Happy Halloween

So, Judge Cooke sentenced a cooperting UBS guy to probation the other day, and today Judge Cohn sentenced a similarly situated co-defendant to 3 months in prison. Curt Anderson has the details:

A federal judge Friday rejected a plea for probation from a New York businessman who admitted concealing $8 million in secret Swiss bank accounts, imposing instead a three-month prison term in the high-profile tax evasion case.
U.S. District Judge James I. Cohn said toy salesman Jeffrey Chernick deserves credit for his cooperation in the broad U.S. probe of Swiss bank UBS AG. But he said allowing Chernick to avoid prison for filing a false tax return "sends the wrong message" in a case that has made international headlines.
"If the court issues a slap on the wrist, to me the notoriety becomes negative," Cohn said. "It essentially informs the public that you can cheat on your income taxes and get away with probation."
Chernick, 70, had faced between 18 months and two years under federal sentencing guidelines. Prosecutors asked Cohn for a nine-month prison term, noting that Chernick's disclosures led directly to the indictments of a Swiss banker and Swiss lawyer on conspiracy charges as well as charges against other UBS clients in the U.S.

Interesting to see the differences in the judges' comments and the ultimate sentence.

Anyway, I'll leave you all with this video, wishing you all a Happy Halloween:

"I needed a defibrillator."

That was Chief Judge Federico Moreno on how he reacted when he realized that Roberto Martinez was asking for an $11 million bonus, and not $1.1 million. Vanessa Blum has all the details here.

From the intro:

Then Chief U.S. District Judge Federico Moreno first read the final fee request for the Mutual Benefits fraud receivership, he thought lawyers were seeking $1.1 million, not $11 million. Then he realized there was no decimal point, the judge recounted Thursday at a hearing in Miami. “I needed a defibrillator,” he joked. “We’re talking about a lot of money.” It is up to Moreno to resolve a simmering dispute over how richly to compensate lawyers for five years of work on one of the largest scams in South Florida history. Roberto Martinez, the court-appointed receiver, is seeking the $11 million bonus to split between his law firm, Colson Hicks Eidson, and primary counsel Kozyak Tropin & Throckmorton. To date, the two Coral Gables firms have jointly collected about $4 million. Moreno did not say when he would rule on the request. Robert Levenson, regional trial counsel for the Securities and Exchange Commission, argued against any fee enhancement, saying it would reduce payments to bilked investors and award lawyers a windfall equivalent to more than $800 per hour.
Receivers should be viewed as public servants and be paid moderately in fairness to victims, he said. “The investors are only going to recover a fraction of their losses,” Levenson said. “These aren’t corporate, market-rate clients.”

Apprently the investors weren't happy either:

No investors spoke at the hearing. In an Oct. 15 letter to Moreno, one investor said he was “appalled” by the receiver’s request. “Please, let’s get these funds back where they belong — in the hands of the investors — and away from greedy hands,” wrote Ronald Meyers of Sanibel Island.

But there is a strong counter-argument:

But Michael Hanzman, of counsel with West Palm Beach-based Ackerman Link & Sartory, who represented defrauded investors in class action litigation, told Moreno the receivership lawyers “deserve a significant fee enhancement.” He did not specify an amount. “If you want to attract the best and the brightest people to take these cases, you have to pay a reasonable fee,” Hanzman said. “This is not a pro bono case.”

That might be overstating it a bit -- the lawyers made an average of $265/hour. The question is whether they should be paid about $800 hour (which is higher than their typical hourly rates) for what everyone agrees was excellent work or whether receivers should make less than their hourly rates because the goal is to return money to the victims.

What say you dear readers?

News & Notes

1. There's a new blog in town -- The BrowardBulldog, run by excellent reporter Dan Christensen, with help from Buddy Nevins and Julie Kay. It'll be a regular read, for sure. The first post is about Jerry Frank Townsend, who was falsely imprisoned for murder and rape. He sued in federal court and recovered $2 million. It's an unbelievable story.

2. God Cares Inc. is alleged to have committed Medicare fraud.

3. Stefan R. Seuss (no relation to the Dr.) has been charged in a huge money laundering conspiracy in connection with a hedge fund investigation.

