Former Dewey CFO Released From Jail After His Current Firm Pays His $1M Fine

The former chief financial officer of Dewey & LeBoeuf spent a night in jail after missing the first of three payments on a $1 million fine, but was released early Friday morning when his current law firm paid the entire $1 million, reports the ABA Journal.

“[Joel] Sanders was sentenced in October 2017 to 750 hours of community service and ordered to pay the $1 million fine over a three-year period,” reports the Journal‘s Debra Cassens Weiss. “Sanders did not get any jail time, but Stolz had said failure to pay the fine would land Sanders in jail until he pays up, for up to one year.”

He was convicted for misleading lenders and bond buyers about the firm’s finances before its 2012 collapse.

Sanders missed his first payment and asked for resentencing because of “dire financial circumstances” and also alleged the fine was unconstitutionally excessive. A New York judge ordered Sanders to jail.

The next day, his current law firm paid the entire $1 million.

Read the ABA Journal report.

 

 




Blockchain Alliance Reaches 100 Members

Steptoe & Johnson LLP announced that the Blockchain Alliance, a public-private forum to combat criminal activity involving cryptocurrencies and blockchain technology, has grown to include 100 industry and government agencies in 19 countries.

Founded in October 2015 by the Chamber of Digital Commerce and Coin Center and led by Steptoe, the Alliance is comprised of a broad coalition of companies and government agencies that work to make the blockchain ecosystem more secure through education and dialogue between government and industry. In less than three years, the Alliance has grown from 17 industry members and six U.S. federal agencies to a total of 100 participants all over the world, including not only cryptocurrency and blockchain technology companies but also regulatory and enforcement agencies on six continents, as well as international entities including Interpol and Europol.

Steptoe partner Jason Weinstein (former deputy assistant attorney general in charge of cybercrime investigations at the Department of Justice and a member of the strategic advisory boards of BitFury, Coin Center and the Chamber of Digital Commerce) serves as the group’s director. Steptoe of counsel Alan Cohn (former assistant secretary for strategy at the Department of Homeland Security and a strategic advisor to several blockchain startups) serves as counsel to the Alliance.

“The growth of this Alliance – with 100 members around the world representing industry and government – is remarkable and reflects the growth of the cryptocurrency and blockchain space as a whole,” Cohn said. “Our mission is to enable industry and law enforcement to jointly protect public safety and help create an environment where innovation can thrive, and it’s working.”

“The Blockchain Alliance is an important organization that furthers vital communication between blockchain-oriented businesses and government agencies to help strengthen their understanding of enforcement objectives and cooperation,” said Amy Kim, chief policy officer of the Chamber of Digital Commerce. “The group’s work is critical in fostering the development of properly functioning markets involving virtual currency in particular and is much needed at a time when policy makers continue to have questions about this space. Its efforts have been instrumental in aiding law enforcement to detect crime and prosecute wrongdoers.”

The Blockchain Alliance serves as a resource for law enforcement and regulatory agencies to benefit from the expertise of some of the brightest minds in the blockchain industry for technical assistance in response to challenges faced during investigations. The Alliance also serves as a platform for open dialogue among law enforcement and regulatory agencies and the blockchain community about issues of concern to make blockchain technology more secure and to deter its use for unlawful purposes.

Additionally, the Alliance provides education and technical assistance regarding cryptocurrencies and other applications for blockchain technology, including through a series of webinars that have reached almost 700 participants in more than 35 countries.

“We are proud of the meteoric growth of the Alliance in just three years. The companies in the Alliance are good corporate citizens, and they deserve the credit for their commitment to working proactively with governments around the world to promote a secure blockchain ecosystem – for the benefit of government, industry, consumers, and the public,” Weinstein said.

 

 




Attorney’s Eye-Popping $460,000 in Earnings to Defend Indigent Clients Prompting Changes

A Texas county is adding more controls after fees to an attorney representing indigent clients this past fiscal year topped $460,000 — more than double the amount of any other court-appointed lawyer in Collin County, reports The Dallas Morning News.

Attorney Marc Fratter, 46, also earned significantly more than anyone on the county payroll, including the district judges who approved his pay sheets, according to reporter Valerie Wigglesworth.

“Fratter said he put in long hours — billing as much as 100 hours a week at times — with his one-man firm handling the workload of as many as six attorneys. He pointed to judges’ signatures on all of his pay sheets. “I’m not hiding anything,” he said.

Read the Dallas News article.

 

 




Ex-JPMorgan Trader Pleads Guilty in Six-Year Spoofing Plot

A former precious-metals trader said to have worked at JPMorgan Chase & Co. admitted he engaged in a six-year spoofing scheme that defrauded investors in futures contracts with the help of his colleagues and bosses, Bloomberg Law reports.

Prosecutors said John Edmonds placed hundreds of orders he never intended to execute — orders designed to move the market, but were canceled before being matched. Edmonds and other traders sought to manipulate futures markets for gold, silver, platinum and palladium on the Nymex and Comex exchanges for their own benefit.

The Bloomberg article continues: “Edmonds, who lives in Brooklyn, New York, said he learned the spoofing strategy from more senior traders at the bank and said his immediate supervisors approved of it, according to the Justice Department.”

Read the Bloomberg Law article.

 

 




Promise Not to Kill Anyone? After Losing Election, TX Judge Wholesale Releases Juvenile Defendants

After losing his bench in a Democratic sweep, Harris County Juvenile Court Judge Glenn Devlin released nearly all of the youthful defendants that appeared in front him on Wednesday morning, simply asking the kids whether they planned to kill anyone before letting them go, the Houston Chronicle reports.

“He was releasing everybody,” said public defender Steven Halpert. “Apparently he was saying that’s what the voters wanted.”

“The longtime Republican jurist — whose seat was among 59 swept by Democrats in Tuesday’s election — is one of two juvenile court judges in Harris County whose track records favoring incarceration contributed heavily to doubling the number of kids Harris County sent to the Texas Juvenile Justice Department in recent years, even as those figures fell in the rest of the state,” writes Chronicle reporter Keri Blakinger.

Four of the juveniles released were facing aggravated robbery charges.

Read the Houston Chronicle article.

 

 

 




Lawyer Removes Post Calling Client a ‘Terrible Criminal’

An Iowa criminal defense lawyer has removed a Facebook post in which he called a client an “idiot” and “terrible criminal” who deserved to be jailed, reports the Associated Press.

Chad Frese said his post was being misinterpreted by other lawyers, who said the rant was highly inappropriate and likely violated ethics rules governing the profession. He said that he shared the post only with his Facebook friends and that he didn’t think it crossed any lines, according to AP reporter Ryan J. Foley.

The post also included: “He needed to shut his mouth because he was the dumbest person in the conversation by 100 times.” And he added, “You wonder why we need jails huh?”

Read  the AP article.

 

 




Chinese Company Charged With Stealing Trade Secrets From U.S. Computer Firm

NBC News reports that the Justice Department revealed Thursday that a federal grand jury has charged companies in China and Taiwan  and three individual Taiwanese nationals with a scheme to steal trade secrets from Micron.

China is “shamelessly bent on stealing its way up the ladder of economic development and doing so at American expense,” said John Demers, assistant attorney general for national security.

NBC reporter Pete Williams writes: “Federal prosecutors said one of the defendants served as president of a company acquired by Micron five years ago. The charges said he went to work for the Taiwan company, United Microelectronics Corporation, and orchestrated the theft of trade secrets from Micron worth nearly $9 billion.”

Read the NBC News article.

 

 




Ex-Penn State University GC Cleared of Wrongdoing

Former Pennsylvania Supreme Court justice and Penn State University general counsel Cynthia Baldwin was cleared Friday of any wrongdoing relative to her representation of university officials during the Jerry Sandusky investigation, reports the Pittsburgh Post-Gazette.

She had been accused by the Pennsylvania Office of Disciplinary Counsel of violating several of the Rules of Professional Conduct for attorneys as she represented Penn State, former PSU president Graham Spanier, and two other administrators while she served as university general counsel from 2010 to 2012, writes reporter Paula Reed Ward.

The case included an alleged conflict in representing the interests of the university as well as the three administrators before the investigating grand jury. All three administrators were convicted of child endangerment stemming from a case which resulted in a former university assistant football coach being convicted of sexually abusing children.

Read the Post-Gazette article.

 

 




DOJ Announces Guidelines to Reduce the Imposition of Monitorships in Corporate Criminal Cases

ComplianceThe Justice Department’s Criminal Division has announced updated policies and procedures related to the selection of corporate monitors in federal criminal cases, according to an advisory written by Paul N. Monnin, a partner in Alston &. Bird.

He writes:

The memorandum makes clear that “the Criminal Division should favor the imposition of a monitor only where there is a demonstrated need for, and clear benefit to be derived from, a monitorship relative to the costs and burdens.” In short, a monitor is now disfavored “[w]here a corporation’s compliance program and controls are demonstrated to be effective and appropriately resourced at the time of resolution.”

The article also includes a link to a PDF of the DOJ advisory.

Read the article.

 

 




Former Partner Sentenced to Five Years in Prison for Scheme to Bribe Alabama Lawmaker

A former partner at Balch & Bingham has been sentenced to five years in prison for a scheme to bribe an Alabama state legislator to oppose expansion of a site designated for an environmental cleanup, reports the ABA Journal.

Gilbert was part of Balch & Bingham’s environmental and natural resources practice, according to reporter Debra Cassens Weiss. Prosecutors had alleged he and a co-defendant, coal company executive David Roberson, funneled $360,000 to the state lawmaker through a consulting contract with his private foundation.

The lawmaker, former Alabama State Rep. Oliver Robinson, was previously sentenced to 33 months in prison after pleading guilty to conspiracy, bribery, wire fraud and tax evasion, the Journal reports.

Read the ABA Journal article.

 

 




‘Frack Master’ of Texas Oil Fame Pleads Guilty to Massive Fraud, Faces Up to 12 Years in Prison

The Dallas Morning News reports that Texas businessman Christopher Faulkner, better known by his now infamous moniker “Frack Master,” has admitted to securities fraud, tax evasion and money laundering and faces up to 12 years in prison, federal officials said Tuesday.

Reporter Jess Mosier writes that Faulkner, the former CEO of Dallas-based Breitling Energy, became a star in business circles for his high-profile media appearances defending hydraulic fracturing or fracking. He used fake college degrees and skimpy business experience to convince Dallas business elite and Texas political elite that he was an oil and gas expert.

“The SEC effectively shut down Breitling Energy and related businesses after suing Faulkner and 11 others in 2016 for misusing $23.8 million of the $80 million they raised for oil and gas investments,” according to Mosier. “Besides the prison time, Faulkner must pay back the nearly $24 million made from his schemes, under the terms of his settlement.”

Read the Dallas News article.

 

 




Feds Investigating Lobbying Contract Between Biglaw Firm and Missouri County

The FBI is investigating a lobbying contract between Jackson County in Misssouri and Biglaw firm Polsinelli, The Kansas City Star reports.

A federal judge referred to the investigation of a lobbying contract last week as she sentenced former Jackson County Executive Mike Sanders and top aide Calvin Williford to prison for conspiracy to commit wire fraud.

The article by Steve Vockrodt and Mike Hendricks explains:

Federal lobbying disclosures show that Polsinelli began lobbying for Jackson County in 2010 until the relationship was terminated in April 2018. Jackson County paid the law firm $1.27 million, largely for lobbying on transportation issues.

It’s not publicly clear what investigators are examining, but multiple sources have said part of the investigation concerns questionable travel expenses.

Read the KC Star article.

 

 




Feds: Lawyer Plotted to Bribe Trial Witness in Murder Case

Newsday is reporting that federal prosecutors in Brooklyn have charged a Queens-based defense lawyer with bribing a witness in an effort to alter the outcome of a notorious 2015 Suffolk County gang-related double-murder trial that involved the execution of a construction flagman who had “disrespected” the killer.

Reporter John Riley explains: “Lawyer John Scarpa, 65, of Hauppauge, represented defendant Reginald Ross, a Crips leader from Yaphank ultimately convicted in Suffolk Supreme Court of the 2010 murders of flagman Raymond Hirt and John Williams, whose killing was designed to lure a friend who owed Ross drug money back to New York.”

Prosecutors allege Scarpa plotted to bribe a witness who had pleaded guilty to participating in the Williams murder, to perjure himself at the Ross trial.

Read the Newsday article.

 

 




Ethics Charges Filed Against 6 of 7 Arkansas Supreme Court Justices

Six of the seven members of the Arkansas Supreme Court were formally charged Thursday with violating the state’s judicial canons, an unprecedented action that stemmed from a complaint filed by Pulaski County Circuit Judge Wendell Griffen, reports the Arkansas Democrat-Gazette.

The Arkansas Judicial Discipline and Disability Commission accused the justices of failing to provide sufficient chance for Griffen to defend himself as they weighed whether to remove him from all cases involving the death penalty. Griffen’s subsequent removal stemmed from his participation in a public protest against executions.

“Griffen attracted a whirlwind of attention in April 2017, when he issued an order that temporarily halted the state’s plans to carry out executions, and that same day he participated in a public protest against the death penalty,” writes reporter John Moritz. “The protest was held in front of the Governor’s Mansion.”

Read the Democrat-Gazette article.

