New Sentencing Guidelines Amendments Have Two Good Provisions for White Collar Criminal Defendants (and Lawyers)

Counting blackboardOn November 1, 2018, several new amendments to the Sentencing Guidelines went into effect. Two of them are quite positive developments for defendants—and their lawyers—in white-collar criminal cases.

As a procedural matter, the new amendments were proposed by the U.S. Sentencing Commission in April 2018. When Congress did not take any steps to disapprove the changes, they automatically went into effect on November 1st. Congress isn’t doing much right now, so they went into effect a few days ago.

Let’s take a look at two helpful new provisions.

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SEC Investigations 101: How It All Begins

SEC HQ front.jpg

By Daniel Portnov

This post kicks off a series for non-lawyers, or non-securities lawyers, who might suddenly find themselves on the wrong end of an SEC document request, subpoena or call from SEC Enforcement division staff.

Receiving a call from SEC Enforcement Division staff can be a sobering experience, especially if you or your company turn out to be the focus of the SEC’s investigation. You will likely have a million questions. One of the first will probably be: “How did this all start?”

This post will explain generally how SEC Enforcement staff initiate their investigations, or a Matter Under Inquiry (“MUI” – pronounced “MOO-ey”). In many cases, the MUI is a precursor to a formal investigation.

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Should Jurors Be Allowed to Ask Questions During a Criminal Trial?

Multiethnic group of thinking people in glasses with question mark looking upThe judge in one of my recent criminal trials allowed the jurors to ask questions. It was mostly fascinating, though there were a few scary moments too.

On the one hand, it gave us valuable insight into what the jury was thinking. I’m sure it helped the prosecution too, but it was incredibly helpful to hear what questions the jury had as we crafted our defense.

All in all, I’m in favor of allowing jurors to ask questions with the right procedural limitations in place to make sure everyone’s rights are protected.

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Latest Developments in the SEC’s Cryptocurrency Enforcement

 

SEC HQ front.jpgBy Daniel Portnov

It’s been a busy 2018 for cryptocurrency enforcement by the SEC. Following statements by Chair Jay Clayton and Co-Director of Enforcement Stephanie Avakian announcing various cryptocurrency concerns, sweeps and initiatives,[1] several recent Commission enforcement actions have backed up its big talk. Nearly one year after the creation of Enforcement’s Cyber Unit, cryptocurrency enforcement has grown into a vital element of the agency’s mission to protect main street investors.

Let’s take a look at some recent developments in this area.

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How to Pick a Fair Jury

JuryI don’t care what jury consultants say, picking a jury is an art and not a science.

For most trial lawyers, it’s based on gut feelings and sizing people up quickly and peeks at what a juror’s t-shirt says or what book she’s reading.

The dirty little secret is that it’s also based an awful lot on stereotypes. I hate that part, but it’s a necessary evil.

I want to talk about uncovering juror bias during jury selection. The Sixth Amendment guarantees a fair trial and that includes a fair jury too.

If you’re looking for wisdom about how to uncover juror bias, you’ve come to the wrong place. (Sorry for the clickbait title.) I’ve tried a lot of cases and talked to a lot of jurors before trial (and after), and I’ve come to the very definite conclusion that it’s pretty much impossible to uncover all the bias during our current jury selection system.

The court system is short on time and resources. We all do the best we can. A recent case out of the Ninth Circuit shows that sometimes the court’s best efforts are not enough.

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A (Small) Victory in a Battle With OIG

superhero-businessman-with-red-cape-concept-for-leadership-picture-id817347476.jpgBy Dan Portnov

As readers of Grand Jury Target know, we have a healthy respect for the various Offices of Inspector General (see here, here and here). OIG investigations can lead to serious consequences and, to add further anxiety, much of how the OIGs conduct their investigations remains mysterious. For someone to get their hands on an OIG Manual or any investigations policy document is virtually unheard of… until last month.

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Can Michael Cohen Reject a Presidential Pardon? Yes. But Would He?

