White Collar Crime Prof Blog

Former President of Monster Indicted

A DOJ Press Release of the U.S.  Attorneys Office of the Southern District of New York announces that the former chief operating officer and president of Monster Worldwide, Inc. was charged with securities fraud and conspiracy in connection with backdating of stock options. The press release states as the alleged criminal activity that:

"TREACY conspired with other former senior executives at Monster to systematically backdate stock option grants to Monster employees between 1997 and 2003, in an effort to provide
profitable options to employees without recording the required compensation expenses, thereby falsely inflating Monster's earnings. As a result, Monster’s public filings with the United
States Securities and Exchange Commission ("SEC") between 1997 and 2005 fraudulently understated the company’s compensation expenses by a total of more than $300 million."

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Wecht & Jurors Talk - Commentary

KDKA.com has an incredible tape from jurors and also with Wecht himself talking.  He hits it on the money when he notes how powerful prosecutors can be. The very fact that citizens who served as jurors and heard the evidence in this case are speaking out, that Wecht is telling how he has been destroyed by enormous legal fees and the emotional strain placed upon him, makes one wonder where is the oversight of main justice and have there been any discussions of a deferred prosecution. (see here)

It is equally bothersome to hear the prosecution claiming they need outsider jurors for the retrial (see here).  It sounds just like the defense argument in a much higher profile case - that is, Jeffrey Skilling's claim when being tried before a Houston jury.

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The Latest in the Wecht Case

This case is beginning to sound like a movie. As I previously noted here:

First there were questions about whether this case warranted a federal prosecution, and more importantly one with this many charges.  Then there was a seven week trial with a long deliberation, but that ended with a hung jury. (see here)  The post trial conduct by the FBI in questioning jurors certainly raised some eyebrows. (see here)  There were even questions about how the jurors names were obtained. (see here) There have also been claims that the FBI fabricated a 2005 affidavit (see here).  And there are claims that an excused juror did not want to leave the deliberations (see here).  And the prosecution is arguing that they need "outsiders" to get a fair jury in the retrial (see here and here).  And the judge responding to claims of bias, says he is not stepping aside. (see here and here) And you have the house committee asking for documents related to this case (see here).  And there have been claims of this being a political prosecution (see here). And you have prominent players asking AG Mukasey to step in here. (see here)

Wouldn't this be a perfect case for a Frank Quattrone style deferred prosecution agreement (see here)?

And just when you think enough has happened here, there is more.  The latest -

• The Pittsburgh Tribune Review (AP) - Wecht appeals to 3rd Circuit to overturn judge's decision
• The Pittsburgh Tribune Review - Judge won't dismiss charges against Wecht
• Pittsburgh Post Gazette - Wecht jurors surprised prosecutors seek retrial

So who will play Wecht is this movie?

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In the News

Forbes.com - Wachovia says has never discussed deferred-prosecution deal with DOJ

Wall Street Journal - Gabelli Funds to Pay $16 Million To Settle SEC Market-Timing Case

DOJ (Press Release) - Owner of Kansas City Computer Service Companies and Family Member Indicted in Scheme to Defraud Federal E-Rate Program

ABA Law Jrl News - E-Mails Show More Abramoff Links to Ex-DOJ Staffers; Probe Continues

DOJ (Press Release) - Former State Prison Supervisor Sentenced for Obstruction of Justice-Related Charge (15 months in prison)

Houston Chronicle -Oscar Wyatt asks to finish his prison term in Houston

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New Pardon Attorney Appointed

A press release of the DOJ states that Ronald L. Rodgers has appointed to serve as the U.S. Pardon Attorney.  The release states:

"Rodgers has served with the Department of Justice since March 1999 in the Drug Intelligence Unit of the Criminal Division’s Narcotic and Dangerous Drug Section, where he has been Director of the Unit since September 2005.

"Prior to joining the Department of Justice, Rodgers served on active duty in the U.S. Marine Corps from 1977 to 1999. His final active duty assignment was as Circuit and Deputy Chief Military Judge of the Navy-Marine Corps Trial Judiciary from 1995 to 1999. During his time in the Marine Corps, Rodgers also gained several years experience as a prosecutor, defense counsel, and trial advocacy instructor.

Rodgers is a 1977 graduate of the U.S. Naval Academy, and a 1983 graduate of the University of Dayton School of Law, where he graduated summa cum laude. Rodgers also attended the U.S. Marine Corps Command and Staff College from 1989-90."

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What's Happening at Wachovia?

WSJ- Marketwatch - Wachovia Faces Money-Laundering Probe: Report

Washington Post (Reuters) - Wachovia Part of Probe into Latin Drug Money: Report

NYTimes - AP - Wachovia Pays $144 Million to Settle Marketing Claims

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Commentary on the Wesley Snipes Sentence

Wesley Snipes received the maximum sentence for his convictions, a sentence of three years (see here).  Co-defendants who were found guilty of conspiracy to defraud the IRS and presenting a false claim to the IRS received 10 years and 4 years and 6 months. A likely question on appeal will be whether Wesley Snipes deserved to receive the maximum penalty as his sentence. 

"'Snipes' long prison sentence should send a loud and crystal clear message to all tax defiers that if they engage in similar tax defier conduct, they face joining him and his co-defendants, . . . , as inmates in prison,' said Nathan J. Hochman, Assistant Attorney General of the Justice Department's Tax Division." (see press release). But some may question whether an individual should receive the maximum sentence in order to provide deterrence to others.  And should a person's celebrity status, warrant the imposition of a harsher sentence? 

See also Doug Berman's Sentencing Law & Policy here.

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Former AOL Exec Cleared in Civil Case

The government first proceeded with a criminal action against a former AOL executive. (see here and here).  After a "not guilty," was returned by the jury, the government tried the civil route. Because the government has the ability to use parallel civil proceedings, they can proceed twice with basically the same evidence and not be precluded by claims of double jeopardy.

Although the government has the right and power to try a second time in a different forum, the results did not change with respect to the former AOL exec.  The jury returned another win for the defense, resulting in a finding against the government's civil fraud charges. (see here)

Attorney Hank Asbill, a partner at Dewey & LeBoeuf LLP, and attorney for the AOL exec, will be speaking as the keynote speaker at the forthcoming White Collar Crime Institute at Stetson U. College of Law's Tampa campus in Florida on May 8, 2008. To attend this function, see here. See here for more details.

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Wesley Snipes Gets 36 Months

The government asked for 3 years (see here) in a memo that focused on the criminal activity that formed the basis of the convictions against Snipes. It's a memo filled with numbers.  In contrast, the defense asked for probation in memo that very much focused on the individual (see here-Download snipes20sentencing20memorandum.pdf)  The defense memo was accompanied with letters in support, something that is common in white collar cases. (see here - Download snipes20exhibits.pdf ).  As noted by Professor Paul Caron on the Tax Prof Blog, there are an array of letters including the celebrity letters. (see here) One very thoughtful letter caught my eye as it was written by Marc Greenberg, professor of law and director of the intellectual property program at Golden Gate University Law School. Now the decision rests in the hands of the judge.  Stay tuned.

Just in - the Orlando Sentinel - Wesley Snipes Sentenced to 36 Months; see also CFNEWS 13 here; CNN - Snipes Gets the Max here Stay tuned for Commentary.

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