White Collar Crime Prof Blog

DOJ Opens a Criminal Investigation of the CIA's Destruction of Interrogation Tapes

Washington, D.C. has been riveted on the CIA's destruction of videotapes of interrogations of two detainees despite judicial directions that they be preserved.  After a preliminary inquiry by the National Security Section of the Department of Justice, Attorney General Mukasey announced (here) that he directed the opening of a full-scale criminal investigation of the decision to destroy the tapes.  The interesting part of the announcement was that the investigation will be led by the First Assistant U.S. Attorney for the District of Connecticut, John Durham, although not as a special counsel along the lines of Patrick Fitzgerald's appointment to investigate the leak of Valerie Plame's identity as a CIA operative.  Durham will be the Acting U.S. Attorney for the Eastern District of Virginia, which has jurisdiction over CIA matters because the agency's headquarters is in Langley.  According to a statement issued by AG Mukasey, Durham's appointment came about because "in an abundance of caution and on the request of the United States Attorney for the Eastern District of Virginia, in accordance with Department of Justice policy, his office has been recused from the investigation of this matter, in order to avoid any possible appearance of a conflict with other matters handled by that office."

Durham will have the same authority as any U.S. Attorney, which means his investigation is subject to the normal supervision by the Attorney General as in any other case.  Fitzgerald, on the other hand, had a broader grant of authority, as outlined in a letter (here) dated December 30, 2003, from Acting Attorney General James Comey: "I hereby delegate to you all the authority of the Attorney General with respect to the Department's investigation into the alleged unauthorized disclosure of a CIA employee's identity, and I direct you to exercise that authority as Special Counsel independent of the supervision or control of any officer of the Department."  Durham certainly does not have that measure of independence, and he is not a "special counsel" or otherwise outside the normal chain-of-command at the Department of Justice.

The Attorney General's announcement notes that the entire U.S. Attorney's Office is recused, and not just U.S. Attorney Charles Rosenberg.  That office was responsible for the prosecution of Zacarias Moussaoui, a case involving issues related to detainee interrogations, so that may be the source of the recusal decision.  Durham will likely draw on Assistant U.S. Attorneys from Connecticut to assist him, and perhaps attorneys from the National Security Section at Main Justice.

Some in the media have speculated that Attorney General Mukasey's announcement shows he is independent of the White House -- the whole "loyal Bushie" issue that plagued his predecessor.  This announcement does not necessarily establish such independence, unless the bar has been lowered to such a degree that a routine decision to follow normal Department of Justice protocol for dealing with a case somehow shows the AG is beyond the reach of political pressure.  Once the National Security Section made its recommendation to upgrade the case to a full-scale investigation, AG Mukasey had little choice but to move forward.  Independence is more a matter of support, and allowing those leading the investigation to see the through to its proper conclusion, not just picking someone experienced to lead it.  Durham is well-regarded as a career prosecutor, but dealing with the CIA and issues related to a political hot potato will require special skills.  Time will tell. (ph)

New Sarbanes-Oxley Article

Lisa H. Nicholson (Louisville) has a new article posted on SSRN's White Collar Crime list.  It is titled, "Sarbanes-Oxley's Purported Over-Criminalization of Corporate Offenders"  and is printed in 2 Journal of Business & Technology Law 43 (2007). The abstract states:

Abstract:     
The Sarbanes-Oxley Act of 2002 and its enhanced criminal penalties, which increase both the monetary fines and terms of imprisonment, were enacted at least in part to aid the SEC and to fill the perceived enforcement gap in combating corporate fraud. Congress, in so legislating, enlisted a criminal law behavioral model to induce law-abiding corporate behavior. In other words, Congress presumes that people will comply with the law after a conscious evaluation of the risks associated with disobeying the law. Deterrent-based punishments, however, may yield less effective outcomes for corporate fraudsters since some actors do not engage in the requisite cost-benefit assessments before acting. Moreover, even if everyone undertook such an assessment, their subjective beliefs will vary the outcomes. Indeed, a corporate offender's attitude toward risk will differ according to the type of criminal penalties that could be imposed, thereby implicating differing levels of marginal disutility.

This Article analyzes whether this tactic - that of enacting increasingly lengthier prison sentences and imposing higher fines alone - will have the desired effect of deterring potential offenders, and punishing wrongdoers. As will be demonstrated below, reliance on the Act's enhanced criminal penalties to deter wrongdoing may not yield the desired result in light of the many uncontrollable factors that may undermine both the imposition of lengthy sentences and higher fines, and the impact of such penalties on convicted wrongdoers. Consequently, the punishment prong of the costs-benefits analysis must fully extinguish all benefits of the unlawful act in order to fill in the gaps that arise from a sole reliance on deterrent-based punishment. The asset forfeiture sanction effectively removes the economic motive for the criminal conduct from the potential offender's 'benefits' calculation. Any purported benefit from the criminal scheme will be wiped out if the offender is caught. This sanction which removes the economic incentive for the fraudulent scheme also punishes those individuals who either engage in a faulty cost-benefit analysis, or who fail to engage in such an analysis altogether.

(esp)

DOJ Asks for Cert in Jefferson Office Search Case

The D.C. Circuit's ruling on the legality of the FBI's search of Representative William Jefferson's House office has caused the Department of Justice more than a little consternation, and the Solicitor General's Office filed a cert petition (available below) on December 19 to overturn the ruling.  This issue is not so much that the government lost below because the materials seized do not appear to have had much significance in the case -- Congressman Jefferson was indicted and faces a trial currently scheduled to start on February 25, 2008.  The problem for the government is how the D.C. Circuit construed the scope of the Speech or Debate Clause, which provides that "for any Speech or Debate in either House, [Senators and Representatives] shall not be questioned in any other Place." U.S. Const. Art. I, § 6, Cl. 1.

In its ruling in United States v. Rayburn House Office Building Room 2113 (available below), a majority of the panel essentially held that the Speech or Debate Clause affords members of Congress a privilege from having materials protected by the Clause being examined by members of the Executive Branch, and perhaps by anyone else for that matter.  The D.C. Circuit stated that "[a]lthough in Gravel the Court held that the Clause embraces a testimonial privilege, to date the Court has not spoken on whether the privilege conferred by the Clause includes a non-disclosure privilege. However, this court has."  The SG argues in the cert petition that this misconstrues the protection afforded by the Speech or Debate Clause, which the government claims is not designed to shield materials from any public disclosure but only to protect against a member of Congress from being questioned about it.

How can the government get the Supreme Court to take a case in which the lower court's ruling does not appear to have had any effect on the underlying prosecution?  The tried-and-true method of "waving the bloody flag" by arguing that the decision will have a deleterious impact on a range of corruption investigations.  That claim may not be completely fanciful because one Congressman, Representative John Doolittle, has already raised questions about subpoenas and searches in an investigation of his dealings with former superlobbyist Jack Abramoff.  The cert petition argues:

The court of appeals' absolute rule against compelled disclosure of Speech or Debate material to the Executive Branch calls vital investigative techniques into immediate and serious question with respect to public cor ruption probes. Although this case involves a search of a Capitol Hill office (a concededly extraordinary event), the court's decision threatens to impede searches of Members' homes, vehicles, or briefcases. Also important are the potential implications for wiretaps and pen registers directed at Members. Even using techniques designed to minimize the interception of privileged conversations, officers typically hear privileged communications or identify calls pertaining to legislative acts while seeking unprivileged evidence of crime.

