White-Collar Crime

Lawyer of the Day: Robert Wayne Hallock

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man in suit grabbing cash.jpgYou’re a partner at the Chicago powerhouse law firm of Kirkland & Ellis, which generally ranks as the most profitable non-New York Biglaw firm in the country. But you decide that a six- to seven-figure income isn’t enough for your needs. So you do this:

1. Sell fraudulent certificates of deposit for $1.8 million.
2. Set up a bank account in the name of an LLC in Florida for the money.
3. Hire somebody to use the money to buy cashiers checks.
4. Proceed to blow hundreds of thousands of dollars on a girlfriend, a wedding, a honeymoon, and his Barrington, IL. lifestyle.
5. Leave the money off your tax return.

This is the scheme hatched by former K&E partner Robert Hallock. Not surprisingly, it didn’t work:

A Chicago-area attorney was convicted of tax evasion in federal court Wednesday for attempting to hide more than $1 million from the IRS. Robert W. Hallock, 62, a former partner at Kirkland & Ellis, was convicted in a bench trial of earning some $1.8 million in 1997 from the sale of fraudulent certificates of deposit.

Hallock funneled the money through a Florida bank account and used it to buy two cars, a truck and nearly $145,000 in jewelry, said Atlanta-based U.S. Atty. David Nahmais, whose office handled the case. He also gave $150,000 to his girlfriend and her parents, prosecutors charged.

Hallock sounds like a criminal and a moron. But he does get points for cojones and creativity. Here’s what he argued at trial:

[Hallock] argued that since [he] was obligated under the UCC to repay the money, he did not have any income — in his words, “a good faith belief, even if crazy, negates willfulness.”

Leave it to a tax lawyer to come up with an argument like that.
Former Kirkland & Ellis Partner Convicted of Tax Evasion [TaxProf Blog]
Bad Barrington Barrister Busted [Roth & Company, P.C.]
Chicago-Area Attorney Convicted of Tax Evasion [Chicago Tribune]

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Jeff Skilling’s Sentence: Like a Lord of the Rings Movie

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barbed wire razor wire prison.jpgReally, really long.* To wit, 292 months long. For the mathematically challenged among you, that’s 24 years and four months. Ouch.
But given the size and scope of the Enron fraud, the lengthy sentence may be appropriate (even if it’s higher than many Wall Streeters expected). You can compare Jeffrey Skilling’s sentence to those of other leading white-collar criminals over at the WSJ Law Blog.
* We briefly contemplated a far more crude cinematic allusion, involving this movie, but thought better of it.
Skilling Sentenced to 24 Years in Prison [Associated Press]
Skilling Gets 24 Years [DealBreaker]
Skilling’s Sentence: 24 Years, 4 months [WSJ Law Blog]

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Stupid Lawyer Tricks: Abusing the Autopen

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cameroon cameroun.jpgOkay, so he’s actually a law student (as a number of you nitpickers would surely point out). Anyway, here’s the story:

A 26-year-old law school standout was arrested for pretending to be a New Jersey congressman, so he could obtain visas for relatives and others in his native Cameroon, said a federal prosecutor.

Njock Eyong is charged with impersonating a federal official, possession of fraudulent visa documents, and fraud by wire scheme, according to an Oct. 11 indictment in the U.S. District Court in Washington, D.C….

While in Washington, he worked as an intern for New Jersey Democratic Rep. Donald M. Payne. In summer 2003, Eyong used the congressman’s signature machines and official stationery to demand that visas be issued, said Barbara Kittay of the U.S. attorney’s office in Washington.

Was Eyong’s fraud hard to detect? Well, the feds knew something was up when letters like this one started emanating from Rep. Payne’s office:

Dearest BELOVED:

I am BARRISTER NJOCK EYONG, Solicitor. I am the Personal Attorney to ENGR: J.M. PEDRO a national of your country, who used to work with shell development company in Bakassi CAMEROUN, who is seeking a VISA…

Student Accused Of Impersonating N.J. Congressman [CBS/AP]

