Matt Kaiser

Matt Kaiser is a lawyer at The Kaiser Law Firm PLLC, which handles complex civil litigation, white collar investigations, and federal criminal cases. On his blog, The Federal Criminal Appeals Blog, he writes about published opinions in criminal cases in the federal circuits where the defendant wins. He can be reached at mattkaiser@thekaiserlawfirm.

Posts by Matt Kaiser

Americans are obsessed with taxes.

Maybe it’s our libertarian streak. Maybe an anti-tax bias is in our DNA from the Boston Tea Party. In any event, no real American likes paying taxes.

And some people don’t like paying them even more than the rest of us. Like Donna Marie Kozak.

In Omaha Nebraska this week, Kozak was convicted of a number of tax crimes. She is a member of the “sovereign citizen group ‘Republic for the united States of America.’”

According to DOJ’s press release about the case,

since the late 1990s, Kozak has engaged in a long series of fraudulent schemes to obstruct the internal revenue laws. These included placing her property in sham trusts, establishing a sham charitable foundation, sending harassing correspondence to IRS employees and filing bogus tax returns, trust returns, private-foundation returns and other false documents with the IRS. In 2008, she filed a tax return based on fictitious income and tax withholdings on Form 1099-OID statements that claimed a refund of $660,000.

At trial, in addition to the questionable tax filings, she also seems to have filed a $19 million tax lien against a federal judge who oversaw the tax fraud prosecution against two of her friends. She also filed other multi-million dollar tax liens against the federal prosecutors who brought her friends’ case.

It seems Kozak did not have a legitimate claim to $19 million from that judge. And self-help to a fake tax lien is not how one should address a suspicion of prosecutorial overreach.

Like the folks who believe that the limits on maritime jurisdiction, explained by a talking salamander, holds the key to beating a federal criminal charge, the full tapestry of wacko tax fraud theories is a lovely thing to behold….

double red triangle arrows Continue reading “Tax Fraud, Tax Protestors, and the Most Awesome Willfulness Doctrine in Federal Criminal Law Today”

Forfeiture law is insane.

There are lots of reasons to hate criminal forfeiture. You could dislike forfeiture because of the way law enforcement uses it to target poor people, the way law enforcement takes small sums of money that no reasonable person would fight over, the way some law man down south threatened parents with choosing between being arrested and having their kids put in foster care or forfeiting their cash, or even the way it creates insane incentives for cops to fund themselves by taking money from people whether they ought to or not. (For examples of this stuff, see either The New Yorker or The Daily Show, depending on whether you’re currently trying to impress someone).

Law enforcement wants that forfeiture money. And, as the examples above show, they’re going to do a lot to get it.

Though now, in Baltimore, a forfeiture case has led to an allegation that a federal prosecutor knowingly produced a forged document in a case.

If you believe a law enforcement officer’s testimony under oath.

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The white-collar bar is a varied and wonderful thing.

On one hand, there are the large-firm players — the FCPA mongers and the folks doing criminal antitrust work who fly all over the globe representing clients in lucrative conference room litigation that will rarely see a courtroom.

These cases are well-funded. Even if the client has a higher chance of French kissing the Chief Justice during the State of the Union address than of being indicted, as long as he’s indemnified by a large company, many firms will do everything they possibly can to be completely and fully ready for an indictment that will never come. I haven’t yet heard of a mock jury for a client in an investigation that isn’t going to be indicted, but I think that’s only because no one has thought it up yet. (And, to my friends currently representing such indemnified clients, you’re very welcome for the suggestion.)

For these folks, attorney-client privilege exists and is relatively easy to preserve. It’s good to be pre-indictment and it’s good to be indemnified.

But, for the rest of the folks accused of white-collar crimes, our Department of Justice is only too happy to make folks choose between a preserved attorney-client privilege and the Sixth Amendment.

How?

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No one has getting indicted on their bucket list. No one sends word of their indictment to their alumni magazine.

That said, if you’re going to get indicted, it’s a whole lot better to be charged in state court in New York than in federal court anywhere else in the country, in at least one way.

