Cases
Birmingham
Water Works Chair, Others Charged in Corruption Probe: The Alabama
Attorney General’s Office filed an indictment that charges the chairwoman
of the Birmingham Water Works Board, a former engineering company vice president,
and the mayor of Mount Vernon with violating Alabama ethics laws. Chairwoman
Sherry Lewis, former vice president Jerry Jones,
and Mayor Terry L. Williams—who also owns an LLP that was implicated
in the scheme—are alleged to have funneled public money to Lewis using the businesses
owned by Jones and Williams. The Federal Bureau of Investigation
assisted the Attorney General’s Office.
Former
Charter School Principal Faces Theft Charges: Laara Allbrett,
the former principal of a charter school in Hawaii, has been charged with stealing
money from the now-shuttered school. The Hawaii Attorney General’s
Office brought the case, which followed the revocation of the school’s
charter in the spring of 2015 after the school racked up hundreds of thousands of dollars in debt.
Former
Sen. Phil Griego Guilty on Five Counts in Corruption Trial: Former
New Mexico State Senator Phil Griego was convicted of two counts of violating
the ethical principles of public service, one count of bribery, one count of fraud
and one count of unlawful interest in a public contract. Griego, who was
prosecuted by the New Mexico Attorney General’s Office, used
his elected position to push through the sale of a state-owned building that garnered
him $50,000 in real estate agent’s fees—an expected bounty that he concealed
from his fellow lawmakers when he encouraged them to support the deal.
JFK
Exec Accepted More than $1.3 Million in Bribes, Schneiderman Says: An executive
at New York’s John F. Kennedy Airport has pled guilty to accepting bribes worth
more than $1.3 million. Edward J. Paquette, the former executive
director of the Terminal One Group Association, used his position to
dole out contracts to catering, transportation, and aircraft servicing firms that
bribed him. With Paquette’s conviction, which included $2 million in civil
claims, the New York Attorney General’s Office has garnered
$15 million in penalties and restitution in a multi-defendant investigation it
dubbed “Operation Greased Runway.”
John
Young Found Guilty in Forged-Will Case: Texas criminal defense attorney John
Stacy Young was convicted of conspiring with a bail bondsman to forge
Young’s client’s will so that Young would inherit an $8 million estate.
That client, who was facing child pornography charges, was with the bail bondsman
when he died. Young and the bondsman were charged by the Texas Attorney General’s Office.
Miami
Lawmaker to Resign, Plead Guilty in Criminal Case Over Residency: Florida
State Representative Daisy Baez has resigned her Florida House seat and
pled guilty to perjury for lying in connection with a probe to determine if she
actually resided in the district that she represented. Baez will be required
to serve a one year term of probation, pay a $1,000 fine, and take an ethics course.
The case was brought by the Miami-Dade State Attorney’s Office.
Public
Corruption in Louisiana 'Can't Get Much Worse,' Says Outgoing FBI New Orleans
Director: The outgoing Federal Bureau of Investigation Special Agent
in Charge in New Orleans has criticized Louisiana’s
“extremely unacceptable” amount of corruption, comparing it unfavorably with
Rhode Island and other states where he worked for the FBI. He suggests that
the imposition of term limits would help reduce the misuse of government power.
New
York Police Officers Facing Rape Charges Quit the Force: Two New York
City Police Department officers have quit prior to facing an internal
trial about their refusal to answer questions about allegations they raped an
18-year old woman they had arrested. The Brooklyn District Attorney’s
Office has charged
the officers, Edward Martins and Richard Hall, in a 50-count
indictment with rape, kidnapping, and official misconduct.
‘Fat
Leonard’ Probe Expands to Ensnare More Than 60 Admirals: The U.S.
Navy is investigating 60 current and former admirals, among 440 total
active-duty and retired personnel, who were connected to corrupt contractor Leonard
Francis, a/k/a “Fat Leonard.” The U.S. Department of
Justice has charged 28 people and provided dossiers of individuals who
they do not intend to prosecute to the Navy, as those individuals may have committed
offenses under the military justice system. Leonard is alleged to have paid
bribes, primarily to officers who aided him in securing expensive government contacts.
McDonnell
Two high-profile
federal cases—separated only by the Hudson River, and described below—resulted
in hung juries on November 16, 2017. Articles in the The
New York Times, The
New York Post, The
New York Daily News, and The
Atlantic have cited the McDonnell decision as one reason for
the mistrials. These cases, and recent release of former U.S. Congressman
William Jefferson, also described below, have prompted commentators to call for
amending federal law.
Corruption
Case Against Senator Menendez Ends in Mistrial: A federal judge has declared
a hung jury in the corruption trial against Senator Robert Menendez
and Dr. Solomon Melgen. Melgen, an ophthalmologist, provided
gifts, political contributions, and trips to Menendez—who, in turn, advocated
for various positions that were beneficial to Melgen. It is unclear whether the defendants will be retried.