4. Big trial win for David Howard and Scott Sakin before Judge Cooke. Jay Weaver has the story here:

Seventeen defendants pleaded guilty to drug and other charges before trial, but the remaining two, a fired Miami-Dade police officer and his brother, took their chances with a jury -- and won.
Antonio and Glenn Roberts were acquitted of conspiracy charges Tuesday after a two-week federal trial in which prosecutors alleged they participated in a cocaine-selling ring. They also claimed that veteran cop Antonio Roberts, 48, tipped off the ringleader -- a childhood friend -- that he was under investigation.
Last year, the Roberts brothers were arrested in a sweep of drug and gambling organizations. Another Miami-Dade officer, Michael King, 43, and former Miami-Dade jail officer, Marvin ``Cone Head'' Coney, 43, were among those arrested.
King pleaded guilty to federal obstruction charges for tipping Coney off to a law enforcement investigation, and to state racketeering charges for placing bets on pro basketball games. He was sentenced to five years in prison. Coney, the lead drug defendant who grew up with the Roberts, pleaded guilty to federal narcotics trafficking offenses and was sentenced to 10 years.
The FBI-led investigation, involving almost 10,500 recorded phone conversations, failed to convict the brothers because jurors found they played no roles in the North Dade drug network, their lawyers said.
Antonio Roberts was acquitted of four drug-related conspiracy and obstruction charges. Glenn Roberts was found not guilty of conspiring to possess more than five grams of cocaine with intent to distribute.
Antonio Roberts' lawyer, David Howard, said his client, who served as a county police officer for 26 years, was trying to help his friend Coney get his life back on track.

First UBS sentencing

Judge Cooke sentenced Steven Michael Rubinstein to probation based on his extensive cooperation with the feds. From the AP's Curt Anderson:

Rubinstein will be on probation for three years, including the year of house arrest with electronic monitoring and travel restrictions. He also must pay a $40,000 fine. Prosecutors had sought a year of prison time, even as they stressed Rubinstein's ongoing importance to the broader UBS investigation.
"The defendant has provided complete and truthful information," said Assistant U.S. Attorney Jeffrey Neiman.
Rubinstein, a Boca Raton resident who is also a citizen of South Africa, said he was "embarrassed and ashamed" by his actions. He pleaded guilty in June to filing a false tax return and has been providing evidence ever since.
"I've tried to make amends as best I can," Rubinstein told Cooke. "I will continue to assist the government in any manner requested."
Outside the courtroom, as Rubinstein hugged his wife, Pamela, his attorney Robert Panoff called it a "fair and just sentence."

Slow

You know it's a little slow when SFLawyers reaches back into the Iqbal well and Rumpole is wishing happy birthday to Teddy Roosevelt. If that's not your thing, you can check up on legal research and writing at UM. Not doing it for you? How about Adam Lambert's new album cover. At least Glee is on tonight:


UPDATE -- no Glee tonight. It's the World Series instead. I dislike both teams, but I'm sure I'll tune in to see the pitching matchup. Too bad I don't have DirecTV as Friday Night Lights starts up tonight, only on satellite...

Judge Cooke affirmed for dismissing count against Ben Kuehne

Great news! Here's the opinion by Judge Barkett.

She starts off discussing the plain language:

Section 1957(a) prohibits knowingly engaging or attempting to engage “in a monetary transaction in criminally derived property that is of a value greater than $10,000 and is derived from specified unlawful activity.” 18 U.S.C. § 1957(a). However, the statute exempts “any transaction necessary to preserve a person’s right to representation as guaranteed by the sixth amendment to the Constitution.” 18 U.S.C. § 1957(f)(1). Thus, the plain meaning of the exemption set forth in § 1957(f)(1), when considered in its context, is that transactions involving criminally derived proceeds are exempt from the prohibitions of § 1957(a) when they are for the purpose of securing legal representation to which an accused is entitled under
the Sixth Amendment. Accordingly, the exemption is limited to attorneys’ fees paid for representation guaranteed by the Sixth Amendment in a criminal proceeding and does not extend to attorneys’ fees paid for other purposes.

Barkett then makes short work of the government's argument:

The Government argues that the exemption in § 1957(f)(1) has been “nullified” or “vitiated” because, shortly after the provision was enacted, the Supreme Court held in Caplin & Drysdale, Chartered v. United States, 491 U.S. 617, 626 (1989) that the Sixth Amendment right to counsel does not protect the right of a criminal defendant to use criminally derived proceeds for legal fees. However, Caplin & Drysdale, which addresses a different statute governing the civil forfeiture of criminally derived proceeds, has no bearing on § 1957(f)(1) and indeed supports the conclusion that such proceeds have been statutorily exempted
from criminal penalties. The Government has pointed to no principle of statutory construction—nor indeed to any legal principle—that supports the conclusion that
a statutory provision may be “nullified” by a Supreme Court decision on a completely different issue, absent any indication that Congress intended such a result.

As Kuehne's legal team has been saying from the start, the government's interpretation yields an absurd result:

As the Government concedes, accepting its interpretation of § 1957(f)(1) would read all meaning out of the exemption. Section 1957 criminalizes only transactions involving criminally derived proceeds. It would therefore make little sense—and would be entirely superfluous—to read § 1957(f)(1) as an exemption from criminal penalties for non-tainted proceeds spent on legal representation, as those funds can always be used for any legal purpose. We do not believe Congress intended such an absurd result, which nullifies the provision and divorces it from its statutory context, thereby violating basic canons of statutory construction.

And congrats to Judge Cooke, who was "eminently correct":

The district court was eminently correct in holding that Defendants are not subject to criminal prosecution under § 1957(a), because the plain language of § 1957(f)(1) clearly exempts criminally derived proceeds used to secure legal representation to which an accused is entitled under the Sixth Amendment.