This Court's guidance is needed. The District of Columbia Circuit denied rehearing en banc by a 5-4 vote, and clarification or reversal of its erroneous decision at some indefinite time in the future cannot alleviate the immediate cloud over ongoing public corruption investigations. The court of appeals' decision affects all congressional investigations because it governs investigations in the District of Columbia -- the seat of our Nation's government. The decision also has a chilling effect in other jurisdictions, because the Department of Justice must weigh the need for evidence in those jurisdictions against the potential that courts will hold that investigations were tainted by the use of previously uncontroversial investigative techniques. The petition for a writ of certiorari should therefore be granted.

The SG's office does not always get its cert petitions granted, but it has a pretty good track record and the Supreme Court may well have to step in to decide the issue because of the delicate issues related to relations between the Executive and Legislative Branch the search raises.  The D.C. Circuit denied rehearing en banc by a 5-4 vote, and there was a dissent from the panel, so this is obviously a close case, which probably enhances the likelihood the Court will get involved by granting the cert petition.  Opposing the Department of Justice will be both Representative Jefferson and, more importantly, the House and Senate, which filed briefs before the D.C. Circuit.  The search caused a great deal of discomfort in Congress, and the real fight will be between the two branches if the case comes before the Supreme Court. 

To avoid any mootness claims if the prosecution of Representative Jefferson is concluded before the Court reaches the issue, the SG asserts that

the investigation underlying this very case has not yet concluded, because the government continues to investigate other participants in Representative Jefferson's schemes. Thus, the evidence seized in the search at issue here is relevant not only to the prosecution of Representative Jefferson, but also to the ongoing investigation and potential prosecution of other individuals. For that reason, the importance of the question presented is not limited to the government's case against Representative Jefferson and will continue regardless of whether he is convicted.

(ph)

Download us_v_rayburn_house_office_building_room_2113_cert_petition_dec_19_2007.pdf

Download us_v_rayburn_house_office_building_room_2113_opinion_august_3_2007.pdf

Buffett and Upcoming General Re Related Trial

Karen Richardson's Heard on the Street Column in the Wall Street Journal, "Reinsurance Trial May Ask: What Did Buffett Know" - see here.

(esp)

Happy New Year - Meet the Bloggers

We wish everyone a happy, healthy, and peaceful new year. 

We will be at the CALI Bloggers Booth at the AALS Conference on Thursday, January 3rd at 3 P.M.  Stop by and say hello.  (ph & esp)

What's Coming in 2008

The New Year will deliver a variety of interesting cases and issues in the white collar crime field, and here are a few developments (and predictions) that may be of interest in 2008 (in no particular order):