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Morning Docket: 10.12.06

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i like ike button.gif* Buttons — isn’t that the new song by the Pussycat Dolls? Yes; but it’s also the issue in a case argued before the Supreme Court yesterday. Question Presented: Was a murder defendant’s right to a fair trial violated when the judge allowed relatives of the victim to sit behind the prosecutor, sporting buttons with the victim’s photo on them? [New York Times; Washington Post; Slate]
* A federal judge rules that candidates for the state bench can’t be barred from personally soliciting campaign contributions. So let’s just shove C-notes down their robes. [New York Times]
* Ex-Enron CEO Jeff Skilling won’t take the Martha Stewart approach: he’d like to remain free on bail while his appeal winds its way through the courts. This makes sense: his sentence is likely to be way longer than Martha’s brief stay at Camp Cupcake. [Washington Post]
* Justice Sandra Day O’Connor was slumming it earlier this week at the Second Circuit. The Times provides a UTR-esque account of the “mind-numbing” proceedings. [New York Times]
* The Supreme Court heard oral argument yesterday in Cunningham v. California, an important case raising the constitutionality of California’s sentencing scheme — and one that will have implications for other state sentencing systems. (Readers of the tea leaves suggest that Chief Justice Roberts and Justice Alito may not be in complete agreement with Justices Scalia and Thomas. Who are you calling “Scalito”?) [Sentencing Law & Policy; Los Angeles Times; New York Times]

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Musical Chairs: 10.05.06

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musical chairs above the law legal blog above the law legal tabloid above the law legal gossip site.GIFOodles of juicy moves today, especially out of and into the federal government. As the leaves change, so do the lawyers.
Government to Private Sector:
* Federal prosecutor John Hueston, a leader of the team that prosecuted Enron execs Kenneth Lay and Jeffrey Skilling, is heading for the greener pastures of Irell & Manella.
All around the country, AUSAs with white-collar criminal experience are leaving U.S. Attorney’s Offices — including our former workplace — for the more lucrative precincts of private practice. The trend is especially pronounced in the legendary Southern District of New York, as noted by Anna Schneider-Mayerson.
Private Sector to Government:
* Corporate and securities lawyer Michael Halloran, a partner at Pillsbury Winthrop, has been appointed to serve as deputy chief of staff and counselor to Christopher Cox, chairman of the U.S. Securities and Exchange Commission.
Lateral Moves:
* Broker-dealer compliance specialist Steven Lofchie, to Cadwalader, Wickersham & Taft, from Davis Polk & Wardwell. (In this day and age, compliance is a hot area. We’re guessing Lofchie got offered a nice deal.)
* Tax lawyer John Narducci, to Orrick, Herrington & Sutcliffe, from White & Case.
* IP lawyer Robert Wasnofski Jr., to Dorsey & Whitney, from Baker Botts.
* M&A lawyer Sandy Feldman, to Kirkpatrick & Lockhart Nicholson Graham, from Torys.
Retirements:
* Plaintiffs’ lawyer Alan Schulman, of Bernstein, Litowitz — and formerly of the indicted Milberg Weiss — is retiring at the end of the year.
Not Going Anywhere — Yet:
* Apple CEO Steve Jobs and HP CEO Mark Hurd are sticking around — despite the problems that their companies face.
NY Practice Leader Leaves One Elite NY Firm for Another [NYLawyer.com]
More NY Partners Switching Firms [NYLawyer.com]
Milberg Weiss: Merger Talks Break Down; An Alum Retires [WSJ Law Blog]
Enron Prosecutor John Hueston to Join Irell & Manella [WSJ Law Blog]
The Gang That Shot Straight Is Disbanding, For a Profit [New York Observer]

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Morning Docket: 10.05.06

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mark foley.JPG* “If Mark Foley had sex with a page in the District of Columbia, it wouldn’t be a crime. In the capital, the age of consent is 16, as it is in many states. That, coincidentally, is the minimum age to be a page.” [Los Angeles Times]
* The Sixth Circuit has placed Judge Anna Diggs Taylor’s warrantless wiretapping handiwork on hold. [Detroit Free Press via How Appealing]
* Some benchslapping of the government, courtesy of Second Circuit Judge Jon O. Newman: “Beatings? Exposure to air-conditioning after standing in the rain? Needless strip-searches? Never approached a due process violation? If I thought your client really believed that, I’ve got to tell you, I’d be really troubled.” [New York Times]
* The other shoe has dropped in the HP leak investigation scandal: criminal charges have been filed against former chairwoman Patricia Dunn and four others. [New York Times]
* Apple joins the options backdating scandal club. [New York Times; WSJ Law Blog]

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Law Firm Associates: How Not To Deal with the Late-Night Munchies

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baby eating blackberry blackberries baby girl.JPG

“No,” Daddy tried to explain, “it’s not THAT kind of blackberry…”
Photograph provided courtesy of a former Wachtell Lipton colleague of ours, Scott L. Black (whom we identify here with his permission; our default rule is anonymity for tipsters). Meet the absolutely adorable Shoshana Black, daughter of Scott and Marnie Black, a high-powered exec at MTV.
You may recall Scott Black from this recent Fortune magazine piece on the David Pajcin / Gene Plotkin insider trading scandal, which we highlighted in a previous post. Black, senior trial counsel at the SEC, nailed Pajcin in deposition questioning. Pajcin pleaded guilty to criminal charges and is now assisting the government with its investigation.
Partners in Crime: I-bankers, Insider Trades, Moles, Strippers… [Fortune]
Earlier: Non-Sequiturs: 09.22.06

