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

We have commented on the case of Alfredo and Niurka Rasco of South Georgia, who were charged in a $6.5 million Medicare fraud scheme. Well, despite a heated and well-founded defense against the charges based upon illegal use of immunized evidence by the government, Mr. Rasco and his wife pled guilty to the charges against them last week during their trial, according to a press release by the U.S. Attorney's Office for the Southern District of Georgia. Mr. and Mrs. Rasco face maximum terms of imprisonment of 12 years and 6 months respectively.

In other news, the U.S. Senate will convene next week to hold an impeachment trial of U.S. District Judge G. Thomas Porteous, Jr., of the Eastern District of Louisiana according to the National Law Journal. Judge Porteous is charged with corruption. Specifically, Judge Porteous is charged with accepting meals, trips and other gifts from bail bondsman Louis Marcotte III and his sister Lori Marcotte in return for giving the Marcottes and their clients special treatment while he was a state court judge. Judge Porteous is also alleged to have made false statements to the Senate and to the FBI in 1994 regarding his past.

Judge Porteous' attorneys are vigorously defending him, however, pointing out that much of the conduct charged against Judge Porteous occurred prior to his appointment to the bench. Furthermore, a federal grand jury had investigated Judge Porteous as part of wide-ranging probe into Louisiana corruption, however no charges resulted. The U.S. Department of Justice also decided to drop the case against Judge Porteous. Judge Porteous' attorneys have denied any wrongdoing by Porteous, and state that he has done nothing to justify his removal from office.  The defense also contends that the FBI and the Senate were aware of the allegations against Judge Porteous prior to voting to confirm his appointment.

A fascinating fact is that Congress is also the nation's least used court. The trial of Judge Porteous will be the Senate's first since the impeachment trial of President William Jefferson Clinton (who appointed Judge Porteous to the bench) in 1999, and the first of a federal judge since 1989. The U.S. House of Representatives has considered bringing impeachment proceedings against federal judges in the interim, but the judges had resigned before the proceedings could be brought. Judge Porteous was referred to the Senate for impeachment by the Judicial Conference of the United States, led by Supreme Court Chief Justice John Roberts Jr., in June of 2008. A committee of 12 senators will serve as both judges and jurors at his trial. Members of the House will serve as prosecutors, or "managers." The Senators will vote on whether to convict Judge Porteous, with a two-thirds majority required to convict. Any of the Senators may question witnesses following examination and cross-examination by counsel. The Senate Committee will first gather evidence for consideration by the full Senate. Each side will have 20 hours to put on evidence. The Senate can only vote to impeach Judge Porteous, and cannot impose any sentence of imprisonment or fine. The trial will take place in the same chamber the Senate uses for confirmation hearings.

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 As reported in the Wall Street Journal and virtually everywhere else, Morgan Stanley has joined Goldman Sachs as the latest target of the federal government's criminal investigation of financial firms relating to the financial crisis which began in 2007, under the government's theory of criminality of failing to disclose to investors that the firms were "betting" on the failure of certain collateralized debt obligations, or CDOs. According to Federal prosecutors, Morgan Stanley designed CDOs, while at the same time Morgan Stanley's trading desk allegedly placed bets that their value would decrease. Similar to the government's investigation of Goldman Sachs, the investigation, headed by the U.S. Attorney's Office for the Southern District of New York, is focusing on whether Morgan Stanley made proper representations to investors about its role.

The investigation has focused in particular on two investments created in 2006, named after former U.S. Presidents James Buchanan and Andrew Jackson, known as the "Dead Presidents" deals by traders. Each deal issued approximately $200 million in bonds. Morgan Stanley did not market the deals to customers--the Jackson deal was underwritten and marketed by Citigroup and the Buchanan deal was underwritten and marketed by UBS AG. Citigroup has stated that it is cooperating with the government in the investigation.

However, as in the investigation of Goldman, prosecutors face an uphill climb against numerous obstacles and defenses. Morgan Stanley did make money on its "Dead Presidents" deals, however it lost $9 billion overall on mortgage-backed securities in 2007. Morgan Stanley has informed the media that it did not mislead investors, and that it has examined the "Dead Presidents" transactions and that it does not believe that the investigation has any substance. The allegations are based on documents which Morgan Stanley voluntarily provided to the U.S. Securities and Exchange Commission in response to a subpoena. 

