United States: White Collar Roundup (August 2013)

Down to the Wire (Application)

The U.S. Court of Appeals for the Second Circuit in United States v. Goffer examined what to do when the government uses a wiretap to investigate crimes that are not enumerated in the Wiretap Act as predicates for obtaining a wiretap. Title III of the Omnibus Crime Control and Safe Streets Act, 18 U.S.C. §§ 2510 et seq., lists certain predicate crimes for which wiretap orders may be issued. Wire fraud is listed among them; securities fraud is not. The statute allows evidence of nonpredicate offenses to be used in a subsequent prosecution in the absence of bad faith. Goffer stemmed from the investigation into securities fraud in connection with the Galleon Group cases. The government convicted the defendants in part on the strength of wiretap evidence, even though they were charged with securities-fraud offenses, but not wire-fraud offenses. The defendants unsuccessfully sought to exclude the wiretap evidence in the district court. After their convictions, they appealed, arguing the wiretap evidence should have been excluded for two reasons: (1) securities fraud is not a predicate under Title III, and (2) any interceptions of nonpredicates can be admitted only if they were inadvertent. The court of appeals rejected these arguments. In so doing, it noted that the government's wiretap applications were premised on a wire-fraud investigation, but noted that "they expected to uncover evidence of securities fraud (which, they expressly noted, is 'not a predicate offense under 18 U.S.C. § 2516')." This language, the court reasoned, ensured there was no "'subterfuge'" in obtaining the wiretap authorizations.

Reprieve Resulting from Skilling Is Not a Slam Dunk

In United States v. Caso, the D.C. Circuit vacated the conviction of former congressional aide Russell James Caso, Jr., who had pleaded guilty to honest-services wire fraud. In 2005, a consulting firm had solicited Caso's boss in the House of Representatives to take legislative action on two proposals. The firm then hired Caso's wife to work on those proposals and paid her $19,000 over the course of a few months for de minimis services. As a congressional employee, Caso was required to file a form to report his wife's income over $1,000. He did not include her income on the form, even though he swore under the penalties of perjury that the form was accurate. After being charged with wire fraud on an honest-services theory, Caso pleaded guilty. After the U.S. Supreme Court's ruling in Skilling v. United States, Caso sought to vacate his conviction. Caso argued he was "actually innocent" of wire fraud, which excused his procedural default on his habeas petition for not raising the issue on direct appeal. But to avoid the procedural default, one must show "actual innocence" on not only the offense of conviction, but also any other more serious offense the government might have forgone in agreeing to the plea bargain. The district court held Caso did not satisfy the conditions of "actual innocence" because he had not shown he was actually innocent of "not only the crime for which he was charged and convicted . . . but also of the separate, uncharged offense of making a 'materially false . . . statement' to the government." Reasoning that the false-statement charge was less serious than the wire-fraud charge, the court of appeals reversed, holding that Caso was not required to prove "actual innocence" with respect to both. The court held that to determine whether the uncharged crime was more serious than the charged crime, courts should look to the potential penalties under the U.S. Sentencing Guidelines as well as the underlying statutes.

Foreign Forfeiture Fun

The D.C. Circuit's opinion in Luan v. United States waded into the murky waters of interpreting 28 U.S.C. § 2467(d)(3). That statute authorizes federal courts to issue orders to restrain property in the United States at the request of foreign governments to "preserve the availability of property subject to civil or criminal forfeiture under foreign law." The statute also directs that a court can issue the restraining order only if the foreign claimant has the same due process protections as would a domestic claimant were the United States seeking a restraining order under 18 U.S.C. § 983(j). In Luan, a magistrate in Hong Kong had issued an arrest warrant for the claimant and an order restraining the proceeds of his alleged smuggling operation, which amounted to some $23 million. Hong Kong asked the United States to restrain the claimant's U.S. assets. The district court issued the restraining order, and Luan appealed, claiming that the restraining order was improperly issued because it was not "issued in a manner consistent with the procedural due process protections of § 983(j)(1)(A)." The issue before the court was whether Hong Kong's actions provided the protections required by due process. The court of appeals affirmed the restraining order, holding that whatever the requirements of
§ 2467(d)(3) were, the claimant's due process was adequately protected by the filing of the Hong Kong arrest warrant, the restraining order and the adversarial hearing.

Government Forms Don't Amount to Business Records

The Ninth Circuit in United States v. Morales held that government immigration forms could not be admitted as business records under Federal Rule of Evidence 803(6), which excepts such out-of-court statements from the normal hearsay bar. Morales had been driving five illegal aliens who were secreted in her truck in Arizona. When she was stopped by the police, the aliens were discovered. Upon their arrest, each was presented with immigration form I-826, on which each admitted to his or her illegal status and requested deportation. Morales was arrested and charged with various offenses relating to the illegal transportation of aliens. At her trial, the government was allowed to introduce into evidence the forms I-826 as business records to establish that each of the passengers was, in fact, an alien. After her conviction, Morales appealed, claiming these forms were improperly admitted because they were not business records. The court of appeals agreed, holding that because the I-826s were government forms, their admissibility is governed by Rule 803(8), not 803(6), and they failed to satisfy that rule. Alas, the conviction was left unmolested because the court found the error was harmless.

Not Guilty, But Hardly Innocent

The Seventh Circuit in Pulungan v. United States clarified that a judgment of acquittal is not the same as a finding of innocence. In this case, Doli Syarief Pulungan had been prosecuted for attempting to export defense articles without a license in violation of 22 U.S.C. § 2778. He spent 23 months in prison both pretrial and after the jury conviction for the offense. On appeal, the Seventh Circuit vacated the judgment, holding there was insufficient evidence to show beyond a reasonable doubt that Pulungan knew a license was required. After his release from incarceration, he sought from the district court a certificate of innocence under 28 U.S.C. § 2513, which would allow Pulungan to obtain compensation under 28 U.S.C. § 1495 for the period of his incarceration. The district court gave him the certificate, ruling that the court of appeals opinion showed he was innocent. The United States appealed, and the Seventh Circuit made plain that a finding of insufficient evidence to support a conviction is not a finding of innocence for the purposes of § 2513. As the court put it, "[a] conclusion that the prosecutor did not prove a charge beyond a reasonable doubt differs from a conclusion that the defendant is innocent in fact." The court also proffered its view of Pulungan's case by concluding, "[h]e is now the plaintiff in civil litigation, so the burdens of production and persuasion are his. If he decides not to testify, that would be a good basis for an adverse inference."

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions