The Freedom of Little Joe Cartwright: Tax Crime, Edgar Allan Poe, Noir Film and Lacrosse

Notes for the week.

Prosecuting Individuals

Federal criminal tax lawyer Jack Townsend blogs at Federal Tax Crimes.  Here is his note on Prosecuting Corporate Employees, particularly in the tax context:

I have previously blogged on Professor Brandon Garrett (UVA Law) who have carved out an academic niche on how the Government deals with corporate crime, particularly large corporate crime (the too big to jail group). See e.g., Judge Jed Rakoff Reviews Brandon Garrett’s Book on Too Big to Jail: How Prosecutors Compromise with Corporations (Federal Tax Crimes Blog 2/10/15), here. At the risk of oversimplifying his arguments, I summarize them in part relevant to this blog entry: When the Government goes after corporate misconduct, it too often focuses only on the corporation in terms of criminal sanctions and not the individuals, particularly those higher up the chain, who committed the underlying conduct. Corporations cannot go to jail; individuals can. Prosecuting and convicting individuals in addition to corporations could, he thinks, provide more front-end incentive for individuals to forego illegal conduct within the corporations. However, as fans of tax crimes know at least anecdotally, it is hard to convict higher level corporate officers for conduct that their underlings actually commit. The poster child example is the acquittal of Raoul Weil, a high-level UBS banker who “remoted” himself from the dirty work of actually servicing U.S. taxpayers seeking to evade U.S. tax. See e.g., Raoul Weil Found Not Guilty (Federal Tax Crimes 11/3/14; 11/6/14).

Mr. Townsend goes on to discuss the DOJ’s Yates Memorandum and new work by University of Virginia law professor Brandon Garrett.  Professor Garrett’s website (Federal Organizational Prosecution Agreements) is the best compendium of deferred-prosecution and non-prosecution agreements.

Michael Landon ("Little Joe Cartwright") being served with a subpoena (1968)

Michael Landon (“Little Joe Cartwright”) being served with a subpoena (1968)

Another useful Townsend post addresses a common issue — the Government’s attempt to muzzle the recipients of subpoenas:

In United States v. Gigliotti, 2015 U.S. Dist. LEXIS _____ (ED NY 12/23/15), here, Judge Dearie denied a motion to suppress evidence obtained pursuant to grand jury subpoena that unlawfully contained the following:
YOU ARE HEREBY DIRECTED NOT TO DISCLOSE THE EXISTENCE OF THIS SUBPOENA, AS IT MAY IMPEDE AN ONGOING INVESTIGATION.

Sound familiar?  Read the entire piece at Judge Criticizes Prosecutor’s Use of Language Directing Secrecy for Receipt of Grand Jury Subpoena.  We have written about the grand jury previously herehere and here.  If you are to young (or too old) to remember Bonanza on TV, here is a refresher.  Here is an episode from 1960 entitled — appropriately, for White Collar Wire readers — “Desert Justice”:

Head-on-a-platter and all that.

Head-on-a-platter and all that.

Or Not Prosecuting Individuals?

White Collar Wire should have sent a Christmas goose to Senator Elizabeth Warren (D-MA), who wants more white-collar types to get indicted: 2015 Spurred Billions in Bank Fines, But Not Enough for Warren.  In particular:

In a 10-page report titled “Rigged Justice: 2016,” the U.S. Senator’s staff cited 20 cases in which they say prosecutors showed “timidity” by not pursuing individuals for civil or criminal misdeeds. No executives at Citigroup Inc., JPMorgan Chase & Co., or Deutsche Bank AG were accused of wrongdoing in cases alleging rigged currency markets and the misleading of investors, her office wrote in the document released Friday. The investigations led to their companies paying billions of dollars in penalties.

Senator Warren will have none of the Yates Memo, thank you:

The report even dismisses a recent U.S. Justice Department announcement, known as the Yates memo, in which Deputy Attorney General Sally Quillian Yates heralded a new direction by telling prosecutors to embark on investigations by focusing on people, not companies. “Both before and after this DOJ announcement, accountability for corporate crimes has been shockingly weak,” Warren’s office wrote.

“Shocking to whom” is a good question, but it’s all good for the white-collar bar.  Here is her report.