• Supreme Court decisions on whether to grant certiorari in the appeals of John and Timothy Rigas (Adelphia Communications) on fraud charges and former Illinois Governor Ryan on RICO/corruption charges.
• Appellate court rulings on the convictions of former CEOs Jeffrey Skilling (Enron) and Joseph Nacchio (Qwest).  Skilling is likely to have at least some of the counts of conviction reversed due to problems with the honest services fraud theory, while Nacchio could well be looking at a new trial on a variety of grounds.
• The CEO trials just keep on coming, with former Reagan Administration budget whiz David Stockman facing charges related to his tenure at auto parts manufacturer Collins & Aikman and Phillip Bennett charged for his role in the collapse of futures broker Refco, perhaps the quickest demise of a public company -- only two months after the IPO.
• More defense procurement cases -- oops, we said that last year.  This time around, the focus will be not only on contractors, especially Blackwater Worldwide, but also government officials charged with investigating corruption, such as former State Department IG Cookie Krongard.
• Foreign Corrupt Practices Act cases will continue to be the hot trend, with Siemens probably setting the record for largest fine assessed in an FCPA case -- perhaps as much as $500 million -- if it is able to settle wide-ranging criminal and civil probes of overseas payments currently estimated at $2 billion.
• Whether the Supreme Court's recent decisions in Gall and Kimbrough bring about changes in white collar sentencing, the most likely source of defendants who can make the case for individualized sentences and take advantage of the newly-restored discretion given to federal district court judges.
• The Barry Bonds perjury/obstruction prosecution will garner significant headlines whenever the home run king appears in court, and his trial will be the hottest ticket since the I. Lewis "Scooter" Libby case, with a different set of political overtones.  It could even be a welcome distraction from the Presidential campaign if it occurs in the fall.
• The Second Circuit will decide whether to uphold U.S. District Judge Lewis Kaplan's ruling dismissing charges against thirteen former KPMG partners and employees due to interference with the payment of their attorney's fees by prosecutors.  If the appellate court reinstates the indictment, then look for a prediction on when the trial will start in "What's Coming in 2009," unless it's headed to the Supreme Court, of course.
• The District of Columbia's decision on the search of Representative William Jefferson's office has caused the Department of Justice much consternation, so don't be surprised to see the Supreme Court grant the government's certiorari petition filed on December 19 (available here).
• The issue of parallel civil and criminal investigations is the subject of an important case before the Ninth Circuit in United States v. Stringer, argued on September 26, 2007.  The opinion should be announced soon, and this is another case that may be headed to the Supreme Court.
• Mortgage fraud moves front and center as the hot focus of the Department of Justice.  A sure sign that there is pressure to bring cases will be the formation of a Mortgage Fraud Task Force -- when in doubt, form a committee.
• As options backdating cases wind down, look for the SEC to begin pursuing disclosure investigations involving banks, brokerage firms, and other financial institutions regarding their exposure to subprime mortgages and the valuation of securities, such as CDOs. tied to that collapsing market.  Not that any of it will ease the pain of collapsing house prices.
• Look for Kobi Alexander to be in Namibia fighting extradition back to Brooklyn to face securities fraud and obstruction of justice charges a year from now.  Indeed, it's an open question whether there will even be a hearing related to the extradition as his attorneys have skillfully thrown up roadblocks to delay even the initial stages of the extradition process.  The 2012 version of this list may well be saying the same thing.
• Look for more election fraud cases with the political season heating up, and the Attorney General might find this to be a good place to make an impression as a non-partisan leader of the Department of Justice.   

Have a safe and happy New Year!

(esp & ph)

Fifth Circuit Rules on Executing Administrative Warrants

John Wesley Hall, at FourthAmendment.com  tells of a recent OSHA case that held that "[t]here is no constitutional right to a pre-execution contempt hearing and that administrative warrants, like criminal warrants, can be executed by means of reasonable force." Attorney Hall talks about the recent Fifth Circuit decision in Trinity Marine Products v. Chao which held that:

"Over the objection of Trinity Marine Products, Inc. ("Trinity"), but pursuant to an administrative search warrant, compliance officers from the Occupational Safety and Health Administration ("OSHA") inspected a workplace owned by Trinity and issued citations. Trinity claims that the search violated the Fifth Amendment because OSHA threatened to arrest Trinity personnel who interfered with the search, but the constitutionally required method to execute administrative warrants when the targeted party refuses to acquiesce is to commence a civil contempt proceeding, which OSHA did not do.

An administrative law judge ("ALJ") heard and rejected Trinity’s argument. Trinity petitions for review. Because Trinity’s contention finds no support in the Constitution or precedent, we deny the petition."

(esp)

Which Crimes Should Be Investigated?

Normally one finds federal prosecutors saying "no comment" on pending investigations.  But the San Francisco Chronicle reported earlier this week a reverse scenario.  It seems prosecutors were calling individuals in the press to obtain information related to State Senate President Pro Tem Don Perata (see here).  It seems this white collar investigation has been ongoing for several years, with no results.

In the interim, the Chronicle reports that Senator Perata was the subject of a carjacking at gunpoint (see here). 

One has to wonder if federal resources are being placed in the correct place. With carjacking as a federal statute, 18 U.S.C. § 2119, would our resources be better spent on stopping this crime?

(esp)

Tough Times for Two Texas DAs

The holidays are always a slow time for news, so when a couple prosecutors find themselves in a little hot water it draws more than the usual amount of media attention.  Harris County DA Chuck Rosenthal's office turned over a slug of e-mails as part of the discovery in a civil rights case against the sheriffs office, and among there were some rather personal ones Rosenthal sent to his executive assistant.  Statements like "I love you" and "I want to kiss you behind your right ear" were in there, according to an AP story (here).  The e-mails were inadvertently released by the federal court, and although they've been resealed, even a short time being available on the internet allowed the media to pounce on them, and that toothpaste won't fit back into the tube now.  DA Rosenthal has apologized for the missives, stating that the disclosure is a "wake-up call to me to get my house in order, both literally and figuratively."  This is our regular reminder that just because you hit the "Send" button doesn't mean the e-mail disappears into the ether, never to be heard from again.  Especially for a chief prosecutor -- send that stuff on your own time.

Meanwhile, in a much less salacious situation up the pike in Dallas County, DA Craig Watkins had his law license suspended on December 14 for failing to pay his state bar dues.  He has since paid them, and it might be an otherwise minor embarrassment except that the DA's name is on all indictments and plea bargains as the county's chief legal officer.  Are the documents valid, or will new indictments be needed for the two weeks he was not licensed?  In the federal system, the United States Attorney's name similarly appears on all filings, but I'm not aware that the person holding the position has to be a member of the district's state bar.  I believe the only requirement is admission to that federal court and the circuit.  While there are internal Department of Justice requiring attorneys to be a member of a state bar, and almost all USAOs that I'm aware of similarly require Assistant U.S. Attorneys to be members in the state bar where the lawyer practices.  I don't think the U.S. Attorney's bar status would affect any filings, and the same may well be the case in Dallas County.  I suspect DA Watkins' will send his check in right away when he receives the first dues notice next year. A Dallas Morning News story (here) discusses the dues flap.  (ph -- with thanks to a Texas reader)

2007 White Collar Crime Awards

In the finest end-of-the-year tradition of various media outlets, we again honor individuals and organizations for their work this year in the white collar crime arena by bestowing "The Collar" on those who deserve our praise, scorn, acknowledgment, blessing, curse, or whatever else you can think of that would be appropriate. Comments are open if any readers would like to suggest additional categories or winners (or losers?), remembering to keep any offerings reasonably mature and somewhat well-meaning, at least to the extent ours meet those criteria (and do not open us up to a libel suit).

With the appropriate fanfare, and without further ado, we present The Collars for 2007:

The Collar for Best Exposure of the Deficiencies in the Federal Sentencing Guidelines -- To President George Bush for finding I. Lewis "Scooter" Libby's guidelines sentence to be excessive.

The Collar for Best Parent -- For the third year in a row, to Bill Olis for all his work on behalf of his son Jamie.  Last year we said one more year and we retire the award in Bill's name, and so this award now is retired and permanently bears the name of The Bill Olis Best Parent Award.

The Collar for Nice Work If You Can Get It -- to former AG John Ashcroft, appointed by a former subordinate as a monitor under a deferred prosecution agreement that will require the monitored company to pay him between $29,000,000 and $52,000,000.

The Collar for Biggest Bang From a Deferred  Prosecution Agreement-- to U.S. Attorney Christopher Christie (the subordinate mentioned in the preceding Collar) for also getting three former colleagues appointed as monitors in the same case, and this comes after his law school alma mater happened to receive a chaired professorship in 2005 pursuant to a deferred prosecution agreement (surprise!!).  Three guesses who may run for Governor of New Jersey in 2009?

The Collar for the Best Skating Not on an Ice Rink -- to Andy Fastow and Jack Abramoff (no explanations needed).

The Collar for Worst Award  -- To the ABA Journal, which originally selected -- with no apparent irony -- the gone-but-surely-not-forgotten AG Alberto Gonzales as its "Lawyer of the Year," initially defending the selection by claiming that he made the most news, even if almost all of it was bad. 

