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

Although it may be considered small change when compared with the fraud of fellow Floridian Scott Rothstein, according to an FBI press release, Gary Ernest Williams, former Chief Financial Officer for Marian Gardens Tree Farm (MGTF) in Groveland, Florida, was sentenced to eight years imprisonment on Monday in the U.S. District Corut for the Middle District of Florida. Williams was charged with embezzling approximately 10.5 million from MGTF since 2000 through falsified checks, use of a credit card in the company's name and making large cash withdrawals which he told bank officials were to be used to pay “employee bonuses.” Willams spent the money on lavish homes, luxury cars, jewelry, drugs, and vacations by private jet. He also failed to failed to pay federal income taxes in the amount of $3,675,000 on the illegally obtained funds.

Williams entered a guilty plea in July. The District Court ordered Williams to pay more than 14 million in restitution to MGFT and to forfeit homes in North Carolina, Pennsylvania and the Bahamas.

• Email This
• Print
• Comments
• Trackbacks

In response to allegations uncomfortably similar to those against former New York celebrity lawyer and arch Ponzi-schemer Marc Dreier, Fort Lauderdale attorney Scott Rothstein, head of Rothstein, Rosenfeldt and Adler, P.A., appeared in response to a criminal information in the U.S. District Court for the Southern District of Florida on Tuesday. The information charges Rothstein with one count of Racketeering Conspiracy, in violation of 18 U.S.C. § 1962(d); one count of Money Laundering Conspiracy, in violation of 18 U.S.C. § 1956(h); one count of Mail and Wire Fraud Conspiracy, in violation of 18 U.S.C. § 1349; and two counts of Wire Fraud, in violation of 18 U.S.C. § 1343, as well as criminal forfeiture, U.S. v. Rothstein, 0:09-cr-60331-JIC.

According to the criminal information, available here, from about 2005 through November 2009, Rothstein, and other “known and unknown” unnamed co-conspirators, allegedly unlawfully obtained approximately $1.2 billion from investors through a Ponzi scheme (outdoing even Dreier’s scheme). The Government alleges that Rothstein used false statements, documents and computer records to induce investors to loan money to alleged borrowers based upon fraudulent and fictitious promissory notes and bridge loans. Rothstein allegedly falsely informed investors that his law firm, Rothstein, Rosenfeldt and Adler, P.A.’s, clients requested short-term financing for undisclosed business deals and that the clients were willing to pay high rates of return for loans negotiated by Rothstein.

Rothstein also allegedly told investors that they could purchase at a discount confidential settlement agreements in sexual harassment and whistleblower cases in amounts ranging from hundreds of thousands of dollars to millions of dollars. Rothstein allegedly falsely represented that the settlement agreements would be repaid to the investors at face value over time. Rothstein allegedly represented to investors that the settlements were highly confidential in order to protect the reputations of the companies and executives involved; that the plaintiffs preferred to settle the claims rather than purse them in a public forum; that Rothstein, Rosenfeldt and Adler, P.A., would disburse the investors’ funds to the plaintiffs; that the firm would make payments to the investors pursuant to the payment schedules in the alleged settlement agreements; that the funds were maintained in designated trust accounts for the investors in accordance with the rules and regulations of the Florida Bar and were verified by independent sources, as well as numerous other alleged false statements regarding the settlement agreements, investment funds and the firm.

To effect the fraud, Rothstein allegedly established numerous trust accounts in Rothstein, Rosenfeldt and Adler, P.A.’s name; falsified statements from financial institutions and manufactured online banking information allegedly showing investors’ monies; created false and fictitious settlement agreements and other documents. Among the alleged false and fictitious documents was a court order in a case, purportedly signed by a Federal District Judge, which falsely alleged that Rothstein, Rosenfeldt and Adler, P.A.’s clients had prevailed in a lawsuit and were owed $23 million, when in fact the firm had settled the case without the clients’ knowledge and had obligated them to pay $500,000 to the defendant.

The information also alleges that Rothstein allegedly falsely told clients that, in order to recover funds, they had to post bonds to be held in Rothstein, Rosenfeldt and Adler, P.A.’s trust account. Over several years, clients wired approximately $57 million to a trust account controlled by Rothstein. Rothstein allegedly created another false Federal court order to conceal the scheme, providing that the funds were to be returned to the clients by a later date.

Rothstein used the funds acquired through the alleged scheme to fund the operations of Rothstein, Rosenfeldt and Adler, P.A., and to expand the firm. The firm grew to employ approximately 70 attorneys. Rothstein is alleged to have laundered the funds from the scheme through corporations, contributions and large bonuses and gifts to employees. The information alleges that Rothstein used the funds to make contributions to Federal, State and local political candidates in a manner designed to conceal the source of the funds and to circumvent Federal and State limits on campaign contributions; for charitable donations; to purchase controlling interests in restaurants in South Florida; and to hire members of local law enforcement to provide security for Rothstein, Rosenfeldt and Adler, P.A., and for Rothstein personally.

The enormous wealth amassed by Rothstein through the alleged scheme is apparent in the Governement’s forfeiture allegations, which seek forfeiture not only of a sum of $1.2 billion, but also of 24 properties in Fort Lauderdale, Lauderdale by the Sea, Boca Raton, Hollywood and Plantation, Florida; New York City and Narragansett, Rhode Island, including Rothstein’s 10% ownership in the Miami Beach mansion of late fashion mogul Gianni Versace, “Casa Casuarina.” Forfeiture is also sought of numerous business interests, bank accounts and jewelry, as well as 24 vessels and vehicles purchased by Rothstein, including a 55 foot yacht.

The Government also lists millions in political and charitable contributions by Rothstein which it seeks forfeiture of, including contributions to the Republican Party of Florida; Florida Governor Charlie Crist; Democratic Chief Financial Officer Alex Sink, who is running for governor; and two hospitals.

As reported in the Miami Herald here, and here, Rothstein started Rothstein, Rosenfeldt and Adler, P.A., in 2002 as an obscure attorney practicing employment law. Over the next six years, his net worth grew from about $160,000 to tens of millions. Rothstein used flashy wealth and connections in the Broward County social and business communities to lure wealthy persons to invest in his schemes. He befriended the rich and famous, including NFL Hall of Famer Dan Marino

George G. Levin, a wealthy Fort Lauderdale resident and hedge fund manager, gave $656 million to Rothstein to invest in settlements purportedly worth $1.1 billion. Levin helped Rothstein market investments in employment and sexual harassment lawsuits to investors, although he is not alleged to have been complicit in Rothstein’s crimes. Another of Rothstein’s clients, car-dealership mogul Ed Morse, claims that Rothstein defrauded him of $57 million, arising from the settlement of a contract dispute with an interior decorator.