Good Practices and Bad

A miscalculated penalty, perhaps.

A miscalculated penalty, perhaps.

From the Harvard Law School Forum on Corporate Governance and Financial Regulation and Jon Eisenberg, a partner in the Government Enforcement practice at K&L Gates LLP, here is a useful article (with cases and charts) about the SEC’s use of civil monetary penalties.  Tellingly, and sadly, the authors point out that “these decisions might not survive appellate scrutiny . . .  but very few respondents appeal their sanctions all the way to the D.C. Circuit.”

 

 

Hall monitor?

Hall monitor?

Deferred-prosecution agreements often impose corporate monitors.  Should the reports of such monitors be kept confidential?  A federal judge ordered the release of the HSBC monitor’s report, over the object of both HSBC and DOJ:

A federal judge has ordered the release of a report detailing how well HSBC Holdings Plc has complied with anti-money laundering requirements imposed by U.S. regulators when the British bank was fined $1.92 billion three years ago.

Thursday’s order by U.S. District Judge John Gleeson in Brooklyn is a defeat for HSBC and the U.S. Department of Justice, which complained the release could make it easier to launder money, including for terrorism, and discourage cooperation with law enforcement.

“This case implicates matters of great public concern and is therefore one which the public has an interest in overseeing,” Gleeson wrote, citing the public’s constitutional right of access under the First Amendment.

I cannot speak to the terrorism angle, but cooperation (and thus, monitoring) both work best when company employees have some comfort that what they say and do will be held in confidence, at least within reasonable parameters.  The public’s oversight interest is real, but surely an organization that has paid billions in fines and is living with a monitor is being “overseen” to a reasonable extent, especially when that oversight requires continued cooperation to be effective.

Read the entire article here: HSBC money laundering report must be made public.  To read our earlier posts about DPAs and monitors, go herehere, and here.

Crime Fiction

Digital content, quoth the raven.

Digital content, quoth the raven.

From the good folks at The Rap Sheet, a piece on the nominees for the 2016 Edgar Awards.  Here is the complete list from the Mystery Writers of America.

Thomas Hardy (1840-1928)

Thomas Hardy (1840-1928)

It is not a raven, but there is a bird in  Thomas Hardy’s poem “The Darkling Thrush”:

I leant upon a coppice gate
When Frost was spectre-grey,
And Winter’s dregs made desolate
The weakening eye of day.
The tangled bine-stems scored the sky
Like strings of broken lyres,
And all mankind that haunted nigh
Had sought their household fires.

The land’s sharp features seemed to be
The Century’s corpse outleant,
His crypt the cloudy canopy,
The wind his death-lament.
The ancient pulse of germ and birth
Was shrunken hard and dry,
And every spirit upon earth
Seemed fervourless as I.

At once a voice arose among
The bleak twigs overhead
In a full-hearted evensong
Of joy illimited;
An aged thrush, frail, gaunt, and small,
In blast-beruffled plume,
Had chosen thus to fling his soul
Upon the growing gloom.

So little cause for carolings
Of such ecstatic sound
Was written on terrestrial things
Afar or nigh around,
That I could think there trembled through
His happy good-night air
Some blessed Hope, whereof he knew
And I was unaware.

Crime Noir and Miles Davis

It's Miles. It's cool.

It’s Miles. It’s cool.

On the subject of crime, Apple Music must have intuited that I like noir-ish fiction and cool jazz.  It directed to me a set of Miles Davis that included “Ascenseur pour l’echafaud” (1958), a French crime film by Louis Malle released in the States as Elevator To The Scaffold (or Lift To The Scaffold in the U.K.)  Davis’s horn on the title track is as evocative as it gets, as seen here:

 

ESPN's 30-for-30

ESPN’s 30-for-30

Wishing It Were Fiction: Duke Lacrosse and Due Process

On Sunday, March 13, at 9 p.m. ET, ESPN’s acclaimed “30 for 30” film series will present Fantastic Lies, a film about the the Duke lacrosse case.  Here is an interview with the producer, Marina Zenovich.

Damage done.

Damage done.

We have written about the Duke lacrosse case before, here and here.

 

Depends on how we sell it.

Depends on how we sell it.

