Georgia Federal Criminal Defense Lawyer & Attorney : Gillen Withers & Lake Law Firm : White Collar Crime, RICO, Trial : Atlanta, Savannah, GA

    Former Georgia State Representative Ron Sailor plead guilty to a superseding indictment and charges of money laundering, wire fraud and fraudulently obtaining a loan today in the United States District Court for the Northern District of Georgia. Sailor had initially plead guilty to laundering and attempting to launder $375,000 worth of alleged drug proceeds in March. However, the court revoked Sailor's plea agreement when it was discovered that, following his December 2007 arrest, Sailor had secretly obtained a $250,000 loan using the Greater New Light Missionary Baptist Church, where he was a pastor, as collateral, without the church's knowledge. Sailor re-pled today to the money laundering charges and the added loan charge.

   Sailor caused the church's annual registration to be changed to show that he was the Chief Executive Officer and drafted a fake resolution of the church's board of directors purportedly authorizing Sailor to borrow money against the church's property, forging the signature of the church's secretary on the document. He also created false church bylaws. Sailor then submitted the documents to a Georgia bank which (with a startling lack of due diligence) made the loan. He hid the loan from the government, whom he was supposed to be assisting with another criminal investigation.

   Sailor will be sentenced in September and could receive a maximum of 80 years in prison and a fine of up to $2.25 million.

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     Kirk Wright founded and was Chief Executive Officer of Atlanta-based International Management Associates (IMA), which managed several hedge funds, as reported by the Atlanta Business Chronicle. By 2006, IMA had thousands of clients, had received more than $150 million in investments and also had offices in New York, Los Angeles and Las Vegas. However, IMA actually lost almost all the money invested, yet Wright falsely reported monthly gains to investors. At the same time, Wright diverted millions to his personal use, spending the money on a half million dollar wedding, multiple properties in Atlanta and California, luxury vehicles, jewelry and on relatives.

     When several investors requested distributions early in 2006, IMA collapsed and the investors, including several National Football League players, received bad checks and filed suit against IMA. Wright proceeded to take $500,000 in cash from the company and fled. The Federal Bureau of Investigation conducted a nationwide manhunt and arrested Wright in May of 2006 at the Ritz Carlton hotel in Miami Beach, Florida, finding him in possession of numerous pieces of false identification and equipment for making false identifications.

     Wright was charged with mail fraud, securities fraud and money laundering and was convicted following a two week trial in the United States District Court for the Northern District of Georgia. He faces up to 710 years in prison and $16 million in fines.

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     Charging two or more distinct offenses in a single count is what the law refers to as duplicity. See generally 1 Wright, Federal Practice and Procedure, § 142 (2^nd ed. 1982); 8 Moore’s Federal Practice, § 8.03 (2^nd ed. 1984). The test for determining whether separate statements in a single false statement count constitutes a single offense turns on whether each alleged false statement in a given count is substantially the same as the others. United States v. Graham, 60 F.3d 463 (8^th Cir. 1995); United States v. Bins, 331 F.2d 390, 393 (4^th Cir. 1961)(“the test for determining whether several offenses are involved is whether identical evidence will support each of them, and if any dissimilar facts must be proved, there is more than one offense”). In a fascinating case against a sitting federal district court judge, the Ninth Circuit noted that the vice of a duplicitous indictment is that a conviction could be obtained without a unanimous verdict as to each of the false statements in a particular count. United States v. Aguilar, 756 F.2d 1418, 1420 (9^th Cir 1985).

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With sentencing scheduled for Thursday, April 24, Snipes has:

• added another lawyer, his sixth attorney, that, apparently, will be present at sentencing,
• moved to continue sentencing, and,
• all important, has requested the use of a laptop at sentencing!

As noted here, the resolution conference to resolve disputed issues regarding the presentence investigation report was held on Friday, April 11, 2008. By Monday of the following week, April 14, 2008 the government had filed a 36 page sentencing memo arguing that by any stretch of a sentencing calculation, Snipes faces a 36 month term of incarceration.

Snipes counsel’s reaction was to file the following day, a motion to continue sentencing. That motion, filed on tax day, was denied by Judge Hodges the following day.

The government, meanwhile has filed a Motion for Bill of Costs, seeking costs of just over $250,000.00.

Yet to be filed by defense counsel is a sentencing memorandum, fairly standard practice in any case of complexity, particularly, where counsel seeks to argue that the factors set forth in 18 U.S.C. § 3553 provide some ground for departure from the applicable guideline range. My guess, any pleading filed the day before sentencing, is filed a day too late.