Rothstein would allegedly give large bonuses to employees of Rothstein, Rosenfeldt and Adler, P.A. on the condition that they make campaign contributions to political candidates who Rothstein would specify. The Government has stated that the recipients of the political contributions have returned the contributions. The Florida Democratic Party has returned $200,000 and the Florida Republican Party has given back $150,000. After Crist won the Governor’s race in 2006, he appointed Rothstein to a panel which nominates Broward County judicial candidates. The Florida Democratic Party has called for an investigation of Crist. Rothstein also allegedly paid gratuities to local law enforcement officers to avoid scrutiny.

Rothstein’s scheme began to unravel over Halloween weekend, when investors began calling the firm for overdue payments and discovered the fraud. Rothstein fled to Morocco in October, taking $400,000 to $500,000 in cash with him and wiring $16 million to Casablanca. Rothstein reportedly sent e-mails to members of his firm that he was contemplating suicide, but he returned to the U.S. on a private jet in early November. He met with Federal authorities and provided details regarding his Ponzi scheme. FBI and IRS agents raided Rothstein, Rosenfeldt and Adler, P.A.’s law offices, and seized Rothstein’s real and personal property. Rothstein agreed to waive indictment, an indication that he is cooperating with the Government, although Rothstein’s counsel has denied that he has any deal with the Government.

The Government’s information does not name Rothstein’s alleged co-conspirators, however news reports suggest members of Rothstein's inner circle at the law firm, and officers at Toronto Dominion Bank, where the investor trust accounts were held.

Rothstein’s alleged Ponzi scheme has been called the largest in the history of South Florida by Federal officials. The Florida Bar has disbarred Rothstein for stealing from the firm’s trust account. Rothstein, Levin and TD Bank are also being sued by a group of investors for more than $100 million.

Rothstein appeared in court on Tuesday in casual attire with a confident demeanor and pled not guilty to the information. U.S. Magistrate Judge Robin Rosenbaum ordered Rothstein jailed pending trial based on Rothstein’s flight to Morocco. Rothstein is represented by attorney Marc Nurik, oddly of Rothstein, Rosenfeldt and Adler, P.A. He faces up to 100 imprisonment if convicted.

• Email This
• Print
• Comments (1)
• Trackbacks

Last Wednesday, the Government, through Deputy Assistant Attorney General Kenneth A. Blanco, filed a brief Motion to Dismiss Third Superseding Indictment with Prejudice seeking to dismiss its indictment against Miami, Florida, attorney Benedict P. Kuehne, and also Colombian attorney Oscar Saldarriaga Ochoa, in the criminal action of U.S. v. Velez, 1:05-cr-20770-MGC, in the U.S. District Court for the Southern District of Florida. The Government’s motion stated that it was based upon the “totality of the circumstances,” including the Eleventh Circuit Court of Appeals’ affirmance of the District Court’s dismissal of the Government’s charge of conspiracy to launder money against Mr. Kuehne. The Government stated that it believe that dismissal was in the interest of justice. On the same day, U.S. District Judge Marcia Cooke entered an order dismissing the Third Superseding Indictment.

The dismissal marked the end of a long ordeal for Kuehne, who was indicted over two years ago for alleged money laundering conspiracy, money laundering concealment conspiracy, concealment money laundering and wire fraud conspiracy. According to the Government’s indictment, Fabio Ochoa Vasquez was one of the leaders of the Medellin Cartel, one of the largest cocaine trafficking and money laundering organizations in the world. In 2001, Ochoa was extradited from Colombia to the U.S. to face charges of conspiring to smuggle approximately 30 tons of powder cocaine into the U.S. per month between 1997 and 1999. Ochoa hired distinguished attorney Roy Black, of the Miami law firm of Black, Srebnick, Kornspan & Stumpf, P.A., and other attorneys to represent him, and the defense in turn retained Mr. Kuehne, of the Law Offices of Benedict P. Kuehne, P.A., to investigate the funds which Ochoa would use to pay his legal team. Kuehne drafted various opinion letters for the offense. The Government alleged that Kuehne was paid for his investigation and opinions by various wire transfers with monies which were the proceeds of specified unlawful activity—the distribution and sale of illegal drugs, including monies from the Colombian “Black Market Peso Exchange” and drug proceeds supplied by undercover U.S. agents.

Kuehne, through his attorney, Jane Moscowitz of Moscowitz & Moscowitz, P.A., filed a motion to dismiss the indictment in July, which may be viewed here, relying on the fact that one of the federal money laundering statutes, 18 U.S.C. § 1957, contains an express exemption for “any transaction necessary to preserve a person’s right to representation as guaranteed by the sixth amendment to the Constitution.” 18 U.S.C. § 1957(f)(1).The motion began with a quote from Banking Crimes: Fraud Money Laundering and Embezzlement, by John K. Villa: "There is an inestimable difference... between expecting a defendant to be able to find an attorney willing to risk his fee, and expecting him to find an attorney willing to risk his personal liberty." Kuehne argued that Congress enacted the exemption in § 1957(f)(1) out of a concern that the threat of prosecution of criminal defense attorneys for accepting fees would have a “chilling effect” on attorneys’ willingness to accept clients, and therefore impose an unacceptable burden on the exercise of the Sixth Amendment right to counsel. The defense argued that the monies paid fell squarely within § 1957(f)(1)’s exemption and that Count One of the indictment should be dismissed. The District Court agreed and dismissed Count One, and the Eleventh Circuit affirmed in United States v. Velez, No. 09-10199, 2009 WL 3416116 (11th Cir., October 26, 2009).

As reported by the Miami Herald, Kuehne addressed reporters on the steps of the courthouse, stating that he always believed “things would turn out well in the end.” Prior to the allegations against him, he had been a prominent member of the legal community, serving on the Florida Bar board of governors, as a past president of the Dade County Bar Association and as a member of Vice President Al Gore’s legal team in the 2000 Florida presidential election dispute. Kuehne expressed his appreciation to the Department of Justice for the dismissal of the matter. Cynthia Hujar Orr, President of the National Association of Criminal Defense Lawyers, which filed amicus briefs in Kuehne’s case, called the Government’s prosecution of Kuehne “disgraceful.”