In opening statements and closing arguments, the genuine is good.  The cornball or the obscure, on the other hand, are bad.  The same is true of our written work.  As noted by Philip Corbett, master of the After Deadline blog in the New York Times:

[A]n overreliance on anecdotal openings — especially the classic “stranger in the lead” approach — can make our prose feel shopworn rather than vivid. This is particularly true when readers encounter unfamiliar names at the top of two or more adjacent stories, whether in print or online.

 

Read the entire piece: Here’s Someone You Never Heard of. Read On.

 


White (Collar) Christmas: Gin, Crime, Theology and the Rat Pack

Deck the halls.

Deck the halls.

 

The hour is upon us, so herewith a few Christmas items.

Cocktails

"Thought I'd never finish shopping."

“Thought I’d never finish shopping.”

Here from the archives is a recipe (via Garden & Gun magazine) for Milk Punch for Christmas Morning and a new recipe for An Old Old-Fashioned   .

From our friends at the Gin Monkey blog, a gin drinker’s gift list and from Gastronomista, a recipe for Jagermeister and Rye.  Yikes.

 

 

 

The Christmas rush.

The Christmas rush.

Crime

From J. Kingston Pierce of The Rap Sheet, here are 10 of The Most Arresting Crime Novels of 2015.

Marilyn Stasio, crime fiction reviewer for the New York Times, sets out her 2015 favorites in Death Takes No Holiday   .

Theology

From David Zahl at MockingbirdConsuming 2015: Favorite Music, Media, Books and Humor.

Billable hours done.

Billable hours done.

Here is my piece for the Cathedral Church of the Advent blog on Christmas Movies and Serial Killers.

 

 

 

 

 

 

And finally, a Rat Pack Christmas scene — Frank Sinatra, Dean Martin and Sammy Davis, Jr. — from 1967’s Robin and The Seven Hoods:

Merry Christmas!


Why You Need More Email

You don't have mail, but you will.

You don’t have mail, but you will.

Actually, that’s not true.  You don’t need more email; rather, you need better email.

Other than a missive alerting you to a sale on gin at your local booze-provider, what constitutes “better” email”?

“Better” email is email alerting you to new posts from White Collar Wire.

It’s simple.

Look left. Good?

Look left. Good?

Enter your email address in the “Susbcribe” box on the left of the home page, and click the grey “Subscribe” button.

Ad-free, too.

Ad-free, too.

An email alerting you to a new post will, helpfully, appear in your inbox.

Do not miss out; help us to be relevant (or, at least, to so perceive ourselves); and re-post anything about gin sales.


Why We Should Ban Any New “Christmas Carol” and Re-Tune Victorian Hymns

Not gluten-free.

Not gluten-free.

The BBC’s classical music site published this article about the Victorians and Christmas stories.  The Charles Dickens classic A Christmas Carol is among them, but so too some more obscure (at least, obscure to me) work by George Eliot and others.

Cool night-cap.

Cool night-cap.

As novelist John Irving  noted in an introduction to A Christmas Carol, the work is essentially a Christian ghost story about human transformation:

Scrooge is such a pillar of skepticism, he at first resists believing in Marley’s Ghost. “You may be an undigested bit of beef, a blot of mustard, a crumb of cheese, a fragment of an underdone potato. There’s more of gravy than of grave about you, whatever you are!” Yet Scrooge is converted; beyond the seasonal lessons of Christian charity, A Christmas Carol teaches us that a man—even a man as hard as Ebenezer Scrooge—can change. What is heartening about the change in Scrooge is that he learns to love his fellowman; in the politically correct language of our insipid times, Scrooge learns to be more caring. But, typical of Dickens, Scrooge has undergone a deeper transformation; that he is persuaded to believe in ghosts, for example, means that Scrooge has been miraculously returned to his childhood—and to a child’s powers of imagination and make-believe.

Most of us have seen so many renditions of A Christmas Carol that we imagine we know the story, but how long has it been since we’ve actually read it? Each Christmas, we are assaulted with a new Carol; indeed, we’re fortunate if all we see is the delightful Alastair Sim. One year, we suffer through some treacle6 in a western setting; Scrooge is a grizzled cattle baron, tediously unkind to his cows. Another year, poor Tiny Tim hobbles about in the Bronx or in Brooklyn; old Ebenezer is an unrepentant slum landlord. . . . We should spare ourselves these sentimentalized enactments and reread the original—or read it for the first time, as the case may be.