So, what does Judge Hodges have to consider the day before sentencing – the presentence report, which will recommend a 36 month sentence and the government’s 36 page sentencing memorandum arguing for a 36 month sentence (is there some cosmic symmetry to the pagination). Mr. Snipes should prepare for 36 months.

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The prosecution decided not to call Bertram “Bert” Fields, “lawyer to the stars,” to testify at the trial of Anthony Pellicano, “private eye to the stars.” Fields had earlier announced his intent to plead the Fifth if called as a witness.

Clients of Field’s firm Greenberg Glusker, including hedge fund manager Adam Sender and movie producer Andrew Stevens, have already testified under grants of immunity to having listened to illegal wiretaps by Pellicano. The government’s wiretap evidence further has Pellicano referring repeatedly to Fields in conversations with others. Fields, who referred Greenberg Glusker clients to Pellicano, is suspected to have known of Pellicano’s illegal methods.

Another lawyer, Terry Christiansen, attorney for billionaire Kerk Kerkorian, has also been charged for retaining Pellicano to wiretap Kerkorian’s ex-wife during child support proceedings.

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The government has filed a 36 page Sentencing Memorandum, available here, contending in exquisite detail that the appropriate sentence for Wesley Snipes is 36 months, the statutory maximum for the 3 misdemeanors for which he was convicted. In my view, and as expressed earlier here, and here, that Snipes will get 36 months is a foregone conclusion. Quite frankly, what is astonishing in reading the Sentencing Memo is how in the world he was acquitted of the remaining counts of the Indictment when he didn’t testify, and the government presented such powerful evidence of his guilt - makes you admire the work of Snipes’ trial counsel, now dismissed, Robert Bernhoft.

The government persuasively argues that for a variety of policy reasons it is appropriate to bring tax cases against high profile targets and that

• “this case cries out for the statutory maximum term of imprisonment . . . because of the seriousness of Snipes’ crimes and
• because of the singular opportunity this case presents to deter tax crime nationwide." (p. 1)
• As Professor Berman points out here, Snipes’ sentencing, which is set for April 24 comes just a few days too late for maximum deterrent value.

At any rate – why is Snipes going to get 36 months:

• because the “tax loss for counts of conviction alone is $2,771,682” (p. 6)
• based on unreported gross income of $13,858,419 for the tax years for the counts of conviction!!
• which results in a guideline sentencing level far in excess of 36 months.

What is interesting in reading the Sentencing Memorandum, apart from the persuasive evidence of intent presented at trial, is that the Presentence Report has been submitted to the parties, and a resolution conference held with the Probation Office on Friday, April 11, 2008, wherein “counsel for the defendant proffered a one-page, high level summary schedule showing a purported tax loss of merely $227,959 for the years 1999-2001” and “a one page analysis captioned ‘Detail of RAR [Revenue Agent Report] Analysis by Year’ covering only 1999 . . . [n]o other schedules have been provided to date.” (p. 6-7) 

For those not familiar with the process, the Presentence Report is prepared, and objections to it are presented to the Probation Officer. Then a meeting is held between counsel and the Probation Officer.

So, one business day after that conference was held with the Probation Officer, the government files its detailed Sentencing Memo outlining the available sentencing calculations for Snipes, none of which get him close to getting under the 36 month statutory maximum.

There will be no Booker issues in this sentencing. There will be no acquitted conduct issues in this sentencing. Snipes will get at or near the 36 month maximum.        

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    Tony Pellicano was the "Private Eye to the Star." However, Pellicano's investigative techniques included threats, illegally tapping phones, and bribing police and telephone company officials to run illegal checks. Consequently, Pellicano and his associates are now in a California district court on numerous charges, including wire fraud, identity theft and illegal wiretapping. Hollywood elite who have already testified at the trial include Garry Shandling, Sylvester Stallone, Chris Rock, Paramount Pictures CEO Brad Grey and former Walt Disney Co executive Michael Ovitz.
     Pellicano's activities were finally discovered when he smashed the windshield on the car of investigative journalist Anita Busch and left a dead fish on the car with a rose in its mouth and a note saying "Stop" in 2002. Later, two men tried to kill Bush at her apartment. Police raided Pellicano's Hollywood office and uncovered evidence of his illegal tactics.
     Pellicano is acting as his own attorney at the trial. The prosecution was forced to drop 28 charges when it could not bring forward the witnesses to prove them, and has rested its case.