The criminal case about the implosion of Dewey & LeBoeuf shows why. Last week, the folks charged in the Dewey meltdown filed a number of motions to dismiss the indictment. Everyone but Zachary Warren filed an omnibus motion to dismiss. Steve DiCarmine filed his own motion that was so, well, something that it contained Above the Law’s quote of the day. Zachary Warren filed a separate motion. There’s some great stuff in all of the pleadings about the government’s case.

What’s perhaps less obvious to those of us who do white-collar criminal defense but don’t normally practice in state court in New York is that, according to the law as set out in these papers, New York state is a magical Shangri-la of due process compared to federal court.

How?

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Time Magazine cover boy Preet Bharara

In the federal criminal world, there are certain cases where the government almost always wins.

Illegal reentry for a previously deported person, for example, is pretty close to a lock for a government win — all the government has to show is that the person isn’t a citizen, was previously deported, and is in the United States again. If the dude’s in the courtroom, the government is a third of the way there. For example, in the last fiscal year, there were 20,840 folks charged with illegal reentry.  Four of them were acquitted at trial.

Similarly, bank robbery is a high-percentage game for the government. These days, most banks have amazing technology that lets them record pretty much everyone inside. Last fiscal year, 896 people were charged with bank robbery. One lucky guy was acquitted.

These days, federal law enforcement is using wiretaps and, according to the Wall Street Journal, old-school sting operations, to go build white-collar cases (it’s a pretty cool article — very cloak and dagger). The strategies that got the federal government the conviction rate it has in drug and gun cases are being applied to investment fraud and insider trading cases.

This is one reason that insider trading cases have looked like as much of a layup as a bank robbery case. The U.S. Attorney’s Office in the Southern District of New York has secured a record of 85 convictions in either guilty pleas or trials without a single loss.

Until this week….

double red triangle arrows Continue reading “The Trouble With Insider Trading Prosecutions”

Conspiracy is probably the most charged offense in the federal courts. At core, its elements are simple (generally). A and B have completed the crime of conspiracy if they (1) have an agreement to do something illegal and (2) some co-conspirator committed an overt act in furtherance of the conspiracy. The overt act does not have to be illegal.

So, if Larry says to Doug, “Let’s lie through email to potential investors about how viable our real estate plan is,” then Doug says “That’s a great idea, let’s do it!” and the two put together a letter they would email to potential investors that contains a number of lies about how viable an investment is, they’ve probably conspired to commit wire fraud.

The tricky bit is that the agreement that’s at the core of a conspiracy charge — like many kinds of contracts — can be implied. It’s rare that folks in a conspiracy negotiate the terms of the conspiracy or memorialize it.

So, if Larry and Doug just sit down and work — together — on a letter that lies to investors, one may (depending on the other facts in the case) think that the two have an implied agreement to commit fraud and that they’re guilty of participating in a fraud conspiracy.

The tricky part is when one person says, in essence, it would be really freaking cool to do X (where X is illegal) but doesn’t really mean that she wants to do X.

For example, some people may think that it would be funny to blow a raspberry on Justice Scalia’s belly. But just because Doug tells Larry that it would be cool to blow a raspberry on Justice Scalia’s belly, and Larry then looks up Justice Scalia’s next public appearance, does not necessarily mean that either one of them actually intends to storm Justice Scalia’s security detail just to blow on the Justice’s stomach.

And, of course, a jury is most likely to find that Doug and Larry are guilty the more they’re doing something that the jurors themselves think of as not funny and, in fact, really quite repugnant.

Like kidnapping, killing, and eating women, or trying to foment a jihad….

double red triangle arrows Continue reading “Attempted Cannibalism and Furthering Jihad: Two Views of Intent in a Criminal Conspiracy”

It would be hard to overstate the importance of Riley v. California. Now data on cell phones (and, hopefully soon, other electronic media) requires a search warrant for law enforcement to get access to it during an arrest (generally — check your individual situation; exceptions may apply).

It’s so hard to overstate the importance of Riley that I don’t think a single media outlet has done it yet (which is really saying something in light of the current state of Supreme Court coverage).