Monopoly pieces and Get Out of Jail Free cardOn August 21, 2018, former Donald Trump attorney Michael Cohen pleaded guilty to multiple criminal counts, including campaign finance fraud. During his plea hearing, Cohen implicated the President in the crime, saying that Cohen had paid Stormy Daniels (a) at Trump’s direction, and (b) with the purpose to influence the presidential election.

Speculation immediately ran wild about the possibility of President Trump pardoning Cohen. On the one hand, it seemed possible because Cohen may know much more than he’s already disclosed to prosecutors during the investigation and because the plea deal did not contain an explicit cooperation deal. (As I’ve written here and here, it seems awfully likely that Cohen is cooperating and getting a deal.)

On the other hand, it seemed unlikely that Trump would pardon Cohen if Cohen had decided to cooperate with the government against him. He’s not exactly the forgiving type. See, e.g., the “failing New York Times,” “Crooked Hillary.”

On August 22, 2018, Cohen’s lawyer, Lanny Davis, was quoted by NPR as saying:

I know that Mr. Cohen would never accept a pardon from a man that he considers to be both corrupt and a dangerous person in the oval office. And [Cohen] has flatly authorized me to say under no circumstances would he accept a pardon from Mr. Trump, who uses the pardon power in a way that no president in American history has ever used a pardon — to relieve people of guilt who committed crimes, who are political cronies of his.

I was talking with a fellow white-collar lawyer the day Davis’ quotes were publicized. Neither of us had ever heard of a situation where someone would reject a pardon.

Could that happen? More important, would it happen?

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What’s a Mistrial?

Group of hands with pointing fingerLate in the afternoon of September 5, 2018, U.S. District Judge Royce C. Lamberth declared a mistrial in the second trial of Nicholas Slatten. The jury had been deliberating for a remarkable 16 (!) days when it sent a note saying, “we are unable to reach a unanimous decision.”

Slatten is a former guard for the private security company Blackwater. This was his second trial. He had previously been convicted of murder for a shooting incident in Baghdad’s Nisour Square on Sept. 16, 2007. That conviction was reversed because the court of appeals concluded that Slatten should have been tried separately from his co-defendant.

Many people hear the phrase “hung jury” or the word “mistrial” and think that’s the end of a criminal case against that defendant. They are always surprised when I explain that it means the government can start all over and try the defendant.

In the Slatten case, Judge Lamberth declared a mistrial but gave the government until September 14 to decide whether to retry Slatten for a third time.

In the Paul Manafort case, the judge considered granting a defense motion for a mistrial after they learned that one juror had commented to a second juror that the defense case was weak.

So, what exactly is a mistrial?

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Why Isn’t Michael Cohen Getting a Cooperation Agreement? (Part Two)

Writing correspondenceLast week, I wrote about the somewhat surprising fact that Michael Cohen pleaded guilty, allocated at the plea hearing that President Trump directed him to make an illegal campaign donation, and yet didn’t have a written cooperation agreement.

In fact, the plea agreement said that neither party would move for a departure from the sentence range, which is generally how a defendant’s cooperation would be taken into account at sentencing.

I promised that I’d offer another possible way that Mr. Cohen might have a cooperation agreement with the government.

The other possible way is through Rule 35.

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Why Isn’t Michael Cohen Getting a Cooperation Agreement? (Spoiler: He Probably Is) (Part One)

Dark room for interrogation. 3d renderingMuch was made this week of the fact that Donald Trump’s lawyer Michael Cohen pleaded guilty without a written cooperation agreement.

He pleaded guilty to multiple federal offenses, including tax fraud, campaign finance violations and bank fraud. The guidelines range agreed to in the plea deal is around 4 to 6 years.

Now, it’s true that his plea agreement did not have a cooperation provision in it. In fact, it said

The parties agree that neither a downward nor an upward departure from the Stipulated Guidelines range set forth above is warranted. Accordingly, neither party will seek any departure or adjustment pursuant to the Guidelines that is not set forth herein.

Even though the plea agreement said that neither party would seek a downward departure (even for assistance), it’s still very possible that Mr. Cohen will get cooperation credit during the whole sentencing process.

Let’s explore how that could happen.

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