White-Collar Crime

I pity lawyers licensed in Virginia, or at other states that require CLE credit. When they go to a conference, they have to actually go to the conference.

For the rest of us, a conference – especially the ABA’s white-collar criminal defense conference – drops much of the pretense of being an educational experience. It’s an odd thing. One would think that the point of going to a conference would be to learn about the law. Yet, sometimes that’s not the move.

I spent some wonderful years in my 20s living in New Orleans. During Mardi Gras, social obligation would require that I attend certain parties before and then after a parade, but they often started really early in the morning and ended very late at night. The entire week before Fat Tuesday became something of a Bataan Death March of merriment, which, when you’re in the middle of it, is not quite so merry after all.

(Relatedly, there’s now a service in New Orleans that will give you an IV of fluids if you happen to have been making merry too much. Gotta love entrepreneurship.)

Aside from the poor schlubs who have to go to the conference to satisfy a state bar that they’re continuing to learn about their profession, laissez les bon temps rouler.

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Dewey & LeBoeuf: it’s baaack (in the headlines).

Criminal charges are on the way for Steven Davis, Stephen DiCarmine, and Joel Sanders — the former chairman, executive director, and CFO, respectively, of defunct Dewey & LeBoeuf.

Almost two years have passed since the Biglaw firm’s bankruptcy filing, causing some observers to think that perhaps the Steves would never get charged. The argument, in a nutshell: they might have been poor managers or even downright moronic, but they didn’t commit any crimes.

Alas, sadly for Messrs. Davis, DiCarmine, and Sanders, it seems that Manhattan District Attorney Cyrus Vance doesn’t agree with that line of thinking. What types of charges can the trio look forward to?

(Please note the UPDATES added to this post, reflecting information from the indictment and the SEC complaint.)

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The biggest business issue confronting the white-collar criminal practitioner is getting paid. It’s trickier in the white-collar world than in other practice areas for a few reasons.

First, normally you’re representing an individual. People normally have less money than companies.

Second, many people who commit crimes to get money do it because they don’t have money to begin with. That includes money to pay you.

Third, if a potential client made money through whatever conduct landed them in a criminal case, the Supreme Court just held that now it’s easier for the government to take that money away from them so they can’t pay you.

As the Chief Justice summarized what the Court did, in dissent,

We have held… that the Government may effectively remove a defendant’s primary weapon of defense — the attorney he selects and trusts — by freezing assets he needs to pay his lawyer. That ruling is not at issue. But today the Court goes further, holding that a defendant may be hobbled in this way without an oppor­tunity to challenge the Government’s decision to freeze those needed assets.

WTF?

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I’ve represented a decent number of people who have been accused of fraud.

Some folks who are accused of fraud are really truly unambiguously guilty. They were presented with an open cookie jar, they thought no one was looking, and they took a cookie (metaphorically). They were presented with a morality test and they just didn’t pass.

Like Glenn Frey teaches us in Smuggler’s Blues, “It’s the lure of easy money; it’s got a very strong appeal.”

Other cases have a lot more nuance.

Most federal prosecutors, I find, tend to see cases as not terribly nuanced. They tend to think that each case is a morality test. Once you get the facts figured out, for the typical AUSA, the moral judgments follow pretty quickly.

My sense, though, is that the world is almost always less clear and clean, even when you have all the facts.

With that background, I read with interest James Surowiecki’s piece — “Do the Hustle” — in the New Yorker a few weeks ago about America and its con men.  (And, yeah, I know, it was a few weeks ago. You finish the New Yorker right when it comes out? I didn’t think so.).

What does the con man tell us about America?

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Most of the Eastern Seaboard is buried under a snowstorm today. Yet, a deeper, harder freeze is finally lifting.

For too long now, the federal government has been living with sequestration. Agencies have seen their budgets frozen or cut. At the same time that the private sector market for lawyers has contracted, getting a job as a lawyer in the federal government has been incredibly hard. It’s been winter in the federal employment world.

And, this week, the Department of Justice has announced that the DOJ hiring freeze is finally over.

This news was so important that the Attorney General himself made the announcement in a video message on the DOJ webpage. (And, by the way, check out the Attorney General’s tie. Very nice.)

The hiring freeze has lifted as a result of a two-year budget deal that President Obama signed in December.

