Did the Founding Fathers Think the Fourth Amendment Would Protect our iPhones?

Our mobile devices increasingly hold the details of our lives. Our phones hold the names and contact information of our friends, family and colleagues. They maintain our calendars and plans. They track our internet activity and preferences, store passwords and even pinpoint our locations.

Not surprisingly, the government has learned to exploit our reliance on mobile devices. Take the example of Daniel Milzman, the Georgetown University student suspected of creating ricin in his dorm room. As Breaking Bad devotees already know, ricin is a highly toxic chemical that is lethal to humans even in small doses.

The government aggressively sought a search warrant for Mr. Milzman’s smartphone to build their case against him. But a magistrate judge in the District of Columbia said no, forcing the government to go back and try again. Here’s the Milzman orderContinue reading

Posted in Criminal Investigation, Search warrant | Leave a comment

Yet Another Way the Deck Is Stacked Against Defendants—Granting Witness Immunity

Brent Roger Wilkes is nothing if not tenacious. In November 2007, he was convicted of wire fraud, bribery, conspiracy and money laundering, all in connection with a scheme to bribe former California State Congressman Randall “Duke” Cunningham and to defraud the Department of Defense. Mr. Wilkes has been fighting the good fight for the last seven years but the Ninth Circuit recently handed him another loss.

The opinion raises interesting questions about the government’s one-sided use of immunity to obtain convictions and the near-impossibility of a defendant forcing the government to grant immunity to a defense witness.

To put this in perspective, one statistical analysis in 2012 shows that the success rate for defendants seeking use immunity for defense witnesses is less than 4%.  Continue reading

Posted in Appeal, Bribery, Immunity, Sentencing | Leave a comment

Is This The First Domino to Fall in FCPA Case? French Citizen Pleads Guilty to Obstruction in Foreign Bribery Case

A French citizen appeared in a Manhattan federal court on March 10, pleading guilty to obstructing a government investigation into bribes paid to secure mining rights in Guinea. Mr. Frédéric Cilins, a 51-year-old businessman, had been arrested during an FBI sting in Jacksonville, Florida last April. His recent guilty plea will supersede the not guilty plea he originally entered with the court.

Mr. Cilins was allegedly acting on behalf of Beny Steinmetz Group Resources (BSGR), a Guernsey-based energy company. BSGR was founded by one of the richest people in the world, Beny Steinmetz.

The question, of course, is whether this guilty plea will be the end of the case or simply the first step to indict others or the company itself. Continue reading

Posted in FCPA, Plea Agreement | Tagged | Leave a comment

Here’s One Way to Afford the D.C. Real Estate Market: Seven Year Sentence for Defendant in Bribery Scheme Involving Public Official

By Sara Kropf

For years now, the calling card of a big-firm white-collar lawyer has been, “I do FCPA work.” But all the focus on foreign bribery work overlooks the domestic bribery schemes that are regularly pursued by the federal government. FCPA work may sound exciting—and involve travel to far-flung and developing nations to visit the outposts of U.S. companies—but most bribery of government officials happens right here in the good ol’ U.S. of A.

Take, for example, Oh Sung Kwon, also known as Thomas Kwon. Mr. Kwon was recently sentenced in connection with a government bribery arrangement in a case before Judge Emmet Sullivan of the federal district court for my home town, the District of Columbia.

Mr. Kwon pleaded guilty to one count of bribery of a public official, one count of conspiracy to commit bank fraud, and one count of willful failure to file a tax return. In return, the sentencing judge imposed a sentence of more than seven years. In addition to serving two consecutive forty-six month periods of incarceration and thirty-six months supervised release for the bribery and bank fraud counts, Mr. Kwon has been ordered to pay restitution of nearly $1.2 million. Continue reading

Posted in Bank fraud, Bribery, Conspiracy, Plea Agreement, Public Corruption, Sentencing | Leave a comment

Expected 151 Months; Got 276 Months. Is Cooperation Worth It?

Frank Castaldi’s story serves as a cautionary tale for anyone trying to cooperate with the government to get a better deal.

In 2008, Mr. Castaldi turned himself in to government investigators, revealing his $77 million Ponzi scheme. Mr. Castaldi fully cooperated with the government and entered into a plea agreement recommending a sentence between 151 and 188 months. So the court’s 276-month sentence no doubt came as a bit of a shock.

Unfortunately, the Seventh Circuit wasn’t the least bit sympathetic.

