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

On Monday, Detroit Attorney Tim Attalla had charges that he helped the Highwaymen Motorcycle Club carry out a drug business thrown out by the U.S. District Court for the Eastern District of Michigan following a bench trial, as reported by an article on Freep.com. U.S. District Court Judge Nancy Edmunds concluded there was insufficient evidence to prove that Mr. Attalla was part of any drug conspiracy, or that he ever served as general counsel to the group.

Prosecutors had argued that Mr. Attalla allegedly assisted Aref Nagi, the former Vice President of the Club, in carrying out a drug conspiracy, including giving him advice on how not to get caught. The government also alleged that Mr. Attalla allegedly gave Nagi Viagra and Vicodin pills on at least two occasions. Nagi was convicted of racketeering in June. During trial, th government had former members of the Club testify against Mr. Attalla that he allegedly hung out at strip clubs with Nagi and also played taped phone conversations between Mr. Attalla and Nagi. The defense argued that Mr. Attalla did nothing more than advise his clients to remain silent pursuant to their Fifth Amendment rights.
 

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On Friday, Marlon Burton of McDonough, Georgia , was sentenced to 30 years imprisonment by the U.S. District Court for the Northern District of Georgia for conspiring to distribute cocaine, heroin and marijuana, according to an FBI press release. Burton was alleged to have imported hundreds of kilograms of cocaine, heroin and marijuana to Atlanta from Mexican drug cartel and to have sold the drugs to various street-level dealers. He was alleged to have traveled to Mexico on several occasions to negotiate prices and quantities of drugs. Burton was alleged to have funneled over $1.5 million in drug proceeds through his construction company and other businesses he controlled. Following a year-long investigation, law enforcement officers stopped a tractor trailer in McDonough carrying 40 kilograms of cocaine. Burton and eight other individuals were indicted in the Northern District of Georgia.

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The Senate Subcommittee on Crime and Drugs is holding a hearing today on whether to overhaul laws governing financial crime, as reported by the National Law Journal, which has a link to video of the hearing. One point of contention has been whether to impose a requirement for financial services employees to meet a fiduciary duty to their clients, or else face criminal penalties.

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As the final hours of 2009 were running out on New Years' Eve, U.S. Supreme Court Chief Justice John Roberts issued the Chief Justice's Year-End Report on the Federal Judiciary, available here, a tradition begun by Chief Justice Warren Burger in 1970 to address the most critical needs of the federal judiciary. The Chief Justice has used the Year-End Report in the past to call for salary increases for federal judges. However, this year, the Report merely states that the federal courts are operating soundly, citing the hardships experienced by the nation in 2009.

The Appendix to the Report surveys the workload of the federal courts in 2009. It notes that the total number of cases filed in the Supreme Court decreased by about 6.1% from 2007 to 2008, however the Court hear more cases argued and issued more signed opinions in 2008 than 2007. Filings in the Federal Circuit Courts of Appeals also declined 6% to 57,740, mostly due to a drop in appeals from the Board of Immigration Appeals.

The Year-End Report notes, however, that criminal case filings in federal district courts rose 8% to 76,655, and the number of defendants climbed 6% to 97,982, surpassing the previous record for the number of defendants, 92,714, set in 2003, and reached its highest level since 1932. Filings relating to immigration, fraud, marijuana trafficking, and sex offenses increased. The number of mmigration cases and defendants reached record levels, as a result of illegal re-entries and visa or entry permit fraud. Most of the increase was in five federal districts near the southwestern border. The Report also observes that, as of September 30, 2009, the number of persons under post-conviction supervision was 124,183, an increase of 3% from the previous year. Supervised release cases and pretrial services cases also rose by several percent.

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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.”

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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.

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As reported in the Atlanta Journal-Constitution, Vernon Marcus Coleman, the last remaining member of the Black Mafia Family, or BMF, was arrested last Thursday. Coleman was apprehended at an apartment in north Atlanta by the U.S. Marshals' Southeast Regional Fugitive Task Force. Coleman had been wanted for over two years on cocaine charges, as well as on a traffic charge in Douglas County.

