Guns, Not Drugs—Two Recent Arms Export Control Act Prosecutions

If a lawyer at a cocktail party introduces himself to you as an “international trade lawyer,” would you think “oh, how boring”?

You shouldn’t.

There may be some less-than-exciting aspects of trade law (see, e.g., anti-dumping work) but this regulatory practice is increasingly attracting the interest of criminal authorities.

Practice tip: If you work in a big firm, make friends with the trade lawyers because some of their clients are going to need your white collar expertise.

Two recent prosecutions in New Jersey are good examples of these kinds of cases. Both involve the Arms Export Control Act, both are against contractors and both deal with supposedly fraudulent military contracts.

The government separately indicted Alper Calik and Hannah Robert for wire fraud and violations of the Arms Export Control Act.

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High Frequency Trading Can Be a High Risk Endeavor — Another Trade Secrets Prosecution

The latest entrant into the Cover-Up Is Worse Than the Crime Hall of Fame is Sahil “Sonny” Uppal, a 26 year old former employee of Citadel LLC. He pleaded guilty to one count of obstruction of justice for hiding his unauthorized sharing of proprietary information related to Citadel’s high-frequency trading practice.

Mr. Uppal worked at Citadel, a Chicago-based financial institution, as a quantitative analyst, writing code for Citadel’s equity trading platform. But Mr. Uppal apparently decided to do more than programming. Instead, he made unauthorized copies of Citadel’s confidential and proprietary information related to high frequency trading, and then covered it up.

Now, the former analyst faces some serious prison time. Continue reading

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Five Early Musings on the McDonnell Guilty Verdict

Yesterday a jury in Richmond found former Governor Robert McDonnell and his wife guilty of public corruption. Here are the details of it.

I’m sure many others will offer in-depth analysis of the verdict in the coming days. Here are my initial thoughts about the verdict and the media coverage of the trial.

First, I was surprised by it. The evidence of a quid pro quo was nil, as best I can tell. The government certainly proved that the McDonnells accepted things of value, no question. But what did they give in return? Not much. The government did not appear to have any direct evidence that anyone agreed to provide official acts in return for those benefits.

I thought that perhaps the jury would split the baby and convict on one of the non-corruption charges. Or even acquit on everything. Boy, was I wrong.

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White-Collar Crime Resource Guide: What is a Grand Jury Target?

Some questions from clients or issues in white collar criminal defense cases come up over and over. I’ll periodically post Resource Guides to cover those questions and issues. Reminder: this is not legal advice.

There are three categories of individuals in a federal grand jury investigation: (1) target; (2) subject; or (3) witness. The prosecutor will decide whether you are a target, subject or witness.

When you hire a white-collar defense lawyer, you will hear a lot about whether you are a target, subject or witness. That’s because your status in the investigation informs many of the decisions your lawyer will help you make during the process, such as whether to talk voluntarily with the government.

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Written Juror Questionnaire Torpedoes Defendant’s Speedy Trial Act Motion

In complex white-collar trials, it’s not uncommon for the court to send written questionnaires to potential jurors ahead of the start of trial. The questionnaires are generally mailed to the potential jurors by the court a few weeks before trial. Having jurors complete the questionnaires allows both sides to review them thoroughly and prepare for voir dire. The court can also ask numerous questions to weed out jurors who should be excused for cause without having to take up hours of court time.

Both the prosecution and defense will suggest questions for the questionnaire. One great trial lawyer I worked with liked to request the question: “what bumper stickers are on your car?” When you think about it, it’s a deceptively simple question. You can learn a lot about someone from what she puts on her bumper for the world to see: she is a Democrat or Republican, she is a member of the NRA or the WWF, she has honor roll kids in school. (Or, perhaps, her kids can beat up other people’s honor roll kids.)

All in all, the questionnaires are a big help. But they can also set a trap for the unwary defense counsel thinking of making a Speedy Trial Act motion. A recent decision from the Eleventh Circuit in a securities fraud case demonstrates how.

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Size Matters? CalPERS CEO Pleads Guilty to Conspiracy

If you don’t know what the California Public Employees Retirement System (“CalPERS”) is, you should. It is the second-largest public pension fund in the country. It is responsible for operating the pension benefit system and health care benefit system for all current and former employees of the State of California. It also operates these benefit systems for employees of other California public entities.

Yeah, I know, that sounds boring.

But consider this: CalPERS has nearly 1.7 million members. Its investment portfolio is $200 billion. Billion.

Capturing that investment business is hugely profitable. So, I suppose it’s not very surprising that CalPERS has been the target of a few fraudulent schemes.

CalPERS probably didn’t expect that its own CEO would be part of one.

From 2002 to 2008, CalPERS’ CEO was Federico Buenrostro, Jr. On July 11, 2014, Mr. Buenrostro pleaded guilty to one count of conspiracy to commit honest services fraud and bribery and to defraud the United States.

So, what did he do?

In short, he accepted bribes and he lied.

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Where Are They Now? An Update on Past Posts

Every few weeks, I review the press releases for the U.S. Attorneys’ Offices across the country. In the blur of stories about drug busts and indictments for low-level health care fraud, sometimes a name sounds familiar.

No, not because it’s a friend. Or a relative. It’s because I’ve written about the person before.

Somewhere around 95% of all criminal cases end in a guilty plea. These cases are no exception. Of course, the government doesn’t issue press releases when it loses a case or when the result is a plea to a minor misdemeanor, so this isn’t a completely representative view of the outcome of all prosecutions.

Here are a few updates on popular past posts.

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Posted in Conviction After Jury Trial, FCPA, Government contracting fraud, Insider Trading, Sentencing | Tagged | Leave a comment

White Collar Crime Resource Guide: Statute of Limitations

Some issues in white collar criminal defense arise over and over. I’ll periodically post Resource Guides to cover those issues. Feel free to suggest other Resource Guide topics in the comments.

Click here for a printable version of this statute of limitations Resource Guide.

Default Statute of Limitations

Generally, there is a 5-year statute of limitations for federal criminal matters. 18 U.S.C. § 3282.

Longer Statutes of Limitations

Although five years is the default statute of limitations, many federal crimes have a longer period.

Capital offenses, as an extreme example, have a limitation period that never expires. If a federal crime is punishable by death, the government can bring an indictment on that crime at any time after the crime has been committed. 18 U.S.C. 3281.

Congress has specifically extended the statute of limitations for a number of white-collar crimes. Continue reading

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Nominate GrandJuryTarget for ABA Recognition

Greetings, readers

The ABA is gathering information for its yearly round-up of the best legal blogs. This is the first year that is eligible, and I’d love to be included on the list. It may not be the road to great riches, but my kids would get a kick out of seeing my name in print.

If you are so inclined (and, perhaps, very bored at work today), please feel free to nominate my blog using this form.

It will only take a minute or two since you are limited to 500 words.

Thanks, everyone.


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Chief Justice Roberts Is On the Side of Criminal Defendants? His Best Quote Yet

The Sixth Amendment guarantees the right to counsel. The Fifth Amendment establishes the grand jury. What happens when the right to counsel conflicts with the grand jury’s role?

The grand jury wins. So says the United States Supreme Court in the context of criminal forfeiture.

Justice Roberts dissented. Along the way, he makes a power case for the importance of protecting a defendant’s choice of counsel. Continue reading

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