What does this mean for the legal world? More after the jump…

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* Lawyer decides to fight City Hall… with spray-can graffiti. [KING]

* A new survey finds that pre-law students want a 2-year law school model. They want to come out of law school with 33 percent less debt? Shocking. [Kaplan Test Prep]

* Should law schools fire professors who stop writing post-tenure? I mean who does that? I thought tenured professors work harder than ever. [PrawfsBlawg]

* A look at the future of computer forensics via Almost Human. Frankly, when I think of the future of criminal policing I think of a different Karl Urban vehicle. [The Legal Geeks]

* With the revelation that standout defensive end Michael Sam is gay, a number of NFL types are trotting out the whole “he’ll be a distraction” excuse. That’s a pretty stupid excuse. [Lawyers, Guns & Money]

* Who is the “tipsy coachman”? [The Volokh Conspiracy / Washington Post]

* It’s a zombie! The living dead! Or maybe just a living woman that banks have declared dead despite all evidence to the contrary. [ATL Redline]

* Remember Brandon Hamilton? He used to be the the assistant dean of admissions at Louisville Law before he promised students $2.4 million more in scholarships than the school had to give. Well, he finalized his plea bargain. [The Courier-Journal]

Mathew Martoma

This afternoon, here in Manhattan, a jury found former SAC Capital portfolio manager Mathew Martoma guilty of insider trading. The verdict wasn’t a shock, given the strong evidence against Martoma and the fact that another former SAC trader, Michael Steinberg, got convicted in December on weaker evidence.

The trial involved a number of boldface names of the legal profession. The office of U.S. Attorney Preet Bharara (S.D.N.Y.), one of our 2013 Lawyer of the Year nominees, was represented by assistant U.S. attorney Arlo Devlin-Brown, one of the office’s most prominent prosecutors (and a star of the college debate circuit, for those of you who used to do debate). Martoma was defended by a team from Goodwin Procter that included Richard Strassberg, an S.D.N.Y. alumnus, and Roberto Braceras, another former federal prosecutor — and the son-in-law of Judge José Cabranes. The prosecution’s lead witness, Dr. Sidney Gilman, was represented by Bracewell & Giuliani’s Marc L. Mukasey — son of former S.D.N.Y. judge and U.S. Attorney General Michael Mukasey.

And some of our readers might know Mathew Martoma. He was a student at Harvard Law School back in the 90s, before he got expelled for fabricating his transcript while applying for clerkships.

Here are some notable numbers relating to the Mathew Martoma mess:

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It’s tricky to be a lawyer these days.

You have to get clients. You have to know how to help them with their legal needs.

You have to know the law, and know how to work appropriately with other lawyers (the ones who have interests aligned with your clients, adverse to your clients, and in that funny other space where you aren’t really sure yet).

And, at some point in your career, you also have to figure out how to get someone to pay you for doing this work for your clients.

If you’re trying to build a white-collar practice, it can be daunting to figure out how to do these things. Happily, there are a few places that can help (with the knowing the law, helping clients with their legal needs, and knowing how to work with other lawyers problems – the getting clients and getting paid problems less so).

Perhaps you also have a strong pressing need to go out of town where you can have all the fun of both missing your family and increasing the chance that you’ll be attacked by bedbugs.

If so, you’re in luck! The white-collar world has not one, but two great conferences (and one of them is coming up soon).

My take on which are the must-attend conferences of the white-collar world is after the jump.

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Let’s play a game of law firm word association. What words come to mind when I say Skadden Arps?

Prestigious? Yes.

Profitable? Definitely.

Sweatshop? Perhaps; some sources say the hours can be “long and unpredictable.”

Funky?

Yes, you heard me: funky….

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It’s a lamentable fact that very few white-collar cases in federal court go to trial. Most plead. Many of those that plead also involve someone providing evidence to the government against someone else; the people involved cooperate (or flip, or snitch, depending on who is talking about what happened).

White-collar cases, at least after an indictment, are often litigated with an eye toward the sentence that will come out at the end. And, with significant sentences in white-collar cases, that makes sense.

Most people plead rather than go to trial because a plea generally locks in some certainty about what will happen at sentencing. (True, in a world where the sentencing guidelines are discretionary, a judge may have a lot of power to decide a sentence that defeats a party’s expectations, but, generally, either by creative use of a statutory maximum — the government agreeing to make certain recommendations — or the simple fact that pleading guilty is a recognition that you aren’t going to spend a lot of the judge’s time sitting in trial, a plea can give a reason to think that the sentence at the end of the case will be lower. Though, of course, there’s always a Madoff exception.)

The flip side, of course, is that there’s a penalty for folks who decide that they would like to go to trial. Indeed, a recent report said that it’s a huge problem in drug cases.

And, on the trial penalty, there is some very interesting litigation in the federal courthouse in DC right now.

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