News and Notes

1. Another UBS defendants bites the dust. (Via AP)

2. Feds drop all charges against lawyer Carlos Loumiet (Via DBR)

3. Sotomayor is a step closer. (Via Herald)

4. Female Herald reporter accused of sexual harassment. (Via Washington Post)

UBS trial continued till August 3

Prior coverage here. Judge Gold agreed to the parties' request to let them try and work it out.

Maybe not on the UBS trial

According to the New York Times, the parties filed a joint motion to continue the case over the weekend in the hopes they can settle:

The Swiss bank UBS and United States federal prosecutors sought Sunday to delay a hearing scheduled for Monday so the two sides could try to settle their closely watched dispute over the release of names of wealthy American clients of the bank who are suspected of offshore tax evasion.

But the postponement request, made in a joint legal filing in a federal court in Florida, came amid fresh threats by the Justice Department that it might impose financial sanctions on UBS and possibly indict the bank should it ultimately refuse to disclose the names if required to do so by a judge.

Judge Gold will hear the motion to continue first thing Monday morning.

UBS trial to start Monday

Lots of press coverage on the case to start Monday here.

I liked this Reuters piece on Judge Alan Gold, who is presiding over the case:

The judge presiding over a high-stakes legal showdown between the U.S. government and Swiss bank UBS AG is seen as a straight-shooter who has not shied away from taking aim at big corporate interests.
Some see Judge Alan Gold of U.S. District Court for the Southern District of Florida emerging as an international mediator as he deals with issues loaded with important foreign policy and financial ramifications, led by U.S. demands for a lifting of Switzerland's treasured bank secrecy laws.
But U.S. attorneys and prosecutors who know him say Gold, a 65-year-old native New Yorker, will studiously avoid doing anything inconsistent with his role as a judge as he handles his biggest and most publicized case since he came to the federal bench in Miami nearly 13 years ago.
"He's about as straight-shooter as they come," said Charles Intriago, a former U.S. federal prosecutor and money laundering expert, who publishes a website for law enforcement officials about asset forfeiture.
"He's the perfect judge for this," he added, referring to the hearing Gold is set to preside over Monday in a suit in which the Justice Department is seeking to force UBS to disclose information on 52,000 secret accounts suspected of being used by wealthy Americans to avoid paying their taxes.
There is little in Gold's record to indicate how he might rule in the case, which experts say could set an important legal precedent since it marks the biggest test ever of Swiss bank secrecy.
Gold grabbed the media spotlight in a business law case once before, when he presided over a class-action lawsuit against Exxon Corp that resulted in a settlement costing more than $1 billion.

Gene Stearns won that case against Exxon. This time around, he's representing UBS.

Quick Hits

Sorry about the slow blogging this week. It's summer and I'm swamped... What up with that?

Okay, to the news:

1. General Noriega has filed a cert petition.
2. Paris Hilton starts trial tomorrow in front of Judge Moreno. Steven Binhak and Michael Weinstein represent her.
3. UBS trial next week.
4. Federal JNC interviews for judge and U.S. atty coming up.
5. Palm Beach is moving firearms cases to federal court. (The State Attorney there says it's because the min-mans in federal court are higher than in state court. But there is no min-man for being a felon in possession of a firearm in the federal system.)
6. More on SexyLexus and White & Case.
7. There's lots of mortgage fraud.
8. Boeis tops Wells.
9. AUSA Scott Ray is leaving the office. Going away party next Thurday at Tobacco Road. Good luck to Scott.
10. The Marshals are busy.

Time for the weekend

Before you leave for the weekend, you should know:

So Jeff Goldblum didn't die (neither did Harrison Ford).

UBS clients are starting to plead.

"Justice Antonin Scalia [is] the Confrontation Clause’s most devoted defender on the Court." (via ScotusBlog).

To Blackberry...

...or not to Blackberry; that is the question.

Other questions of the today:

1) Isn't it time for someone to figure out who Rumpole is? (I think he's given us a hint with this picture -- it's taken from Datran, no?)

2) Is the government dropping the UBS suit?

3) How many more Medicare arrests will there be?

4) Can law firms withhold pay for not billing enough hours?

5) Why aren't all of us taking longer vacations?

6) How bad is the food at the SuperMax?

7) Over the top ad? Or just good fun?

8) Should Madoff get 12 years?

9) If you got these tattoos, you would lie too, wouldn't you?

Let's all get together for some legal research

Judge Gold set an evidentiary hearing for July 13th to sort out whether treaties or Swiss law prevent UBS from divulging account holder names to the IRS, reports the DBR. (The link is for subscribers only.) According to the article by John Pacenti, Gold ordered the Attorney General to explain by June 30th whether the IRS position is correct. Anyone making assertions about what Swiss law says needs to be in court for the hearing.