Now let's see if the government does the right thing and dismiss the rest of the indictment against Ben...

Monday Mashup (Updated)

Pretty tough sports weekend with the Fins and Canes heartbreakers. At least the blog fantasy team whooped SFLawyers. Not a lot happening today.... So let's check out what's going on around the net:

Rumpole has been all over the state court email fiasco.

Perhaps the state judges should take their cue from Justice Thomas and hush. Yes, he was talking about oral arguments:

Thomas — who hasn't asked a lawyer a question during arguments in nearly four years — said he and the other eight justices virtually always know where they stand on a case by reading legal briefs before oral arguments.
"So why do you beat up on people if you already know? I don't know, because I don't beat up on 'em. I refuse to participate. I don't like it, so I don't do it," Thomas said during an appearance before law students at the University of Alabama.
Thomas didn't name names, but fellow conservative Justice Antonin Scalia is generally considered the court's most aggressive questioner during oral arguments. President Barack Obama's lone nominee so far, Justice Sonia Sotomayor, isn't afraid to ask questions either.
Thomas scoffed at the idea that the justices try to use questions to influence the opinions of fellow members of the court.
"All nine of us are in the same building," he said. "If we want to sway each other we know where we are. We don't need oral arguments to do that. It doesn't make any sense to me."

The Supremes will be hearing the juvenile sentencing cases from Florida in a couple weeks. The ABA covers it here:

As any parent knows,” children are different. So said U.S. Supreme Court Justice Anthony M. Kennedy more than four years ago in Roper v. Simmons. There, a deeply divided court ruled 5-4 that executing those who committed murder as ju­veniles vio­lated the Eighth Amendment’s proscription against cruel and unusual punishment. Part of the reason, the court said, was that juveniles were less cul­pable, less mature and less responsible than adults.
“The reality that juveniles still struggle to define their identity means it is less supportable to conclude that even a heinous crime committed by a juvenile is evidence of irretrievably depraved character,” Kennedy wrote for the majority.
“From a moral standpoint,” he added, “it would be misguided to equate the failings of a minor with those of an adult, for a greater possibility exists that a minor’s character deficiencies will be reformed.”
This month the court returns to the subject of juvenile justice by examining what has been termed the penultimate punishment for juveniles, life without parole.
In a pair of cases from Florida, Graham v. Florida and Sullivan v. Florida, the court must determine whether Roper’s reasoning—that juvenile defendants are fundamentally different from adult defendants—extends from the death penalty to life without parole. Arguments are scheduled for Nov. 9.

UPDATE -- Another Vanessa Blum video report this morning!

Why I love Florida's Sunshine law

If you haven't seen this yet, you gotta read Susannah A. Nesmith's piece in the DBR today about the email clash between the state court judges on seniority:

Cueto, elected last year, fired off a letter Oct. 14 questioning Brown’s authority to take away his short-term seniority rights. In his e-mail, Cueto said he had been advised he might have grounds to sue but decided not to.
“I do not want to bring any negative publicity to our branch of government, which is still held in high regard in the community,” he wrote in the e-mail to all judges in the county.
***
Hours after Cueto sent his e-mail, County Judge Robin Faber hit “reply all” to voice his support for Brown’s decision, which he said would “right a wrong, to give judges respect for their years of service, regardless of the distinction between circuit and county.” He noted Brown ran for chief judge this year, saying he would change the seniority rules, and merge circuit and county experience to calculate seniority.
***
Circuit Judge Reemberto Diaz fired off a terse response to Faber’s e-mail.
“Mr. Faber: In the past few weeks, I have received three (3) unsolicited e-mails from you. Let me respond in the order they were received:
1. NO. I don’t know an interior decorator to recommend to you;
2. NO. I don’t want to buy comedy tickets from you;
3. NO. I’m not interested in your misguided opinion about the chief judge’s decision. This is not Craig’s list nor a blog. Have a good day.”
In an interview this week, Diaz found fault high and low. “Quite honestly, I’m not interested in what some county judge has to say about the seniority,” he said.
***
Veteran Circuit Judge Robert Pineiro may have put an end to the e-mail debate last Friday with a tongue-in-cheek note reminding the Miami-Dade judiciary to mind their manners. “Alright, I think it is definitely time to resolve this discussion and bring it to a dignified conclusion — one which will make us proud,” he wrote. “I suggest pies (preferably apple) at 10 paces.”

This is too good to be true, isn't it? Here are the actual emails... there are lots of other nuggets, including judges questioning whether seniority is a right guaranteed by the Constitution.
___________________

More fun stuff -- an order from Judge Pat Kinsey of Escambia County was making the rounds yesterday. Above the Law summarizes the lawsuit: "Albert Freed (pictured) won a trip to Hawaii (not pictured). As part of the vacation celebration, Mrs. Freed bought her husband some new Hanes brand briefs. But Mr. Freed is a husky gentleman, and apparently the new trunks couldn’t contain all of his junk. He sued Hanes, claiming they made 'defective' underwear."

Too much fun for a Friday afternoon.