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Sentencing for Wesley Snipes is set for April 24, 2008 and he has just dismissed his trial counsel, Robert Bernhoft and his firm. Bernhoft, who, you will recall, was brought into the case, just prior to trial has had notable success against the government in prior IRS cases, and he did a masterful job at trial in this case. The jury acquitted Snipes of the felony charges and convicted him of three misdemeanors. 

Snipes, appearing ecstatic after the verdict, apparently, is ecstatic no longer because Bernhoft filed a motion to withdraw as counsel of record last Tuesday, April 1. Judge Hodges granted that motion the following day, noting that Snipes had instructed the Bernhoft firm to file the motion. Snipes apparently has no clue how bad this lawyer shifting makes him look, but to gain an understanding of the musical chairs at play here, take a gander at the timeline of events:

Trial was originally scheduled for October 22, 2007.

October 3, 2007 just three weeks before trial was scheduled to begin, Bernhoft filed his notice of appearance in the case, along with a Motion for Continuance, which was denied.

October 3, 2007, previous counsel for Snipes, including Daniel Meachum, filed a motion to withdraw as counsel.

October 9, 2007 Bernhoft filed a scathing Motion for Reconsideration alleging a variety of deficiencies in preparation by prior counsel.

That Motion was granted and trial was scheduled for January, 2008.

January 11, 2008, Meachum filed a notice of appearance and was back in the case.

February 1, 2008, the jury acquitted Snipes of the felony tax counts, but convicted him on three misdemeanor tax offenses.

March 28, 2008 two new counsel filed motions indicating that they were appearing as counsel for Snipes.

April 1, 2008 Judge Hodges granted those motions.

April 1, 2008, exactly three weeks before sentencing Bernhoft and his firm filed a Motion to Withdraw as counsel of record.

April 2, 2008 Judge Hodges granted the Bernhoft firm's motion to withdraw.

In an earlier post, I had posited that Snipes’ acquittal on the more serious felony charges was a pyrrhic victory since all of his relevant conduct would be taken into account at sentencing. My prediction then and now is that Snipes will receive a  sentence toward the upper end of the statutory maximum sentence of three years.

Snipes is still left with several lawyers, but Bernhoft did a magnificent job at trial. That Snipes has again dismissed his lead counsel just prior to sentencing is now an established pattern, which, quite frankly, looks bad, and my guess is, doesn't sit well with the Court. 

This set of musical chairs as sentencing approaches has the look of desperation. April 24 will be an unpleasant day for Mr. Snipes, no matter his machinations with counsel.

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I have yet to weigh in on the many fine blogs that have followed the Dickie Scruggs case since the indictment in November of last year (particular kudos are due to David Rossmiller’s exceptional work here), but with Zach Scruggs’ plea to misprision of a felony last week, and, since Mississippi is the land of Faulkner, here is my editorial stream of consciousness:

My first thought on Zach Scruggs’ plea:

This is the way the world ends,
This is the way the world ends,
This is the way the world ends,
Not with a bang, but a whimper.

T.S. Eliot, The Hollow Men

It has been said by one prosecutor that misprision is for girlfriends, but, apparently, that prosecutorial gift extends to sons as well. It is surprising in the extreme that the government allowed Zach to enter a plea to misprision. The sentencing guidelines for misprision are very low, and that plea virtually guarantees that Zach won’t serve much time in prison.

One of the things that has struck me about the defendants’ plea colloquy is that several of them have wanted to weigh in and lessen their culpability (see here, Zach's plea transcript, p.15-16, and here, Dickie's plea transcript and his famous earwig comment, p. 15). Generally, statements by defendants in mitigation are not made until sentencing, and even then that can be a dangerous tact because here the defendants are entering pleas to some of the most serious offenses, bribing a judicial official, and straining at gnats at the plea is not cottoned to by district court judges.

I  was fundamentally surprised at three things in the pretrial motions practice in this case: (1) that more attacks were not raised by defense counsel against the wiretaps (there is an entire body of Title III litigation out there); (2) the shrill, overblown writing style of the defendants’ motions that, (3) was very effectively countered in direct, succinct writing that highlighted the nits at which the defendants were picking and the substantial, and fundamentally wrong conduct the defendants were engaged in.

Finally, I was extremely surprised at Dickie Scruggs’ guilty plea, particularly because the plea agreement, p.10, does not protect him from additional criminal investigations that, plainly, are ongoing.

In that respect, Balducci predicted in one of his conversations with Judge Lackey that he knows where the bodies are buried (Scruggs Indictment, p. 5). My guess, there are other bodies out there, and it will be interesting to see how aggressively the government pursues those case.

