White-Collar Crime

  • January 5, 2018
    Guest Post

    by Peter Shane, Jacob E. Davis and Jacob E. Davis II Chair in Law, The Ohio State University Moritz College of Law

    *This piece was originally posted on Take Care.

    Yesterday, lawyers for Paul Manafort, President Trump’s former campaign manager, filed a civil suit in the U.S. District Court for the District of Columbia, seeking to void the appointment of Robert S. Mueller III as special counsel, set aside Mr. Manafort’s indictment, or, at the very least, curtail Mr. Mueller’s authority to investigate whatever business dealings of Mr. Manafort were unrelated to the 2016 presidential campaign.

    Among other charges, Mr. Manafort was indicted on October 27, 2017 on allegations of conspiracy to launder money, conspiracy against the United States, being an unregistered agent of a foreign principal, and making false and misleading statements under the Foreign Agents Registration Act.

  • August 31, 2017
    Guest Post

    by Dan Froomkinstacks on stacks

    The ultra-high-end real estate business, where Donald Trump made a lot of his money, is the easiest place for oligarchs and others to launder large amounts of illicit cash.

    And because several of the lawyers on special counsel Robert Mueller’s team investigating Russian connections with the Trump presidential campaign are specialists in money-laundering and other financial crimes, some observers are speculating that he may be looking into Trump's past business dealings to see if any of those connections are relevant to the matter at hand.

  • August 30, 2017
    Guest Post

    by Winston Paes, Debevoise & Plimpton LLP; former Chief of the Business and Securities Fraud Section at the United States Attorney’s Office for the Eastern District of New YorkMoney

    For better or worse, the U.S. Department of Justice (“DOJ”) is perceived, and has acted, as a global police force whose jurisdiction extends far beyond the shores of the United States. While the DOJ’s enforcement of violations of the Foreign Corrupt Practices Act (“FCPA”) garners much fanfare, the money laundering statutes, specifically, Sections 1956 and 1957 of Title 18 of the United States Code, have resulted in a greater number of prosecutions and expanded the reach of U.S. law enforcement for offenses that barely touch or affect the United States.

  • August 31, 2015
    Guest Post

    by Reuben Guttman, partner, Guttman, Buschner & Brooks, PLLC; member, ACS Board of Directors

    This month, former United States Congressman Michael Grimm will begin an extended vacation courtesy of the United States Federal Bureau of Prisons. Mr. Grimm was awarded an eight month getaway as the prize for a scheme to defraud the Internal Revenue Service while running a New York health food restaurant. He pled guilty last December but was formally sentenced in July, 2015.

    A December 23, 2014 press release issued by the United States Attorney’s Office for the Eastern District of New York stated that “Michael Grimm has now publicly admitted that he hired unauthorized workers whom he paid ‘off the books’ in cash, took deliberate steps to obstruct the federal and state governments from collecting taxes he properly owed, cheated New York State out of workers’ compensation insurance premiums, caused numerous false business and personal tax returns to be filed for several years, and lied under oath to cover up his crimes.”

    As Mr. Grimm counts down his final days of freedom, there is no question that the summer of 2015 is for him a far cry from his summer of 2011 when he was a member of the House Finance Committee and hawked legislation requiring whistleblowers to report wrongdoing to corporate internal compliance groups before disclosing information to the Securities and Exchange Commission. Back then Grimm explained that “most companies want to know if an employee is doing something wrong or hurting customers.” Mr. Grimm’s choice of words was telling. Employees doing something wrong? What about their bosses?

    These days Mr. Grimm is a poster child for why employees should not be required to blow the whistle internally before reporting to government regulators. What is the likelihood that one of Mr. Grimm’s employees would have had their grievances fully and completely addressed if they complained about being paid off the books? The truth is that when the boss is the culprit, internal compliance programs are not a viable means of redress for employees. Enron, Tyco and WorldCom all had internal compliance programs, none of which worked.

  • May 22, 2015
    Guest Post

    by Thomas O. McGarity is a Member Scholar and past president of the Center for Progressive Reform, and a professor at the University of Texas Law School. He is the author of Freedom to Harm: The Lasting Legacy of the Laissez Faire Revival.

    The Wall Street Journal recently devoted nearly two pages of its Saturday Review section to an editorial by Charles Murray of the American Enterprise Institute urging American corporations to violate laws that they deem to be “pointless, stupid or tyrannical” as acts of civil disobedience.  The article, which is a capsule summary of his recently published book titled By the People: Rebuilding Liberty Without Permission,” betrays a profound misunderstanding of the concept of civil disobedience and a deplorable contempt for the laws that Congress and state legislatures have enacted to protect their citizens from corporate malfeasance.

    This is, of course, the same Charles Murray who has made millions of dollars writing poorly documented books like The Bell Curve and Losing Ground, which were designed to allow conservative politicians to feel good about reducing welfare for the poor, limiting immigration from Latin America, and eliminating affirmative action policies.  If for no other reason than that Charles Murray is one of almost-candidate Jeb Bush’s favorite authors, his newest salvo bears close scrutiny.

    The essential underlying premise of the article is that the Code of Federal Regulations is chock full of senseless regulations, the violation of which could not possibly lead to any actual harm to anyone.  This premise is an article of faith for critics of federal regulation, but it has little basis in fact.  The one actual regulation he cites (an OSHA standard requiring railings for exposed stairway floor openings to be 42 inches high) may be far more detailed in its specification than it needs to be, but it is by no means senseless.  As Murray recognizes, it is intended to prevent workers from precipitous falls.

    Murray’s big idea is for companies in various regulated industries to get together and agree to engage in acts of “civil disobedience” by consciously violating regulations they deem senseless.  He points out that regulatory agencies have become so debilitated that they do not have nearly enough inspectors to detect violations of any of their regulations.  The agencies therefore depend to a great extent on voluntary compliance with their regulations.  Murray suggests that if companies just quit voluntarily complying with what they deem to be pointless, stupid or tyrannical regulations, the agencies would probably not penalize them (just as the traffic cop stationed next to a crowded freeway does not try to pull over speeders who are traveling with the flow of traffic), and the world would be a better place.  Those violators that the agencies did prosecute should fight the government tooth and nail to send the message that corporate America will no longer tolerate the injustice of senseless regulation. What’s more, he proposes that as part of this conspiracy to break the law, the corporations should create “defense funds” to which they’d all contribute, to pay the legal fees of the ones who get caught.

    Murray’s idea is a gross perversion of the concept of civil disobedience as the nonviolent violation of a law that the violator deems to be unjust and the willingness to suffer the legal consequences to demonstrate the law’s injustice.