• Email This
• Print
• Comments (1)
• Trackbacks

The trial of Bear Stearns hedge fund managers Ralph Cioffi and Matthew Tannin got underway last week. As reported by attorney Jacob Zamansky in Forbes and the New York Daily News, the parties gave opening statements on Thursday. Assistant U.S. Attorney Patrick Sinclair argued that Bear Stearns financial officer Matthew Tannin allegedly told investors on 11 occasions that he was putting more of his own money into Bear Stearns’ troubled High-Grade Structured Credit Strategies Fund and High-Grade Structured Credit Enhanced Leveraged Fund. Tannin allegedly told investors that it would be “silly” to redeem their investments. Sinclair also told the jury that Cioffi failed to disclose to investors that he had transferred $2 million of his own money to another Bear Stearns fund. The prosecution cited alleged incriminating e-mails between Cioffi and Tannin in which the defendants allegedly acknowledged that the subprime mortgage market was “toast” and that they should “close the fund.” Sinclair argued that Cioffi’s and Tannin’s actions were allegedly to save their bonuses and reputations. He spoke to the jury for about 45 minutes.
 

In contrast, Cioffi’s attorney, Dane Butswinkas, delivered a two hour opening statement using charts and exhibits to show the complexity of Bear Stearns’ management structure, hedge funds and the operation of the collateralized debt obligation (CDO) market. Butswinkas argued that the defendants were the victims of market forces beyond their control and that the defendants did their best to predict the future performance of the market and the funds. Tannin’s counsel, Susan Brune, also spent approximately two hours explaining to the jury about hedge funds, CDOs and market risk. Brune attributed the failure of the funds on a “run on the bank” and argued that the funds’ investors were well aware of the risks. Brune characterized the prosecution’s theory as “I lost my money, therefore there has to be a fraud.” The defense argued that the e-mails were taken out of context, and that worrying about markets is not a crime.
 

Nearly 300 investors kept their investments in the hedge funds, which lost $1.4 billion in July of 2007. The two hedge funds had experienced positive growth until the preceding quarter, however an internal Bear Stearns report showed that securitized subprime mortgages were losing value fast.
 

• Email This
• Print
• Comments (1)
• Trackbacks

The trial of former Bear Stearns hedge fund managers Ralph Cioffi and Matthew Tannin begins today in Brooklyn, as reported by Bloomberg. A jury will be selected today. 

Cioffi and Tannin are charged with allegedly causing losses of $1.4 billion to investors by misleading investors regarding the health of two Bear Stearns hedge funds, the Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund Ltd. ("Enhanced Fund"). and the Bear Stearns High- Grade Structured Credit Strategies Master Fund Ltd. ("Master Fund"). Cioffi was a hedge fund manager and Tannin was an attorney who served as chief operating officer. They are charged with alleged conspiracy, securities fraud and wire fraud. Cioffi is also charged with alleged insider trading.

Cioffi's and Tannin's attorneys have argued that the collapse of Bear Stearns was actually the result of the failure of two other Bear Stearns hedge funds a year prior to the failure of the Enhanced Fund and the Master Fund.

U.S. Attorney Benton Campbell, a former member of the Justice Department’s Enron Corp. Task Force, and Assistant U.S. Attorney James McGovern, are leading the prosecution of Cioffi and Tannin. The prosecution alleges that Cioffi and Tannin were promoting the funds to investors while knowing that the health of the funds was in serious risk. The government has listed 38 witnesses and 532 exhibits which it intends to present at trial, however, the centerpiece of the government's evidence is expected to be Cioffi's and Tannin's own words in e-mails.Cioffi allegedly sent one e-mail on March 15, 2007, with the subject-line "Fear," stating that he was fearful of what the markets were going to do. In another e-mail, Tannin allegedly stated that if AAA bonds were downgraded, there would be no way for the funds to make money. Google released additional private e-mails to the government last week. Prosecutors allege that e-mails show Cioffi and Tannin allegedly boasting of how they were luring investors to invest more money in the funds at the same time they knew that the funds were in trouble. Witnesses for the government are expected to include Bear Stearns employees and investors in the hedge funds.

Cioffi is defended by attorney Brendan Sullivan, who won reversal of the charges against Alaska Senator Ted Stevens, as well as Margaret Keeley and Dane Butswinkas, all of Williams & Connolly LLP. Tannin is being represented by Susan Brune and Nina Beattie of Brune & Richard LLP. Commentators have observed that the e-mails by Cioffi and Tannin can be read in "many" ways.

A year following the failure of the funds, Bear Stearns itself failed and was purchased by JP Morgan Chase & Co. The failure of Bear Stearns was accompanied by failures of Lehman Brothers Holdings, Inc., and AIG. Losses from U.S. banks and mortgage companies in the financial collapse total at least $396 billion.

• Email This
• Print
• Comments (4)
• Trackbacks

As reported by Chris Herring over at the Wall Street Journal Law Blog, the trial of former Bear Stearns hedge fund managers Matthew Tannin and Ralph Cioffi is scheduled to commence next Monday. And now the government has obtained Tannin's e-mails from his private Google account. Tannin had closed the Google account on the advice of his counsel. Prosecutors suspected that Tannin was hiding something. Google released the e-mails a few days ago. U.S. District Judge Frederic Block for the U.S. District Court for the Eastern District of New York has ruled that since the e-mails have been released, the government cannot explore whether Tannin was trying to hide anything from investors in his personal e-mails, stating that it would confuse the jury and citing the fact that the government already intends to present 38 witnesses and over 500 exhibits in its case against the defendants.

E-mails between Tannin and Cioffi allegedly expressing concern over the health of the hedge funds have already been released to the public. The newly-produced e-mails are expected to reflect similar alleged concerns by the defendants.

As reported by CNN, Cioffi and Tannin are the only two persons to face criminal charges resulting from the worst financial crisis in U.S. history since the Great Depression. The defendants are alleged to have misled investors in two of Bear Stearns' hedge funds to believe that the condition of the funds was better than it in fact was. The hedge funds collapsed in the Spring of 2008, resulting in over $1 billion in losses to investors.

Legal observers have characterized Cioffi's and Tannin's prosecution as a "test case" and have cited the government's need to make an example to discourage similar conduct in the financial sector. Although Cioffi and Tannin may have offered the government what it believed to be its most clear cut case, commentators have noted it may be difficult to prove that Cioffi and Tannin possessed an alleged intent to defraud investors rather than merely being misguided or stupid, given the fact that very few foresaw the subprime mortgage crisis and the collapse of the market.

