March 21, 2013

Supreme Court of the United States says: The Holding of Padilla v. Kentucky Will Not Apply Retroactively

In United States v. Chaidez, No. 11–820, (February 20, 2013). The Supreme Court of the United States held that it’s earlier decision in Padilla v. Kentucky, holding that the Sixth Amendment requires defense attorneys to inform criminal defendants of the deportation risks of guilty pleas, does not apply retroactively to cases already final on direct review.

Roselva Chaidez came to the United States from Mexico in 1971; she became a lawful permanent resident in 1977. In 2003, she was indicted in the U.S. District Court for the Northern District of Illinois on three counts of mail fraud in connection with an insurance scheme. On the advice of her attorney, Chaidez pleaded guilty and received a sentence of four years of probation. The U.S. government initiated removal proceedings in 2009 under a federal law that allows deportation of any alien who commits an aggravated felony. Chaidez’s attorney never told her that pleading guilty could lead to her deportation.

Chaidez filed for a writ of coram nobis, arguing ineffective assistance of counsel. While this motion was pending before the district court, the U.S. Supreme Court issued its decision in Padilla v. Kentucky, holding that it is ineffective assistance of counsel when an attorney fails to advise a client that he or she may face deportation as a result of pleading guilty. The district court concluded that Padilla did not announce a new rule, so its holding applied to Chaidez's case. The U.S. Court of Appeals for the Seventh Circuit reversed, holding that Padilla does announce a new rule and is not retroactively applicable in this case.

The Supreme Court held that the Padilla ruling created an entirely new rule relating to whether advice about deportation fell under the scope of the Sixth Amendment right to counsel. Because the Court considered this rule separately from previous cases, it was considered a new rule and therefore could not retroactively apply to already decided cases.

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September 10, 2012

Fourth Circuit Holds that Money Laundering Applies to the Profits of Crime, Not the Expenses

In United States v. Cloud, 680 F.3d 396; 2012 U.S. App. LEXIS 10946, The United States Court of Appeals for the Fourth Circuit reversed Defendant William Roosevelt Cloud’s money laundering convictions, applying State v. Santos, 553 U.S. 507 (2008). Cloud’s convictions all stemmed from a complex mortgage-fraud scheme in which Cloud would dupe buyers with good credit into purchasing property as an ostensible joint-real estate investment with Cloud; unbeknownst to the buyers, however, the properties had already been “flipped” by Cloud who was making a profit on each deal and who had in his pocket a group of lawyers, loan officers, and mortgage brokers – all of whom were perpetuating the conspiracy.

Cloud was indicted for mortgage fraud and money laundering. The mortgage fraud charges stemmed from Cloud encouraging his buyers to make false statements on their mortgage applications. The money laundering charges arose from Cloud paying a number of people to help him to find home buyers and facilitate their real estate closings. Cloud was convicted by a jury and sentenced to 324 months' imprisonment.

On appeal, Cloud argued that the government failed to prove the money laundering charges because it did not show that the transactions involved the profits of unlawful activity as required by Santos.

The appellate court agreed, stating:

“Cloud's money laundering convictions are based on payments to recruiters, buyers, and other coconspirators for the role each person played in the mortgage fraud scheme. Cloud's mortgage fraud depended on the help of others, and their help, in turn, depended on payments from Cloud. Such payments are no different than ‘the felon who uses the stolen money to pay for the rented getaway car’ or ‘the initial recipient of the wealth’ in ‘any wealth-acquiring crime with multiple participants . . . [who] gives his confederates their shares.’ Santos, 553 U.S. at 516 (plurality opinion). Because Cloud's money laundering convictions on Counts 28-33 were based on paying the ‘essential expenses’ of his underlying fraud, we find a merger problem.”

Applying the precedent of Santos, the Court reversed defendant's money laundering convictions.

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September 6, 2012

Fourth Circuit Finds No FBAR Penalty Exceptions for Voluntary Disclosure and Plea Bargains

In U.S. v. Williams, 2012 U.S. App. LEXIS 15017; 2012-2 U.S. Tax Cas. (CCH) P50, 475, the United States Court of Appeals for the Fourth Circuit held that a taxpayer could be liable for significant civil penalties for failing to report interest in foreign bank accounts. The United States brought an enforcement action to collect the civil penalties assessed against defendant taxpayer Williams, pursuant to 31 U.S.C.S. § 5321(a)(5), for his failure to report his interest in two foreign bank accounts by failing to file a completed form TD F 90-22.1 (FBAR) for tax year 2000. The U.S. District Court for the Eastern District of Virginia, at Alexandria, entered judgment in favor of the taxpayer. The United States appealed.

By way of background, the FBAR is required to be filed by U.S. persons, which include U.S. citizens, resident aliens, trusts, estates, and domestic entities that have an interest in foreign financial accounts and meet the reporting threshold. The total threshold is also much lower than with Form 8938, being $10,000 at any time during the calendar year. The penalties associated with failure to file the FBAR are also more severe. If the failure to file is determined to be non-willful the penalty is $10,000, but if the failure to file is “willful,” then the penalty for violating the law is up to the greater of $100,000 or 50 percent of account balances.

In the instant case, the district court held that the United States failed to establish that Williams willfully violated 31 U.S.C.S. § 5314. But on appeal, the Court found that Williams’ signature on his 2000 federal tax return was prima facie evidence that he knew the contents of the return. Williams made a conscious effort to avoid learning about reporting requirements, and his false answers on both the tax organizer and his federal tax return evidenced conduct that was meant to conceal or mislead sources of income or other financial information. This conduct constituted willful blindness to the FBAR requirement. Williams’ guilty plea allocution further confirmed that his violation of § 5314 was willful because the taxpayer acknowledged that he willfully failed to report the existence of two foreign bank accounts to the Internal Revenue Service or the Department of the Treasury as part of his larger scheme of tax evasion, and this failure was an admission of violating § 5314. At a minimum, Williams’ undisputed actions established reckless conduct, which satisfied the proof requirement under § 5314. The district court clearly erred in finding that the taxpayer did not willfully violate § 5314.

The judgment of the district court was reversed and the case was remanded for further proceedings.

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April 26, 2012

Employee Who Used Work Computers to Steal Trade Secrets Secures Dismissal of Charges

In United States v. Nosal, No. 10-10038, 2012 U.S. App. LEXIS 7151, the United States Court of Appeals for the Ninth Circuit held that theft of trade secrets by an employee using his work computer did not qualify as a federal crime under the statute used to charge him. The Court upheld the ruling of the United States District Court for the Northern District of California, which dismissed five counts of an indictment against defendant for failure to state an offense pursuant to the Computer Fraud and Abuse Act (CFAA), 18 U.S.C.S. § 1030.

Defendant David Nosal used to work for Korn/Ferry, an executive search firm. Shortly after he left the company, he convinced some of his former colleagues who were still working for Korn/Ferry to help him start a competing business. The employees used their log-in credentials to download source lists, names and contact information from a confidential database on the company's computer, and then transferred that information to Nosal. The employees were authorized to access the database, but Korn/Ferry had a policy that forbade disclosing confidential information. The government indicted Nosal on twenty counts, including trade secret theft, mail fraud, conspiracy and violations of the CFAA. The CFAA counts charged Nosal with violations of 18 U.S.C. § 1030(a)(4), for aiding and abetting the Korn/Ferry employees in "exceed[ing their] authorized access" with intent to defraud. Nosal filed a motion to dismiss the CFAA counts, arguing that the statute targets only hackers, not individuals who access a computer with authorization but then misuse information they obtain by means of such access.

The district court granted the defense motion to dismiss these charges, and the Court of Appeals for the Ninth Circuit upheld that ruling. Chief Judge Alex Kosinski noted that the phrase “exceeds authorized access” in the CFAA does not extend to violation of use restrictions. The Court further held that the CFAA was a statute meant to punish hacking – the circumvention of technological access barriers – not misappropriation of trade secrets. Finally, the Court stated that if there was any doubt about whether Congress intended the CFAA to prohibit the conduct in which defendant engaged, then the court had to choose the interpretation least likely to impose penalties unintended by Congress.