Both the Goldman and Morgan Stanley criminal investigations were the result of a civil fraud investigation of a dozen Wall Street firms begun by the SEC in 2009. Analysts have stated that all Wall Street investment banks have been receiving subpoenas about CDOs and CDO marketing. The SEC has been inquiring with firms regarding whether any of their clients were betting against CDOs.

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Supreme Court Justice John Paul Stevens, who notified President Barack Obama last week that he will be stepping down from the Court when its current term is over in June or July, has written nearly 400 opinions over his nearly 35 year tenure on the Court. Justice Stevens has weighed in on many occasions on criminal law issues over the past three and a half decades. Contrary to the label commonly applied to Justice Stevens as a "liberal," like all Supreme Court Justices, he has sided with the government in criminal cases more often than not. However, Justice Stevens has been the originator of many opinions which have upheld and furthered the rights of the individual in criminal cases, some of the more notable of which are outlined below.

On sentencing issues, Justice Stevens authored the opinion in Apprendi v. New Jersey, 530 U.S. 466 (2000), the forerunner of the Court's landmark decisions in Blakely v. Washington, 542 U.S. 295 (2004) andUnited States v. Booker, 543 U.S. 220 (2005), in which the Court first famously held, in regard to New Jersey's "hate crimes" statute, that "[t]he Constitution requires that any fact that increases the penalty for a crime beyond the prescribed statutory maximum, other than the fact of a prior conviction, must be submitted to a jury and proved beyond a reasonable doubt."

Justice Stevens has been an ardent opponent of capital punishment throughout most of his term on the Court and has been the author of numerous opinions limiting the application of the death penalty. In Atkins v. Virginia, 536 U.S. 304 (2002), the Court held that execution of "mentally retarded" offenders constituted cruel and unusual punishment, and in Thompson v. Oklahoma, 487 U.S. 815 (1988), ruled that juveniles under the age of 16 cannot possess the requisite culpability for imposition of the death penalty. And in Beck v. Alabama, 447 U.S. 625 (1980) the court mandated that, in capital cases, the jury must be instructed on, and permitted to consider, a verdict of guilt on a lesser included offense.

 In other cases, Justice Steven held in Johnson v. California, 545 U.S. 162 (2005), that a State could not impose the burden on a defendant claiming a racially discriminatory striking of a juror pursuant to Batson v. Kentucky, 476 U.S. 79, to show that the striking was "more likely than not" the product of purposeful discrimination. He also held, in Hubbard v. U.S., 514 U.S. 695 (1995), that a federal court is not a department or agency of the United States for the purposes of making false statements in a matter within the jurisdiction of the United States pursuant to 18 U.S.C. § 1001.

 The Blog wishes Justice Stevens a happy retirement and looks forward to the appointment of his successor.

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As set forth in the official DOJ Blog yesterday, Deputy Attorney General David W. Ogden issued three Memorandum to DOJ prosecutors no doubt intended to remedy some of the setbacks the Department suffered last year as a result of discovery violations. The subject of one of the Memos is “Guidance for Prosecutors Regarding Criminal Discovery.” The second Memo reference is “Issuance of Guidance and Summary of Actions Taken in Response to the Report of the Department of Justice Criminal Discovery and Case Management Working Group.” Finally, a separate Memo is address to all DOJ litigating components and all U.S. Attorneys.

Taking the "Memo to the U.S. Attorneys and DOJ Components" first, Odgen summarizes that he had convened a working group to address DOJ policies and practices regarding criminal discovery issues. Odgen references that he is sending to all DOJ trial attorneys and AUSAs a memo containing Guidance For Prosecutors Regarding Criminal Discovery that prosecutors should follow to ensure that discovery obligations are met in all future cases. Interestingly, Odgen directs that each U.S. Attorney’s Office develop a discovery policy consistent with the law and local rules and practices. That policy must be in place by March 31, 2010.

The “Guidance For Prosecutors Regarding Criminal Discovery” Memo sets out detailed steps prosecutors are to follow regarding discovery. The six page Memo first advises that the prosecutors must determine who is a member of the “Prosecution Team” for the purpose of determining what documents must be reviewed for disclosure.

The Guidance Memo then directs that the discovery review should cover the following: 1) the investigative agency’s files, 2) Confidential Informant/Witness/Source files, 3) Evidence and Information Gathered During the Investigation, 4) Documents or Evidence Gathered by Civil Attorneys and/or Regulatory Agencies in Parallel Civil Investigations, 5) Substantive Case Related Communications, 6) Potential Giglio Information Relating to Law Enforcement Witnesses, 7) Potential Giglio Information Relating to Non-Law Enforcement Witnesses and Fed.R.Evid. 806 Declarants, 8) Information Obtained in Witness Interviews, a) Witness Statement Variations and the Duty to Disclose, b) Trial Preparation Meetings With Witnesses and c) Agent Notes.