• Email This
• Print
• Comments
• Trackbacks

As we check back with Sir Robert Allen Standford, the most noteworthy development is perhaps that the Bellagio, a Las Vegas casino and luxury resort, filed suit against Stanford last week in a Clark County Nevada district court for an alleged $258,480 in unpaid gambling debts.The lawsuit alleges that Stanford signed for 14 markers between January 15 and 22 of this year.

Oddly enough, Stanford is allegedly a self-professed Southern Baptist who reportedly infused the boardroom culture in his companies with religion, surrounded himself with individuals he met through church and used church contacts to find customers. Furthermore, Stanford's adoptive home, Antigua and Barbuda, is one of the leading host nations for the multi-billion dollar international online gambling  industry. Stanford, however, reportedly refused to deal with persons involved in gambling in his business dealings. While Stanford's companies based in Antigua have ceased operations, its online gambling sector has continued to thrive.

The Securities and Exchange Commission, which has frozen Stanford's assets, is investigating the Bellagio markers.

• Email This
• Print
• Comments
• Trackbacks

As is well known, Bear Stearns, one of the largest investment banks in the world, was sold to JP Morgan Chase and effectively ceased to exist in March of 2008, after two Bear Stearns hedge funds invested in collateralized debt obligations—mainly subprime home loans—and once worth approximately $1.6 billion, lost nearly all of their value. The collapse of Bear Stearns was the harbinger for a succession of massive failures of financial institutions, including Lehman Brothers, Merrill Lynch and AIG, triggering the current global recession.

As reported by New York Magazine, Reuters and the Daily Telegraph, two managers of the hedge funds, Ralph Cioffi and Matthew Tannin were charged in June in the Eastern District of New York with several counts of wire and securities fraud for allegedly misleading investors regarding the status of the funds in the Spring of 2007. Cioffi, a hedge fund manager, and Tannin, the Chief Operating Officer of Bear Stearns Asset Management (BSAM), have pled not guilty. The collapse in value of the funds cost investors approximately $1.4 billion. When traders wanted to sell some of the funds’ subprime mortgages, no one wanted to buy them.

The trial of Cioffi and Tannin is set to begin in October. The evidence against Cioffi and Tannin consists largely of e-mails between them and investors describing the funds as “an awesome opportunity,” despite allegedly knowing that the funds had problems. Bear Stearns investors are expected to testify at the trial. Both men have consistently maintained their innocence. They face a potential 20 years in prison if convicted.

Cioffi is also charged with alleged insider trading for withdrawing $2 million of his own money from the funds. The government alleges that he engaged in hundreds of transactions involving the funds without the necessary approval by the fund’s directors and despite being warned about conflicts of interest. All trades between Bear Stearns, a securities firm, and BSAM, an asset management firm, were supposed to be vetted by an independent committee. In the Fall of 2006, Bear Stearns ordered a moratorium on such internal trades by Cioffi. Prosecutors sought to introduce evidence of Cioffi’s alleged insider trading in order to demonstrate how Cioffi allegedly operated.

British bank Barclays, a shareholder of one of the funds, also filed suit against Cioffi and Tannin for alleged fraud, however, the suit has been withdrawn.

The prosecution of Cioffi and Tannin makes conspicuously noticeable the fact that no senior executives from Bear, Lehman Brothers, AIG, etc., have been charged with any wrongdoing in the fallout from the financial crisis.

 

• Email This
• Print
• Comments
• Trackbacks

Pharmaceutical giant Pfizer, inc., will pay $2.3 billion to the Federal government and 49 States to settle allegations that it violated federal regulations in promoting several drugs, as reported by the Atlanta Journal-Constitution. The settlement is the largest in U.S. history to date in a healthcare fraud case. 

Georgia will receive $21.7 million as part of the settlement. A spokesperson for the Georgia Attorney General's office told the media that Georgia's portion of the settlement funds would be earmarked for Georgia's Medicaid program.

The U.S. Department of Justice had accused the New York-based pharmaceutical company and its subsidiaries of conducting marketing campaigns to promote drugs including Geodon, Lyrica, Zyvox, and no longer marketed Bextra, for uses not approved by the U.S. Food and Drug Administration. The government also alleged that Pfizer gave kickbacks such as cash, travel and entertainment to members of the healthcare industry in order to persuade them to prescribe these drugs and others, including Lipitor, Zyrtec and Viagra. The only State which did not join in the suit was South Carolina.

Pharmacia & Upjohn Co., a subsidiary of Pfizer, has pled guilty to a felony charge of violating the Food, Drug and Cosmetic Act, and will pay a fine of $1.3 billion.

• Email This
• Print
• Comments
• Trackbacks

As reported in the Atlanta Journal-Constitution and the Associated Press, closing arguments have started in the terrorism trial of Atlanta area native and former Georgia Tech student Ehsanul Islam Sadequee. Sadequee is representing himself and will present his own closing argument.

Sadequee called only two witnesses in his defense before resting his case, including his older sister, Sharanika Sonali Sadequee. Sadequee told the Court that he did not want to testify in his defense. His sister testified that he was quiet, inquisitive and nonviolent and had traveled to Bangladesh to marry his long-time love. The government contends that the trip was actually a cover for Sadequee's alleged plan to attend a terrorist training camp. Sharanika Sadequee testified that her brother has been prohibited from discussing certain subjects in the trial, including his arrest in Bangladesh, which she called a kidnapping, and an attack on Sadequee by another inmate while he has been in custody. Sadequee's mother prayed in the courtroom throughout the proceedings.

U.S. District Court Judge William S. Duffey, Jr., scolded Sadequee for attempting to introduce his wedding photographs into evidence at the last minute. The Judge denied Sadequee's motion for acquittal and ruled that there was sufficient evidence to take the case to the jury on all four counts. The jury will begin deliberations later today.

• Email This
• Print
• Comments (1)
• Trackbacks

We did not weigh in yesterday, but the biggest federal criminal defense news was clearly the conviction of U.S. Representative William Jefferson of Louisiana in his criminal trial in the U.S. District Court for the Eastern District of Virginia, as reported by the New Orleans Times-Picayune. The jury of eight women and four men returned a verdict of guilty against Jefferson on 11 of 16 counts, including 2 counts of conspiracy to solicit bribes to a public official in violation of the Foreign Corrupt Practices Act (FCPA), 2 counts of soliciting bribes, 3 counts of honest services fraud, 3 counts of money laundering, and one count of racketeer influenced and corrupt organization (RICO) violations. As a testament to Jefferson's defense, the jury did not find Jefferson guilty on three of the honest services charges as well as a charge for obstruction of justice and a count for violation of the FCPA.