Mistrial
Declared For Norman Seabrook, Ex-Corrections Union Head: A hung jury was declared
after three days of deliberation in the federal corruption trial of former head
of the New York City Correction Officers Union, Norman Seabrook,
and hedge fund manager Murray Huberfield. Huberfield
is alleged to have paid Seabrook a $60,000 bribe to ensure that $20 million of
the corrections union’s pension fund was placed with Huberfield’s company.
The U.S. Attorney’s Office for the Southern District of New York
has indicated that it will retry the case.
Former
Congressman William Jefferson Goes Free, Thanks to Supreme Court Ruling In McDonnell
Case: Former Louisiana Congressman William Jefferson—who
hid $90,000 in cash in his freezer as part of a long-running bribery scheme—has
been released from prison after serving less than half of his 13-year prison sentence.
In October, the federal judge overseeing his case vacated all but three convictions
against Jefferson, in light of McDonnell. The judge recently vacated
another count that charged Jefferson with racketeering, which carried a sentence
of up to 20 years. Jefferson’s two remaining charges, which related to
bribery of a foreign official—and survived McDonnell—had statutory
maximum sentences of five years each. The government and Jefferson reached
an agreement
to avoid another trial: the government would keep the $189,000 that had been forfeited
to it and agree to a sentence of time served, and Jefferson would waive any further appeals.
Ethics
Prosecutors
State
Bar Will Implement New Ethics Rule: The California State Bar
has approved an amendment to its Rule of Professional Conduct 5-110
that requires prosecutors to “make timely disclosure to the defense of all evidence
or information known to the prosecutor that the prosecutor knows or reasonably
should know tends to negate the guilt of the accused, mitigate the offense, or
mitigate the sentence.” This rule is similar to the provisions in the
American Bar Association’s Model Rule of Professional Conduct 3.8.
Rule
Would Push Prosecutors to Release Evidence Favorable to Defense: New
York State Chief Judge Janet DiFiore announced a formal rule that requires
every judge in her state to instruct prosecutors to actively seek and disclose
Brady information. Judges will have the power to level contempt
charges against prosecutors who do not comply with that order. The rule
is derived from a report
issued by a state criminal justice task force that was issued earlier this year.
The
Lessons of Cyrus Vance’s Campaign Contributions: A former elected
city councilmember and district attorney suggest in The New York Times that
limiting the dollar amount of campaign contribution and providing taxpayer-funded
matching funds for district attorney campaigns would increase public confidence
in New York district attorney’s offices.
Two
Murder Convictions for One Fatal Shot: An article that discusses several multiple-defendant,
multiple-trial cases argues that prosecutors should not be permitted to argue
irreconcilable theories regarding, for example, which defendant was the shooter
in a murder. (While the writer does not use the term, the practice he identifies
could be stopped by the robust application of judicial estoppel.)
Supreme
Court Suspends License of Top LaPorte County Lawyer for at Least Four Years for
Eavesdropping on Privileged Conversations: A prosecutor in Indiana
has been suspended from the practice of law for at least four years by the Indiana
Supreme Court for intentionally eavesdropping on privileged communications
between two defendants he was prosecuting and their attorneys. Robert
Neary had been the chief deputy prosecutor in LaPorte County.
Martha’s
Vineyard Prosecutor Guilty of Misconduct: The Massachusetts Board
of Bar Overseers has found that an assistant district attorney committed
misconduct by meeting with a represented person without his attorney. The
lengthy decision
recommended that the prosecutor receive a public reprimand.
Defense Attorneys
Weinstein
Work Pulls Lawyer Back Into an Ethical Debate: In a story about white collar
defense attorney David Boies, The New York Times (which
fired
Boies around the time the article was published) details Boies’s “potential
ethical issues” in cases including his representation of both the Times
and Harvey Weinstein. During his representation of Weinstein,
Boies helped Weinstein execute a contract
with a private investigation firm that had been hired to help block a negative
article about Weinstein in Times.
Ex-Executives
Move to Compel Law Firm to Produce Notes from Internal Investigation: Former
executives from General Cable Corporation are arguing that a
law firm should be required to produce documents from an internal investigation.
The former executives argue that any privileges that the documents enjoyed has
been waived by the firm’s decision to share those documents with the Securities
and Exchange Commission and an independent auditor.
Court Puts Brakes on Ordering
Kammen to Military Trial: An Indianapolis criminal defense attorney has successfully
halted an order by a Guantanamo military commission that would have required him
to continue his representation of an alleged mastermind of the 2000 USS Cole Bombing.
Richard Kammen had argued that he was unable to ethically
represent Abd al-Rahim al-Nashiri because the government was
monitoring their conversations even after Kammen had been assured the eavesdropping had ceased.
