appeal." Yesterday, the Eleventh Circuit Court of Appeals rejected this interlocutory appeal. As a result, Mr. Snipes's case will be back on the docket in Orlando soon, and he will either have to go to trial or work out some kind of deal.

Again, this case is another example of a perfect storm: a combination of factors that makes it very difficult for a defendant to get a fair trial. Status, race, publicity and tax concerns always make it difficult to defend such cases.

Posted by Paul Kish | Permalink | Email This Post

Posted In: Appeals , Federal Criminal Trials , White Collar Crime

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A person facing a federal criminal trial often asks his or her lawyer for advice about whether to take the witness stand. A recent decision in the United States Court of Appeals for the Eleventh Circuit now provides some help to criminal defense lawyers in Florida, Georgia and Alabama, the states covered by the Eleventh Circuit. The decision in United States v. Moore helps by whittling away at the old rule which said that the defendant's testimony could fill holes in the prosecution's case even when the government failed to produce sufficient evidence of guilt.

One of the hardest questions facing lawyers who represent people accused of crimes is to give advice about whether the defendant should testify in his or her defense. My firm, Kish & Lietz, helps clients with this difficult decision in every case we handle. This decision is especially difficult when we come to the conclusion that the prosecutor's case is extremely weak. Sometime, lawyers recognize that juries will convict, even when there is virtually no evidence. For example, many jurors are so upset about drugs that people who have virtually no involvement can get swept up in a guilty verdict. However, the lawyer often figures out that he or she might win the case on appeal by arguing what we call "insufficiency of the evidence." An appellate court is much less likely to get swept up in the emotion of a trial, and can weigh the sufficiency of the evidence more objectively.

However, for many years, the Eleventh Circuit issued a series of decisions which say that even when the prosecutor did not present sufficient evidence, the lack of evidence could be "fixed" if the defendant took the witness stand. The theory behind this rule was that by convicting the defendant who testified, the jury must have decided that the defendant was lieing, and these lies could form affirmative evidence that would fill the holes in the otherwise insufficient prosecution case. This is a truly unfair rule.

Under the Federal Rules of Criminal Procedure, a defendant can ask the trial judge to throw out a case at the point when the prosecutor finishes up his evidence. We lawyers call this a request for a "judgment of acquittal." A 1994 change allowed the judge to hold off on this decision until the defense lawyer finishes putting up his or her case. However, the old rule in which the defendant's testimony could fill the holes in the prosecutor's case placed defense attorneys in a bad spot when a judge decided to postpone making a decision about the judgment of acquittal until the close of all the evidence.

This past week, the Moore decision fixed this situation a little bit. The case says that when a judge holds off ruling on a request for a judgement of acquittal, yet the defendant is later convicted, the appellate court will look at a "snapshot" of the evidence the way it appeared when the prosecution rested its case. In other words, the defendant's decision to testify cannot be used to fix the holes in a weak prosecution when the judge reserves ruling on a request for a judgment of acquittal.

As I said, giving advice about whether our clients should testify is one of the hardest things we do. In future posts, I plan to discuss other laws that impact this crucial decision.

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Posted In: Appeals , White Collar Crime

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Here in Atlanta, Georgia we convinced a federal judge to impose probation as a sentence for a client in a white collar fraud case, but we now are fighting against an appeal by the government. This is happening more and more, judges ruling that sentences are just too long for some minimally involved white collar defendants, and the government appealing because they are unhappy with the sentence. Fortunately for our client, we do a lot of appeals in federal court and are comfortable in helping defend the proper sentence.

This whole issue started with the unfortunate 1984 passage of the Federal Sentencing Guidelines, a set of complicated rules that generally call for harsher sentences. The Guidelines were mandatory, and many judges felt as if they were being forced to hand down unfair sentences. Myself and many other criminal defense attorneys fought against these rules for many years, culminating in a decision from the U.S. Supreme Court which held that the Guidelines are unconstitutional, but can nevertheless be used in an "advisory" fashion. After this ruling, many judges started imposing shorter sentences.

In white collar fraud cases, some judges simply do not see the need to incarcerate a defendant who made no money, whose entire life has been turned upside down, and who already has been forced to shell out a small fortune in order to hire an attorney who knows his way around the dangers facing a criminal defendant in federal court. Earlier this year, we convinced a judge to impose a sentence of 6 months home confinement and several years of probation on just such a client.

The government was very unhappy with the decision from this respected judge, and appealed the case to the United States Court of Appeals for the Eleventh Circuit. We did a lot of research, and discovered that many other clients such as ours received similarly reduced sentences, because it was the fair thing to do. We called these other cases to the attention of the court of appeals in our brief, which can be found on the PACER system for electronic filing in federal court.

I will continue to write about appeals in white collar fraud cases in other posts. There is another major case before the U.S. Supreme Court which likely will be decided in late 2007 or early 2008, which could have an impact on these situations.

Posted by Paul Kish | Permalink | Email This Post

Posted In: Appeals , White Collar Crime

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