Jefferson, who is 62, faced a maximum of 235 years in prison if convicted on all counts. He has been allowed to remain released pending his sentencing on October 30. A forfeiture hearing will be held regarding his assets.

Jefferson was the first African-American congressman from Louisiana since Reconstruction.

• Email This
• Print
• Comments
• Trackbacks

Ehsanul Islam Sadequee, 23, nicknamed "Shifa," which means "Cure," is representing himself in his trial in the U.S. District Court for the Northern District of Georgia on four counts of allegedly conspiring to provide material support to terrorism. As reported by the Atlanta Journal-Constitution and the Associated Press, Sadequee began his 14 minute opening statement with a prayer. He told the jury that he had talked about jihadist "fantasies" but that it was empty talk and that there was no plan to carry out acts of terrorism. Sadequee denied conspiring with known terrorists. He told the jurors that he only discussed jihad in online chat rooms."If everything is a question mark, can there be a plan?" he asked the jurors.

Assistant U.S. Attorney Robert McBurney argued to the jury that Sadequee only needed to orchestrate the crime, not carry out any terrorism. The government claimed that Sadequee began visiting online sites frequented by Islamic militants and leaving messages regarding his intent to join the Taliban shortly after the September 11, 2001, terrorist attacks, when he was only 15.

The government presented testimony by Omer Kamal, an Atlanta accountant, former Georgia tech student and friend of Sadequee's. Kamal testified that he, Sadequee and Syed Haris Ahmed, who was convicted in June, watched training videos by Osama bin Laden and the Taliban, and practiced jihad attack techniques with paintball guns in North Georgia. He stated that he backed out of the group when they started planning to visit the Middle East to link up with terrorist groups. Kamal cooperated with the FBI and agreed to testify against Sadequee after becoming concerned that he was under surveillance. He said that the group discussed attacking targets including the White House, the U.S. Capitol, Guantanamo Bay Prison and Abu Ghraib. Kamal said he had slipped a note under his friends' doors when he decided to leave the group. Sadequee then went with Ahmed to Toronto, Canada, to meet with terrorists there. Sadequee spent over an hour cross-examining Kamal yesterday.

Mr. McBurney argued that Sadequee sent videos of the alleged targets to a terrorist suspect in Britain disguising the videos with titles such as "jimmy's 13th birthday party" and "volleyball contest." He claimed that Sadequee subsequently traveled to Bangladesh in order to get married, but also to link up with terrorist groups. Sadequee was arrested in Bangladesh in 2006. Mr. McBurney said that Sadequee communicated with other terror suspects including Ahmed and Mirsad Bektasevic, a Balkan-born Swede who was convicted in 2007 of planning to blow up a target in Europe to force the pullout of foreign troops from Iraq and Afghanistan.

Ahmed, who is awaiting sentencing, has agreed to testify against Sadequee, and will take the stand today.

Sadequee has worn a gray tunic with a beard and long hair during the proceedings. Sadequee's mother, Shirin, sat in the audience during the proceedings and wept and prayed for her son. If convicted Sadequee faces up to 60 years in prison.

• Email This
• Print
• Comments
• Trackbacks

We closely followed the trial of Syed Haris Ahmed, who was convicted for providing material support to terrorism in early June--all of our posts may be found here. The trial of Ahmed's alleged co-conspirator, Ehsanul Islam Sadequee on terrorism charges began yesterday in the U.S. District Court for the Northern District of Georgia. Sadequee has apparently taken a page from Ahmed, who delivered a highly unusual closing argument in his own case, and has opted to represent himself and will present his own opening statements, according to the Atlanta Journal-Constitution. Sadequee has opted for a jury trial unlike his alleged co-conspirator, who was tried by the same judge, the Honorable William S. Duffey. The parties completed jury selection yesterday.

Attorney Don Samuel is serving as stand-by counsel for Sadequee. Mr. Samuel told the Court that Sadequee did not understand what it meant to represent himself. Judge Duffey replied that he had informed Sadequee regarding what it meant to represent himself numerous times.

Sadequee, who is nicknamed “Shifa,” was born in Virginia in 1986, and is of Bangladeshi descent. He and Ahmed are most infamously accused of videotaping landmarks in Washington, D.C., in April of 2005, for purposes of terrorism, including the United States Capitol and the headquarters building of the World Bank. It is also alleged that Sadequee and Ahmed engaged in paramilitary training in North Georgia; met with a circle of terrorists in Toronto, Canada, in February of 2005; and sent the video of the alleged targets to Younis Tsouli, a terrorist in the United Kingdom.

• Email This
• Print
• Comments
• Trackbacks

As noted at White Collar Criminal Prof Blog and The Justice Fellowship, the U.S. House of Representatives Subcommittee on Crime, Terrorism and Homeland Security held a hearing last week on "Over-criminalization of Conduct and Over-federalization of Criminal Law." Organizations which addressed the Subcommittee on issues of over-criminalization and over-federalization included the American Bar Association, the American Civil Liberties Union, the National Association of Criminal Defense Attorneys, the Heritage Foundation and the Federalist Society.

The hearing considered the lack of distinction between federal criminal and civil offenses, as well as over-federalization of criminal law where federal criminal laws have been enacted to cover offenses already subject to state criminal laws, usually providing for harsher penalties. The Subcommittee noted the existence of approximately 4,500 federal criminal laws, with approximately 50 new criminal laws enacted by Congress each year.

The hearing should be welcome news to most federal criminal defense practitioners. Reform in these areas is badly needed. In some cases, certain prosecutions of alleged federal crimes would be more equitably, and less expensively, handled through the imposition of civil fines and penalties. Furthermore, in many cases, State prosecutorial entities are as capable as Federal entities to prosecute offenders in areas where State and Federal criminal law overlaps. The Blog looks forward to the proposals for reform which result from the hearing.

• Email This
• Print
• Comments
• Trackbacks

As reported by the New Orleans Times-Picayune, Judge T.S. Ellis, III, of the U.S. District Court for the Eastern District of Virginia read instructions to the jury yesterday which lasted over 2 & 1/2 hours, and the jury retired for its deliberations in the case against former U.S. Representative William Jefferson. The jury deliberated for about four hours and will re-convene to continue deliberations this morning.

