Posted On Wednesday, March 13, 2013
By:
Principal Deputy Attorney General Stuart F. Delery, who heads DOJ’s Civil Division, used last Friday’s speech to the Second Annual Consumer Protection Summit at Georgetown University School of Law to review the 2012 accomplishments of the Consumer Protection Working Group. In his remarks, he highlighted the efforts of the Consumer Protection Branch in securing of over $1.95 billion in criminal fines, forfeiture, restitution and civil disgorgement, as well as 23 criminal convictions during 2012. He also indicated that there is more to come.
The Consumer Protection Working Group is part of the Financial Fraud Enforcement Task Force, a grouping of federal agencies, working in partnership with state governments, formed in the wake of the financial crisis to pursue those thought to be responsible for numerous abuses in the financial industry. As we reported previously, DOJ plans to make increased cooperation with the states on financial fraud a top priority, seeing opportunity for shared resources to create, as Acting Associate Attorney General Tony West put it, “a formidable force-multiplier when it comes to accountability and deterrence.”
His comments are yet another reminder of DOJ’s dedication to maintaining the trend of increased government enforcement in the name of consumer protection, including criminal prosecutions if necessary, against companies and those who run them.
Delery ticked off a laundry list of priorities for the Civil Division generally and the Consumer Protection Branch specifically, including “dietary supplement safety, debt relief scams, phantom debt scams, payday lending, lottery scams, and even romance scams.” He added, however, that their work is even broader than that diverse grouping.
He went on to indicate that cases brought during 2012 included cases against food manufacturers that produce food under insanitary conditions; drug makers who mislead consumers about the safety and efficacy of the drugs they produce and market; and those who commit fraud in the mortgage industry. We have reported on specific examples of those types of prosecutions recently, including:
- The prosecution of former officers and employees of the Peanut Company of America (PCA) in relation to a salmonella outbreak traced to its plant in Georgia (read more);
- The scattered fallout from the Second Circuit’s ruling in Caronia that the First Amendment can provide a defense to drug manufacturers facing charges relating to off-label marketing (read more); and
- The Lender Processing Services Inc. (LPS) case, where LPS agreed to pay $35 million in criminal penalties and forfeiture as part of a non-prosecution agreement, which followed the November 2012 felony guilty plea by the former CEO of wholly owned LPS subsidiary (read more).
While Delery also mentioned the importance of “collaboration, education, and outreach,” his overriding message was that DOJ and its sister agencies will use all tools available in pursuit of their consumer protection mission. His comments are yet another reminder of DOJ’s dedication to maintaining the trend of increased government enforcement in the name of consumer protection, including criminal prosecutions if necessary, against companies and those who run them. The trend is more than perception, as all objective statistical data supports this conclusion. His remarks are also a reminder of the need for increased vigilance in establishing, maintaining and enforcing corporate compliance programs.
Posted On Tuesday, March 12, 2013
The necessity for making requests for Brady evidence specifically and repeatedly has been noted time and time again. The importance of obtaining Brady evidence and any appropriate remedy at the trial level is based on the recognition that the standard for appellate review of alleged Brady violations is an extraordinarily difficult one to meet for aggrieved defendants. One recent example is the discussion of the issue in a non-precedential opinion by a panel of the Third Circuit in United States v. Battles, No. 12-1827 (3d Cir. February 28, 2013). In Battles, the Third Circuit upheld convictions for bank fraud and conspiracy to commit bank fraud.
According to the evidence presented by the government at trial, Jonathan Battles designed a scheme in which one of his girlfriends, Angelique Torres, would steal vendor checks from her employer and send them to Battles. Battles then gave the checks to another one of his girlfriends, Tamika Booker, who would deposit them in her bank account. Both Torres and Booker pled guilty while Battles opted to go to trial, which ended with him being found guilty of bank fraud and conspiracy to commit bank fraud.
The focus of Battles’ argument regarding Brady evidence was the video tape evidence regarding police interviews of Torres. Torres was interviewed by police three times and served as the government’s chief witness at trial. Records indicate that each of the interviews was videotaped. However, the tapes weren’t provided to Battles prior to trial. Rather, Battles was given only summaries of the first and third interview. Battles did not request copies of any of the videos in pretrial discovery. The first and third interview videos were produced following trial and reviewed by the district court prior to the court ruling that Battles was not entitled to relief. The government claimed not to have any knowledge of the videotape of the second interview.
The court stated once again, however, that the focus is on the fairness of the trial, not on whether the prosecutor acted in good faith or whether defense counsel did all he or she could have done to gather helpful information.
The Third Circuit acknowledged that the government is required to provide a criminal defendant with all exculpatory evidence, including evidence that could be used to impeach a government witness. The court stated once again, however, that the focus is on the fairness of the trial, not on whether the prosecutor acted in good faith or whether defense counsel did all he or she could have done to gather helpful information. On appellate review, evidence is only considered exculpatory if there is a reasonable probability that the jury would have reached a different decision if the evidence had been disclosed.
The court, citing United States v. Perdomo, 929 F.2d 967, 970 (3rd Cir. 1991) re-stated the three elements for a Brady claim in the Third Circuit:
- the prosecution must suppress or withhold evidence,
- which is favorable, and
- material to the defense.
Of course, the most difficult hurdle in the Brady challenge is the “materiality” of the evidence. On that issue, the court went on to state that the evidence is only material if there is a reasonable probability that had the evidence been disclosed to the defense, the result of the proceeding would have been different, citing U.S. v. Bagley, 473 U.S. 667, 675 (1985).
The Court, based on this standard, held that the undisclosed videos were not material. As set forth in its decision in United States v. Welker, 657 F.3d 160, 186, 188 (3rd Cir. 2011), the court emphasized that “undisclosed Brady material that would have provided a different avenue of impeachment is material, even where the witness is otherwise impeached” but “it is only those new avenues of impeachment that sufficiently undermine confidence in the verdict that will make out a successful Brady claim.” Additionally, impeachment evidence has little, if any, use if it is similar to evidence which was introduced at trial. The Third Circuit held that Battles failed to show how the videos would have provided him with additional grounds to attack Torres’ credibility. Therefore, he failed to establish that his rights had been violated.
Battles also claimed, among numerous additional issues for appeal that the district court misapplied the sentencing guidelines in several ways. The first alleged error relating to the district court’s finding of the amount of loss in the range of $400,000 – $1,000,000. Torres stole five checks totaling $169,494, which were sent to Battles. These checks were identified in the indictment. Torres later stole eight checks, totaling $708,682. However, these checks weren’t sent to Battles. Rather, they were seized by police when they searched her home. The district court considered the value of both sets of checks in determining that the intended loss was between $400,000 and $1,000,000.
Battles argued that the district court should have only considered the checks identified in the indictment. The Third Circuit determined that it was not clearly erroneous for the district court to consider the second set of checks were acts that Battles “aided, abetted, counseled, commented, induced, procured or willfully caused and were also reasonably foreseeable acts – of others in furtherance of the jointly undertaken criminal activity. U.S.S.G. 1B1.3(a)(1)(A) & (B).” In this regard, Torres testified that she and Battles had discussed her stealing additional checks, which he said he needed for his business, and that she did so. While Torres had been inconsistent about whether she intended to send the checks to Battles, because she testified that she stole them after Battles told her he needed them, the second theft could be considered part of the same scheme as the first theft.
A complete copy of the opinion can be found here: http://www.ca3.uscourts.gov/opinarch/121827np.pdf
