It hasn't been a good run for receivers and trustees in the Southern District of Florida lately. John Pacenti covers the latest abuse of trust here:
A longtime court-appointed trustee and receiver entrusted with $1 million earmarked for the victims of ex-lawyer Scott Rothstein’s mammoth fraud is refusing to return the money and is the subject of a federal investigation, sources told the Daily Business Review.
The money was donated by the law firm chairman in his heyday as a Broward County power broker to Holy Cross Hospital in Fort Lauderdale. As part of the recovery effort for fraud victims, federal authorities and bankruptcy attorneys for the defunct Rothstein Rosenfeldt Adler demanded the money back, along with millions of dollars in other charitable and political donations made by Rothstein and his law firm.
The hospital returned the money in November shortly after Rothstein’s $1.2 billion fraud collapsed. A source said the money was wired by the hospital directly to an account controlled by Marika Tolz, who was working under a contract with the U.S. Marshals Service.
The federal law enforcement agency, which is responsible for assets seized in criminal cases, hired her to safeguard the Holy Cross money until it could be disbursed and to oversee real estate seized from Rothstein after reports that one of his properties was burglarized and another was infested with mold.
The U.S. trustee’s office discovered the $1 million discrepancy in May and asked Tolz to resign from its rotating panel of trustees assigned to bankruptcy cases. The Daily Business Review reported in May that Tolz had resigned from her cases after discrepancies were discovered, but investigators and the the U.S. trustee’s office have remained tight-lipped about the case.
The SDFLA Blog is dedicated to providing news and notes regarding federal practice in the Southern District of Florida. The New Times calls the blog "the definitive source on South Florida's federal court system." All tips on court happenings are welcome and will remain anonymous. Please email David Markus at dmarkus@markuslaw.com
Friday, July 30, 2010
"Miami also has a great NBA basketball team, right?"
That was the chief of the multidistrict panel, U.S. District Judge John G. Heyburn II of Kentucky, after Ervin Gonzalez was pushing for the oil litigation to be here in Miami. From Curt Anderson's report:More than 100 lawyers crowded into a sixth-floor courtroom in Boise's downtown courtroom, jockeying amongst themselves for the limited speaking slots in a hearing that lasted about 1 1/2 hours. Although some 2,000 miles from the Gulf, Boise was the scheduled stop for the roving seven-judge panel.
Most lawyers only got to talk for a few minutes, and there were a few moments of levity.
After Miami attorney Ervin Gonzalez extolled the virtues of South Florida and its chief federal judge, Federico Moreno, Heyburn cracked that Miami also has "a great NBA basketball team, right?" -- a reference to the Miami Heat's recent signings of stars LeBron James, Dwyane Wade and Chris Bosh.
Assuming the cases are centralized as expected, the judge or judges chosen to hear them will have to decide key issues such as whether they are dismissed or allowed to continue, and whether to certify one or more class actions for people and businesses in similar situations. If the cases are not dismissed and unless there is an early settlement, a handful are usually chosen to go to trial first as "bellwhethers" that can determine the ultimate outcome of all lawsuits.
Thursday, July 29, 2010
255 pages of en banc fun
The 11th Circuit issued United States v. Irey today, with 255 pages of opinions, which are a must read for any criminal practitioner in this Circuit. The question presented is whether a lengthy variance (from 30 years to 17) was reasonable in a horrific case involving multiple acts of child rape. The majority, written by Carnes and joined by Dubina, Black, Hull, Marcus, Wilson and Pryor, found the variance substantively unreasonable. Lots of interesting questions addressed, like how much deference is due to trial courts at sentencing.
Here are some highlights from Carnes' opinion:
The steady stream of criminal cases flowing through this Court brings us many examples of man’s inhumanity to man, and we see a depressingly large number of crimes against children.
The 17 ½-year sentence, if all of it were to be served, would amount to only 4 months and a week for each of the 50 distinguishable victims that Irey raped, sodomized, or sexually tortured.
In light of 18 U.S.C. § 3624, Irey will likely serve only 15 years and 3 months of his sentence, which works out to less than four months for each of those 50 victims who can be distinguished from each other in the images that show some of Irey’s crimes. And that calculation does not include any time for Irey’s additional criminal behavior of producing and distributing the massive amount of extremely graphic child pornography. Four months per child raped, sodomized, and tortured is grossly unreasonable. In sentencing there should be no quantity discount for the sexual abuse of children.
We realize that 17 ½ years, even when reduced to 15 ¼ years to serve is, as the panel stated, “a substantial portion of a human life—and no serious person should regard it as a trifle.” … Irey, after all, sentenced the children he raped, sodomized, and sexually tortured to a lifetime of harm, and the egregious child pornography he created and distributed will, because he uploaded it to the internet, continue causing harm for far longer than 17 ½ years. Irey’s pink wall series will last longer than his own lifetime or ours, inciting and encouraging the sexual abuse of multitudes of children yet unborn.
Because of the substantial deference district courts are due in sentencing, we give their decisions about what is reasonable wide berth and almost always let them pass. There is a difference, though, between recognizing that another usually has the right of way and abandoning one’s post. We will not quit the post that we have been ordered to hold in sentencing review and the responsibility that goes with it. The Supreme Court has instructed us that “[i]n sentencing, as in other areas, district judges at times make mistakes that are substantive,” and that it is our duty “to correct such mistakes when they occur.” Rita, 551 U.S. at 354, 127. In this case the district court made a substantive mistake, a clear error in judgment, by unreasonably varying downward from the advisory guidelines sentence when no sentence less than it is sufficient to fulfill the purposes set forth in the Sentencing Reform Act. To do our duty to correct that mistake, we vacate the sentence the district court imposed and remand with instructions that the defendant is to be resentenced within the guidelines range.
Judge Tjoflat concurs that the amount of variance is unreasonable but dissents, arguing that the case should be remanded for the district judge to find what is reasonable. He argues that it is not the job of the 11th Circuit to sentence Irey:
In sum, when placed on a balance sheet, the grave institutional harm caused by the court’s approach significantly outweighs any benefit the approach might yield. Resentencing defendants on appeal diminishes the role of the district court in the eyes of the legal profession, and it diminishes the public’s confidence in the district courts as an institution for administering criminal justice. It misallocates and gobbles up judicial resources. None of this is necessary. If a sentence constitutes an abuse of discretion, we should simply say so and return the case to the district court, the appropriate forum for the main event.
The first dissent is written by Judge Edmonson, and joined by Birch Barkett and Martin:
The limit that the law places on the right use of appellate court power to interfere with the sentencing decisions of United States District Judges (who, of course, have -- under the law -- powers of their own) is, for me, what this appeal is about. The specific case before us involves a serious crime and ghastly conduct -- “horrific” in the District Judge’s words -- on the part of Defendant. And, no party
has contended that the District Judge, in imposing the sentence, made a significant procedural error. The government prosecutors (who bear the 1 burden of showing reversible error) contend that the sentence imposed in district court is too lenient and that no sentence would be lawful except the maximum sentence of imprisonment that the pertinent criminal statute will allow: 30 years.
The issue is not whether federal appellate judges ought to do their duty. They must. And the issue is not whether appellate courts can review sentences and sometimes correctly set them aside, even when the sentence was imposed without procedural errors. They can. Appellate judges do have some legitimate power to review the substance of sentences: that is, to determine whether a District Judge has imposed a sentence that is either too lenient or too harsh as a matter of law. The general question presented here is what is the limit, under the law, on the power of appellate judges in deciding such reviews.
Next up is Judge Birch, who says (I think quite rightly):
The time-worn adage in jurisprudence that hard facts often lead to bad law is certainly applicable to this case. I have little doubt that had I been the sentencing judge I might well have fashioned a different and harsher sentence for this defendant. But the decision at play here is the respective roles of the appellate court and the sentencing court. Our appellate role is properly constrained by the standard of review to which we are required to adhere. As Judge Edmondson persuasively describes the application of that standard to the record, it compels an affirmance of the sentencing court’s judgment in this case. Accordingly, I respectfully dissent and join in the dissenting opinions of Judge Edmondson and Judge Barkett.
Judge Barkett also dissents, joined by Birch and Martin:
I agree with just about everything in Judge Edmondson’s dissent. If there is any point of departure, it is the addition (or clarification, in my view), that the district judge must articulate the reasons for the sentence imposed based on the evidence in the record. Because the record may support a number of reasonable sentences, this articulation is necessary so that the appellate court can be satisfied that the district judge actually considered how all of the § 3553 factors relate to the defendant’s individual case.
Here are some highlights from Carnes' opinion:
The steady stream of criminal cases flowing through this Court brings us many examples of man’s inhumanity to man, and we see a depressingly large number of crimes against children.
The 17 ½-year sentence, if all of it were to be served, would amount to only 4 months and a week for each of the 50 distinguishable victims that Irey raped, sodomized, or sexually tortured.
In light of 18 U.S.C. § 3624, Irey will likely serve only 15 years and 3 months of his sentence, which works out to less than four months for each of those 50 victims who can be distinguished from each other in the images that show some of Irey’s crimes. And that calculation does not include any time for Irey’s additional criminal behavior of producing and distributing the massive amount of extremely graphic child pornography. Four months per child raped, sodomized, and tortured is grossly unreasonable. In sentencing there should be no quantity discount for the sexual abuse of children.
We realize that 17 ½ years, even when reduced to 15 ¼ years to serve is, as the panel stated, “a substantial portion of a human life—and no serious person should regard it as a trifle.” … Irey, after all, sentenced the children he raped, sodomized, and sexually tortured to a lifetime of harm, and the egregious child pornography he created and distributed will, because he uploaded it to the internet, continue causing harm for far longer than 17 ½ years. Irey’s pink wall series will last longer than his own lifetime or ours, inciting and encouraging the sexual abuse of multitudes of children yet unborn.
Because of the substantial deference district courts are due in sentencing, we give their decisions about what is reasonable wide berth and almost always let them pass. There is a difference, though, between recognizing that another usually has the right of way and abandoning one’s post. We will not quit the post that we have been ordered to hold in sentencing review and the responsibility that goes with it. The Supreme Court has instructed us that “[i]n sentencing, as in other areas, district judges at times make mistakes that are substantive,” and that it is our duty “to correct such mistakes when they occur.” Rita, 551 U.S. at 354, 127. In this case the district court made a substantive mistake, a clear error in judgment, by unreasonably varying downward from the advisory guidelines sentence when no sentence less than it is sufficient to fulfill the purposes set forth in the Sentencing Reform Act. To do our duty to correct that mistake, we vacate the sentence the district court imposed and remand with instructions that the defendant is to be resentenced within the guidelines range.
Judge Tjoflat concurs that the amount of variance is unreasonable but dissents, arguing that the case should be remanded for the district judge to find what is reasonable. He argues that it is not the job of the 11th Circuit to sentence Irey:
In sum, when placed on a balance sheet, the grave institutional harm caused by the court’s approach significantly outweighs any benefit the approach might yield. Resentencing defendants on appeal diminishes the role of the district court in the eyes of the legal profession, and it diminishes the public’s confidence in the district courts as an institution for administering criminal justice. It misallocates and gobbles up judicial resources. None of this is necessary. If a sentence constitutes an abuse of discretion, we should simply say so and return the case to the district court, the appropriate forum for the main event.
The first dissent is written by Judge Edmonson, and joined by Birch Barkett and Martin:
The limit that the law places on the right use of appellate court power to interfere with the sentencing decisions of United States District Judges (who, of course, have -- under the law -- powers of their own) is, for me, what this appeal is about. The specific case before us involves a serious crime and ghastly conduct -- “horrific” in the District Judge’s words -- on the part of Defendant. And, no party
has contended that the District Judge, in imposing the sentence, made a significant procedural error. The government prosecutors (who bear the 1 burden of showing reversible error) contend that the sentence imposed in district court is too lenient and that no sentence would be lawful except the maximum sentence of imprisonment that the pertinent criminal statute will allow: 30 years.