The jury weighing the evidence in the six week long trial of Jefferson on 16 criminal counts, including racketeering, honest services fraud and violations of the Foreign Corrupt Practices Act, consists of two white males, six white females, two black males and two black females. Jefferson's case is the first time the Foreign Corrupt Practices Act has been applied to a public official. The Court sent three alternate jurors home yesterday, instructing them to remain "pristine" with regard to their exposure to information regarding the case.Jefferson's lead attorney, Robert Trout, told reporters that Jefferson intends to be present at Court each morning when the jury arrives.

Closing arguments were heard earlier in the week, with numerous media outlets and journalists from Louisiana in attendance.

• Email This
• Print
• Comments
• Trackbacks

The trial of former Representative William Jefferson, which has gone on for six weeks in the U.S. District Court for the Eastern District of Virginia, will come to an end today. As reported by Ashby Jones at the Wall Street Journal Law Blog and UPI, both sides gave their closing arguments yesterday. Judge T.S. Ellis will give jury instructions and likely send the case to the jury this morning.

The case is best known for the infamous discovery of $90,000 in cash stuffed in boxes for burgers and pie crusts in the freezer at Jefferson's home by federal agents. Jefferson was indicted in 2007 on 16 counts of bribery, racketeering, and violations of the Foreign Corrupt Practices Act. The government charged Jefferson with using his position to promote business ventures in West Africa in exchange for cash payments for his family.

Assistant U.S. Attorney Rebecca Bellows argued during the govenrment's closing that Jefferson allegedly schemed to give at least $100,000 in cash (the "freezer money") to the Vice President of Nigeria, Atiku Abubakar, as a bribe in exchange for granting rights to a telecommunications company with ties to Jefferson's family. The government also played video and audio tapes of meetings between Jefferson and Virginia businesswoman Lori Mody, who was working for the government as an informant. In one video, Jefferson supposedly informed Mody that the cash would be "doled out" to "make sure the hook is in there," and on another tape Jefferson allegedly referred to the bribe as "a goodwill present."

The defense maintained during trial that Jefferson's conduct was stupid or unethical, but not criminal. Defense attorney Robert Trout told the jury during his closing arguments that the government wanted to make Jefferson's actions a crime when it was really a "gray area." He told the jury that Jefferson only agreed to give the money to Abubaker in order to please Ms. Mody.

Prior to closing arguments, Judge Ellis refused to dismiss an obstruction of justice count against Jefferson. Jefferson faces a lengthy prison sentence if convicted.

• Email This
• Print
• Comments
• Trackbacks

As reported by the Atlanta Journal-Constitution and WSB Radio, Anthony Ray, a DeKalb County resident, solicited money from investors by promising them large returns from real estate investments by his company, Key Funding Group. He would frequent local churches to locate victims, making presentations to the congregations. Ray lulled his victims by giving them back portions of their investment and falsely referring to them as returns. Ray hosted his victims at several locations around the Atlanta area, including his condominium in Buckhead as well as a $680,000 home in Decatur, Georgia, which belonged to one of his victims and in which he ran his office. In all, Ray stole at least $5 million from over 30 investors.

Ray stole $160,000 from his own parents. He started Key Funding Group with his father, Calvin Ray, 70, and took out large loans using his father’s identity and his parents’ home as collateral. His parents subsequently turned him in. Ray’s twin brother, Antonio, told reporters that Ray took everything his parents had, and that their father, decided that they had to prosecute.

Ray previously served five years in prison for stealing his brother's identity.

• Email This
• Print
• Comments
• Trackbacks

On Wednesday, U.S. Attorney General Eric Holder addressed the Organized Crime Drug Enforcement Task Forces and Asset Forfeiture Program's National Leadership Conference. Mr. Holder spoke regarding the Organized Crime Drug Enforcement Task Forces (OCDETF) Program, an inter-agency program established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. OCDETF combines the resources and expertise of the Drug Enforcement Administration, the Federal Bureau of Investigation, the Bureau of Immigration and Customs Enforcement, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Marshals Service, the Internal Revenue Service, and the U.S. Coast Guard in cooperation with the Department of Justice Criminal Division, Tax Division and its U.S. Attorney’s Offices, as well as state and local law enforcement. Its mission is to identify, disrupt, and dismantle drug trafficking and money laundering organizations.

Mr. Holder praised the track record of OCDETF and the Asset Forfeiture Program. He mentioned that, since the inception of the Attorney General's Consolidated Priority Organization Target (CPOT) List in 2002, OCDETF has dismantled or disrupted over 1,2000 CPOT and CPOT-linked organizations.

The Attorney General discussed the innovation of OCDETF in establishing the OCDETF Fusion Center to gather intelligence on drug trafficking and money laundering organizations from human and electronic sources in its "Compass" database. Mr. Holder also stated that the International Organized Crime Intelligence and Operations Center -- or "IOC-2"--has recently entered into a partnership with the OCDETF Fusion Center to add data to the Compass database in order to "broaden our capability to attack organized crime in all its forms."

Mr. Holder also remarked on the success of permanent OCDETF Strike Forces in Boston, New York, Atlanta, Tampa, San Juan, Houston, Phoenix, San Diego, with an additional Strike Force planned for El Paso. He mentioned that OCDETF has begun placing Document and Media Exploitation (DOMEX) Teams in the Atlanta and Houston Strike Forces, which permit agents to rapidly capture and exploit evidence and permit prosecutors to quickly develop trial exhibits.

The Attorney General cited the national security threat of the Mexican drug cartels. Mr. Holder furthermore discussed the success of the Asset Forfeiture Program and noted that, since 1984, more than $13 billion in net federal forfeiture proceeds have been deposited into the Justice Assets Forfeiture Fund and more than $4.5 billion has been equitably shared with more than 8,000 state and local law enforcement agencies nationwide, thereby supplementing their constrained resources without further taxing the public. The Attorney General stated that, in fiscal year 2008 alone, approximately $500 million was paid to more 39,000 victims.

Mr. Holder also praised Operation Honor Student, which involved a task force led by the Rhode Island U.S. Attorney’s Office, the Asset Forfeiture and Money Laundering Section of the Criminal Division, and the Food and Drug Administration’s Office of Criminal Investigations, and resulted in the forfeiture of $2.7 million from the accounts of GeneScience, one of the largest biopharmaceutical companies in China which had been involved in the illegal distribution of Human Growth Hormone into the United States. He noted that the task force employed a new statutory vehicle-- 18 U.S.C. § 981(k) --enacted as part of the Patriot Act and used for the first time, which permitted the Government to seize the funds, physically located in China, from the corresponding accounts of Chinese banks in New York. Task force agents estimate that at the time of the investigation, GeneScience manufactured approximately 90% of the hGH being illegally sold and distributed in the United States.