Coleman went by several aliases, including Jason Stevenson Parkinson and WU, a rapper. He claimed to be associated with The Life Records, The Illustrious Family and B-EZ Entertainment. Agents discovered fake documents in Coleman's apartment with his aliases, as well as drug paraphernalia. Coleman told agents that he knew he was wanted because he watched his fugitive profile on a cable channel.

The BMF operated a drug distribution business nationwide before coming to the attention of authorities in 2003. By that time, Atlanta had become a key city in the nationwide organization that ran a violent, yet lucrative, national drug distribution business. Atlanta was a key center for the organization and, at one point, the BMF controlled or had a hand in virtually all of the cocaine and crack cocaine sold in Atlanta, Los Angeles, Detroit and locations in between. The BMF would use limousines to transport cocaine between cities.

Approximately 150 BMF members have been arrested and convicted in several cities on drug and weapons charges. Coleman is the final BMF member to be apprehended. Last December, another BMF member, Fleming Daniels, was sentenced to 20 years in the U.S. District Court for the Northern District of Georgia for distributing more than $1 million in cocaine. A total of 16 defendants have been indicted in Atlanta in relation to the BMF. 11 have pled guilty and Daniels' the only one of the cases to go to trial.
 

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Last week, the U.S. Attorney's Office for the Northern District of Georgia unsealed two indictments charging 34 defendants in a nationwide drug trafficking and distribution network based in Colombia, Guatemala Panama and Mexico, known as the "Gulf Cartel." The defendants were members of "cells" which coordinated the distribution of millions of dollars worth of cocaine and marijuana. One of the network's cells was based in Atlanta, with other cells in several other cities, including Jackson, Mississippi; Memphis; Indianapolis and Austin, Texas. The traffickers shipped drug proceeds from Atlanta and other cities to Texas by tractor-trailer, and then to Mexico, concealing the money with legitimate cargo.

The indictments are the result of "Operation Confluence," a series of searches and arrests executed last week in conjunction with similar operations around the country, including “Operation Dos Equis,” “Operation The Family,” “Operation Stinger” and “Operation Vertigo, which are part of “Project Reckoning,” a multi-agency law enforcement effort designed to bring down the Gulf Cartel. Federal and state agents employed wiretaps, surveillance, police traffic stops and other techniques in the investigation, which culminated in nationwide arrests and seizures executed on September 16.  In all, Project Reckoning has resulted in the arrest of 332 individuals, the seizure of $57 million in U.S. currency, and the seizure of 51,147 pounds of marijuana, 16,347 kilgorams of cocaine and other quantities of drugs and guns.U.S. Attorney General Michael Mukasey announced the results of the project last week at the DEA's Atlanta Division headquarters.

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On Friday, Jared Robert Wheat, Stephen Douglas Smith, Tomasz Holda, Sergio Oliveira and their company, Hi-Tech Pharmaceuticals, Inc., pled guilty in the United States District Court for the Northern District of Georgia pled guilty to conspiring to import and distribute adulterated, mislabeled and unapproved drugs and to commit mail fraud and wire fraud, according to the website for the Office of the United States Attorney for the Northern District of Georgia.

The defendants were alleged to have set up an off-shore pharmaceutical manufacturing facility, a small four-room facility in Belize. At the facility, the defendants produced generic versions of popular drugs such as Xanax, Valium, Ambien, Vioxx, Zoloft, Viagra, and Cialis. The production is alleged to have not authorized by the Food and Drug Administration ("FDA") and in violation of FDA regulations as well as the patents for the drugs, and to have been in unsanitary conditions. The defendants then marketed and sold the drugs to individuals without prescriptions, primarily over the internet. The defendants are alleged to have realized millions from the scheme. The FDA Office of Criminal Investigations participated in the investigation of the case. 

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Jack Killorin, the Director of the Atlanta High Intensity Drug Trafficking Area Task Force (HIDTA), announced to the press that drug enforcement efforts have resulted in a rise in drug prices and decrease in drug quality in the metro Atlanta area. Killorin cited the HIDTA’s and Drug Enforcement Administration’s (DEA) shutting down of two drug trafficking operations in December and seizure of millions of dollars worth of drugs and $10 million in cash. Killorin further noted the DEA’s large seizures of methamphetamine in Gwinnett County over the last three years, including a record-setting $50 million worth of crystal meth seized in Buford, Georgia, in 2006.

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