The Alistair Sim version is a classic, but my favorite is the 1984 version with George C. Scott as Scrooge:


As noted in this Economist book review, the Victorians were also great — perhaps the greatest — hymn-writers, unafflicted by the grinning, emoji-level landscape of most “Contemporary Christian Music”:

[H]ymn-books were the bestsellers of the age. Hymns were a vital part of popular culture: their texts appeared on posters, tombstones and in school reading-books and they were the primary means of teaching the principles of Christianity to adults and children alike. “Let me write the hymns of the church,” one preacher maintained, “and I care not who writes the theology.”

A marvelous contemporary antidote to the milktoast of much CCM  is found in the work of Indelible Grace, a movement that “re-tunes” old hymns — many of them Victorian.  Here is a look:

 The tunes, although all within the same rootsy bandwith, are lovely, and the theology solid.


The Yates Memo and Three Dog Night

Deputy Attorney General Yates

Deputy Attorney General Yates

Unless you have been on a monastic retreat or hidden as carefully as Hillary Clinton’s email server, you have by now likely read reports and analyses of the “Yates Memorandum,” a policy document issued by Deputy Attorney General Sally Yates entitled “Individual Accountability for Corporate Wrongdoing.”

(Here is the document:  Yates-Memo-Prosecution-of-Individuals.pdf ).

In this essay, I focus on one particular aspect that may be crucial for companies, their boards of directors, their audit committees and law department: The timing of potential disclosures to the Government and the degree to which outside counsel needs to have comfort that what he or she is relating to the Government on the company’s behalf is more or less reliable.

The Yates Memo sets out six principles that the Department of Justice intends to apply in a renewed (or apparently renewed) emphasis on the prosecution of individuals in the context of the investigation of corporate wrongdoing.

The key summary paragraph is as follows:

The guidance in this memo reflects six key steps to strengthen our pursuit of individual corporate wrongdoing, some of which reflect policy shifts and each of which is described in greater detail below: (1) in order to qualify for any cooperation credit, corporations must provide to the Department all relevant facts relating to the individuals responsible for the misconduct; (2) criminal and civil corporate investigations should focus on individuals from the inception of the investigation; (3) criminal and civil attorneys handling corporate investigations should be in routine communication with one another; (4) absent extraordinary circumstances or approved departmental policy, the Department will not release culpable individuals from civil or criminal liability when resolving a matter with a corporation; (5) Department attorneys should not resolve matters with a corporation without a clear plan to resolve related individual cases, and should memorialize any declinations as to individuals in such cases; and (6) civil attorneys should consistently focus on individuals as well as the company and evaluate whether to bring suit against an individual based on considerations beyond that individual’s ability to pay.

There has been considerable criticism of DOJ from politicians, editorialists and judges (see the Southern District of New York’s Judge Jed Rakoff here and a note here and here about Judge William H. Pauley) over the paucity of individual prosecutions arising from the financial crisis.  Assuming that the memorandum is more than a simple public relations effort to deflect that criticism, a number of points come to mind.

Difficult to keep calm, actually.

Difficult to keep calm, actually.

First, if implemented, the Yates Memo will cause more corporate officers and employees to lawyer up, and lawyer up earlier, then at any time since the savings and loan crisis.  As a white-collar and internal-investigations lawyer with looming college tuition to pay for, I have no objection to such an outcome, but it may actually make getting the facts out of an internal investigation more difficult, not less.

Second, the renewed focus on facts pertaining to individuals will potentially make it very uncomfortable for boards of directors, audit committees, chief legal officers and other decision-makers who will more frequently be tempted to throw company officers and employees under the bus than previously.  To cite Three Dog Night from their eponymous 1969 album, “one is the loneliest number.”

Third, although DOJ officials in speeches have said repeatedly that they are not trying to force corporate outside counsel to be police officers, there is more than a whiff of that impulse in the Yates Memo.  Such an approach raises multiple potential conflict of interest problems.

Civil discovery.  Criminal facts?

Civil discovery. Criminal facts?

