Four Rothstein associates charged

They are: Howard Kusnick (a lawyer), Stephen Caputi (IT department), William Corte (IT department), and Curtis Renie (person who posed as a plaintiff in fake cases). They are all charged by information, so it appears that they have cut deals and are cooperating.

They drew Judges Marra (Kusnick), Dimitroleas (the two IT guys), and Zloch (Renie).

From the USAO press release:

The Information against Howard Kusnick alleges that, while an attorney at RRA, Kusnick engaged in a scheme to defraud two clients of RRA by authoring a letter purporting to settle pending litigation in the clients’ favor. In fact, however, no such litigation had been instituted and no such settlement existed. Rather, the purpose of the letter was to lull the clients into believing that RRA was pursuing litigation on their behalf when, in fact, the clients’ funds had been used to pay off earlier investors and to further the investment fraud scheme.

The Information against Stephen Caputi alleges that Caputi at times acted as both a purported banker and plaintiff during meetings with potential investors. For example, the Information alleges that Caputi, posing as an official from TD Bank, provided investors with fraudulent bank statements that reflected purported balances of trust accounts at TD Bank. In this way, Caputi lulled the investors into believing that the account balances were sufficient to fund their investments. On another occasion, Caputi posed as a plaintiff during a meeting with potential investors who had requested to meet with plaintiffs. Caputi pretended to be a plaintiff who had purportedly executed a $10,000,000 settlement agreement, thus raising potential investors’ confidence in the deal.

According to the Information against Curtis Renie and William Corte, these defendants worked at RRA’s IT Department as chief of information technology and as a document management specialist, respectively. Renie and Corte created a fictitious web page copying the legitimate web page of TD Bank. At Rothstein’s direction, the defendants posted false account balances on the fictitious web page to make it appear as if the accounts were well-funded. On one occasion, the defendants modified the phony TD Bank web site to reflect that RRA held between $300 million and $1.1 billion on deposit at TD Bank. In fact, however, no such funds were in the accounts. The false account balances were shown to investors to induce them to invest into the fraudulent investment scheme.

Finale week

American Idol, Dancing with the Stars, Oprah...

Oh, you came here for law stuff. Fine:

1. Judge Dubina's daughter doesn't like the health care law. Here is Martha Dubina Roby's Facebook page. She is a freshman congresswoman from Alabama. Oral argument is in Atlanta on June 8, and the panel is Judges Dubina, Marcus and Hull.








2. Goodwin Liu has given up his bid to be on the 9th Circuit. The Senate should be ashamed.

3. Alan Mendelsohn wants a short sentence.

4. The 11th Circuit debates what "he" means in a prosecutor's closing argument. From Judge Wilson's dissent:

Attempting to bolster the credibility of Mark Duke’s cooperating codefendant, the prosecutor argued the following to the jury:

[Duke’s co-defendant] told the truth, ladies and gentlemen,
and here is how we know it, there’s a witness that you
heard from but he didn’t come in here and talk to you from
this witness stand. After he shot, stabbed, and cut the throat
of Randy Duke, he took Randy Duke’s blood with him
throughout that house.

In doing so, the prosecutor impermissibly commented on Duke’s decision not to testify, in violation of his Fifth Amendment right against self-incrimination. The majority is willing to accept the State’s explanation that the “he” the prosecutor was referring to was not really Mark Duke but was Randy Duke’s “blood.” It is willing to accept that the “blood” is a male “witness” that the jury “heard from.” It is willing to accept that the prosecutor used “2 he” in one sentence to refer to blood and “he” in the next sentence to refer to Mark Duke, without ever indicating any possible change of subject. This makes no sense because it would mean that Randy Duke’s blood “shot, stabbed, and cut the throat of Randy Duke” and that Randy Duke’s blood took itself “throughout the house.” The majority accepts this story even though the State could not consistently or coherently articulate such an argument in the moments after the comment was made, and despite the fact that the prosecutor who spoke it did not dispute that he was referring to Duke. I respectfully part company with my colleagues in accepting this logic.

I do not see how the jury could have possibly interpreted this statement as anything but a comment on Mark Duke’s failure to testify. Accordingly, I dissent.

News & Notes

1. Jeff Weiner has a new book. Check out this very useful resource -- Federal Criminal Rules & Codes plus. It's got everything a federal criminal lawyers needs in one handy place.

2. John Edwards may get charged. Amazing to me that we are wasting our scarce prosecutorial resources going after Edwards for being a scumbag.

3. Jared Loughner is incompetent. The arrest photo made that pretty clear, no?

4. How Appealing has this info about the panel for Obamacare:

An anonymous source reports that the three-judge panel will consist of Chief Judge Joel F. Dubina and Circuit Judges Frank M. Hull and Stanley Marcus.
Judges Hull and Marcus were both appointed to the Eleventh Circuit by President Clinton. Chief Judge Dubina was appointed to the Eleventh Circuit by the first President Bush. And don't let the fact that all three judges have seemingly male first names fool you, because Judge Hull is female.

Judge Reinhardt quotes 12 Angry Men...

...in this case. HT: MC. Good stuff:

Scene One

Juror #8: I just want to talk.

Juror #7: Well, what’s there to talk about? Eleven
men in here think he’s guilty. No one had
to think twice about it except you.

Juror #10: I want to ask you something: do you
believe his story?

Juror #8: I don’t know whether I believe it or not
— maybe I don’t.

Juror #7: So how come you vote not guilty?

Juror #8: Well, there were eleven votes for guilty.
It’s not easy to raise my hand and send
a boy off to die without talking about it
first. . . . We’re talking about somebody’s
life here. We can’t decide in five
minutes. Supposin’ we’re wrong.

Scene Two

Juror #6: I said . . . this is a very important case
and we should be very convinced that if
the defendant is found guilty that it is
beyond a reasonable doubt. . . .

Foreman: We have spent some time now trying to
understand the reasonable basis for his
doubt, and I personally did not yet
understand it . . . . I would say that twothirds
of the jurors have tried to persuade
— have actively tried to persuade . . .
him that his current view is incorrect.
. . .

Juror #4: Well, I guess he believes from the evidence
that he’s seen that there hasn’t
been sufficient proof. . . .

Juror #5: I think the question may have been
raised: “Do you have a political agenda?”
I think [it] might have been in the
heat of the argument, because it does get
heated back and forth from a bunch of
different people. It may have been said.
. . .

Juror #9: Well, he said this is a serious thing, and
I don’t really feel that there is enough
cause for — or something to that effect.
. . . What he said was, “I wouldn’t want
to take anyone’s freedom away, unless,”
you know, “I was sure that certain things
took place.” . . . .

The first passage above is dialogue from the classic Academy Award-winning 1957 film, Twelve Angry Men, in which Henry Fonda plays a holdout juror who, over two tense hours, convinces his eleven peers that the defendant in a murder trial
should be acquitted. The second excerpt comes from the transcript of proceedings during the petitioner’s murder trial, in which each juror was examined and cross-examined, seriatim and mid-deliberation, after it was reported that one juror was
taking a different view from the others. In the end, the trial court dismissed that juror on the ground that he was “biased” against the prosecution. With an alternate juror in place, the jury returned a guilty verdict.

Twelve Angry Men made for great drama because it violated the sanctity of the jury’s secret deliberations by allowing the audience into the jury room. It was, of course, a work of fiction. We are presented here with a similar intrusion into heated deliberations involving a holdout juror, except that this one took place in open court, and it resulted in a woman being convicted and sentenced to life imprisonment after the holdout was dismissed. Under the precedent that existed when petitioner’s conviction became final (and exists today as well), the trial court’s actions violated the petitioner’s Sixth Amendment rights, as incorporated with respect to the states under the Fourteenth Amendment. We therefore conclude that petitioner is in custody in violation of the Constitution, reverse the judgment of the district court, and remand with instructions to grant the writ.

Justice Kennedy uses pictures in opinion...

... to show the overcrowding in California jails. There's one of them to the left. Yikes, that looks just awful.

Doug Berman asks whether visual aids are appropriate in opinions:

Because it has long been known that a picture is worth a thousand words, I certainly think it appropriate and useful for courts to consider adding visual aids to their rulings. And yet, I also recognize that a move to using more visual images in judicial opinions could open up a very interesting can of pictorial worms. In this Plata case and in some other settings, the visual aids added to opinion have usually been made part of the case's record by one of the parties. But I wonder if it would it be appropriate for an opinion to reprint a dramatic graphic or a special pictorial submitted into the record by the parties. Further still, might some justices or judges even consider creating their own special graphics or even a video to highlight and punctuate the pictures they are trying to create with their words?

Especially because I am a terrible artist, I hope graphic skills do not soon become essential to being an effective litigator. And yet, in this great new world full or new media, I do not think it is crazy to believe (and fear?) that visual images may begin playing a larger role in judicial decision-making.

I don't think there is anything to fear. Pictures and evidence from lower courts should be made part of opinions. It helps the reader and the public to see what is at issue. I like it.

Bail for 76-year old Imam? UPDATE -- nope

I was planning another rant (see here and here) this morning on the bail reform act and how DOJ's asks for detention way more than it should. But I have a small fire drill this morning on a case that I have to deal with...

John Pacenti and Jay Weaver have articles about the terrorism charges and the bond hearing this morning for Hafiz Muhammad Sher Ali Khan. Needless to say, I'm not sure why there couldn't be conditions of release set for Khan and his son that would ensure that he shows up for court and not engage in criminal activity. It's almost impossible to prepare for any trial, let alone a trial with classified material, while your client is detained (especially in the special housing unit).

I do like that I'll be able to say KHAN on the blog for the foreseeable future:



UPDATE -- Judge Garber denied bond for Khan and his son.

Quick news and notes

1. One of the Mutual Benefits defendants has pled out, which means that Judge Jordan (or whoever takes over his division after he goes up to the 11th Circuit) will only have one lengthy trial, not two. From Jay Weaver's article:

A prominent attorney whose fortunes rose with a Fort Lauderdale viatical insurance company at the center of a $1.25 billion investment fraud case pleaded guilty Wednesday to a single conspiracy charge, marking a major development in the long-running prosecution of executives and others at Mutual Benefits Corp.

Michael McNerney, 62, of Fort Lauderdale, admitted that as its lawyer, he helped the now-defunct company lure thousands of investors worldwide into buying dubious life insurance policies held mostly in the names of people dying of AIDS.

His role was part of an alleged investment scam lasting from 1995 to 2004 that authorities say rivals the $1.2 billion Ponzi scheme of disbarred Fort Lauderdale lawyer Scott Rothstein, convicted last year of selling fabricated legal settlements in a separate criminal case.

The Mutual Benefits and Rothstein cases rank as Florida’s largest fraud prosecutions.

He got a good deal -- a five year cap under Section 371.

2. The 11th Circuit's en banc decision today in Gilbert v. United States has all kinds of great rhetoric. Carnes wrote for the majority on complicated habeas issues, but he characterizes the issue as: "The primary question, in plainer English, is whether a federal prisoner can use a habeas corpus petition to challenge his sentence. Our answer is “no,” at least where the sentence the prisoner is attacking does notexceed the statutory maximum."

There are 105 pages of opinions, and I haven't read them in depth yet. But I found some good passages, especially from the dissents.

Judge Hill starts his dissent with this:

Ezell Gilbert’s sentence was enhanced by eight and one-half years as the result of his being found by the district court – reluctantly and at the explicit urging of the government – to be a career offender. Ezell Gilbert is not now, nor has he ever been, a career offender. The Supreme Court says so.

Today, this court holds that we may not remedy such a sentencing error. This shocking result – urged by a department of the United States that calls itself, without a trace of irony, the Department of Justice – and accepted by a court that emasculates itself by adopting such a rule of judicial impotency – confirms what I have long feared. The Great Writ is dead in this country.

More:

The government even has the temerity to argue that the Sentencing Guidelines enjoy some sort of legal immunity from claims of error because they are not statutes at all, but mere policy suggestions. And the majority appears not to understand that Gilbert’s imprisonment – no matter how his sentence was calculated – is the act of the Sovereign, who is forbidden by our Constitution to deprive a citizen of his liberty in violation of the laws of the United States.

I recognize that without finality there can be no justice. But it is equally true that, without justice, finality is nothing more than a bureaucratic achievement. Case closed. Move on to the next. Finality with justice is achieved only when the imprisoned has had a meaningful opportunity for a reliable judicial determination of his claim. Gilbert has never had this opportunity.

A judicial system that values finality over justice is morally bankrupt. That is why Congress provided in § 2255 an avenue to relief in circumstances just such as these. For this court to hold that it is without the power to provide relief to a citizen that the Sovereign seeks to confine illegally for eight and one-half years is to adopt a posture of judicial impotency that is shocking in a country that has enshrined the Great Writ in its Constitution. Surely, the Great Writ cannot be so moribund, so shackled by the procedural requirements of rigid gatekeeping, that it does not afford review of Gilbert’s claim.

Much is made of the “floodgates” that will open should the court exercise its authority to remedy the mistake made by us in Gilbert’s sentence. The government hints that there are many others in Gilbert’s position – sitting in prison serving sentences that were illegally imposed. We used to call such systems “gulags.” Now, apparently, we call them the United States.

One last thought. The majority spends an enormous amount of time arguing that Gilbert is not a nice man. Perhaps. But neither, I expect, was Clarence Gideon, the burglar, or Ernesto Miranda, the rapist. The Supreme Court managed to ignore this legal irrelevancy in upholding the constitutional principle under attack in those cases. Would that we could have also.

Wow. Now that's good stuff. I will post more as I wade through it all.

Go, Bill Barzee, Go!

My suite-mate Bill Barzee showed the SDNY how we roll down here in the SDFLA. He threw a bunch of great body blows today during his opening for Zvi Goffer, the off-shoot of the Raj Rajaratnam case. Via Reuters, the prosecutor threw the first jab:

The opening statements in the Manhattan federal court trial began with a prosecutor, Andrew Fish, turning around to point his right forefinger at one of the three defendants, securities trader Zvi Goffer, and call him "the ring leader of this criminal scheme."

Goffer, 34, who once worked at Raj Rajaratnam's Galleon Group and two other trading firms, is on trial with his brother and fellow trader Emanuel Goffer, 32, and another trader, Michael Kimelman, 40. The trial comes a week after Rajaratnam was found guilty of insider trading by a jury in the same courthouse.

Barzee then gave the smack down:

"Zvi Goffer, you're fired. That's what Raj Rajaratnam told Zvi Goffer," Goffer's lawyer, William Barzee, said as he began his opening statement, echoing the well-known real estate developer Trump's trademark phrase on his reality TV show. "He was fired because he lost so much money."

Barzee said his client waded into "the river of gossip" of Wall Street for tips and speculation, not for improperly leaked secrets as the government charges. "He was like a gold prospector searching for gold in a river," Barzee said.

Prosecutors have described the broad Galleon probe as the biggest investigation ever of insider trading at hedge funds.

The Goffer brothers and Kimelman are accused of bribing two lawyers at the prominent law firm Ropes & Gray with tens of thousands of dollars for secret information on takeover targets. The case of each man will be decided separately at the trial, which is expected to last up to five weeks.

I just love this part:

Barzee told the jury that another lawyer -- Jason Goldfarb, who the government says also passed tips to the defendants -- was a workers' compensation lawyer who had nothing to do with corporate mergers.

He said Zvi Goffer had a nickname for Goldfarb -- GQ.

"It stood for 'Gossip Queen.' That was the kind of guy Jason Goldfarb was. He would repeat anything that he ever heard from anyone" talking to Zvi Goffer "endlessly about dozens and dozens of stocks." Goldfarb has pleaded guilty.

Go get em Bill.