United States: White Collar Roundup - March 2016

What Makes Forfeiture Excessive?

When sentencing defendant Benjamin Viloski for his involvement in a kickback scheme, District Judge David N. Hurd "declined to consider Viloski's age, health, and financial condition in determining whether [his] previously issued forfeiture order of $1,272,285.50 was unconstitutionally excessive." On appeal to the U.S. Court of Appeals for the Second Circuit in United States v. Viloski, the court addressed whether that declination was an error. The court held that "a [district] court reviewing a criminal forfeiture under the Excessive Fines Clause may consider . . . whether the forfeiture would deprive the defendant of his future ability to earn a living." In so holding, the court folded this factor into the other four proportionality factors to be considered when analyzing a penalty under the Excessive Fines Clause: (1) "the essence of the crime" and "its relation to other criminal activity," (2) "whether the defendant fits into the class of persons for whom the statute was principally designed," (3) the maximum possible fine, and (4) the "nature of the harm" the defendant caused. As to the heart of Viloski's argument, however, courts should not consider a defendant's "personal circumstances" such as age, health or financial condition. 

FCPA Settlement With a Kicker: The First SEC Individual DPA

The SEC announced a resolution of civil and criminal actions against PTC Inc. and two of its Chinese subsidiaries for violating the Foreign Corrupt Practices Act (FCPA). According to the SEC press release, PTC self-reported the violation and agreed to pay $28 million in penalties and disgorgement for the conduct. The allegations are that PTC's Chinese subsidiaries paid for nonbusiness travel and leisure activities for Chinese government officials who were in a position to give PTC business. Over the course of several years, the subsidiaries had spent approximately $1.5 million on the improper travel, gifts and entertainment for the Chinese government officials and reaped approximately $11.8 million in profits. In resolving the case, the SEC also announced its first deferred-prosecution agreement with an individual in an FCPA case. The matter was also criminally prosecuted by the DOJ, which also settled as announced here.

Winning the Indictment Battle But Losing the Reputational War

After realizing that an FBI agent had improperly reviewed privileged e-mails, the government voluntarily dismissed an indictment for healthcare fraud against a cardiac surgeon. The charges had been filed in 2011, and the surgeon's co-defendant was convicted. The surgeon asked the district court to expunge the indictment from the record, but the court refused. District Judge Sue E. Myerscough wrote that "[c]onsequences that result from every arrest and conviction are not the type of unwarranted adverse consequences that justify expunging a defendant's criminal records." The surgeon appealed to the Seventh Circuit, and judges on the panel expressed skepticism during the argument. Circuit Judge Diane S. Sykes said, "That case is long since over. You won. Your client won. You're bringing a request for relief that has no basis." The government contends the court doesn't have jurisdiction to hear the case because the indictment was dismissed. To listen the argument, click here.

DOJ Plans to Spend Big on National Security and Cybercrime

The DOJ has asked for $29 billion for its fiscal year 2017 budget. Attorney General Loretta E. Lynch said, "With investments in priority areas from national security and cybercrime to community policing, this budget will allow us to protect the progress we have made and build on our success in the years to come." The proposed budget calls for an additional $70 million to go toward the DOJ's "litigating components," which include the U.S. attorney's offices and the department's Criminal Division in Washington, D.C. That increase over the 2016 budget would bring the total to $3.502 billion for the litigating units, which is a 4.7 percent increase. As for law enforcement, the budget calls for an additional $1.1 billion for the FBI, DEA, U.S. Marshals Service and ATF, which would bring the total budget for law enforcement up to $14.756 billion. That would be a 6.1 percent increase over 2016. To read the DOJ's press release on the proposed budget, click here. For a PowerPoint presentation with details on the budget allocation and changes from 2016, click here.

Infomercials, Speedy Trials and Criminal Contempt

The Seventh Circuit in United States v. Trudeau affirmed the criminal-contempt conviction and 10-year sentence of defendant Kevin Trudeau, who, according to the panel, "spent his career hawking miracle cures and self-improvement systems of dubious efficacy." Trudeau, whom you might recognize, was sued by the Federal Trade Commission (FTC) for violating consumer-protection laws. To settle one such suit, Trudeau entered into a consent decree, later modified, in which he agreed not to "misrepresent the content of [any] book" in infomercials. But he did. The government raised this violation with the court, which issued a show-cause order for criminal contempt with a six-month cap. Unlike for most offenses, the potential punishment for criminal contempt is limited not by statute but by the terms of the show-cause order issued by the court. In this case, that limit was six months. The case was ultimately transferred to a new judge, however, who issued a new order without any cap. He did that more than 70 days after the initial order was entered. Trudeau argued he could not be tried because of the Speedy Trial Act, which requires trial for a felony to occur within 70 days of indictment. The district court ruled the act did not apply to the initial show-cause order because it had a six-month cap. Trudeau was ultimately convicted of criminal contempt and sentenced to 10 years. On appeal, the Seventh Circuit affirmed. In doing so, it agreed the act did not apply to the initial show-cause order because of the six-month cap, but it did apply to the second show-cause order, which had no cap. Nonetheless, there was no violation because the trial was held within 70 days of the issuance of the second order.

Convicted Inside Trader Escapes "Sadistic" Captivity ... for Now

The Second Circuit has ordered convicted stock trader Doug Whitman to be released from custody in the wake of the U.S. Supreme Court's grant of certiorari in Salman v. United States. As we reported here, Salman asks the Supreme Court to determine what the government must prove to win a conviction for insider trading. Whitman sought release from custody pending the Supreme Court's ruling in that case, which he claims will have implications for his conviction. The U.S. Attorney's Office for the Southern District of New York, which prosecuted Whitman, opposed the request. At oral argument before the Second Circuit, Judge Barrington Parker said that opposing Whitman's release sounded "sadistic" to him. Unsurprisingly, the panel issued an order releasing Whitman for the time being. To read more, click here.

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.

Authors
Daniel E. Wenner
Dennis T. Kearney
Steven A. Cash
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
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.

Disclaimer

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.

General

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