February 4, 2010

FCPA bust: the conspiracy angle

Federal prosecutors in the Africa-scam case are alleging that the nearly two dozen arms-dealer defendants were part of a single conspiracy, which if accepted would make the case a lot easier to press. Notes FCPA Blog:

But will the single-conspiracy approach set up the entrapment defense? Reuters quoted two defense attorneys as saying "they believed their clients barely knew each other beyond perhaps an occasional handshake when their paths happened to cross in the industry." That suggests some defendants might argue they were a group of strangers recruited into an illegal conspiracy promoted and run entirely by the feds and their mole.

January 21, 2010

FBI targets gun business in giant FCPA sting

The FBI might have targeted any of many lines of export business for its unprecedented sting operation ("the first large-scale foreign bribery investigation using undercover federal agents"). It happened to select a big gun show, the sort of event many of whose participants have very little love lost with the Obama Justice Department. Now Business Week says, half-hopefully or not, that the resulting prosecutions may "leave the firearms industry wounded." Was that a foreseen consequence? Much more about the Foreign Corrupt Practices Act in our earlier FCPA posts.

More: Ira Stoll talks with Harvey Silverglate about the Supreme Court's narrow definition of entrapment. And Mike Koehler at FCPA Professor has a lot of detail about the defendants and allegations.

Further: From Koehler, new details hinting that foreign bribery in the arms trade was something already on Justice's radar screen before the sting.

January 9, 2010

"The catchall fraud law that catches too much"

Roger Parloff in Fortune on "honest services" doctrine.

January 2, 2010

Around the web, January 2

• "At Dechert -- and Elsewhere? -- Litigation Coming Back to Life" [WSJ Law Blog]
• But the private sector still can't do it: "State Dept Argues for Continuation of Mandatory Retirement Age for Foreign Service" [Workplace Prof]
• Are taxpayers entitled to scrutinize doings of "labor studies" centers at public universities? [Inside Higher Ed, Michelle Malkin]
• Uh-oh: proposal to create private right of action under FCPA [FCPA Professor, more] Enforcement of the statute ten years ago, and today [same]
• Objectors to Wal-Mart Massachusetts wage/hour settlement seem to have upped payout by $20 million [AmLaw]
  
• Paul Cassell on dismissal of Blackwater guard prosecution [Volokh]

December 10, 2009

Jim Copland on honest services fraud

His new op-ed in the Washington Examiner, "Vague law is bad law", takes a look at the alarmingly amorphous statute now before the Supreme Court:

Justice Antonin Scalia has suggested that the law "would seemingly cover a salaried employee's phoning in sick to go to a ballgame." ...As Scalia notes, the statute "invites abuses by headline-grabbing prosecutors" who hope to advance their careers by collecting high-profile scalps.

New Marie Gryphon paper on overcriminalization

The newest Civil Justice Report from the Manhattan Institute, by senior fellow Marie Gryphon, is entitled "It's a Crime: Flaws in Federal Statutes That Punish Standard Business Practice". Executive summary:

Since the dawn of Anglo-Saxon common law, conviction for committing a crime required evidence of malicious intent--that is, a conscious willingness to violate society's norms by inflicting harm on people directly or by misappropriating or abusing their property. This stricture, which is often referred to as the blameworthiness principle, has tended to ensure that people who inadvertently and in good faith infringe laws and regulations will not suffer the stigmatization of a criminal conviction, not to mention the penalty of a steep fine or incarceration.

For their own compelling reasons, the economic and social policies of the New Deal came to undermine the blameworthiness principle. Standards of conduct promulgated to protect and advance the public's health, safety, and welfare carried with them deterrents imported from the criminal law. Today, the regulatory state, the New Deal's descendant, so thoroughly encompasses the range of commercial activity that businesses and businesspeople trying to reduce their costs, better their products, best their rivals--do all of the things, in short, on which survival in a market economy depends--run an ever-present risk of becoming ensnared in the criminal law. In many instances, the laws in question are so voluminous and loosely drafted that even a student of the legislation would not have fair notice of what conduct was prohibited and what was not.

Ordinary Americans have been convicted of crimes under overbroad federal laws because their employer unsuspectingly forwarded drugs that had been mislabeled by another company; because their adult children failed to properly record the itinerary of a camping trip in a public park while doing volunteer work for the family touring business; and because their computer servers stored copies of clients' e-mails as an emergency precaution. Others have been judged criminals for such common failings as violating the terms of an employee handbook that prohibited otherwise legal behavior; lying about the details of a legal business transaction in response to media inquiries; and falsely claiming to be a talent scout in order to attract women.

Perhaps the most egregiously catch-all statutes are those governing mail and wire fraud. They assign criminal penalties to any "scheme or artifice to defraud" as long as the defendant could foresee that someone would use either the U.S. Postal Service or any form of electronic communication in (perhaps inadvertent) furtherance of the scheme as it unfolded. Yet these statutes lack any explicit language requiring a showing of harm, and the courts have not inferred or supplied such a requirement. Today criminal liability attaches to "any scheme or artifice to deprive another of the intangible right of honest services" in the above areas. Such vague and capacious language gives overzealous prosecutors a virtual carte blanche to indict.

Continue reading   New Marie Gryphon paper on overcriminalization

November 30, 2009

Supreme Court takes up honest services fraud

The Washington Legal Foundation will be co-sponsoring a panel discussion with the National Association of Criminal Defense Lawyers this Wednesday morning Dec. 2 in Washington, D.C., with former Attorney General Dick Thornburgh of K&L Gates, Brady Dugan of Akin Gump, Jonathan Marcus of Covington & Burling, and Richard Craig Smith of Fulbright & Jaworski. (Invitation and speakers, PDF; webcast and other info)

November 25, 2009

"Right and Left Join Forces on Criminal Justice"

Adam Liptak's article brings front-page New York Times attention to a welcome trend that's been building for years now. Commentary: Adler/Volokh.

November 21, 2009

"Jury rejects prosecutor's rigged game"

Our own Marie Gryphon on the Bear Stearns acquittals.

November 14, 2009

Around the web, November 14

• Sen. Chris Dodd's financial services bill would overturn Stoneridge, establish aiding-and-abetting securities liability [WSJ editorial]
• "Card Check: Canada is the Model, But a Failed, Unpopular Model" [Carter at ShopFloor on our new John Endean labor-law paper]
• Media Matters and TV talker Rachel Maddow advance cheap smear against Heritage Foundation's valuable overcriminalization project [Radley Balko and again]
• Other courts have generally declined to follow that lamentable California decision of a year ago imposing liability on name-brand pharmaceutical manufacturer for injuries allegedly caused by its generic competitors [Jeff Pilkington & Geoff Klingsporn, Beck & Herrmann at Drug and Device Law and more, earlier here and here]
• More from the Connecticut lawmaker: "Sen. Dodd To Introduce Emergency Paid Sick Leave Bill" [Daniel Schwartz, earlier]
• Age discrimination complaints to EEOC unexpectedly decline 7% [Adjunct Law Prof via Workplace Law Prof]