The Collar for Hottest 30-Year Old . . . Statute -- To the Foreign Corrupt Practices Act, which has come into its own as a "mature" criminal statute, even being noticed by the New York Times.  And get your minds out of the gutter, this is a family-friendly blog!

The Collar for Best Able to Move Past a Conviction -- hands down this one goes to Martha Stewart, who has moved on with her life with hardly a misplaced dinner fork.

The Collar for Least Qualified to Hire an Assistant U.S. Attorney -- To Monica Goodling, former White House Liaison to AG Alberto Gonzales (briefly a "Lawyer of the Year" -- see above), who admitted she allowed political considerations to enter into the hiring of career AUSAs. 

The Collar for What Started With a Bang Sure Ended With a Whimper -- To former investment banking star Frank Quattrone, who went through two trials (first jury hung), a conviction later overturned by the Second Circuit, and then received the only deferred prosecution agreement given to an individual in a white collar crime case to this point, with the condition being that he remain a good boy for twelve months.  He did, and is now free from his prior entanglements.

The Collar for the Law Firm With the Most Named Partners Charged With a Crime -- To what was known as Milberg Weiss Bershad & Schulman, whose three living partners (Milberg died long before the firm's troubles arose) were all charged in federal indictments, with Bershad and Schulman pleading guilty.  As a cherry on top, the firm's predecessor included another name partner who entered a guilty plea, William Lerach.

The Collar for Wildest Bribery Case in Mississippi -- To Dickie Scruggs, made famous in the movie "The Insider" about the tobacco litigation that made him rich, who now faces charges of trying to bribe a state court judge in Mississippi, along with his son and another attorney at the firm.  This one has it all: money, local politics, undercover tapes, wiretaps.  Who's writing the screenplay for this one?

The Collar for the Biggest Perjury Case Since, Well, the Last Biggest One -- Now that I. Lewis "Scooter" Libby dodged prison and dropped his appeal, it's on to the next "biggest" perjury case: the prosecution of one Barry Lamar Bonds for lying to a grand jury investigating the steroids factory Balco.

The Collar for the Next Next Biggest Perjury Case Since . . . -- To Roger Clemens, who has loudly proclaimed his innocence regarding steroid use after being named in the Mitchell Report on the invasion of performance enhancing drugs in baseball, will be pressured to testify under oath before Congress when it holds hearings on the Report.  With a scheduled interview on Sixty Minutes, perhaps Congress will make lying to Mike Wallace a federal offense, because Clemens would be a fool to walk into a perjury trap on Capitol Hill.

The Collar for Hardest "What Do These Two Have In Common" Trivia Question -- To Michael Dwayne Short, formerly of Hyattsville, Maryland, who will be forever linked with I. Lewis "Scooter" Libby.  Care to guess why? [Answer will be posted in the Comments on January 1 in case you care.]

The Collar for the White Collar Defendant Most Needing Relief -- To Chalana McFarland, a first-time offender who received 30 years for a mortgage fraud.

The Collar for the State With the Most High-Profile Federal Corruption Investigations -- A tie this year between Louisiana and Alabama, with Alaska starting early to secure next year's award.

The Collar for Blogs That Should Be Nominated for Some Award -- To The D & O Diary (written by Kevin LaCroix) and The FCPA Blog (written by Dick Cassin), both outstanding for their thorough, balanced posts that are uniformly informative -- they deserve recognition for the service they provide to readers but probably won't in various popularity contests.

(esp & ph)

Tax Shelter Ruling May Help In KPMG Prosecution -- Grab the No-Doz!