The Guidance Memo then directs that although prosecutors may delegate the process of review to others, they “should not delegate the disclosure determination itself.”

The Guidance Memo reminds prosecutors that discovery within DOJ is covered by the U.S. Attorney’s Manual Section 9-5.001, which is broader than what the law requires and that if a prosecutor chooses to follow that broader course, “defense counsel should be reminded that the prosecutor is electing to produce discovery beyond what is required . . .” The Memo then addresses the scope, timing and form of discovery disclosures, but cautions that, “[p]rosecutors should never describe the discovery being provided as ‘open file.’”

Finally, the Guidance Memo counsels that the prosecutor should make a good record regarding the disclosures.

The “Issuance of Guidance and Summary of Actions Taken in Response to the Report of the Department of Justice Criminal Discovery and Case Management Working Group” Memo reminds prosecutors of the words of Justice Sutherland that it is the prosecutor’s duty is “that justice shall be done.” Berger v. United States, 295 U.S. 78, 88 (1935). This Memo informs prosecutors of the establishment of the Guidance Memo set out above and that each U.S. Attorney’s Office shall have a “discovery coordinator.” In addition, DOJ has:
 

• Created an online directory of resources pertaining to discovery issues that will be available to all prosecutors at their desktop;
• Produced a Handbook on Discovery and Case Management similar to the Grand Jury Manual so that prosecutors will have a one-stop resource that addresses various topics relating to discovery obligations;
• Implemented a training curriculum and a mandatory training program for paralegals and law enforcement agents;
• Revitalized the Computer Forensics Working Group to address the problem of properly cataloguing electronically stored information recovered as part of federal investigations;
• Created a pilot case management project to fully explore the available case management software and possible new practices to better catalogue law enforcement investigative files and to ensure that all the information is transmitted in the most useful way to federal prosecutors.
 

No doubt much will be written in coming days and weeks regarding these Memoranda and what I’ve set out here is strictly an overview. Every criminal practitioner in federal court should read, study and be familiar with these Memoranda.

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Leading the Georgia news today is the nomination of Assistant United States Attorney Sally Quillian Yates by President Barack Obama to be the United States Attorney for the Northern District of Georgia. The President announced Mrs. Yates' nomination in a Christmas Eve press release.

Mrs. Yates has served as the interim head of the U.S. Attorney's Office for the Northern District of Georgia since August, when the former U.S. Attorney, David E. Nahmias, stepped down to become Chief Justice of the Georgia Supreme Court. She has had a distinguished career as a federal prosecutor since joining the U.S. Attorney's Office in 1989. Mrs. Yates became the Chief of the U.S. Attorney's Office's fraud and public corruption unit in 1994, and became a top aide to the U.S. Attorney in 2002. Prior to joining the U.S. Attorney's Office, Mrs. Yates, a double graduate of the University of Georgia, was in private practice with King & Spalding. Notably, Mrs. Yates successfully prosecuted former Atlanta Mayor Bill Campbell and former Georgia State Schools Superintendant Linda Schrenko for corruption, and was an integral part of the investigation into the 1996 Olympic Park bombing in Atlanta. Mrs. Yates is married to J. Comer Yates, an attorney and Executive Director for the Atlanta Speech School, which has served children with speech, hearing, language or learning disabilities since 1938.

Mrs. Yates' nomination has been widely praised, including by the criminal defense bar. The nomination must be approved by the United States Senate. If confirmed, Mrs. Yates will be the first female U.S. Attorney for the Northern District of Georgia. Georgia was one of the 13 original federal districts created by the Judiciary Act of 1789, and was subdivided into the Northern and Southern Districts in 1848, and further subdivided again to include the Middle District in 1926. The Act provided that "there shall be appointed in each district a meet person learned in the law to act as attorney for the United States in such district, who shall be sworn or affirmed to the faithful execution of his office, whose duty it shall be to prosecute in such district all delinquents for crimes and offences, cognizable under the authority of the United States, and all civil actions in which the United States shall be concerned, except before the supreme court in the district in which that court shall be holden." Judiciary Act of 1789, Sec. 35. There are currently 93 U.S. Attorneys in a corresponding number of districts across the nation. The Federal Criminal Defense Blog congratulates Mrs. Yates on her nomination and expected confirmation.

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