Articles Posted in Public Corruption

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Entrapment is making a comeback.

As a defense I mean. It started making a comeback as a government tactic shortly after September 11 before it migrated to the non-national security law enforcement world.

And the Seventh Circuit appears to be the new home of the entrapment defense as it rises, phoenix-like, on the shores of Lake Michigan. In United States v. Barta, the Seventh Circuit again affirmed the new strength of an entrapment defense in that part of the country.

If you remember one quote from this opinion, remember this one: “The point is that the government is supposed to catch criminals, not create them.”

the-venus-flytrap-4-1234316-m.jpgMr. Barta’s Business

James Barta founded a company called Sav-Rx. Sav-Rx was a “prescription benefit management business.” I believe that means that they help businesses that offer a prescription benefit to their employees with that.

Mr. Barta Meets with the FBI (Unwittingly)

In any event, Mr. Barta came to meet with a man named Castro. Or, referred to as Castro, since he was actually an undercover FBI agent. Castro was known as a guy who could deliver contracts with people at Los Angeles County. He delivered those contracts by bribing them.

When Mr. Barta first met with Castro he told him, right off the jump, “I’m not trying to sell you anything.” He said he was merely there to tell Castro what Sav-Rx does.

Castro told Mr. Barta that he could connect Sav-Rx with the Los Angeles County government because he knew a guy and he’d need to be paid. Barta left twelve minutes after the meeting started.

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Michael Roussel used to be a Captain in the New Orleans Police Department. As you might expect, he was convicted of bribery.

After his conviction at trial, he went to sentencing. The judge determined that an enhancement for receiving more than one bribe was warranted. The Fifth Circuit, in United States v. Rousel, disagreed.

419055_rainy_night_in_the_french_quar.jpgSynergy

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How do you determine the value of a thing?

Normally, in our free-market (or heavily regulated free-market) economy, we think that the value of a thing is set by what people are willing to pay for it.

If I’ll see you my collection of neckties for $10,000, and you’ll pay $10,000 to buy my collection of neckties, then we know my collection of neckties is worth $10,000.

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Former Congressman William Jefferson, a son of New Orleans, will perhaps be best known for having been found with cash – cold, hard, cash – in his freezer.

He was convicted in the United States District Court for the Eastern District of Virginia of eleven charges in connection with a bribery scheme involving his role as a member of Congress and officials in Africa. In a major coup for his lawyer, he was not convicted of the offense involving the cash found in his freezer.

IMG_3793.jpgHe was convicted, alas. And, the Fourth Circuit affirmed 10 of his 11 counts of conviction in United States v. Jefferson.

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A Joke:

What’s the difference between a white-collar investigation and a blue-collar investigation?

In a blue-collar case, the government knows what the person has done, they just don’t know who done it.

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The Supreme Court’s opinion in United States v. Skilling marked a sea change in how the government prosecutes public corruption cases. It used to be that all the government had to prove is that a public figure had a conflict of interest and didn’t disclose it. After Skilling, that is no longer a crime.

As the Third Circuit recently discussed, federal circuit courts are unwinding prior prosecutions of public officials for failing to disclose conflicts of interest since that is no longer a crime.

1223590_notebook_wih_spiral_and_red_cover.jpgLast week, it was the Fourth Circuit’s turn in United States v. Hornsby. The Fourth Circuit reversed Mr. Hornsby’s conviction for honest services fraud, but did not undo his conviction for obstructing justice to hide his honest services fraud.

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Christopher Wright and Andrew Teitelman were friends. As sometimes happens to the best of us, Mr. Wright fell on hard times. He was in the middle of a divorce, and he was out of cash. His mother had just died from cancer. He had a drinking problem that was getting worse.

Mr. Teitelman helped his friend out – he got him into rehab and, as a lawyer, Mr. Teitelman represented Mr. Wright in his divorce proceeding when he could no longer afford his first divorce lawyer. He also represented Mr. Wright in a foreclosure proceeding and, later, in an eviction proceeding. For all this legal work, Mr. Wright paid $350.

1317372_philadelphia_.jpgMr. Teitelman also helped Mr. Wright get housing when Mr. Wright had to move. Mr. Teitelman’s sole client (aside from Mr. Wright) was Ravi Chawla. Mr. Chawla was a developer, who had an empty apartment building. Mr. Teitelman persuaded Mr. Chawla to let Mr. Wright stay in one of the units of that apartment building, for free. Mr. Chawla also tried to send a multi-million dollar real estate deal to Mr. Wright to try to get some money in Mr. Wright’s pocket during this time – Mr. Wright was a realtor – though nothing came of the deal.

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It’s good to be king.

The government, in a criminal investigation, can issue a grand jury subpoena to collect evidence and put witnesses under oath. It can execute search warrants to go into a home or business and take documents. It can cut deals with people it thinks are involved in a criminal enterprise, so that they’ll spend less time – or no time – in prison if they turn in someone else.

Someone fending off a government investigated can’t do any of this.

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Sometimes, the cooperating witness in a case seems a little shadier than the guy who got caught.

Herman Friedman owned an apartment building in West New York, New Jersey. He rented out 16 apartments. One day, a building inspector visited Mr. Friedman’s property. He noticed that the building had only 15 legal units – not 16. The inspector issued a Notice of Violation.

To try to sort this out, Mr. Friedman went to meet with a Construction Code Official, Franco Zanardelli. Perhaps like many New Jersey zoning officials, Mr. Zanardelli was working for the FBI. He was trying to get a sentence reduction under 5K1.1 after he was caught taking bribes in a prior investigation.