For as long as we can remember, the word on the street has always been that cops cannot lie. So if you’re doing a drug deal with an undercover cop, and you ask him point blank if he’s a police officer, then he has to tell you the truth. He...
So Jacki called the cops on her man. She didn’t mean for him to go to jail, really. But it was a stressful situation, and this was the best way she could think of to get back at him. It felt great, and having the cops on her side — having...
Just a quick update. The Supreme Court decided Dillon v. U.S. today (read the opinion here), and the decision totally sucks. Here’s what we said about it a couple of weeks ago: There are a lot of federal inmates serving unfairly long sentences, due to the bizarre discrepancy in sentencing...
“Nathan, when you become mayor, I’m gonna be the first volunteer for your security detail.” This was a detective speaking, back when we were an ADA in the Manhattan DA’s office. My office, as usual, had about five cops in it. I liked this detective, and asked how come he...
We’re still waiting to hear how the Supreme Court decides the trio of cases on “honest services” fraud. In the meantime, we’re wondering if yesterday’s Dolan decision might be a harbinger of what’s to come. In Dolan, the Court was dealing with a vague statute. It left out a crucial statement...
In the early days of the War on Terrorism, the Bush administration wanted to know what interrogation techniques were legal. So it asked the DOJ’s Office of Legal Counsel for a memo on what could and could not be done to prisoners. Staff lawyer John Yoo was tasked with doing...
It was a case of very strange bedfellows today at the Supreme Court. The 5-4 decision in Dolan v. U.S. (opinion here) wasn’t split on ideological lines, but on lines of seniority. The majority consisted of the five most junior Justices, while the senior Justices were joined in a solid dissent. ...
It’s hard not to love the recently-retired Justice Souter. A one-of-a-kind individual who writes, not with a computer or even a typewriter, but with a fountain pen. Who never uses email, cell phones or answering machines. Whose home is filled with thousands of books, but no TV. More than that,...
The International Criminal Court came into being almost 8 years ago. It has jurisdiction to prosecute genocide, crimes against humanity, war crimes, and criminal aggression. Well, that is, it has jurisdiction to prosecute those crimes once they’ve been defined. And to date, they haven’t yet come up with a definition...
Extortion is a kind of threat. A threat that’s so bad, it’s criminal. For a threat to be criminal extortion, it needs to be of a kind to make someone do something against his will, that’s adverse to his own interests. Threatening to kill a child if the parents...
There are four Mondays left in June. Four more days in which the Supreme Court is expected to announce its decisions in the 27 or so cases still out there this term. That’s about one case per day from now till then. We’re picturing the Justices pulling all-nighters, stacks of...
So yesterday, the Supreme Court ruled 5-4 in Berghuis v. Thompkins (opinion here) that you need to actually tell the cops that you’re invoking your right to remain silent, if you want them to stop asking questions (or at least not be able to use your subsequent responses against you). ...
When we first moved to NYC in 1997, we thought we knew what racial tension was. After all, we’d grown up in various parts of the South and out West, and had seen and heard quite a lot of invidious prejudice. But we hadn’t seen anything, by comparison. We’d seen...
What’s with all the lawyers getting arrested these days, being charged with financial frauds, Ponzi schemes and the like? Is this a new trend? It sure seems like one.
The latest news is the announcement about an hour ago that the SDNY is charging one Kenneth Starr (no, not that one, this one), money manager for a bunch of celebrities, with yet another Ponzi scheme, funnelling $30 million of investors’ money into his own pockets. He’s a lawyer in New York. (You can read the complaint here.)
Then there’s the former law firm partner Michael Margulies, charged the other day with embezzling $2 million from his firm and clients in Minneapolis over the past 16 years. Coincidentally-named lawyer James Margulies of Cleveland was charged the other day in a $60 million stock swindle. A couple of weeks ago, two lawyers were charged with a mortgage-rescue fraud involving stripping $3 million in equity. A lawyer went to prison a little before that for rigging tax-lien auctions.
That’s just a handful of headlines from this month alone. But it’s been going on for several months now. We’ve been noticing lawyers getting charged with increasing frequency ever since last July when Marc Dreier got sentenced to 20 years for hedge fund swindles totaling God knows how many hundreds of millions of dollars. It really kicked into high gear, however, in December, after Scott Rothstein was arrested for a $1.2 billion Ponzi scheme. And now there are several cases being announced every month.
What’s going on here?
Sure, these kinds of schemes tend to get noticed all at once, when the economy goes south, and the market’s gains no longer mask the fraud. So we’re not wondering why all of a sudden there’s a bunch of financial-fraud arrests. Our question is how come so many of these cases involve lawyers.
Has the profession changed? Is it something new about how lawyers are getting more involved as investment managers and financial advisors? Or is there a new focus by law enforcement? We really don’t know.
But it sure looks like something’s going on out there. What do you think?
Lanny Breuer, the DOJ’s Assistant Attorney General for the Criminal Division, gave a speech today announcing a “new era of heightened white-collar crime enforcement — an era marked by increased resources, increased information-sharing, increased cooperation and coordination, and tough penalties for corporations and individuals alike.”
You can read his prepared remarks here. We did, and we find them very troubling.
* * *
“The techniques that have been used historically to go after organized crime or blue-collar crime need to be used at times in white-collar crime, because the American people expect no less.” That’s a quote from Breuer’s speech today.
That ought to scare you. It scares us. We’re going to have mob agents looking at Wall Street with the wrong filter. Bring a shopping bag to a friend’s house? It’s a cash delivery! Share gossip and rumors heard on the street? It’s insider trading!
And how many federal prosecutors really understand the day-to-day nuts and bolts of the financial world? Sure, they’re mostly bright and well-educated, but how many know the lingo? How many know what actually goes on at those long tables, with everyone on the phone and banging away on their keyboards? Considering where federal prosecutors come from, we’re willing to bet it’s not a big number at all.
So agents are going to be interpreting things wrong. And prosecutors are going to be interpreting things wrong. And now they’re just going to be doing it more.
How is that not scary?
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