Bern backs UBS

The government of Switzerland filed an elegantly understated amicus brief for Judge Gold's consideration on Thursday (according to PACER) or yesterday (according to the media). The upshot of it is that enforcement of the United States' summons—which it implies (but refrains from outright saying) is just a "fishing expedition"—circumvents the applicable treaty and violates Swiss law. Here is the very abridged version:

The Government of Switzerland has a strong interest in the preservation of the integrity of Swiss law and sovereignty and in promoting respect by the United States of its international treaty obligations to Switzerland.

If the Court were to order UBS to produce evidence from Switzerland, and backed that order with coercive powers, the Court would be substituting its own authority for that of the competent Swiss authorities, and therefore would violate Swiss sovereignty and international law.

The Wall Street Journal reports that an IRS agent speaking at a financial conference in Miami confirms that more "John Doe" summonses are in the works.

Judge Gold rules Florida law on Cuba travel is unconstitutional

If you wanna go to Cuba, now's a good time to pack your bags. Yesterday Obama eased restrictions on travelling there. And today, Judge Gold issued an Order finding a Florida law making trips there more expensive unconsitutional. Here's the Herald's take:

A federal judge Tuesday morning overturned a 2008 state law that increased registration fees and requirements for travel agencies specializing in trips to Cuba.
U.S. District Court Judge Alan S. Gold's decision comes just a day after the Obama administration announced lifting several travel restrictions to Cuba -- allowing Cuban exiles to visit the Island more than once a year, pushing for use of cellphones on the island and easing requirements for remittences to relatives.
In question was the 2008 Sellers of Travel Act approved by the state Legislature and signed into law by Gov. Charlie Crist. The act required travel agencies in Florida selling trips to Cuba to post up to a $250,000 bond and pay up to $25,000 in registration fees.

In other news, another UBS client who hid assets offshore pleaded guilty. From the Herald:

A Lighthouse Point man pleaded guilty Tuesday in federal court in Fort Lauderdale to filing a false income tax return, as part of a wide-ranging government probe of wealthy clients of Swiss banking giant UBS AG who hid assets offshore.
According to court papers, Robert Moran had $3.4 million in a UBS account in Switzerland as of Dec. 31, 2007, but didn't report to the Internal Revenue Service that he had the account nor declare income from it as required by U.S. law.
Moran, who is founder and president of Moran Yacht & Ship in Fort Lauderdale, faces up to three years in prison and a fine of $250,000.
He held the UBS account in the name of Winter Drive Investments, S.A., a Panamanian corporation that he controlled, according to court papers.
A U.S. citizen who has or controls an offshore bank account worth more than $10,000 is required to say so on income tax returns.
Moran is the second UBS client to face criminal tax charges since UBS agreed in February to provide the United States with the names and account information of 250 to 300 U.S. clients.

Blogging Block

Nothing is grabbing me for a post today. Maybe because it's Spring Break next week... Or maybe because I have to go to FDC this morning. I dunno...

Anyway, I guess I could write something up about the accountant accused of hiding money in the UBS Swiss bank account.

Or maybe the cops in Ft. Lauderdale who were sentenced in a drug ring yesterday.

I could write about the potential penalties for Donte Stallworth and ask for your opinion about who should get more time -- a DUI defendant who kills someone or a first-time fraudster in federal court.

Hmmmm... Perhaps I should engage the commenter in the post below who asks what I would do if I were U.S. Attorney.

But alas, I need to head out for a couple hours now. Hopefully I'll come back and have some great posting idea. Post suggestions in the comments please.

Baker & McKenzie UBS Memo Takes Center Stage

SFL here.

Come on folks -- David needs to focus on his trial, and a bunch of nudnick commenters force him to change his comment policy. Oy.

Meanwhile, the UBS saga unfolds on multiple fronts, in addition to Judge Gold's courtroom. In Senate testimony yesterday, a Baker & McKenzie tax memo took center stage:

According to a 180-page list of exhibits released by the Permanent Subcommittee on Investigations, a UBS memo dated July 4, 2000, shows that the Swiss bank relied on outside legal counsel from Baker & McKenzie when setting up offshore asset vehicles and insurance plans to aid U.S. clients. (The UBS memo citing legal advice obtained from Baker & McKenzie can be seen on PDF pages 178 and 179.)

The memo, which was signed by UBS financial planning and wealth management employees Jonathan Bourne and René Sonneveld, explicitly states that the firm was consulted when setting up such schemes.

It also appears that UBS is arguing some sort of abstention doctrine before Judge Gold:

Branson said that UBS views the John Doe summons filed by the IRS in federal court in Miami as a dispute between the IRS and the Swiss government, which can best be resolved through diplomacy rather than litigation that is neither "proper nor productive."

UBS is being advised by Wachtell, Lipton, Rosen & Katz litigation partners John Savarese, Ralph Levene, and Martin Arms. Eugene Stearns, chairman of Florida firm Stearns Weaver Miller Weissler Alhadeff & Sitterson, is serving as local counsel to UBS along with litigation partners Ana Barnett and Gordon Mead, Jr. (Stuart Gibson, senior litigation counsel with the Justice Department's tax division, is the lead lawyer for the government.)

What is with the Swiss and diplomacy? Also, when is litigation ever "proper or productive"?

Welcome to America!

More Complications in the UBS Case

SFL here, still filling in while David does his "trial lawyer" thing.

More on UBS --

Now Judge Gold has a Swiss federal court to possibly contend with:

UBS was sued on Tuesday in a Swiss federal court by wealthy American clients seeking to prevent the disclosure of their identities as part of a tax-evasion investigation by the United States Justice Department.

The lawsuit accuses UBS and Switzerland’s financial regulator, the Swiss Financial Market Supervisory Authority, or Finma, of violating Swiss bank secrecy laws and of conducting what Swiss law considers illegal activities with foreign authorities. It also named Peter Kurer, the chairman of UBS, and Eugen Haltiner, the chairman of Finma, as defendants.

The suit, filed by a lawyer in Zurich, Andreas Rued, on behalf of nearly a dozen American clients, underscores the growing clash between Swiss banking secrecy laws and those of the United States. Tax evasion is not considered a crime in Switzerland. Disclosing client names under Swiss law is a criminal offense and can expose bank executives and officers to fines, prison terms and other penalties.

Oh no -- foreign law possibly impacting our legal process again? Remember that whole Supreme Court controversy a few years back?

Me neither, but Judge Scalia probably does.

Ho Hum -- The Princess, A Sex Sting, and UBS

Hey, can you tell it's SFL here?

Yep, still foolin' around while David tries another big case.

So I told you all this UBS thing was big. Here's an update on what went down in Judge Gold's courtroom yesterday:

U.S. District Judge Alan S. Gold set a July 13 hearing on the IRS lawsuit, unless an agreement is reached first. UBS claims that turning over the account names would violate Swiss privacy law and jeopardize the bank's license to stay in business.

"Such violations would expose these (UBS) employees to substantial prison terms, as well as fines, penalties and other sanctions," the UBS lawyers said in a court filing last week. "There is simply no reason to have, nor equity in having, such an expedited process here."

The IRS had sought an accelerated timetable, but Justice Department tax attorney Stuart Gibson and UBS lawyers told Gold at a brief telephone hearing Monday they had agreed on a lengthier process. Gold also set a series of deadlines for court filings.

"I would appreciate the continued efforts to discuss this matter, to narrow down what the legal issues are and the factual issues are," Gold said.

Most judges probably would appreciate that.

What do you know -- the feds bust a Miami Beach sex ring:

Bernabe-Caballero, 34, remained without bond in Miami's Federal Detention Center Monday night and was scheduled for a 10 a.m. hearing Tuesday about extradition to Michigan, where the grand jury in the case had convened.

Bernabe-Caballero's attorney, Rene A. Sotorrio, declined to comment.

Smart move, I wouldn't say anything either if my client was facing these kind of allegations.

And -- can you believe it -- a story about a cocaine princess and federal court.

Sometimes these things write themselves.

More on Kuehne R&R

SFL here, hope you had a nice weekend.

Here's a nice quote from John Pacenti's article on Judge Bandstra's R&R on Ben Kuehne:

If Bandstra’s decision stands, the case would be down to five substantive money laundering counts. Kuehne and Saldarriaga are accused of using a money broker to hide the movement of drug profits into the defense fund. The money broker was an informant working with the government and exchanging pesos for dollars used in U.S. drug stings.

Miami litigator Jane Moscowitz, one of Kuehne’s attorneys, said she was thrilled with the Bandstra ruling.

“It took my breath away that the motion had been granted,” she said.

And us too, Jane.

And here's some more background on the IRS/UBS suit, which is being closely watched in financial and legal circles:

While the deferred prosecution agreement reached between Swiss banking giant UBS and federal prosecutors on Wednesday might have initially looked like a great deal for the government, in reality the Zurich-based bank isn't disclosing nearly as many client names as law enforcement officials are suggesting, says Miller & Chevalier tax partner George Clarke III.

Clarke says that the decision by the Justice Department to file suit against UBS on Thursday in Miami is evidence of this.

Despite forking over $780 million in penalties as part of its deferred prosecution agreement, UBS, represented by Wachtell, Lipton, Rosen & Katz litigation partner John Savarese, managed to secure a pretty good deal for itself, Clarke says.

Sure, not bad for a bunch of carpetbaggers from New York. But what are we, chopped liver?

Is It Friday Already?

By SFL

Boy the federal court beat is...a little beat today.

Does it count as SD FL news that I saw Judge Moreno having a nice lunch at La Loggia yesterday?

No, guess not -- darn, where's Julie Kay when you need her?

Anyways, the always-in-trial big man already updated us on Joe Cool. Judge Huck set sentencing for May 6.

Third time's the charm in the Liberty 6 retrial, which is starting to feel like Jarndyce and Jarndyce -- only longer.

What do you all think of this line from the defense opening:

“This case is a 100 percent setup; this is a manufactured crime,” the lawyer, Ana M. Jhones, said in her opening argument, which drew several objections from the prosecution, most notably when she remarked that “taking an oath to Al Qaeda is not a crime.”

True, but do must jurors think it should be?

And finally, more details on the IRS v. UBS showdown unfolding right here in sunny South Florida:

With today’s lawsuit, the U.S. asked a federal judge to enforce its so-called John Doe summonses. On July 1, a federal judge in Miami approved an IRS summons seeking information on thousands of UBS accounts owned or controlled by U.S. citizens. Negotiations between the U.S., Switzerland and UBS have been at a standstill since then, according to a Justice Department filing.

UBS said in a statement that it expected today’s filing.

“UBS believes it has substantial defenses” to the U.S. attempt to enforce the summonses and will “vigorously contest” the case, the bank said in the statement. The bank’s objections are based on U.S. laws, Swiss financial privacy laws, and a 2001 agreement between UBS and the IRS, according to the statement.

Anyone know who has been retained to represent UBS on this? I know a certain humble blogger who's available.

Have a great weekend all!

Guest Blogging At David's Place.

Hi folks, SFL here.

David was kind enough to lend me the keys to his soapbox for a few days because, as you may have heard, he's busy doing IMPORTANT LEGAL STUFF.

In fact, here's a taste of what the big man has been up to this week:

The guiding principle of the medical profession is often stated as "First, do no harm."

But according to federal prosecutor Sean Cronin, Dr. Ali Shaygan operated by a different four-word motto, "Mo' money. Mo' money," with deadly consequences.

Making his opening statement Wednesday to a Miami federal jury, Cronin called Shaygan a drug dealer who sold prescriptions for dangerous narcotics to boost his income.

One of Shaygan's patients, James "Brendan" Downey of West Palm Beach, died in June 2007 after overdosing on methadone prescribed by Shaygan, Cronin said.

Shaygan's attorney, David O. Markus, countered that the 37-year-old physician prescribed appropriate doses of medications to patients who claimed to be suffering from pain and other ailments.

"He had a legitimate medical reason for doing what he did," Markus said. "Because a patient passes away doesn't make the doctor a criminal."

Shaygan, who lives in Miami Beach, is charged with 141 counts of unlawful prescribing and causing Downey's death. If convicted, he faces more than 20 years behind bars.

Geez, all I do is move around money.

Good luck David!

In other SD FL news, all you machers can see if you made the list. No, not the Madoff investment list, but the list of 19,000 offshore UBS bank accounts of American investors who may have been trying to avoid US taxes:

The largest bank in Switzerland, UBS, agreed Wednesday to reveal the names of wealthy Americans whom the authorities suspect of using offshore accounts to evade taxes.

The change in policy is the result of UBS' admitted role in conspiring to defraud the Internal Revenue Service. As part of the agreement, the bank will pay $780 million in damages, and also close all offshore accounts of its American clients.

You can see the filing that was submitted to Judge Cohn here.

Ok ok I know it's not Shakespeare, and I'll see if I can punch it up a bit, but I did promise myself -- out of my deep respect for David -- not to "work blue."

Boy, now I know how Bob Saget feels.

Have a good day everybody!

UBS exec indicted in tax probe

Very interesting case. (Here's the AP and the Daily Business Review) All of the criminal defense lawyers in town were scanning the paper this morning to see who represented defendant Raoul Weil, a top executive at UBS. Weil isn't here in the US, but he hired New York lawyer Aaron R. Marcu from Covington & Burling. Here's the indictment.

I still haven't figured out formatting with this new Blackberry Bold, so I will post more info and the indictment when I get to the office later today. In the meantime, anything going on that you all wanna discuss?