Pryor Cashman is pleased to announce that U.S. District Court Judge Michael Simon dismissed with prejudice all criminal charges against Dan Heine, the former Chief Executive Officer of The Bank of Oswego. This is a tremendous victory for Mr. Heine, who was represented at a 29-day jury trial by Jeffrey Alberts, a Partner in the firm's Litigation Group who also co-heads the firm's Financial Institutions Group.
Federal prosecutors had asked Judge Simon to sentence Mr. Heine to a term of imprisonment of over 8 years. Pryor Cashman advocated against this request, which would have been profoundly unjust, and argued for dismissal of the charges. Mr. Heine now has prevailed and will not spend any time in prison.
"I could not be happier with the top-notch representation that I received from Jeffrey Alberts and the Pryor Cashman trial team," Dan Heine said.
This victory came after a hard-fought battle. Federal prosecutors charged Mr. Heine with 27 crimes relating to an alleged fraud on The Bank of Oswego. Mr. Heine denied that he was guilty of these crimes and engaged Pryor Cashman to defend him. Pryor Cashman filed a motion to dismiss, which detailed prosecutorial errors in obtaining an indictment. The government then dropped 8 of its charges. At trial, a federal jury acquitted Mr. Heine on 6 additional counts. On appeal, the Ninth Circuit vacated the judgment on the remaining charges and remanded the case to the District Court, which dismissed all charges against Mr. Heine.
This case established precedents that will serve as critical guardrails to protect defendants in future criminal cases. Among other things, it clearly established that statements banks make to regulators that are literally true do not become criminal falsehoods simply because they omit information that regulators believe to be important.
In this case, the allegedly false statements included entries in call reports, which are quarterly reports banks submit to regulators. In holding that statements in these reports did not violate criminal law, the Ninth Circuit noted that statements about bank loans that prosecutors described as false were actually true responses to questions asked in call report instructions relating to past due loans. The court therefore rejected the prosecution's argument that it was a crime to omit other information that the FDIC would have liked to know about those loans, such as whether the borrowers were personally responsible for making loan payments.
In addition to Mr. Alberts, Mr. Heine's trial team included Mark Weiner, a former Pryor Cashman associate, and local counsel Caroline Harris Crowne, a partner at the law firm Tonkon Torp LLP. Federal Public Defenders Elizabeth Daily and Stephen Sady represented Mr. Heine before the Ninth Circuit. We are grateful to Tonkon Torp and Federal Public Defenders for their assistance in this case and for their contributions to this successful outcome for Mr. Heine.
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