If a good fifty-page opinion analyzing the validity of a tax shelter doesn't get your juices flowing, you must be living a really boring life . . . no wait, maybe it's the other way around.  Anyway, what would otherwise be an obscure opinion from the Court of Federal Claims takes on added meaning when it is considered in connection with the KPMG tax prosecution, described at one point by prosecutors as the largest tax fraud case ever filed.  The decision in Jade Trading LLC v. United States (available below) found that a complex set of transactions designed to shelter income from taxes called Son of Boss -- these tax vehicles had other cute names like Flip/Opis and Blips -- violated the economic substance rule and hence the tax deductions generated by it would be disallowed.  The court summarized its conclusion in this way: "In sum, this transaction's fictional loss, inability to realize a profit, lack of investment character, meaningless inclusion in a partnership, and disproportionate tax advantage as compared to the amount invested and potential return, compel a conclusion that the spread transaction objectively lacked economic substance."  For those of us non-tax types, I think that means it was essentially a sham transaction.  Now, here's the scary part for the two taxpayers in the case, who were trying to limit (or avoid) taxes on a $40 million capital gain: "The determination that the transaction lacked economic substance and the conclusion that each LLC’s basis in its partnership interests must be substantially reduced requires this Court to conclude that the IRS’s 40-percent penalty is applicable at this juncture." [Italics added]  That's a very hefty price to pay on top of the taxes that will be due, so don't be surprised to see this case appealed to the Federal Circuit.

Where does the KPMG prosecution come in?  The Son of Boss tax shelter, which was peddled by BDO Seidman's "Tax $ells" Group [again with the cute name!] in this instance, is similar to what was sold by KPMG to its clients that is the basis of the prosecution, with the help of financing from Deutsche Bank and some alleged cookie-cutter legal opinions.  While there are only three defendants remaining at this point, the district court's order dismissing charges against thirteen other defendants is on appeal to the Second Circuit, so there is at least a chance that they too could face charges.  While the government would be ill-advised to get into a fight over the validity of the tax shelters in the criminal trial, at the risk of boring the jury to death, one avenue of defense was thought to be that the shelters peddled to KPMG's clients were legitimate, or at least the government never showed they were improper.  The decision in Jade Trading could make it much more difficult to offer that claim.  Defense briefs on the dismissal decision are due at the Second Circuit by January 11, so the case should be ready for oral argument by March, with a decision perhaps coming down by the summer.  (ph)

Download jade_trading_v_us_tax_shelter_opinion_dec_21_2007.pdf

How Not to Respond to a Malpractice Verdict

Being accused of legal malpractice is not much fun, so being found liable has to be much worse.  But to then try to avoid the judgment by filing for bankruptcy and using other subterfuges can result in a criminal prosecution for contempt, as one New York lawyer discovered.  In a case that shows some people have an aversion to honesty, the lawyer -- a freshly minted law school graduate from two years earlier -- gave a rather inflated view of his credentials to attract the client, and then proceeded to file the lawsuit after the limitations period for the suit expired.  From there, according to a New York Law Journal article (here), the client filed a malpractice claim and won a judgment of nearly $400,000 in 1999; in the meantime, the lawyer was disciplined by the state bar.  Then came the bankruptcy filing to avoid the judgment, which was rejected, and later an agreement by the lawyer to sell his firm and make arrangements to pay the former client the judgment, which he then violated by not making the required payments.  U.S. District Judge Denise Cote, who had presided over the case since 1997, finally referred the matter to the U.S. Attorney's Office for a contempt prosecution.  She has now sentenced the lawyer to a two-year probation plus spending six nights in community confinement.  Judge Cote did not fine him because she wants all his money going to pay the judgment.  At the sentencing, the lawyer is reported to have said, "I'm not sure exactly what to say except that I am sorry."  I'm not sure exactly what else could have been said, because any attempt at an excuse might have sent the Judge through the roof.  A fair question can be asked whether the attorney should remain a member of the bar.  According to the records of the New York State Unified Court System (search here), he remains a member in good standing of the New York bar.  Talk about giving lawyers a bad name. (ph)