As you may dimly remember from the criminal procedure class you took in law school, the “search incident to arrest” doctrine is a little screwy and subject to abuse. The general rule is that police can search things on your person or in the area of your arrest to make sure you don’t destroy evidence or hurt them, but nothing else. Later cases have held that the area you can reach while you’re being arrested (where you could destroy evidence or find something to hurt the police) includes the entire interior area of your car, regardless of how far you can reach or how wedged under the seat cushions that currency counterfeiting machine is.

This body of law is a lovely example of how pro-law enforcement results drive any reasonable understanding of how a test should be applied. Reading these cases in law school is a formatively disheartening experience (“really, that’s the kind of junk judges come up with? Why have laws at all?” etc.).

Riley, though, draws a line around your phone. Sure — the police can look into your pocket to see if that square box is a cell phone or a detonating device, and they can look in the back of your van to see if you could have reached a butterfly knife if you had a 20-foot arm span — but they can’t look inside the phone without first getting a warrant.

Of course, the Court could have decided this in a few ways. It could have written a very narrow doctrinal opinion. Or it could have issued a deeply divided set of opinions where there isn’t a clear statement about the development of the law as much as a resolution of one case. But, instead, the Court issued a 9-0 decision, authored by the Chief Justice, which was a celebration of the importance of electronic privacy and recognizes that we’re in a new world — and need new rules to handle it….

double red triangle arrows Continue reading “Search Warrants To ISPs, The Supreme Court, And Electronic Privacy”

As Lincoln said, “Nearly all men can stand adversity, but if you want to test a man’s character, give him power.”

It’s a familiar enough idea. You see it in both Macbeth and the genesis story of just about every Marvel supervillan. It’s true, I think, not just of people but also of institutions. Like governments.

Just about every time I go to federal court for a sentencing hearing — where it seems the AUSA is fighting for each additional month in prison like it will take a point off his mortgage — I think about this quote from Nietzsche:

double red triangle arrows Continue reading “Nietzsche, American Power, And Edward Snowden”

Good bye, sweet Generalist. We hardly knew ye.

I’m a white-collar criminal defense lawyer. I love it. There are times when I think that I’ve won the work lottery. Yet, in this column, I’m going to complain about it.

Normally, I think that being a white-collar defense lawyer means that I represent folks who are under investigation by the Department of Justice, a law enforcement agency that would refer a case to the Department of Justice, or a regulator like the SEC, CFTC, or Office of Inspector General (in some situations — OIG’s both handle debarment and developing a case for DOJ).

But sometimes I’ll do other kinds of work too. Recently, I’ve represented clients in civil litigation. I’ve represented clients in arbitrations. And I’ve negotiated resolutions of disputes where litigation is looming but not yet happening. I’ve gotten really good results for clients in these kinds of cases (and, like any lawyer, I’ve had some cases break bad too). I like to think that if a case comes in that presents a relatively sophisticated litigation problem that doesn’t require a specialist (think of an ERISA case) I would consider doing it. And there are other lawyers in my firm who, to be sure, do primarily civil work.

But, despite that, I identify myself as a white-collar defense lawyer.

Sometimes, even though a potential client is exactly the kind of person I want to represent, presenting myself or being known as a white-collar defense lawyer is a problem.

When is that?

double red triangle arrows Continue reading “The Downside To A Professional Identity; Or The Demise Of The Litigation Generalist”

In the past few columns, I’ve talked about the reasons why white-collar trials are hard in federal court. So few of them go to trial and, of those that go to trial, so few have a win for the defense. One reason is how people accused of crimes are treated as witnesses and Rule 608(b). Another reason is that, especially in white-collar cases it seems, folks who are later accused of crimes are chatty with agents, and that seemingly never fails to break bad.

Another reason is that lots of folks cooperate with the government. When many people realize that there’s going to be someone going to prison (see, e.g., the statistics on plea rates), they reason that they’d rather someone else go to prison instead of them.

Snitches are tricky. Often you don’t know what they’ve said before to the government until late in the game. Their statements are Jencks — so a defense lawyer is supposed to get them, but often federal judges only require that they’re turned over very close to trial.

Snitches are also crafty witnesses….

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