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Morning Docket: 10.04.06

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burka burqa burkha burqha.jpg* An investigation by the Justice Department Inspector General reveals that the Bureau of Prisons doesn’t have enough staff to monitor communications of imprisoned terrorists with the outside world, including mail and phone calls. [Washington Post]
(And what about Instant Messenger? “What ya wearing?” “A burka.” “Love to slip it off you…”)
* The Supreme Court kicks off October Term 2005 — and J. Lo is in the house. José Antonio López’s appeal raises the question of what constitutes a “felony punishable under the Controlled Substances Act” (which the Court has grappled with before, and surely will again). [New York Times; Los Angeles Times; Washington Post]
* That wacky Ninth Circuit ruling from earlier this year, holding that arresting the homeless for sleeping on streets and sidewalks constitutes “cruel and unusual punishment,” may be coming home back to the shelter to roost. It could jeopardize Los Angeles’s attempted crackdown on homeless encampments. [Los Angeles Times]
* Larry Sonsini’s reputation has been tarnished by his involvement in the HP and options backdating scandals. But he’s got all his life to live, he’s got all his love to give; he will survive… [WSJ Law Blog]
* Ex-Comverse Technology CEO Kobi Alexander, wanted back in the United States on options backdating charges, is granted bail by a Namibian court, over U.S. objections. Those starstruck Namibians! Ever since Brangelina, they’re suckers for the rich and (in)famous. [Associated Press]

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Morning Docket: 09.29.06

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* Senate approves broad new rules to try detainees. [New York Times; Bashman linkwrap]
* Senate House grandstands over Hewlett-Packard as most witnesses take Fifth; libertarians celebrate that time wasted is time not spent passing new appropriations. [New York Times; WaPo]
* Verizon Wireless piles on against H-P. [WSJ Law Blog]
* Observers suggest Supreme Court cases over abortion might be contentious. You think? [Legal Times]
* Dozen Iraqi journalists arrested under new law against criticism of government. See? They’re already following in our footsteps up to the Alien and Sedition Acts! [New York Times]
* Belgium rules sifting of bank data illegal. [WaPo]
* California court hearing testimony over how many angels can dance on the pinhead of an anesthesized Death Row inmate. [Bashman linkwrap]
* Louisiana appellate court strikes down med-mal damages cap for failure to index to inflation, providing another excuse for doctors not to return to post-Katrina New Orleans. [Point of Law]
* New York Times writes thumbsucker on the Pirro marriage. [New York Times]

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Morning Docket: 09.28.06

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brangelina branjelina.jpgHey, it’s not yet noon — so we can still call this “Morning Docket.”
(Sorry for the delay. But if you care about actual legal news, as opposed to our crude musings on them, you really should go here or here instead.)
* BREAKING: Ann Baskins just resigned as general counsel of HP. And her lawyer, K. Lee Blalack 2nd of O’Melveny & Myers, said that she will not answer questions at today’s congressional hearings into the HP leak investigation scandal. [New York Times]
* Apparently Namibia is good for things other than harboring baby-bearing celebrities. Kobi Alexander — who is not an NBA player, but the ex-CEO of Comverse Technology — has been found in the African nation. As you may recall, after he was indicted on federal criminal charges arising out of alleged options backdating, Alexander became a fugitive. [Wall Street Journal via WSJ Law Blog]
* Not all internet sickos are creepy white men like John Mark Karr. There are a few ladies out there, too. [Pittsburgh Post-Gazette via How Appealing]
* Federal prosecutors are looking into whether Jeanine Pirro, anti-porn prosecutrix and the Republican candidate for New York attorney general, illegally taped conversations of her husband, to figure out if he was having (another) affair. Her partner in (possible) crime: Bernard Kerik, the former New York City police commissioner and ill-fated pick for DHS Secretary. [New York Times]
(Anyone have a link to the tapes? We heard them on the news this morning, and Pirro repeatedly drops the F-bomb. It’s pretty awesome.)
* The long and tortuous path to legislation governing the treatment of terror detainees may be reaching an end — and not a moment too soon, since this story is kinda hard to follow. And a bit boring. And torture generally doesn’t lend itself to humor opportunities. But see here. [New York Times; How Appealing (linkwrap)]
* We described the HP leak investigation scandal as a “made-for-television movie” well before Rep. Dianna Degette (D. Colo.) did. [WSJ Law Blog]

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