• Email This
• Print
• Comments
• Trackbacks

In an astonishing development in an appeal of one of the Alaska corruption cases that led to the Senator Stevens prosecution, the Department of Justice has admitted that Brady material was withheld from the defense in the case of Victor Kohring. (Brady material is evidence favorable to the defense which the prosecution has to disclose) Yesterday, the Department of Justice Appellate Section filed a motion before the Ninth Circuit admitting that a review of the case by Main Justice attorneys “has uncovered material that, at this stage, appears to be information that should have been, but was not, disclosed to Appellant before his trial.” The government agrees in the pleading that the case should be remanded back to the district court and that there should be an order for the defendant's “immediate release on personal recognizance . . .”

After Senator Stevens’ case imploded over Brady violations, Judge Sullivan, the presiding district court judge, held DOJ trial attorneys Nicholas Marsh and Edward Sullivan and assistant U.S. Attorneys from Alaska, Joseph Bottini and James Goeke, in contempt. Goeke, Bottini, Marsh and Sullivan prosecuted the government’s case against Kohring.

Kohring was convicted in 2007 on bribery and extortion related charges and sentenced last year to 42 months imprisonment. He is currently imprisoned in California.

Every criminal practitioner out there has a duty to press the government to disclose Brady evidence. I believe that what we are seeing here is but the tip of the iceberg in governmental misconduct of withholding evidence that is favorable to the accused.

• Email This
• Print
• Comments
• Trackbacks

While the Bernard Madoff scandal has seized national headlines, the guilty plea of Georgia’s own, homegrown Bernie Madoff, Wendell Ray Spell, of Gainesville, has passed relatively quietly. As announced by the U.S. Attorney’s Office for the Northern District of Georgia, Spell pled guilty last week in the Northern District of Georgia to a criminal information containing one count of mail fraud. Spell bought and sold construction equipment, doing business under the names of North Georgia Equipment Sales, LLC and Cornerstone International Investments, LLC. Spell’s business faltered, and in order to keep it afloat, Spell obtained funds from investors to allegedly purchase additional equipment by falsely informing investors that he could re-sell the equipment for a substantial profit. Spell would promise investors that he would split the profits from the re-sale of the equipment with them 50/50, or that he would pay them 36% interest annually. Spell deceived investors into believing that he had purchased equipment by preparing counterfeit bills of sale and other documents, in an extensive Ponzi-style fraud.

In this manner, Spell obtained more than $60 million from more than 50 investors in Gainesville and elsewhere. Spell used the investment proceeds to pay “phantom” profits to investors, to pay his personal expenses and to purchase real and personal property for himself and his family.

Spell’s sentencing date has not yet been set, but he faces as much as 20 years incarceration and a fine of up to $250,000.

As reported by the Gainesville Times, Spell was released on a $25,000 unsecured bond pending sentencing. The government has filed forfeiture claims on 10 pieces of heavy equipment owned by Spell. At least 18 “investors” in the Gainesville area have filed suit against Spell.

• Email This
• Print
• Comments
• Trackbacks

The defendant in U.S. v. Farinella, NO. 08-1839, 08-1860, 2009 WL 615408 (7th Cir., Mar. 12, 2009) purchased 1.6 million bottles of “Henri’s Salad Dressing” in 2003, id. at *1. The label on each bottle of dressing stated that the dressing was “best when purchased by” and then gave a date from January to June 2003. Id. With enough dressing to flavor a salad the size of Rhode Island, the defendant proceeded to change the dates on the bottles to May to July of 2004, and then resold the bottles to dollar stores, where they were sold to the public. Id.

The Department of Justice viewed the defendant’s change as fraudulent and misleading, and charged the defendant with wire fraud and introducing a misbranded food into interstate commerce with intent to defraud or mislead, and the defendant was convicted and sentenced to five year’s probation. Id. However, eminent Seventh Circuit Judge and legal commentator Richard Posner disagreed.

Judge Posner stated that the government’s characterization of the “best when purchased by” date as an “expiration date” was itself false and misleading, observing that “[s]alad dressing, however, or at least the type of salad dressing represented by Henri’s, is what is called ‘shelf stable’; it has no expiration date.” Id. The Court observed that neither the FDA nor the Federal Trade Commission had published any regulations defining or prohibiting the change of a “best when purchased by” date. Id. at *2. Judge Posner noted that there was no evidence that selling salad dressing after the “best when purchased by” date endangered human health, that any of the 1.6 million bottles had deteriorated, or that any purchaser of the dressing had ever complained about the taste—indeed the Henri’s evidenced no deterioration in flavor by the time of the defendant’s trial, some 4 years after the last “best when purchased by” date. Id. The Court also observed that the government had presented no evidence regarding either the industry’s or consumers’ understanding of the meaning of the “best when purchased by” date. Id. Judge Posner viewed the government’s persistent and self-serving equation of “best when purchased by” with “expires on” as disingenuous to say the least.

         Judge Posner next took the government to task for presenting an FDA expert at trial who testified that he had found no evidence in FDA databases that the defendant had inquired with the FDA regarding the relabeling of the salad dressing—thereby implying that changing the “best when purchased by” date on the label somehow required FDA approval or permission when there was no evidence that it did. Id. at *3. The Court cited the rule that “‘The idea of secret laws is repugnant. People cannot comply with laws the existence of which is concealed.’” Id. (quoting Torres v. INS, 144 F.3d 472, 474 (7th Cir.1998); citing George Campbell Painting Corp. v. Chao, 463 F.Supp.2d 184, 190-91 (D.Conn.2006); Oppenheimer Mendez v. Acevedo, 388 F.Supp. 326, 335 (D.Puerto Rico 1974)).

         The Court concluded that:

[T]o prove a person guilty of having made a fraudulent representation, a jury must be given evidence about the meaning (unless obvious) of the representation claimed to be fraudulent, and that was not done here. We remind that one possible meaning of “best when purchased by” is that it is a guarantee by the seller that if purchased by then (and, presumably, eaten within a reasonable time afterward) it will taste as good as when it was first sold; if this is the meaning that consumers attach to the phrase, there was no misrepresentation.

Id. at *4. It held that because the government had presented insufficient evidence that the defendant had engaged in misbranding, he was entitled to be acquitted. Id.

