As you’ve likely heard, there’s a Southern governor on trial for public corruption.
Shockingly, he’s not from Louisiana.
Former Virginia governor Bob McDonnell and his wife Maureen are on trial for, in essence, taking gifts from a guy named Johnnie Williams in exchange for doing things in the governor’s mansion (there are also some bank fraud charges and obstruction charges, but frankly, in comparison to the public corruption stuff the bank fraud is terribly dreary). After five weeks of trial and testimony, the case just went to the jury.
There has been a lot of commentary on the McDonnell trial (see, e.g., here, here, here, and here). One thing that hasn’t been talked about during the trial much: the defense severance motion that was denied at the very start.
And, as the trial has continued, that motion looks more and more important in hindsight….
If you’re going to steal millions from clients, at least make a good story out of it. Like blowing hefty sums on luxurious private air travel and wiring millions to casinos to cover gambling debts. Make it a rock star story right up until the very end.
Of course, it’s hard to imagine a lawyer successfully stealing millions. There are just too many checks in place to let it get that far. It felt like the only thing anyone needed to know to pass professional responsibility was to respect escrow accounts. You just make sure all the money you’re watching for your customers, consumers, lenders and employees is always accounted for. There’s inevitably more than one person handling the bank statements. It’s just hard to lose millions.
Nonetheless, one law firm with offices around the country thinks it’s discovered more than a minor problem in its accounts. In fact, it just filed a lawsuit against its former managing partner, alleging that he siphoned off a cool $30 million from client escrow accounts to live like a proverbial rock star….
Mindy Kaling and Preet Bharara at the Harvard Law School commencement.
The legal world doesn’t have too many “crossover celebrities,” figures who are big enough to be known outside our little corner of the world. We can all think of a few — Alan Dershowitz, Judge Judy, Supreme Court justices (arguably) — and not all of them are awesome (cough cough, Nancy Grace).
One of the youngest crossover celebrities is Preet Bharara, U.S. Attorney for the Southern District of New York. He’s been on the cover of Time magazine. He’s attended the Vanity Fair Oscars party.
Bharara is best known for his crackdown on Wall Street abuses and insider trading, but he’s a fun person underneath the prosecutor’s dark suit. Yesterday the New York Times ran an interesting profile of Bharara. Here are some highlights….
On Friday, special prosecutor Michael McCrum secured an indictment of Texas Governor Rick Perry. Perry, whose 2012 campaign is the first abortion Republicans have celebrated in years, is accused of coercion and abusing his office when he threatened to, and subsequently did, revoke funding for the Public Integrity Unit. That unit is charged with rooting out government corruption, and Perry took away its budget because the district attorney in charge of the unit — a Texas Democrat — was convicted of drunk driving and wouldn’t step down. Perry thought she should leave her post because she had lost the public trust over her conviction and not at all because she had been investigating possible corruption related to Perry’s signature project, the Cancer Prevention and Research Institute of Texas.
If you don’t think this is shady and improper, you’re a hyperpartisan for Perry. Entirely obliterating the agency charged with protecting citizens from official corruption because you don’t like the person in charge — for whatever reason — smacks of overreach. Imagine Congress and the President zero-funding the Supreme Court because they wanted one justice to resign. It’s just cockroach hunting with a bazooka.
Still, is it criminal as opposed to just shady? That’s a different question. Law professors weigh in….
When I was in law school, I went to hear Chief Justice Rehnquist speak. He told a story of going to visit Finland, and meeting with their attorney general. The Chief Justice asked the attorney general whether the highest court in Finland could overturn an act of its parliament. She didn’t know the answer. She huddled with her staff for a few minutes, then told Rehnquist that they think their Supreme Court could, but the issue had never come up, because their high court had never tried.
Rehnquist told the audience that he thought this was just straight up freaky (not his words). And then began to wonder why he thought this was so strange. He concluded that there is something in the American psyche — especially in the part of the American psyche that lawyers seem to embrace — that feels compelled to push power to its outer limits.
This is a dangerous thing to think about if you think that our law enforcement community — from the lowly beat cops to an FBI forensic accountant — shares this disposition.
Friends and family confirmed that [the frustrated insecure bully], an unpredictable, petty individual who frequently loses his temper when he feels he is being threatened or disrespected, has in recent months been inquiring into joining the ranks of the Raleigh Police Department. In this role, the man with a massive chip on his shoulder and no visible sense of empathy would be tasked with peacefully resolving disputes and evenhandedly administering justice to members of the community over whom he would have official power.
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.
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.
Here’s something I’m envious of as a Canadian lawyer. The United States is filled with celebrity lawyers: Robert Shapiro, Gerry Spence, Harvey Levin (thank you, TMZ), Judge Wapner, Judge Judy, Judge Joe Brown, Judge Lance Ito.
Bobby and Teddy—lawyers. John, Jr., a prosecutor. Bill and Hillary and the current POTUS and FLOTUS, lawyers all.
And, of course, the most celebrated American lawyer, Geraldo Rivera (you forgot that, didn’t you?).
The U.S. loves to gawk at its lawyers, making them famous for defending ex-Hertz pitchmen, or for screaming at people on crappy daytime television where they make all judges look like arrogant cork smokers.
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.
As part of a nationwide tour, Above the Law is coming to the great city of Chicago.
Join preeminent law firm management consultant Bruce MacEwen, Katten Muchin Chicago managing partner Gil Sofer, and JPMorgan Chase & Co. assistant general counsel Jason Shaffer for a panel discussion (sponsored by Pangea3) on the evolutionary and market forces bearing down on the law firm business model. Come on by Thursday, November 20, at 6 p.m., for thought-provoking discussion, food, drink, and networking.
Space is limited and there will be no on-site registration, so please RSVP
Average law school debt for graduates of private universities hovered around $122,000 last year. With only 57% of new attorneys actually obtaining real lawyer jobs, recent graduates have a lot to consider when it comes to managing their student loan payments. Thanks to our friends at SoFi, today’s infographic takes a look at student loan debt, including the possible benefits of refinancing for JDs…
Kinney Recruiting’sEvan Jowers is currently in Hong Kong for client meetings and still has a few slots available through October 22. Evan will also be in Hong Kong November 14 to December 15. Further, Robert Kinney has been in Frankfurt and Munich this week and is available for meetings with our Germany based readers.
One of our key law firm clients has referred us to one of their important clients in the US, Europe and China – a leading global technology supplier for the auto industry – in order to handle their search for a new Asia General Counsel and Asia Chief Compliance Officer.
Kinney is exclusively handling this in-house search.
This position will have a lot of responsibility and include supervision of eight attorneys underneath them in the Asia in-house team. The new hire will report directly to the global general counsel and global chief compliance officer, who is based in the US. The new hire’s ability to make judgement calls is going to be as important as their technical skill set background.
The position is based in Shanghai and will deal with the company’s operations all over Asia and also in India, including frequent acquisitions in the region.
It is expected that the new hire will come from a top US firm’s Shanghai, Beijing or Hong Kong offices, currently in a top flight corporate practice at the senior associate, counsel or partner level. Of course, the candidate can be currently in a relevant in-house role.