Fourth, the focus on individual wrongdoing (and disclosure of facts relating to individual wrongdoing) is to apply equally in the civil arena. Companies and businesspeople have far more civil problems then criminal.  The ultimate effect of the Yates Memo may be felt most dangerously (and most expensively) in the civil context.

Fifth, it is unclear (at least to me) whether and to what extent the Yates Memo will require outside counsel conducting an internal investigation to modify a standard Upjohn instruction.  (We have previously discussed Upjohn warnings in these posts).  In other words, does company counsel need to add an explicit statement that, should the witness reveal facts about himself or herself that appear to be a reasonable basis of criminal liability (theirs or the company’s), the lawyer will probably tote those facts over to the Government?

As a practical matter for corporations and those who guide and advise them, as well as for lawyers who represent individual officers and employees, the most delicate task will be trying to figure out at what point in time does one pull the disclosure trigger with regard to evidence of individual wrongdoing.

In other words, when do you know what it is that you know? And, what if you make your early or premature disclosure to the Government but you are wrong?

Off to college? Or, to a meeting at the U.S. Attorney's Office?

Off to college? Or, to a meeting at the U.S. Attorney’s Office?

As I write this, my daughter is a high school senior in the midst of college applications.  These applications come at the tail end of a lengthy period of campus visits, alumni interviews, webpage reading and prayer.  We have been diligent, and the process by turns exhilarating, disappointing and expensive.

What struck me is how different things look now than when we began.  At some point, one must “land the plane” – that is, make a decision – whether one is in the midst of a college search process or an internal corporate investigation.  Yet, had my daughter been forced to apply very early in the process to, say, what were her top five choices then, we would have been in an artificially different (and most likely more disadvantageous) situation from the one in which we find ourselves today.

The Yates Memo will put boards of directors, audit committees and chief legal officers is in a similar position of having to make a call unnaturally early in an internal investigation in hopes of reaping the harvest of cooperation.  As most anyone who is been through an internal investigation can attest, the factual landscape and legal conclusions are often different (but more accurate) late in the day.  The next months and years under the Yates Memo will tell, but it would be a shame if, in order to grasp at cooperation’s life jacket, American businesses and their legal advisers are put in a situation that helps neither the legitimate aims of Government prosecutions nor those companies’ shareholders and stakeholders.

SIDEBAR: In the context of governmental policy, it is easy to talk about the prosecution of individuals without putting a face (and a life) to a name.  With faceless defendants, we sometimes forget what investigations and trials can do to individuals and their families.

Tom Hayes and wife Sarah Tighe

Tom Hayes and wife Sarah Tighe

In this five-part series in the Wall Street Journal, David Enrich lays out the prosecution of LIBOR trader Tom Hayes.  “The Unraveling of Tom Hayes” bears a careful read.

 


Friday cocktails: Barware, Jameson Slushies, Perfect Martinis and Emerson, Lake & Palmer

A brief guide for the weekend.

(Hennie Haworth)

(Hennie Haworth)

It’s hard to operate a home bar without good barware, as explained in All the Essential Barware You Need at Home

 

Inside-Job-e1432667629585From Liquor.com, a short on a bourbon-based cocktail (at right) called The Inside Job.

 

Lots of anti-oxidants.

Lots of anti-oxidants.

Perhaps a bit frothy, but a Dye House cocktail (left) (from Samuel Nelis, Waterworks Food + Drink, Winooski, Vermont via Gaz Ragan) looks cool.

 

The Jameson Slushie

The Jameson Slushie

From Gastronomista, this idea (right) beats all hell out of an Icee: Jameson Slushies.

 

 

My mother has always enjoyed an old-fashioned at Christmas.  See this below from Liquor.com:

And finally, from Crave, a return to The Perfect Martini, which is likely a bit sweet for many these days.

Very retro.

Very retro.

At the end of the week, I am always grateful for the many blessings bestowed upon me.  I am reminded that “it is better to take refuge in the Lord than to trust in princes” (Psalm 118:9).

Which, in turn, puts me in mind of Emerson, Lake & Palmer’s “Lucky Man” (1970):

 

 


The Five Best Ways for Your Client’s Employees to Get Indicted

A glass of ice water, please.

A glass of ice water, please.