         Most significantly, the Court called out the prosecutor by name in its opinion, relating that the prosecutor, during rebuttal closing argument, had made statements to the jury to the effect that the defendant was “trying to buy his way out” by hiring a “high-paid lawyer” and that you “can’t buy justice.” Id. at *5. The Court also cited the prosecutor’s implying to the jury that changing the “best when purchased by” date prevented the manufacturer from tracing the product to prevent it from causing illness; her urging the jury that if the defendant’s actions were proper, that they should start “growing their own food;” her references to “truckfulls of nasty, expired salad dressing;” and numerous other references, despite the fact that there was no evidence of any health or safety issues with the dressing, or any problems with its taste or freshness. Id. The Court took a dim view of these repeated instances of misconduct and invited the district court to explore the issue of the proper sanction for such misconduct, concluding:

We are not permitted to reverse a judgment on the basis of a lawyer's misconduct that would not have caused a reasonable jury to acquit, United States v. Hasting, 461 U.S. 499, 505-06, 103 S.Ct. 1974, 76 L.Ed.2d 96 (1983); United States. v. Boyd, 55 F.3d 239, 241-42 (7th Cir. 1995), but in this case, had the government presented enough evidence to sustain a conviction, we would have reversed the judgment and ordered a new trial on the basis of the prosecutor's misconduct. That sanction is not available only because the government presented so little evidence that the defendant is entitled to an acquittal. That does not detract from the gravity of the prosecutor's misconduct and the need for an appropriate sanction. The government's appellate lawyer told us that the prosecutor's superior would give her a talking-to. We are not impressed by the suggestion.

Id. at *6.

Gillen Withers & Lake LLC is a law firm with extensive experience in federal corporate and white collar criminal defense and appellate work, as well as complex civil and class action litigation, headed by eminent former federal prosecutors, with an outstanding track record and reputation throughout Georgia and nationwide. The attorneys of Gillen Withers & Lake LLC go to battle for their clients and vigorously represent them at all stages of proceeding. Contact Thomas Withers in Savannah at (912) 447-8400 or twithers@gwllawfirm.com or Craig Gillen in Atlanta at (404) 842-9700 or cgillen@gwllawfirm.com.

• Email This
• Print
• Comments
• Trackbacks

A highly disturbing instance of governmental misconduct has come to light in the Southern District of Florida in the form of a gross and unwarranted invasion of the defense camp and the attorney-client relationship by the government. The case of United States v. Shaygan, Case No. 08-20112-CR, was a prosecution of a physician on 141 counts of allegedly unlawful dispensing of controlled substances in violation of 21 U.S.C. § 841(b)(1)(C). Dr. Shaygan received excellent representation by the law firms of David Oscar Markus and Mark David Seitles, P.A., and on March 12, 2009, the jury acquitted Dr. Shaygan on all counts at the conclusion of trial.

            However, as revealed by a motion to dismiss the indictment for governmental misconduct or for evidentiary hearing filed by the defense on March 1, relations between the prosecution and the defense became strained when counsel for Dr. Shaygan stated that the defense intended to file a motion to suppress a post-arrest interview of Dr. Shaygan by a DEA agent based upon Dr. Shaygan’s statement that he had invoked his Sixth Amendment right to counsel during the interview. The Assistant United States Attorney informed defense counsel before several witnesses that filing such a motion to suppress would result in a “seismic shift in the prosecution.”

            Irrespective of these rumblings by the prosecution, the defense filed a motion to suppress. Overtly, the government retaliated by obtaining a superseding indictment adding more than 100 additional counts. In addition, without informing the Department of Justice, the court or the defense, the prosecution also approached two fact witnesses and directed them to tape record their communications with defense counsel. The witnesses’ recordings of defense counsel without counsel’s knowledge were revealed to the defense only when one of the witnesses testified that he possessed a recording of a conversation with counsel during trial. Despite this disclosure, the defense’s motion alleges that it was not until one week later when a member of the prosecution team told a member of the defense team that he had been recorded by the witness without his knowledge.

• Email This
• Print
• Comments
• Trackbacks (1)

False claims actions, or “qui tam” actions, are well known actions by a “whistleblower,” or relator, who has discovered fraud against the Government, pursuant to the False Claims Act (FCA), 31 U.S.C. § 3729. If the Government decides to intervene in their case, the whistleblower can share in any recovery by the Government.

In addition to the FCA, other government agencies have their own incentives for whistleblowers. The most notable example is the Department of Treasury and Internal Revenue Service, which have long had a whistleblower program in place. However, on December 20, 2006, President George W. Bush signed the Tax Relief and Health Care Act of 2006 into law, which dramatically increased incentives under the IRS’s whistleblower program. Section 406 of the Act, codified at Section 7623 of Title 26 of the United States Code/ Section 7623 of the Internal Revenue Code, entitled “Expenses of detection of underpayments and fraud, etc.” provides in part that:

1.  The Secretary of Treasury is authorized, in cases where such expenses are not otherwise provided for by law, to make awards for (1) the detection of underpayments of taxes, or (2) the detection and bringing to trial and punishment persons guilty of violating, or conspiring to violate, the internal revenue laws. 26 U.S.C. § 7623(a).

2.  If the Secretary proceeds with any administrative or judicial action based upon information brought to the Secretary’s attention by an individual, the individual shall receive as an award at least 15 percent but not more than 30 percent of the collected proceeds (including penalties, interest, additions to tax, and additional amounts resulting from the action), or from any settlement in response to such action, subject to the exception in 26 U.S.C. § 7623(b)(2)(A), discussed below. The amount of the award shall be determined by the Whistleblower Office and shall depend on “upon the extent to which the individual substantially contributed to such action.” 26 U.S.C. § 7623(b). NOTE: All of Section 7623’s award provisions apply only if there is an action against a taxpayer (1) whose gross income exceeds $200,000 for any taxable year subject to the action, and (2) the tax, penalties, interest, additions to tax, and additional amounts in dispute exceed $2,000,000. 26 U.S.C. § 7623(b)(5). NOTE: No awards can be made under Section 7623 unless the information submitted to the Secretary is submitted under penalty of perjury. 26 U.S.C. § 7623(c).

Gillen Withers & Lake LLC, is headed by civil and criminal defense attorneys who are among the most distinguished in the Southeast, with a national reputation and excellent track record, who vigorously represent and make every effort on behalf of their clients. Contact us today by calling or e-mailing Craig Gillen in Atlanta at (404) 842-9700 or cgillen@gwllawfirm.com or Thomas Withers in Savannah at (912) 447-8400 or twithers@gwllawfirm.com.

• Email This
• Print
• Comments (1)
• Trackbacks