The issue is not whether federal appellate judges ought to do their duty. They must. And the issue is not whether appellate courts can review sentences and sometimes correctly set them aside, even when the sentence was imposed without procedural errors. They can. Appellate judges do have some legitimate power to review the substance of sentences: that is, to determine whether a District Judge has imposed a sentence that is either too lenient or too harsh as a matter of law. The general question presented here is what is the limit, under the law, on the power of appellate judges in deciding such reviews.
Next up is Judge Birch, who says (I think quite rightly):
The time-worn adage in jurisprudence that hard facts often lead to bad law is certainly applicable to this case. I have little doubt that had I been the sentencing judge I might well have fashioned a different and harsher sentence for this defendant. But the decision at play here is the respective roles of the appellate court and the sentencing court. Our appellate role is properly constrained by the standard of review to which we are required to adhere. As Judge Edmondson persuasively describes the application of that standard to the record, it compels an affirmance of the sentencing court’s judgment in this case. Accordingly, I respectfully dissent and join in the dissenting opinions of Judge Edmondson and Judge Barkett.
Judge Barkett also dissents, joined by Birch and Martin:
I agree with just about everything in Judge Edmondson’s dissent. If there is any point of departure, it is the addition (or clarification, in my view), that the district judge must articulate the reasons for the sentence imposed based on the evidence in the record. Because the record may support a number of reasonable sentences, this articulation is necessary so that the appellate court can be satisfied that the district judge actually considered how all of the § 3553 factors relate to the defendant’s individual case.
Wednesday, July 28, 2010
Obama finally starts to push federal judge confirmations...
... at least a little bit. According the BLT:
President Barack Obama called on the Senate today to vote on long-stalled nominees for the federal judiciary -- dipping a toe into an issue that has appeared relatively low among his priorities.
In remarks at the White House, Obama said he wants to work with Republicans to fill judicial vacancies. He did not name any individual nominees, but he appeared to reference Nashville, Tenn., labor lawyer Jane Stranch when he said nominees have been waiting as long as eight months to be confirmed.
Obama nominated Stranch in August 2009 to the U.S. Court of Appeals for the 6th Circuit, based in Cincinnati. Although she has bipartisan support and there’s no organized, public effort to block her, she’s been waiting since November for a confirmation vote by the full Senate.
“Most of these folks were voted out of committee unanimously, or nearly unanimously, by both Democrats and Republicans,” Obama said. “Both Democrats and Republicans agreed that they were qualified to serve. Nevertheless, some in the minority have used parliamentary procedures time and again to deny them a vote in the full Senate.”
Hopefully, Kathy can get a hearing quickly.
In other news, the NY Times is calling for change in white collar sentences and child porn sentences:
Sentencing for white-collar crimes — and for child pornography offenses — “has largely lost its moorings,” according to the Justice Department, which makes a strong case that the matter should be re-examined by the United States Sentencing Commission....
As a general principle, sentences for the same federal crimes should be consistent. As the Justice Department notes in its report, a sense of arbitrariness — sentences that depend on the luck of getting a certain judge — will “breed disrespect for the federal courts,” damaging their reputation and the deterrent effect of punishment.
Possession of a single piece of child pornography, for example, is supposed to result in a five-to-seven-year sentence — longer with aggravating circumstances — but many judges instead are imposing probation or one year for first offenses. Many federal judges have told the sentencing commission that the child pornography guidelines are far too severe.
The Justice Department is not explicitly recommending that sentences be lowered; in fact, the new financial regulatory law suggests higher sentences in some areas. But readjusting the guidelines downward in some cases is clearly one of the possible routes the sentencing commission could take. The rules for child pornography, for example, include extra penalties for using a computer, but everyone in that repugnant world uses a computer, rendering the rules obsolete.
The key in both areas is helping judges find ways to differentiate the worst offenders from those who have caused less damage or are less of a threat to society. White-collar sentences are now based on the size of the fraud, but that may not be the best way to measure the role of a defendant or the venality and damage involved.