The nice folks at the Birmingham Bar Association (and white-collar criminal defense lawyer Steve Shaw in particular) invited me to deliver a lunchtime CLE on a white-collar subject of my choice.  The topic ended up being “The Five Best Ways for Your Client’s Employees to Get Indicted.”

One could come up with more ways your client’s employees could get indicted, but life is short.

Hunting for 18 U.S.C. Section 1001.

Hunting for 18 U.S.C. Section 1001.

Here is the handout: The Five Best Ways for Your Client’s Employees to Get Indicted. Download it.  It’s not legal advice, but it has some fairly useful material about bribery, obstruction and honest-services fraud in the Eleventh Circuit, as well as quotes from Men In Black (1997).  We spent a fair amount of time on practical considerations in working with businesspeople involved in white-collar investigations, including this piece: Stalking Horses, Pitchfork Crowds, Narrow Neckties, Mr. Rogers’s Slippers and Indicted Employees: 6 Steps To Dodge Being Deweyed.

All about the ratings.

All about the ratings.

And, there was even a caution against the “Efrem Zimbalist, Jr. Syndrome,” named after the star of the old television series The FBI.  Watch this 140-second video on the Efrem Zimbalist, Jr. Syndrome.


Wine, White-Collar Crime and You.

A conference with elan.

A conference with elan.

The ABA Southeastern White Collar Crime Institute near Atlanta on September 10 and 11, 2015  is a good event at a nice place (Chateau Elan) for white-collar practitioners.

Sharman speaking again?

Sharman speaking again?

They are letting me speak at the conference, but do not let that dissuade you from attending.  The faculty list is comprehensive and the topics timely.

Plus, it’s at a winery.

Here are some of the topics:

The Effective Use of Criminal Discovery: Tactics for the Defense and the Government
Litigating Prosecutorial Conduct: The Line Between Ethics and Tactics
The Foreign Corrupt Practices Act (FCPA) and Other International Bribery Crimes: When Other Nations Join the Enforcement Party
Supreme Court Update and Other Notable Developments in Criminal Law
A View from the Top: A Look at Federal Law Enforcement Initiatives
You Can’t Always Get What You Want: Sentencing Issues in Economic Crimes
and the Limitations of USSG § 2B1.1
White Collar Criminal Enforcement: Is the Government More Willing Than Ever To Go To Trial?

 


The Myth of Club Fed

All included.

All included.

For those who refer in cavalier fashion to white-collar convicts and “Club Fed,” consider this New York Times article on Raj Gupta’s federal prison experience: Onetime Allies on Wall Street Have Uneasy Prison Reunion After Insider Trading Trials.  In particular:

In their heyday, Raj Rajaratnam and Rajat K. Gupta were business partners who lent each other a helping hand.

The two men were very different. Mr. Rajaratnam was a high-rolling hedge fund manager who loved to take risks, while Mr. Gupta was a consultant educated at Harvard Business School who worked all his life at one firm, McKinsey & Company.

Years after their closely watched insider trading trials and two of the biggest victories for prosecutors in the government’s crackdown on insider trading on Wall Street, the men find themselves under the same roof: In a new development, both are now at the main prison at the Federal Medical Center Devens in Ayer, Mass., northwest of Boston, with 1,000 other inmates.

Stroll around the grounds until you feel at home.

Stroll around the grounds until you feel at home.

In theory, “federal medical centers” (or “FMCs”) are at the more civilized end of the Bureau of Prisons structure.  The BOP website for FMC Devens refers to it as “an administrative security federal medical center with an adjacent minimum security satellite camp.”  Sounds nice enough.  Like a tough post office, perhaps.

The reality is different:

Though Mr. Gupta earned inmates’ respect, prison conditions can seem harsh to those accustomed to civilian life. White-collar convicts are typically treated better than murderers, but the main prison in Devens houses inmates of all security levels; until recently, it was home to Dzhokhar Tsarnaev, the Boston Marathon bomber.

When Mr. Gupta arrived in June 2014, he was assigned to Devens’s minimum security camp, which houses 135 inmates. But in April, Mr. Gupta was sent for six weeks to the Special Housing Unit, or SHU (pronounced “shoe,” as fans of the Netflix series “Orange Is the New Black” know), as punishment. His infraction was having an unauthorized item: an extra pillow.