 

 




Three Charged in $364M Scheme That Paid for Splurges on Diamonds, Bugattis and Mansions

A federal grand jury has indicted three men for what officials describe as a $364 million Ponzi scheme to defraud investors, reports The Dallas Morning News.

Jay B. Ledford and Cameron R. Jezierski of Texas, along with Kevin B. Merrill of Maryland, raised money from investors who thought they were buying into cheap portfolios of consumer debt on credit cards and student and auto loans, investigators from the Federal Bureau of Investigation and Securities and Exchange Commission said.

“The defendants lured investors through an elaborate web of lies, duping them into paying millions of dollars into this Ponzi scheme,” said U.S. Attorney Robert K. Hur in a statement.

The report by Lison Joseph says the trio spent more than $73 million of investors’ money at casinos and to buy diamond jewelry and luxury cars including Lamborghinis, Ferraris, Bentleys and Bugattis.

Read the Dallas News article.

 

 




Former Skadden Partner May Face Charges Related to Manafort-Linked Ukraine Report

The ABA Journal reports that attorneys for former Skadden, Arps, Slate, Meagher & Flom partner Greg Craig say he did not circulate a report put together by the law firm and involving former Trump campaign chair Paul Manafort.

Reporter Stephanie Francis Ward explains: “The report was written by Skadden attorneys about the 2011 trial of Yulia Tymoshenko, a former prime minister of Ukraine who was found guilty of abusing her office. Working as a lobbyist, Manafort solicited the report on behalf of Viktor Yanukovych, Ukraine’s pro-Russian president and a rival to Tymoshenko. The plan was to use the report to defend her trial.”

The Washington Post reports that Skadden was paid $4.6 million, a fact Manafort did not reveal, while Ukrainian officials said they paid $12,000 for the report.

And CNN reports that the U.S. Attorney’s Office for the Southern District of New York is also looking into whether Craig failed to register as a foreign agent as required by the Foreign Agents Registration Act.

Read the ABA Journal article.

 

 




Former Locke Lord Partner Indicted on Charges Related to Alleged Cryptocurrency Ponzi Scheme

Above the Law reports that a former partner at Locke Lord and founder/CEO of MSS International Consultants Ltd., a private equity fund headquartered in the British Virgin Islands, was arrested on a charge of conspiracy to commit money laundering.

According to the indictment, Mark S. Scott was part of a conspiracy to conceal the source of $400 million in process from an alleged pyramid scheme involving a purported cryptocurrency, OneCoin. Prosecutors allege he transferred money in and out of the country in order to hide the origins of the money, reports Above the Law editor Kathryn Rubino.

A judge set Scott’s bail at $1 million, secured by $200,000 cash, and placed Scott on home detention with an electronic monitoring device.

Read the Above the Law article.

 

 




Annual Security Report Deadline is Approaching

The U.S. Department of Education’s deadline for institutions to comply with the Annual Security Report is Oct. 1, 2018, points out Canopy Programs by United Educators.

Canopy Programs is offering assistance with its Clery Compliance Toolset, which can generate reports that include policies and procedures, as well as statistics for the past three calendar years.

The online tool will allow users to effectively:

  • Develop policies and procedures
  • Log crime and fire incidents
  • Request and log crime statistics from local law enforcement
  • Generate daily crime logs

Request a demo or download a white paper.




Judge Rejects Ex-Bank Executives’ Bids for Acquittals, New Trials

A federal judge on Thursday refused to overturn the fraud and conspiracy convictions of four former executives for the only financial institution to be criminally charged in connection with the federal bank bailout program, the Associated Press reports.

Judge Richard Andrews refused to enter judgments of acquittal or set new trials for the former Wilmington Trust executives.

“Former bank president Robert Harra Jr., former chief credit officer William North, former chief financial officer David Gibson and former controller Kevyn Rakowski were convicted in May on charges of fraud, conspiracy and making false statements to federal regulators,” writes reporter Randall Chase

Read the AP article.

 

 

 




Federal Judge’s Meltdown Ends With Hostages, Suicide

A federal administrative law judge arrested last week, accused of threatening the mother of his child with a rifle, shot and killed himself early Friday morning, ending a tense 10-hour standoff in Florida, reports the Miami Herald.

Police and federal agents had already confiscated a weapons cache from the home of Timothy Maher a few days before he took hostages and then killed himself. Three hostages were unharmed.

“The standoff was the culmination of a 10-day cat-and-mouse game between the troubled judge and local and federal law enforcement that began with Maher being arrested on firearms charges and included the shutdown of a downtown Miami Social Security office,” reports the Herald.

Read the Miami Herald article.