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Georgia State Representative Walter Ronnie Sailor, Jr., who represents District 93, which incorporates parts of DeKalb and Rockdale Counties, pled guilty on Tuesday to a federal money laundering sting count, and further resigned from the General Assembly. Sailor is alleged to have approached an undercover Federal Bureau of Investigation agent posing as a drug dealer at an Atlanta hotel in November 2007, allegedly offering to launder drug proceeds for a fee. The agent allegedly met Sailor several times to provide him with sums of money represented to be drug proceeds, and Sailor would allegedly meet with the agent to provide the agent with checks for the proceeds. Sailor was arrested last December, and immediately began cooperating with the government. He will be sentenced in May.

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In the trial of long time Allegheny County, Pennslyvania coroner, and famed forensic pathologist, Cyril Wecht, closing arguments begin tomorrow in front of District Court Judge Arthur Schwab. The indictment, charging mail fraud, wire fraud, and honest services, was recently trimmed down, the government alleges, to streamline trial, and because certain counts were infirm as there was no mailing to suport the charge.  

This case has been particularly rancorous, even in the context of federal criminal trials where the stakes are high.

• The defense moved to recuse the trial judge because of his alleged ex parte contacts with government counsel;
• The trial court referred the government’s motion for sanctions against defense counsel to the Disciplinary Board of the Supreme Court of Pennslyvania;
• Several appeals have been taken on various issues to the Third Circuit Court of Appeals, with Judge Schwab, a careful, no non-sense jurist, having been reversed on 2 occasions (484 F.3d 194 (3rd Cir. 2007);  and
• Congressional testimony by Former Attorney General and Wecht defense counsel decrying the alleged political motives behind the prosecution. 

In the course of the six week trial, the government presented evidence that Wecht made underlings run personal errands, that he overbilled clients for travel and that he had a had a quid pro quo with Carlow University that was expressly debunked by the administrators at Carlow. 

• Is this the stuff - having to run unauthorized errands for your boss - that federal crimes are made of?
• Is every moral lapse a federal criminal case?

One famed prosecutor has argued that fraud is as ancient and as versable as man himself, and was first set forth in Leviticus 19:11-13 - do not lie, do not cheat, do not deceive one another (citation). But, is that, in fact, the case?

• Are there instances, where deceptive conduct is handled by termination?
• Are there not instances where conduct exceeding the bounds of office decorum and decency are handled by civil filings?

With closing arguments to begin tomorrow it will be interesting to see if the jurors believe that what the government has charged and proven is actually a crime.

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Friday February 1, 2008 was a good day for actor Wesley Snipes, who was acquitted of the felony charge of conspiring to defraud the Internal Revenue Service, and convicted of three misdemeanor counts. Snipes, who on one occasion sent a 600 page diatribe to the IRS, had changed attorneys a mere 90 days prior to trial terminating the services of high profile counsel Billy Martin, and hiring the less well known, Robert G. Bernhoft of Milwaukee.

Interestingly, Bernhoft’s trial strategy of fronting the inanity of Snipes’ personal beliefs regarding his tax protester status, worked with the jury rejecting the felony conspiracy charge, but convicting him of only three misdemeanor counts.

It will be interesting to watch Snipes’ sentencing to see if the felony/misdemeanor distinction is a pyhricc victory as all relevant conduct will be attributable to Snipes. It is this writer’s guess that Snipes will still be facing a sentence at the upper end of the maximum sentence he can potentially receive – 3 years.

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One of the defendants in an Atlanta-area mortgage fraud ring involving approximately 20 other persons was sentenced on Thursday by United States District Judge Thomas W. Thrash, Jr., to 7 years imprisonment, followed by 3 years supervised release, and a staggering $40,226,000 in restitution. Leslie Rector was one of the leaders of the scheme, which was headed by Phillip Hill, and which involved more than 50 homes and 250 condominiums in the Atlanta area.

Similar to numerous other increasingly common mortgage fraud cases, the defendants would sell the properties to “straw purchasers” at inflated prices, who would apply for a mortgage loan at an inflated price, in the process making numerous false representations on loan documents that the purchaser had paid a downpayment, would reside in the home and would be responsible for repayment of the mortgage. In exchange for engaging in these loan “flips,” the defendants would pay kickbacks to the purchasers.

The defendants rounded out their scheme by obtaining fraudulently inflated appraisals on the properties. The extensive scheme involved appraisers, loan officers, “recruiters” of straw borrowers and attorneys, many of whom pled guilty prior to the 8 week trial in March of 2007.

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