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November 22, 2010

“Mini-Madoff” Sentenced to 14 Years in Prison

Florida hedge fund manager Arthur Nadel recently was sentenced to 14 years in prison, stemming from a $162 million Ponzi scheme. Nadel, 77, had pled guilty to 15 counts of securities fraud, mail fraud and wire fraud. According to prosecutors, Nadel had defrauded investors by falsely claming that he was a successful attorney and trader, only later to spend their money to furnish his lavish lifestyle.

Nadel will serve his sentence at the same federal prison in North Carolina that houses famed inmate and Ponzi mastermind Berni Madoff. Madoff, 72, pled guilty to fraud charges last year after cheating investors out of billions of dollars. He is currently serving a 150-year sentence. Prior to surrendering to authorities in 2009, Nadel went on a two-week, cross-country trip, during which time he communicated in a letter to a family member that he anticipated that the press would call him “mini-Madoff”.”

All persons charged with crimes are entitled to the protections afforded by the United States Constitution. An experienced criminal defense attorney helps to ensure that a defendant’s rights are protected before, during and after a trial. If you have been charged with or convicted of a criminal offense, you should consult with a criminal defense attorney immediately. For a confidential consultation, contact the Law Offices of Marc Neff at (215) 563-9800 or via email at marc@nefflawoffices.com.

November 19, 2010

“Massive Frauds” on the Rise

An FBI official recently reported to the U.S. Senate Judiciary Committee that the bureau has uncovered “massive frauds” in its continuing effort to fight financial crime. Kevin Perkins, Assistant Director of the FBI’s Criminal Investigative Division, reported that new corporate fraud cases, including newly identified Ponzi schemes, are up by 111 percent. In addition, high-yield securities frauds have grown by more than 200 percent.

Several high-profile securities fraud cases have surfaced in just the past few months alone. In June, former chairman of Taylor, Bean, and Whitaker, a large mortgage origination company, was charged with a $1.9 billion fraud that contributed to the failure of Colonial Bank, one the United State’s largest banks and the sixth-largest bank failure in the country. In July, a managing partner at WG Trading and Westridge Capital Management pleaded guilty to his participation in a $700 million scheme that defrauded charitable and university foundations as well as pension and retirement plans. In September, the owner and former chief executive officer of Capitol Investments pleaded guilty to an $880 million Ponzi Scheme involving his New Jersey Firm.

Perkins also reported that in the last three years, the number of mortgage fraud cases seen by the FBI has steadily climbed from 1,200 in 2007 to over 3,000 in 2010. Of these cases, nearly 70 percent represent losses to financial institutions and other victims exceeding $1 million. In many of these cases, according to Perkins, “the loss far exceeds $1 million.” In response to the growing number of mortgage fraud schemes, the government has undertaken “Operation Stolen Dreams”, a take-down of mortgage fraud schemes throughout the country by President Obama’s interagency Financial Fraud Task Force.

All persons charged with crimes are entitled to the protections afforded by the United States Constitution. An experienced criminal defense attorney helps to ensure that a defendant’s rights are protected before, during and after a trial. If you have been charged with or convicted of a criminal offense, you should consult with a criminal defense attorney immediately. For a confidential consultation, contact the Law Offices of Marc Neff at (215) 563-9800 or via email at marc@nefflawoffices.com.


March 23, 2010

Supreme Court of the United States to ConsiderTwenty Year Old Political Corruption Law

The Honest Services Fraud statute, a tool used by prosecutors in political corruption cases over the past twenty years, may soon be voided or modified by the Supreme Court of the United States due to vagueness and over breadth. The Honest Services Fraud doctrine presumes that a public official owes a duty of honest service to the public who he or she represents. When that public service official breaches that duty by concealing a financial interest, and using the mail, telephone or email to do so, that politician can be prosecuted under the Honest Fraud Services statute, amongst other charges. In the past, some states have used the law to prosecute legislators who accept gifts or jobs from lobbyists who receive public funding. Others have been prosecuted under the doctrine for non-disclosure of certain financial information on financial statements, where it was later found that the official voted against legislation which would have affected the non-disclosed income. Proving a violation of the Honest Services Fraud statute is much easier than other violations, such as bribery.