Continue reading

Posted in Appeal, Investor fraud, Plea Agreement, Sentencing | Tagged | Leave a comment

The Largest DBE Contracting Fraud. Yes, Ever.

Government contracting fraud has been a hot area for the Department of Justice these last few years. And who can blame it? It’s a huge amount of money being handed out by many agencies, sometimes with less oversight than is appropriate.

There’s even a database researched by the Project on Government Oversight called the “Federal Contractor Misconduct Database.”  It lists the top 100 government contractors and then the number and amount of (supposed) misconduct committed by them. I can’t vouch for the accuracy of the site but it’s an interesting read.

One area of government contracting fraud that has clearly caught the attention of the government is the program allowing for set asides for minority-owned or disadvantaged businesses.

Romeo Cruz, one of the defendants behind the largest case of Disadvantaged Business Enterprise (DBE) fraud in history, surrendered himself to the Bureau of Prisons earlier this month. According to the government, he was involved in a 15-year, $136 million DBE scheme. Continue reading

Posted in Government contracting fraud, Sentencing, Tax fraud | Tagged | Leave a comment

Was There a Fox in the Henhouse? Corporate Auditor at Public Company Charged with Insider Trading

As someone who handles litigation and white-collar criminal matters, I’m often troubled by my clients’ corporate audit department. It will author lengthy, non-privileged reports about processes at companies that don’t work. Those reports put everyone on notice about those failing processes. The reports list a bunch of “action items” that should be undertaken to correct those processes. In my experience, companies rarely have the time, money or desire to put into place all of the suggested corrections. And, bam! You have negligence or recklessness or even willful blindness.

But here’s a story about a corporate auditor who allegedly did more than simply write a report that caused heartburn for outside counsel. Steven Dombrowski was the Director of Audit for Allscripts Healthcare Solutions, Inc. Allscripts’ common stock traded on NASDAQ. Mr. Dombrowski was recently indicted in the Northern District of Illinois for insider trading. Continue reading

Posted in Indictment, Insider Trading, SEC Investigation | Tagged | 1 Comment

Never Too Old For Bribery? Florida Couple Sentenced for Offering $1.24 Million in Bribes to Obtain Federal Contracts for Foreign Military Goods

Sorry it’s been so long since I last posted. I took a few weeks off for the holidays and then tried and won a defamation trial in Virginia last month, sort of.  It’s back to the grindstone now, though. There were quite a few interesting white-collar cases in the last six weeks so I’ll be playing catch up in my next few posts. Glad to be back!

A Florida couple and a Utah-based military procurement officer were sentenced in January 2014 for a three-year bribery scheme that involved foreign military aircraft contracts. Continue reading

Posted in Bribery, Conspiracy, Government contracting fraud, Plea Agreement | Tagged | 1 Comment

When a 20-Month Prison Sentence Goes in the “Win” Column

For the government, sentencing seems to be a science, not an art. Let the probation office calculate the guideline range. Request a sentence within it, usually at the high end. Done.

But for defense counsel, sentencing is an art, not a science,. You have to consider the crime itself, the sympathetic nature of the victims, the background of your client, the leanings of the judge, the testimony of any witnesses during sentencing, and similar sentences for similar offenses.

If the result of all that “art” is twenty months in prison, it may sound like a very long time. Even with good time credits, you will spent about 17 months behind bars. Watching your client sentenced to 20 months hurts.

But getting a 20 month sentence when it could have been 78 months? Well, that’s a different story. When the government asks for over 6 years in prison and you end up with less than 2 years, that’s not a bad outcome.

The former CEO of an aircraft leasing company was recently sentenced to 20 months for wire fraud. I call it a victory because the government asked for 78 months. Continue reading

Posted in Commercial Bribery, Conviction After Jury Trial, Obstruction, Sentencing, Wire Fraud | 1 Comment

Hey, I’m a Guest Blogger!

The kind folks at White Collar Crime Prof Blog let me post over there today (thanks Ellen!). The Second Circuit issued a great opinion for white collar defendants limiting the continuing conspiracy theory. Finally, a court has reined in the government’s use of this theory to get around the statute of limitations. Check out my guest post here. And, if you aren’t already reading White Collar Crime Prof Blog regularly, you should be. They cover a whole range of interesting issues and will keep you up to date on conferences and other events of interest to white collar practitioners.

Posted in Appeal, Conspiracy, Dismissal of charges in indictment, Tax fraud | 1 Comment