As repellent as child pornography is, it does not help judges when someone found with a few photographs is held to similar standards as someone disseminating thousands of them. These are sensitive areas, but a thoughtful re-examination by the commission and Congress could bring new respect for the federal judiciary.
I agree that these issues need to be looked at closely; but the NY Times and the Justice Department are wrong that we should be seeking consistency in sentencing. Each person and each case is different. And accordingly, each sentence needs to be individual. Basically, what Emerson said.
President Barack Obama called on the Senate today to vote on long-stalled nominees for the federal judiciary -- dipping a toe into an issue that has appeared relatively low among his priorities.
In remarks at the White House, Obama said he wants to work with Republicans to fill judicial vacancies. He did not name any individual nominees, but he appeared to reference Nashville, Tenn., labor lawyer Jane Stranch when he said nominees have been waiting as long as eight months to be confirmed.
Obama nominated Stranch in August 2009 to the U.S. Court of Appeals for the 6th Circuit, based in Cincinnati. Although she has bipartisan support and there’s no organized, public effort to block her, she’s been waiting since November for a confirmation vote by the full Senate.
“Most of these folks were voted out of committee unanimously, or nearly unanimously, by both Democrats and Republicans,” Obama said. “Both Democrats and Republicans agreed that they were qualified to serve. Nevertheless, some in the minority have used parliamentary procedures time and again to deny them a vote in the full Senate.”
Hopefully, Kathy can get a hearing quickly.
In other news, the NY Times is calling for change in white collar sentences and child porn sentences:
Sentencing for white-collar crimes — and for child pornography offenses — “has largely lost its moorings,” according to the Justice Department, which makes a strong case that the matter should be re-examined by the United States Sentencing Commission....
As a general principle, sentences for the same federal crimes should be consistent. As the Justice Department notes in its report, a sense of arbitrariness — sentences that depend on the luck of getting a certain judge — will “breed disrespect for the federal courts,” damaging their reputation and the deterrent effect of punishment.
Possession of a single piece of child pornography, for example, is supposed to result in a five-to-seven-year sentence — longer with aggravating circumstances — but many judges instead are imposing probation or one year for first offenses. Many federal judges have told the sentencing commission that the child pornography guidelines are far too severe.
The Justice Department is not explicitly recommending that sentences be lowered; in fact, the new financial regulatory law suggests higher sentences in some areas. But readjusting the guidelines downward in some cases is clearly one of the possible routes the sentencing commission could take. The rules for child pornography, for example, include extra penalties for using a computer, but everyone in that repugnant world uses a computer, rendering the rules obsolete.
The key in both areas is helping judges find ways to differentiate the worst offenders from those who have caused less damage or are less of a threat to society. White-collar sentences are now based on the size of the fraud, but that may not be the best way to measure the role of a defendant or the venality and damage involved.
As repellent as child pornography is, it does not help judges when someone found with a few photographs is held to similar standards as someone disseminating thousands of them. These are sensitive areas, but a thoughtful re-examination by the commission and Congress could bring new respect for the federal judiciary.
I agree that these issues need to be looked at closely; but the NY Times and the Justice Department are wrong that we should be seeking consistency in sentencing. Each person and each case is different. And accordingly, each sentence needs to be individual. Basically, what Emerson said.
Monday, July 26, 2010
Rothstein feeder to pay $830 million
The Sun-Sentinel has more here:
The Fort Lauderdale hedge fund manager who was the largest feeder to Ponzi schemer Scott Rothstein has agreed to give up much of his wealth as part of a settlement with bankruptcy attorneys.
The settlement agreement by George Levin and his Banyon investment entities — which funneled $830 million into Rothstein's $1.4 billion investment fraud — was filed late Monday in U.S. Bankruptcy Court.
It does not spell out which assets Levin has agreed to sell and turn over to the trustee for Rothstein's now-bankrupt law firm, but Levin and his wife get to keep their $4.2 million Fort Lauderdale home and roughly $750,000 in personal possessions, according to the agreement.