Accused
of Misconduct, Criminal Defense Attorney Quits Practice: In Washington,
criminal defense attorney John R. Crowley has surrendered his
law license rather than responding to bar complaints. The Washington
Association of Prosecuting Attorneys has contacted all county prosecutors
about Crowley, noting that his former clients may well argue that he was ineffective in their cases.
Fitchburg
Mayor Recommended for Public Reprimand for Lawyer Misconduct: Fitchburg,
Wisconsin Mayor Jason Gonzalez—a criminal defense attorney—is facing
a potential public reprimand for several counts of professional misconduct that
were detailed in a complaint.
Two former clients complained that Gonzalez was not diligent in his representation
of them; he was also found to have provided misstatements and omissions to state investigators.
Op-Eds
Sen.
Luther Strange: The Importance of Taking on Corruption: Senator, and
former Attorney General, Luther Strange writes about his decision to
build, support, and protect a public corruption unit at the Alabama Attorney
General's Office, and the remarks he made as a keynote speaker at
this year’s CEPI National Anticorruption Academy. While outlining
some of the challenges that his office faced—including attempts by the legislature
to zero out the office’s budget to retaliate against it for investigating the
Speaker of the House—Sen. Strange describes the work done by his corruption
prosecutors as “one of his proudest legacies.”
Legislation
US House Lawmakers Debate
Overhaul of AML Regulations: The U.S. House of Representatives
is considering several anti-money laundering and corporate transparency-related
bills, including H.R.
3089 (the Corporate Transparency Act of 2017), H.R.
2219 (the End Banking for Human Traffickers Act of 2017),
and H.R. (the
Counter Terrorism and Illicit Finance Act). The House Financial
Services Committee recently held a hearing,
“Legislative Proposals to Counter Terrorism and Illicit Finance,”
to discuss the various proposals. Perhaps of particular interest to the
state attorney general community, the proposals differ substantially in how they
treat state prosecutors and authorities with only civil enforcement authority:
the Corporate Transparency Act permits federal and state agencies to
use a criminal or civil subpoenas to obtain information about a company’s
beneficial ownership; the Counter Terrorism and Illicit Finance Act would restrict
that information to federal prosecutors armed with federal criminal subpoenas.
AML Reform Bill Gains Support
in US Senate: The U.S. Senate is considering S.
1241, the “Combating Money Laundering, Terrorist Financing, and
Counterfeiting Act,” which would help federal prosecutors obtain bank
records and criminalize attempts to conceal or misrepresent to a U.S. financial
institution the true ownership of an entity that seeks to use the institution’s services.
Tools
FinCEN
Issues Advisory to Financial Institutions Regarding Disaster-Related Fraud:
The Financial Crimes Enforcement Network (FinCEN) issued an advisory
to warn financial institutions about the potential for fraudulent transactions
in the wake of disasters, including recent hurricanes and wild fires.
Podcast:
Bribe, Swindle, or Steal: TRACE International has a free
podcast, with episodes that include a recent interview with David Green,
Director of the UK Serious Fraud Office; a recap of the Bernie
Madoff case (courtesy of Madoff’s former lawyer, Ira Sorkin); and a
description of the “Fat Leonard” Navy scandal.
International
Israeli
Anti-Corruption Police Question Netanyahu for Fifth Time: Israel Prime
Minister Benjamin Netanyahu has been questioned by Israeli police for
a fifth time in connection with two ongoing investigations. One investigation
seeks to determine whether the Prime Minister accepted bribes; the other examines
allegations that he promised a newspaper that he would curb its competitor in
exchange for more favorable press coverage. Netanyahu’s lawyer called
his client “an honest person,” but admitted that he had a “weakness for wealthy people.”
Fixing
Everything But What’s Broken: Malaysia after the 1MDB Scandal: The
Global Anticorruption Blog argues that the $1.7 billion in assets recovered
by the U.S. Department of Justice from 1MDB, a Malaysian
sovereign wealth fund that was looted, reveal limitations in the Malaysian government’s anticorruption efforts.
Prosecutor
and Judge Issue Rare Response to Criticism From Turkey: Not long before the
start of the trial of Turkish banker Mehmet Hakan Atilla, New
York City federal prosecutors and the judge overseeing the case forcefully responded
to allegations by Turkey that the investigation was tainted by
politics. Turkish authorities have announced that they opened investigations
into both former U.S. Attorney Preet Bharara—who was leading
the office when the case was charged—and current acting U.S. Attorney
Joon Kim. The lead defendant in the case, Reza Zarrab,
is cooperating with the government and will testify at trial.
Confronting
Corruption in South Africa: Why? How Much? How to?: Paul Hoffman,
the director of South Africa’s Accountability Now, provides an assessment of
corruption in South Africa and offers some solutions to fight
it—including the creation of an independent, well-supported investigative body that focuses on only corruption. |
