USA Today on Misconduct by Federal Prosecutors; AUSA in Senator Ted Stevens Prosecution Takes Life;

USA Today ran a lengthy piece on prosecutorial misconduct on September 22. The article states that, since 1997, federal courts have determined that Department of Justice attorneys violated laws or ethical rules in some 201 cases, including the duty expressed by Supreme Court Justice George Sutherland over 70 years ago in Berger v. United States, 295 U.S. 78 (1935);

The United States Attorney is the representative not of an ordinary party to a controversy, but of a sovereignty whose obligation to govern impartially is as compelling as its obligation to govern at all, and whose interest, therefore, in a criminal prosecution is not that it shall win a case, but that justice shall be done. As such, he is in a peculiar and very definite sense the servant of the law, the two-fold aim of which is that guilt shall not escape or innocence suffer. He may prosecute with earnestness and vigor -- indeed, he should do so. But, while he may strike hard blows, he is not at liberty to strike foul ones. It is as much his duty to refrain from improper methods calculated to produce a wrongful conviction as it is to use every legitimate means to bring about a just one.

Most of the cases of misconduct involved concealment of favorable or impeaching evidence from the defendant and presenting false testimony to the jury. In the cases found by the reporters as part of a six month investigation, the misconduct by the prosecution was so egregious that courts dismissed the charges against the defendants or overturned the defendants' convictions. The story states that investigations of prosecutorial misconduct by the Department of Justice prompted by complaints from judges rose to 61 last year, from 42 in 2001. The Department's Office of Professional Responsibility has reported that it has completed more than 750 investigations over the past decade, and that it has found intentional violations in 68 cases. Reporters found that only one prosecutor had been barred from practicing law, even temporarily, in the past 12 years. In one rare exception, in 2007 the Department prosecuted Richard Convertino, a former Assistant U.S. Attorney, for allegedly obstructing justice in his handling of a Detroit terrorism case. Convertino was acquitted.

The story cites the case of Nino Lyons, who was alleged to have been a drug trafficker, and allegations that prosecutors concealed evidence which would have discredited the witnesses against him, many of whom were incarcerated convicted felons. The prosecution was alleged to have withheld from Mr. Lyons' defense promises made to the witnesses to reduce their prison time, and the failure of one key witness to even identify Mr. Lyons. The concealed evidence came to light only after it was suggested in a government filing after Mr. Lyons had already been incarcerated for three years. The U.S. District Court for the Central District of Florida overturned Mr. Lyons' conviction and declared him innocent.  The ordeal also cost Mr. Lyons his home and his business. U.S. District Judge Gregory Presnell wrote in his order that prosecutors engaged in "a concerted campaign of prosecutorial abuse" including covering up evidence and letting felons lie to the jury. Judge Presnell further said that prosecutors "brazenly" defied court orders and presented witnesses who were "allowed, if not encouraged, to lie under oath." As small compensation, the Justice Department paid $150,000 of Mr. Lyons' legal bills in a confidential settlement. The story states that the Department of Justice has paid nearly $5.3 million in legal bills for wrongly accused defendants.

The article noted the heavy caseload and lack of supervision of many federal prosecutors as a possible causes of misconduct. In response to the article, Acting Deputy Attorney General Gary Grinder wrote a letter to the editor, which may be read here, in which he defended that the number of cases of prosecutorial misconduct is actually "minuscule," given the fact that the Department of Justice prosecuted more than 720,000 cases and more than 1 million defendants in the time period covered by the study, suggesting that serious prosecutorial misconduct only occurs in approximately 1 in 3,600 cases.

In related news, following the dismissal of the prosecution of late Alaska Senator Ted Stevens, the Department of Justice commenced an investigation of several Department attorneys for potential prosecutorial misconduct. Senator Stevens was killed in a plane crash on August 9, 2010. One of the attorneys under investigation was Assistant U.S. Attorney Nicholas A. Marsh. Marsh, aged 37, committed suicide late last month, as reported in the Louisville Courier-Journal.

U.S. District Judge Emmet Sullivan appointed a special prosecutor to investigate what he called the worst misconduct he had seen in nearly 25 years on the bench. Marsh's attorney issued statements to the media following his death that Marsh was fearful of the investigation preventing him from continuing to work at the Department of Justice, and indicated that Marsh and investigators were actually "on the verge of a successful resolution." The Department has expressed its condolences to Marsh's family, as does the Blog.

 

 

Former Brocade CEO Greg Reyes Sentenced to 18 Months; Counsel Blames Lawyers for Failure to Catch Stock Option Backdating

From Law.com, the former Chief Executive Officer of Brocade Communications Systems, Inc., Gregory Reyes was sentenced to 18 months in prison yesterday in U.S. District Court for the Northern District of California for securities fraud and backdating stock options. The government had sought a 37 month sentence and a loss amount of $137 million.

Reyes' counsel attempted to argue that his lawyers should have done a better job in advising Reyes. U.S. District Judge Charles Breyer apparently found the argument an interesting one, stating "Yes, it's not a bad question to ask, 'Where were the lawyers?'" However, the Court rejected the argument, finding that Reyes was a sophisticated executive who understood what he was doing.

Reyes was first tried and convicted on the charges in 2006 and was sentenced to 21 months' imprisonment. However, the Ninth Circuit Court of Appeals reversed his conviction last year based on prosecutorial misconduct in interfering with witness testimony. Reyes was tried a second time in February and March of this year, and was convicted on nine counts. During the trial, Reyes' counsel blamed Brocade's outside counsel, attorneys with the law firm of Wilson Sonsini Goodrich Rosati, for failing to catch stock option backdating. However, Reyes' trial counsel never called anyone from the firm to testify. One of the documents at issue in the case was drafted by two experienced attorneys.

The Court received over 400 letters on Reyes' behalf.
 

Government Looks for Success Against Former KB Home Executive Following String of Failures in Stock Option Backdating Cases

After the failure of its backdating case against Gregory Reyes, former Chief Executive Officer of Brocade Communications Systems, prosecutors with the U.S. Attorney's Office for the Central District of California are taking a new tack in its backdating case against former KB Home CEO Bruce Karatz, according to the National Law Journal. Karatz is alleged to have received millions in undisclosed income as a result of backdating stock options, and made $232 million in his last three years as CEO alone. The prosecution has decided to focus on Karatz's personal gain from the alleged scheme, and circumvent the defense--effective in the Brocade Communications Systems case--that backdating is not criminal where the corporation is aware of it, or where a defendant relies on the advice of attorneys or accountants. Defendants have also successfully argued that backdating is a legal and legitimate practice, and that many companies restate their income as a result of such conduct.

The U.S. Court of Appeals for the Ninth Circuit reversed Reyes' conviction in August based on the government's alleged prosecutorial misconduct in intimidating and influencing witnesses. The government's failure in the Reyes case came along with its defeat in 2008 in a backdating case against Kent Roberts, the former General Counsel of McAfee, Inc., a security software firm, and the dismissal of its case against two former executives of Broadcom Corp.