In other news, Rumpole has admitted that he was wrong and "[o]f course Mr. Markus is right."
The Fort Lauderdale hedge fund manager who was the largest feeder to Ponzi schemer Scott Rothstein has agreed to give up much of his wealth as part of a settlement with bankruptcy attorneys.
The settlement agreement by George Levin and his Banyon investment entities — which funneled $830 million into Rothstein's $1.4 billion investment fraud — was filed late Monday in U.S. Bankruptcy Court.
It does not spell out which assets Levin has agreed to sell and turn over to the trustee for Rothstein's now-bankrupt law firm, but Levin and his wife get to keep their $4.2 million Fort Lauderdale home and roughly $750,000 in personal possessions, according to the agreement.
In other news, Rumpole has admitted that he was wrong and "[o]f course Mr. Markus is right."
Sunday, July 25, 2010
Shocker
The front page of today's New York Times says that after John Roberts and Sam Alito were appointed, the Supreme Court shifted more to the right. I'm sure all of you are just shocked by this...
Here's the link to the lengthy piece:
http://nyti.ms/b3ypgw
I'll be in court all day Monday, so have at it in the comments.
Here's the link to the lengthy piece:
http://nyti.ms/b3ypgw
I'll be in court all day Monday, so have at it in the comments.
Friday, July 23, 2010
Friday slog (UPDATED with Lew Freeman's sentence)
Some quick news items while you try to stay dry:1. Darth Vader attempt to rob bank. (via NY Daily News).
Before he surrendered, Freeman hugged his wife and two children in long, tearful embraces and shook hands with dozens of other supporters. He also took off his brown suit -- down to a long sleeve T-shirt, gym short and black loafers, knowing he would probably have to surrender to authorities immediately after his sentence.
Before he was sentenced, Freeman apologized to Judge Huck, his colleagues and his family, saying, ``I have let you down.''
Huck described Freeman, a New York native who moved to South Florida to attend the University of Miami and later its law school, as a Jekyll and Hyde character.
Huck said while his personal charitable deeds and volunteer work in the community were admirable, his theft of millions of dollars from client trust accounts and his lying to the court as a receiver were inexcusable.
Freeman was facing 12 to 15 years in prison under federal sentencing guidelines.
3. Bonnie. (zzzzzzzzz)
4. Rumpole picks a fight with me over whether you should ever promise to a jury that your client will take the stand. He says it's too risky. And I agree that in most cases, you can't make that promise. But you can't have hard and fast trial rules. Sometimes, it's worth taking that risk in opening. Every case is different, so I have only one rule of trial practice -- there are no hard and fast rules.
Wednesday, July 21, 2010
White House nominates Kathy Williams
Finally! Such good news for Kathy and for the District. From the White House press release:Today, President Obama nominated Judge Charles Bernard Day and Kathleen M. Williams to United States District Court judgeships. “These candidates have distinguished records of service, and I am confident they will continue to serve the American people with integrity and an unwavering commitment to justice, ” said President Obama.
***
Kathleen M. Williams has served as the Federal Public Defender for the Southern District of Florida since 1995. She previously served in the same District as Chief Assistant Federal Public Defender from 1990 to 1995 and as an Assistant United States Attorney from 1984 to 1988. Ms. Williams has worked in private practice as an associate in the Miami offices of Morgan, Lewis & Bockius from 1988 to 1990 and of Fowler, White, Burnett from 1982 to 1984. From 2002 until 2008, Ms. Williams was the Chairperson of the Federal Defender Advisory Group and the Defender representative to the Defender Services Committee of the Judicial Conference. Ms. Williams received her J.D. in 1982 from the University of Miami School of Law and her B.A. magna cum laude in 1978 from Duke University.
Kathy, who is taking Judge Hurley's seat (he went senior), will make an excellent judge. The next step is confirmation. Everyone should send letters to Senator Nelson urging him to act quickly. Kathy should be easily confirmed, especially after Senator Lindsey Graham's comments about the confirmation process, which were right on the money.
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