The Supreme Court is expected to rule on three cases within the next few months, all of which involve the Honest Services Fraud doctrine. Lawyers for the accused have chosen to attack the law itself, citing its vagueness as grounds that the law is unconstitutional. In order for a law to be valid, the law must be written with specificity, so that those required to obey the law know exactly who the law affects and what actions are prohibited. Lawyers argue that public officials for whom the doctrine applies do not understand what actions are, and are not, covered by the law. One lawmaker has been prosecuted for merely accepting free lodging from lobbyists. Others have accepted jobs or have been accused of using their influence to help relatives and friends do the same.

Crimes such as bribery, extortion, and other corruption related violations are legislated specifically; indicating who the law applies to and what elements of the crime must be proven to convict a violator. The Honest Services Fraud doctrine is more of a catchall law, which can be used by prosecutors to more easily gain a conviction or convict a public official where the evidence against said official is not sufficient to sustain conviction for other violations. Many of the officials currently serving time or convicted in the past under the statute were also convicted of more specific crimes such as bribery. However, to the extent that politicians have been convicted solely under the Honest Services Fraud doctrine, a Supreme Court decision to void the law would potentially overturn those convictions.

Supreme Court Justice Antonin Scalia has been quoted as saying a political official could potentially be prosecuted under the Honest Services Fraud doctrine for dropping his name at a restaurant to get a table on a Saturday night. As many judicial officials share in his position, it is expected that the law is either limited by the Supreme Court as to what behaviors are considered illegal, or the law declared unconstitutional as is and Congress be instructed to rewrite new, more specific legislation.

The Law Offices of Marc Neff have over 20-years of experience successfully defending clients charged with fraud and related offenses. If you are under investigation for fraud, or have been charged with a criminal offense, contact our offices immediately. There are defenses available to you, and Law Offices of Marc Neff can assist in developing a successful defense. You may schedule a confidential consultation by calling (215) 563-9800 or by email, marc@nefflawoffices.com

September 9, 2009

United States Court of Appeals Rules Delaware’ Sports Betting Plan Violates Federal Law

A plan which would have allowed single-game betting on all major sporting events at Delaware’s three racetrack betting locations, beginning September 1st, was not allowed to take effect. The United States Court of Appeals for the Third Circuit ruled the plan a violation of a 1992 Federal Law. The Professional and Amateur Sports Protection Act of 1992 outlawed sports betting nationwide, with the exception of a few states. The Act allowed Nevada to continue licensed sports betting and also exempted the sports lotteries conducted by Oregon, Montana, and Delaware. The Act also provided a one-year grace period for states, who had allowed sports betting over the previous ten-year period, to create legislation permitting sports wagering; a clause which was clearly crafted for the State of New Jersey, however the State chose rather to let the grace period lapse. The Act applies to all major sporting events, both professional and amateur, with exceptions for horse and dog racing, and also jai alai, a Spanish sport which has not gained much popularity in the United States.

Delaware wished to institute its sports betting plan in accordance with the PASPA’s exemption for Delaware’s sports lottery; the proceeds to help offset an $800 million state budget deficit. Attorneys for the four major professional sports (football, basketball, baseball, and hockey) argued that allowing betting on single game sporting events would compromise the integrity of the games by promoting game fixing. Attorney Kenneth Nachbar argued the Act’s exemption for the Delaware sports lottery does not allow the State to institute single-game betting, stating “the closer you get to single-game betting, the more you call into question the integrity of what happens on the field or on the court.” Rather, Delaware’s sports lottery, which has not been in existence since 1976, allowed for betting on multiple games via parlay bets. Attorneys for the State of Delaware argued the plan meets the definition of a lottery under the 1992 Act, but to no avail.

Last year, Tim Donaghy, a referee in the National Basketball Association, was charged with crimes relating to betting on single games and passing along inside information to bookies. It is still unknown for sure whether Donaghy, through his position as a referee, affected the outcome of any NBA games he worked. He pled guilty to Federal Fraud charges and was sentenced this summer to fifteen months in prison.

Fraud

Fraud is defined as an intentional deception made for personal gain or to damage another individual. Fraud can be committed in many forms, including tampering with sporting events or other events which invite legal betting. The penalties for committing fraud vary, depending on the type of fraud and the damage caused by the fraudulent activities. The Law Offices of Marc Neff have over 20-years of experience successfully defending clients charged with fraud and related offenses. If you are under investigation of fraud, or have been charged with a criminal offense, contact our offices immediately. There are defenses available to you, and the Law Offices of Marc Neff can assist in developing a successful defense.

May 11, 2009

Third Circuit Follows Olhovsky Decision with another Pro-Defense Opinion in Tomko – Ruling a Lenient Sentence Is Not Unreasonable

One day following the Third Circuit’s precedential opinion in U.S. v. Olhovsky, the Court issued an en banc decision in the case of U.S. v. Tomko, again holding that a lenient, below-guidelines sentence is not unreasonable if supported by mitigating circumstances. In Tomko, the Defendant pled guilty to Federal tax evasion charges; stipulating to a tax loss of $228,557 for work performed on his own home but disguised as expenses to his company via false invoices. At sentencing the District Court looked to the sentencing guidelines which called for a prison term of twelve (12) to eighteen (18) months, as well as a fine. The trial Judge then took into consideration the mitigating factors associated with the case, such as the fact the Defendant was a first-time offender, the Defendant was involved in philanthropic activity, and that imprisonment of the Defendant would pose great risk to the employment of his company’s over three hundred (300) workers. The Judge decided to depart from the guidelines, sentencing the Defendant to three (3) years probation (the first of which to be served under House Arrest), two hundred fifty (250) hours of community service, and a fine of $250,000. Although the sentence was well below guidelines regarding incarceration, the fine was above the range provided by the guidelines ($3,000 - $30,000).

The sentence was appealed by the Government as being too lenient; specifically, the Government felt imposing a sentence of House Arrest to be served in the Defendant’s home, having been improved through the Defendant’s criminal tax evasion, was unreasonable. The Appellate panel reversed the sentence, ruling that the leniency of the sentence was procedurally unreasonable because the District Court had not addressed the necessity for general deterrence of criminal activity, allowing the Defendant to serve his sentence in his mansion; the center of the tax fraud case. The Third Circuit Court of Appeals then granted a rehearing en banc to determine if the panel decision to reverse was correct.

The Court cited to precedence in Gall v. U.S., which established the principle that “the fact that the appellate court might reasonably have concluded that a different sentence was appropriate is insufficient to justify reversal of the district court.” The Court determined that based on the record, the District Judge sufficiently considered the arguments that the Defendant’s offense merited prison time and that by imposing a lesser sentence, a message would be sent that wealthy individuals could “buy” their way out of trouble. Although a dissenting opinion states that the Defendant did not distinguish himself from other tax evaders, the majority decision asserts the mitigating factors considered by the District Judge merited the sentence of probation.

There are many types of white collar crime, including Tax Evasion and Fraud. Attorney Marc Neff has over 20 years experience successfully representing corporate and business executives, professionals, public officials, and others charged with federal white collar crimes. For a confidential consultation, contact our office via phone at (215) 563-9800 or via e-mail at Marc@nefflawoffices.com.

January 16, 2009

White-Collar Fraud Expected to Increase as Recessionary Economy Continues

An economic recession necessitates many changes in the home, in the marketplace, and in Government. For corporate executives, however, the profitability targets of their respective corporations do not change. According to a recent article in Business Week, recessionary times create incentives for corporate execs to cheat, or commit fraud in order to create the perception that they are continuing to meet corporate goals for their shareholders; not meeting revenue and earning targets would likely result in the firing of the executive. The article cites to data from the National White Collar Crime Center, which shows that during the most recent economic recessions (Savings and Loan, 1990, and Internet bust, 2000), white-collar fraud arrests increased by 52% and 25% respectively over the following two-year period.

The New Year began with the first major case of corporate accounting fraud of this recession when Satyam Computer Services, an outsourcing company out of India, was discovered to have a $1 billion discrepancy on their accounting statements. The company had planned to buy-out two Indian construction companies which would have fixed the discrepancy on the company’s balance sheet; however, due to the recession, the company was unable to complete the deal. Nevertheless, the company was portrayed on their financial statements as if the deal had been completed, leading to the $1 billion discrepancy in assets. More notable, but similar, instances of fraud occurred following the last recession, with companies such as Enron, WorldCom, and Tyco being revealed as having “cooked-the-books”.

A web-conference conducted by Deloitte Financial Advisory Services’ Anti-Fraud Consulting Service resulted in a finding that nearly two-thirds of the corporate executives who participated expected an increase in uncovered fraudulent practices during this recession. As corporate executives fight to show that they can manage a corporation successfully in an economic downturn in order to keep their jobs, executives face the “fraud triangle”, or the pressure, opportunity, and rationalization to commit fraud, says Donna Epps from Deloitte. Fraud is much harder to spot when the economy is good because a company can more easily cover their tracks. Currently, the regulatory systems in place are antiquated and may even be corrupted by the fact that some regulators may have even aided the corporations in circumventing the rules. In an effort to create a new regulatory system, more conducive to spotting white-collar fraud, the U.S. Government Accountability Office recommends creating a comprehensive system with clearly defined goals.

According to the FBI, corporate fraud investigation involves the following activities:

(1) Falsification of financial information, including:

(a) False accounting entries;
(b) Bogus trades designed to inflate profit or hide losses; and,
(c) False transactions designed to evade regulatory oversight.

(2) Self-dealing by corporate insiders, including:

(a) Insider trading;
(b) Kickbacks;
(c) Backdating of executive stock options;
(d) Misuse of corporate property for personal gain; and,
(e) Individual tax violations related to self-dealing.

(3) Obstruction of justice designed to conceal any of the above-noted types of criminal conduct, particularly when the obstruction impedes the inquiries of the SEC, other regulatory agencies, and/or law enforcement agencies.

The Law Offices of Marc Neff has successfully represented corporate and business executives, professionals, public officials, and others who have been or could have been charged with a variety of white collar federal crimes such as money-laundering-racketeering.php">RICO, tax fraud, mail fraud, bank fraud, money laundering, etc., for over twenty years. During times in which federal investigations of corporate fraud are at a heightened level, it is important to obtain the assistance of experienced counsel should you come under investigation, or believe that you soon will. For a confidential consultation, please contact Marc Neff by phone at (215) 563-9800 or email Marc@nefflawoffices.com

September 11, 2008

Corruption Trial for Pennsylvania State Senator Begins This Week

Pennsylvania State Senator Vincent Fumo, a member of the Pennsylvania Senate since 1978, will stand trial starting this week on corruption charges. Fumo was indicted nearly a year and a half ago on 139-counts of corruption and related offenses, including but not limited to conspiring to defraud the Senate, conspiring to defraud a South Philadelphia non-profit organization, conspiring to defraud Philadelphia’s Independence Seaport Museum, obstruction of justice, and tax violations. The U.S. Attorney’s office alleges that the fraudulent activities for which Fumo is accused totaled $3.5 million.

Fumo’s trial will begin by the selection of the jury; a pool of two hundred potential jurors has been summoned from Pennsylvania’s Eastern District, which includes Philadelphia, Bucks, Montgomery, Delaware, Chester, Lancaster, Lehigh, Northampton, and Berks. Narrowing the pool down to the final twelve jurors may very likely take an entire week. Once the jury has been selected, the actual trial will begin with the prosecution presenting its case. According to the 267-page indictment, the prosecution will attempt to prove that Fumo would use tax dollars for projects and items related to personal gain, as well as using Senate employees for the same. He is even accused of using Senate money to hire a private investigator to spy on his ex-wife and girlfriends. Fumo allegedly destroyed evidence in an FBI and IRS investigation relating to his operations at the Independence Seaport Museum as well.

In Fumo’s defense, a list of potential witnesses has been produced, which includes important city and state officials such as Governor Rendell, former Philadelphia Mayor Wilson Goode, two former State Supreme Court Justices, current Philadelphia judges, and Representatives Robert Brady and Chaka Fattah. If convicted, the U.S. Attorney is expected to seek a prison sentence of at least 10-years. For Fumo, who is 65-years of age, a conviction could potentially mean a life-sentence.

The Law Offices of Marc Neff have over 20-years of experience successfully defending clients charged with fraud and related offenses. If you are under investigation, or have been charged with a criminal offense, contact our offices immediately. There are defenses available to you, and the Law Offices of Marc Neff can assist in developing a successful defense.


September 4, 2008

Prosecutors Given New Guidelines for Investigating White Collar Crime

On the same day that the United States Court of Appeals upheld the dismissal charges against 13 former KPMG executives due to a finding that their constitutional rights had been violated, the United States Justice Department announced new guidelines for the prosecution of white collar crime. In the KPMG case, federal prosecutors would not allow KPMG to pay the legal fees of its executives. This was just one of the many tactics used in the past by federal prosecutors to compel cooperation from corporations and its individuals. The department faced criticism from corporations, attorney groups, and legislatures over its practice of “cooperate or face indictment”. Often times, cooperation would involve compelling privileged information and testimony from corporate officers, attorneys, etc., and as seen in the KPMG case, restriction on the company from paying legal fees for its officers.

The new guidelines set forth that prosecutors may not undermine attorney-client privilege, consider whether the company is paying the legal fees of its employees, officers or directors being investigated for wrongdoing, and whether a company has made joint defense agreements with other firms or individuals. Prosecutors may also only consider whether a corporation has disciplined employees “that the corporation identifies as culpable, and only for the purpose of evaluating remedial measures or compliance program”, whereas before prosecutors could consider whether a corporation disciplined or fired employees for the purposes of evaluating cooperation. Some critics have called for permanent legislation rather than simply guidelines, including Pennsylvania Senator Arlen Specter, but agree that this is a step in the right direction. Corporate law groups also hope that similar guidelines are adopted by other government agencies, such as the Securities and Exchange Commission.

There are many types of white collar crime, ranging from RICO and Money Laundering to all types of Fraud. Attorney Marc Neff has over 20 years experience successfully representing corporate and business executives, professionals, public officials, and others charged with federal white collar crimes. For a confidential consultation, contact our office via phone at (215) 563-9800 or via e-mail at Marc@nefflawoffices.com.

July 17, 2008

Philadelphia and New York City Defrauded of Thousands of Dollars

Richard Gottfried, an ex-convict, concealed his criminal past in order to obtain employment as a court-appointed sentencing consultant in both Philadelphia and New York City. He advertised himself as a mitigation specialist, offering his services to criminal defense lawyers, promising to help gather information that would benefit defendants at sentencing hearings. In doing so, he was able to cheat the Philadelphia Court system out of nearly $400,000 and New York City Courts out of $60,000. Gottfried admitted to the Philadelphia scheme, but pled not guilty in New York, to charges of grand larceny, offering a false instrument for filing and falsifying business records.

Gottfried was involved in a New Jersey Real Estate scam in 1996, for which he served 20-months of a federal sentence; a crime for which District Attorney dubbed Gottfried a “Great Pretender”. However, he was able to charm himself into a position with the Philadelphia criminal court system. Five years later, he was accused of forging a phony law-degree, a phony psychologist’s license, and forging lawyer’s signatures on invoices which defrauded the city of nearly $400,000. He pled guilty to charges including theft by deception, in February of 2007, and was sentenced to as many as 23-months in prison.

In 2004, Gottfried began working for the New York City Court system and is accused of billing the city for over $60,000 worth of non-existent work relating to 42 defendants, one of which had already closed his case. Gottfried is currently on work-release for the charges he pled guilty to in Philadelphia. He faces a potential 15-year prison sentence if convicted in the New York City case.

The Law Offices of Marc Neff have over 20-years of experience successfully defending clients charged with fraud and related offenses. If you are under investigation of fraud, or have been charged with a criminal offense, contact our offices immediately. There are defenses available to you, and the Law Offices of Marc Neff can assist in developing a successful defense.

July 9, 2008

Mortgage Fraud Increase Leads to FBI Crackdown

The late 1990’s saw the beginning of a housing boom, brought on by Federal programs which made buying a home easier through government-sponsored loan programs; such as Fannie Mae and Freddie Mac. This led to a sharp appreciation in housing values throughout the country; however it also led to a growing rate of mortgage fraud. Mortgage fraud continues to top the list of white-collar crimes throughout the country, and is considered a major factor in the bursting real-estate bubble we see today. Even now that the bubble has burst, we continue to see an increased rate of fraud in the form of foreclosure fraud and subprime shenanigans, says Michael J. Anderson, who oversees the FBI’s white-collar crime division in the Dallas, Texas area.

Federal Agencies have stepped-up their efforts to crack-down on the problem of mortgage fraud. In an operation dubbed “Operation Malicious Mortgage”, 406 people have been charged in 144 different cases throughout the country, between March 1 and June 18 of this year. Over the past 3-years, the FBI’s mortgage fraud caseload has doubled to about 1,400 cases. Although neither Pennsylvania nor New Jersey is considered amongst the top-10 states experiencing mortgage fraud, cases have been brought in the Delaware Valley. The FBI is focusing its efforts on fraud committed by industry insiders, such as appraisers who inflate a properties value for purposes of attaining a loan. During the housing boom, this practice was masked by the fact that housing values were increasing, making the value catch-up to the inflated rate of appraisal. However once the bubble burst, housing values slowed to a halt, making such fraud easily apparent.

According to the FBI, common forms of mortgage fraud include Property Slipping, Silent Second, Nominee Loans/ Straw Buyers, Equity Skimming, Inflated Appraisals, and Foreclosure Schemes. According to Anderson, “Mortgage fraud has continued to be a growing crime trend and it’s just a matter of how quickly can law enforcement catch up.”

Mortgage Fraud is just one area of white-collar crime handled by our offices. Marc Neff has over 20-years of experience successfully defending those accused of fraud and similar white-collar offenses. The Law Offices of Marc Neff can assist in your defense. For a confidential consultation, please contact our office at your earliest co

July 2, 2008

ATTORNEY-CLIENT PRIVILEGE BILL EXPECTED TO PASS U.S. SENATE VOTE WITH EASE

Recently, a piece of legislation which would make it illegal for federal prosecutors to order companies to turn-over privileged documents as part of a cooperation agreement, passed a U.S. House of Representatives vote; and now is backed by a dozen U.S. senators, 32 former federal prosecutors, and coalitions such as the ACLU. The practice of federal prosecutors obtaining privileged information through cooperation agreements has led to the obtaining of information which would otherwise have never been uncovered and in-turn, larger investigations and convictions. The Bill, which would make this practice illegal, has not been described as “pro-company” or “pro-business”, but rather based on the fundamental principles of legal counseling. Attorney-client privilege has always been a staple in our legal system, and the practice of forcing a company to disclose such privileged information contradicts this basic standard.

The Bill comes after a federal judge threw-out several individual indictments against employees of KPMG, after learning that federal prosecutors banned KPMG from paying their employee’s legal fees. The judge ruled such imposition on the individuals as onerous. Stemming from this decision, and similar decisions following the ruling, the Attorney-Client Privilege Protection Act was written; and if passed, would limit the right of prosecutor’s to demand privileged information from companies attempting to seek a plea agreement or deferred prosecution agreement. The Bill would not impose penalties on prosecutors who violate the law, however, it would make information obtained illegally inadmissible. The Bill is expected to pass either before the Senate’s summer recess or soon after the inauguration of the next President.

Attorney-client privilege is a legal concept that protects communications between a client and his or her attorney and keeps those communications confidential. For a confidential consultation regarding current or potential legal issues, contact the Law Offices of Marc Neff at your earliest convenience.