Inmates often grab the pillows of departing prisoners. Mr. Gupta hoped an extra pillow would help with a bad back.

* * * *

It was the second time that Mr. Gupta was sent to “the hole,” as the SHU is sometimes called. Last summer, Mr. Gupta was dispatched to the unit for sitting during the inmate count.

“He was actually tying his shoe,” Mr. Morgan said.

Inmates in the unit are kept in near solitary conditions. They are allowed out of their cells only for one hour of exercise a day, said Michael Santos, a former federal prisoner who is now a consultant. A light is on 24 hours a day for observation.

When inmates are moved for a visit, they must wear orange jumpsuits and are restrained in an elaborate procedure. “There is a cutout door within the cell door,” Mr. Santos said, through which inmates are also fed. “The inmate is told to back step to the door, squat down, and then he will be told to put his arms behind his back, and through that slot, the guard will put handcuffs on him,” he said.

The guard opens the door only when the inmate has been cuffed.

At a disciplinary hearing in May, Mr. Gupta’s privileges such as visiting rights were revoked, people briefed on the situation said. When Mr. Gupta’s elder sister traveled from India to see him, he offered to serve more time if she could visit, these people said. His requests were denied. She returned to India without seeing her brother.

The shoe is on the white-collar foot.

The shoe is on the white-collar foot.

Securities fraud is unlawful and merits punishment, but we should bear in mind that no Bureau of Prisons facility is a resort.

Not only is prison no respite for the convicted, the entire criminal-justice process is life-destroying for the white-collar defendant from the git-go, even if the person or company is not charged or, if charged, ultimately acquitted.  Here are a few thoughts in one minute and 52 seconds:

 

 

 

 

 

 


FIFA Indictments, Corporate Compliance, Alfred Kinsey and Robert Lee

Shaving too close.

Shaving too close.

Law360’s Zachary Zagger has a nice piece on the FIFA prosecution and quotes, among others, Jack Sharman:

“Given this many defendants and the fact that there is going to be at least some who are going to cooperate, it would not surprise me if there wasn’t a second wave of charges or people coming out of the woodwork, people you have not heard of yet,” said Jackson R. Sharman III, a white collar criminal defense attorney with Lightfoot Franklin & White LLC.

“If it is going to survive, it is going to have to have a more rigorous compliance structure than some of the items that have come across thus far,” Sharman said suggesting that it may need to create something like a corporate board of directors or an inspector general-type official to address compliance issues directly.

Here is a link to the full article:  3 Things To Watch Out For In The FIFA Corruption Case

Compliance drill.

Compliance drill.

We have spoken with the Wall Street Journal previously about the FIFA case: FIFA Indictments and the Notion of Global Compliance:

Jackson Sharman, a white collar specialist at Lightfoot, Franklin & White LLC, says that the case shows that the notion of a swelling, global compliance culture may be exaggerated. Attorneys and compliance professionals often make the mistake of believing their concerns about bribery are representative of the organizations where they work, he said. “It’s dangerous to assume that a legal regime is being internalized by everybody, because clearly it’s not,” Mr. Sharman said. “Assuming that others think the same way as you think can be fatal.”

Setting others aside, it can also be fatal to your enterprise if you fail to understand how you going about thinking through compliance questions.

Robert Edward Lee

Robert Edward Lee

Much has been made recently of Confederate images and names.  On the compliance front, I invoked Robert E. Lee last year in a post about McKinsey, General Lee and the Culture of Compliance:

Except perhaps for “paradigm” and “silo,” the word “culture” is one of the most abused in the vocabulary of compliance, ethics and consultants.  (I once heard a consultant say that he needed “a high hover over the silos.”  I thought it an ironic mash-up about drones and agriculture; it was not).  Yet, “culture” has a meaning in the broader world; in commerce; and in compliance.  “Culture” represents a gear-shift in compliance and ethics, and can be smooth or bone-rattling.

 

Not Robert Edward Lee.

Not Robert Edward Lee.

(For the careless reader, note that the title refers to McKinsey, the consulting firm, not to Alfred Kinsey, the sex researcher).

 

 

Global or domestic, “compliance” comes in three flavors — criminal, civil and regulatory.  Sometimes, you get a mouthful of all three at once.

Why is that?  And, what to do about it?

A few thoughts here: