Tuesday, April 28, 2009

Bernie Madoff Would be Proud- More Fraudsters Afoot

Lawyers Line Up for New Investor Fraud Cases in Fla., Pa.
by Brian Baxter, AmLaw Daily

Bernie Madoff and Allen Stanford aren't the only accused fraudsters giving Am Law 200 lawyers business these days. This week the SEC charged two investment advisers with orchestrating multimillion-dollar frauds. Dechert, Mayer Brown, Carlton Fields, and Pepper Hamilton are among the firms queuing up to represent the defendants and aggrieved investors. The week began with the SEC unveiling a 22-page complaint against Donald Anthony Walker Young, accusing him of running a Ponzi scheme and misappropriating more than $23 million from investors. On Tuesday the SEC froze the assets of Acorn Capital Management, based in Kennett Square, Pennsylvania (Young was principal at the firm). The SEC has stated that most of those who invested with Young are from the Philadelphia area. The charges have shocked the residents of idyllic Chester County, Pa., where the 38-year-old Young lived and enjoyed horseback riding and foxhunting. (Ironically, Young also lived part-time in Palm Beach, Fla., where he was a close neighbor of Madoff's, the Palm Beach Daily News reports.) Dechert partner Paul Huey-Burns in Washington, D.C., a former attorney with the SEC's Division of Enforcement, reportedly was representing Young. But when reached on his cell phone on Friday, Huey-Burns told us that while he's represented Young in the past, he's no longer involved in this case as it pertains to the SEC charges.

Pepper Hamilton partner Cuyler Walker in Berwyn, Pa., is representing several investors claiming to be victims of Young's alleged Ponzi scheme. He declined to disclose the names of those investors but said they were cooperating with investigators. "There is a process the SEC is following, and we are seeing how that could play out," Walker told The Delaware County Daily Times. Prosecutors have yet to file criminal charges against Young. Nearly 1,200 miles to the south, the SEC charged Naples, Fla., investment adviser William Gunlicks and his firm, Founding Partners Capital Management, with defrauding investors by misrepresenting the nature of their $550 million in investments. The agency requested and received an emergency asset freeze from U.S. district court judge John Steele in Fort Myers, Fla., who appointed Gray Robinson partner Leyza Blanco in Miami to be receiver for Founding Capital and several subsidiary funds.
Founding Capital has retained Mayer Brown's Sean Casey, former deputy chief of the business and securities fraud unit at the U.S. attorney's office in Brooklyn, for the SEC case. Casey, who joined the firm in February, also previously served as senior counsel in the SEC's enforcement division. (Casey declined to comment.)

The SEC claims that Gunlicks and Founding Partners maintained that their funds had audited financial statements for 2007 when they did not. Gunlicks, whom the SEC accuses of using investor funds to pay personal expenses, has tapped Carlton Fields partner Michael Pasano in Miami for counsel.

Friday, April 3, 2009

Blagojevich Charged With 16 Corruption Felonies

The New York Times has an update on the Blago the Clown story:

By MONICA DAVEY and SUSAN SAULNY. Published: April 2, 2009
CHICAGO — Rod R. Blagojevich, the ousted governor of Illinois, used his chance to fill the Senate seat vacated by Barack Obama as one more money-making plan in a vast racketeering scheme, federal prosecutors said Thursday, an operation they portrayed as the “Blagojevich Enterprise.” In a 19-count indictment, prosecutors said the “primary purpose of the Blagojevich Enterprise was to exercise and preserve power over the government of the State of Illinois for the financial and political benefit of” Mr. Blagojevich, his family and his friends.
Running 75 pages, the indictment had been expected for nearly four months, since Mr. Blagojevich was arrested. The former governor, a second-term Democrat whose political career has come apart, was charged with 16 felonies, including racketeering conspiracy, wire fraud, extortion conspiracy, attempted extortion and making false statements to federal agents. Five of his closest advisers — his brother, one of his top fund-raisers, two of his former chiefs of staff and a Springfield businessman — were also charged with crimes.
Mr. Blagojevich, who was believed to be vacationing with his family near Walt Disney World in Florida when the indictment was announced here late Thursday, issued a statement through his publicist. “I’m saddened and hurt, but I am not surprised by the indictment,” he said. “I am innocent. I now will fight in the courts to clear my name.”
The indictment lays out a broad pattern of corruption spanning from before Mr. Blagojevich was elected governor in 2002 to the day of his arrest, Dec. 9. He used his official position, the indictment suggested, to seek financial gain in nearly every element of government work, from picking members of state commissions to signing legislation.
Mr. Blagojevich sought a return on deals to give money to a hospital, to approve legislation helpful to racetrack owners, to pick a particular candidate to fill the Senate seat and, according to the indictment, from a United States representative who was pressing for a $2 million grant for a publicly supported school.
The indictment describes the member of Congress as United States Congressman A, one of a series of unidentified public officials listed throughout the document only by letters of the alphabet. White House officials confirmed that Rahm Emanuel, a former House member who is President Obama’s chief of staff, was Congressman A.
In 2006, when Congressman A was making inquiries about the status of state grant money intended for the school, Mr. Blagojevich sent a message that a brother of the representative (apparently, officials said, Ari Emanuel, an agent in Hollywood) needed to have a fund-raiser for Mr. Blagojevich, the indictment says. Mr. Blagojevich told an employee not to release the grant money, already in the state’s budget, until the governor gave further notice. According to the indictment, the fund-raiser never occurred.
Then last year, the indictment says, Mr. Blagojevich seemed to envision multiple, varying plans for how he might secure money or win a high-paying job through his choice of who would fill Mr. Obama’s seat. Among them, the documents say, Mr. Blagojevich believed he might get $1.5 million in campaign contributions from an associate of one person, identified only as Senate Candidate A, who hoped to receive the appointment.
In December, at the time of Mr. Blagojevich’s arrest at his home on the North Side of Chicago, Patrick J. Fitzgerald, the United States attorney for the Northern District of Illinois, said he had gone forward with a criminal complaint — not a formal indictment after a review of the case by a grand jury — because telephone calls intercepted by agents had forced the authorities to move quickly to stop what Mr. Fitzgerald described as a crime spree in progress. At that point, the Senate seat, now held by Roland W. Burris, was still vacant.
Some legal experts had suggested that Mr. Fitzgerald’s choice might signal that he did not yet have a prosecutable case in hand; some raised broader questions about the strength of his case and the difficult legal distinction between illegal acts and simply unseemly political talk.
But legal experts said that the scope of the indictment on Thursday showed no signs that prosecutors were backing away from their case.
“It weaves together all the series of acts we’ve all been hearing about,” said Leonard L. Cavise, a professor at the DePaul University College of Law who has expertise in criminal defense. “It’s broad ranging. It will be a very complex trial.”
Some of the most serious counts against Mr. Blagojevich carry prison sentences of as long as 20 years.

Ethical Attorney Comes out on Top in Ted Stevens Case

The American Law Litigation Daily reported on April 3, 2009 that Brendan Sullivan, Jr. of Williams & Connolly is their Litigator of the Week. Alison Frankel reports:
"Every two years, when The American Lawyer conducts its Best Litigation Department contest, we talk to lots of opposing counsel--the lawyers who've appeared on the other side of cases our finalists tell us they've won. You might be surprised at what we hear. Opposing counsel occasionally have pretty nasty things to say, accusing the other side of exaggeration, misstatement, overaggression, and, sometimes, outright misconduct.

Except when Williams & Connolly is the firm on the other side. We have never heard a lawyer on the other side of a case from Williams & Connolly criticize the firm that's led by our Litigator of the Week, Brendan Sullivan, Jr. W&C has adopted Sullivan's rigorous standard of behavior, which demands that lawyers fight hard but always within the bounds of the rules of procedure. Sullivan and the other firm leaders train their lawyers to litigate honorably.

That's why Sullivan's outrage at the prosecution's missteps in the political corruption case against former Alaska senator Ted Stevens was so genuine. As we noted the last time we named him Litigator of the Week
http://editorial.incisivemedia.com/c/1LzOi4H5vKcHyEnAN , Sullivan was deeply aggrieved by the government's lapses, and after the trial, he sent a 16-page letter to then-Attorney General Michael Mukasey, calling for the Justice Department to investigate its own team. "His zealous advocacy," we predicted, "may yet get Stevens off the hook."

On Wednesday, it did: Attorney General Eric Holder announced his decision to drop charges against Stevens
http://editorial.incisivemedia.com/c/1LzOHj21jyzYJoGnA , citing additional evidence that prosecutors hid exculpatory material from Stevens and Williams & Connolly.

Sullivan, who is notoriously reluctant to talk to reporters, didn't respond to our request for an interview. But he did send us his press release on Holder's announcement
http://editorial.incisivemedia.com/c/1LzP6xmX7mXfU8Zan . It's unlike any other press release we've received, and it's well worth reading. Not only does Sullivan mince no words in criticizing the government, which he accuses of "stunning" misconduct, he also identifies "heroes in this story": the trial judge, Emmet Sullivan, the Justice Department lawyers who investigated the conduct of the Stevens prosecution team, and Eric Holder, whom Sullivan calls "a pillar of integrity in the legal community."

But he doesn't stop there: "[Holder] has demonstrated the kind of leadership that we defense lawyers seek and that the Department of Justice desperately needs. Ineffective leadership permits this type of prosecutorial misconduct to flourish."

The same can be said of leadership on the private side. And through his conduct in the Stevens case, Sullivan leads by example.

Wednesday, April 1, 2009

Ballad of Timothy Geithner

Attorney Anne McKinney sings a funny parody about Mr. Geithner's tax woes and poor ethical decisions. Over half a million youtube.com viewers have had a chuckle at this creative parody. Follies fan's are sure to enjoy it as well.