Articles Posted in Federal Criminal Defense

It’s all over the newspaper today, with headlines like “BombShel” and “Silver Lining Crook Book,” that the long-time Speaker of the New York State Assembly, Sheldon Silver, has been hit with fraud and corruption charges by U.S. Attorney for the Southern District of New York, Preet Bharara.  Everyone is talking about the accusations – Silver allegedly received millions of dollars over about a dozen years from two law firms for referrals in exchange for political favors.  But what, exactly, is Silver charged with?

Silver has been charged with five counts in a criminal complaint.  First, keep in mind that a criminal complaint is merely the beginning of a criminal prosecution in federal court.  In order for the U.S. Attorney’s Office to pursue this case, they will have to present evidence before a grand jury, which would have to vote an indictment.  Only then could the case proceed to trial.  Many have said that the government could indict a ham sandwich – and in this case, given the details in the criminal complaint, appears to be a likely scenario.

One other possibility is that Silver could enter into a plea bargain with the U.S. Attorney’s Office and plead guilty to what is called an Information.  It has the same legal power and effect as an indictment, but would not require the U.S. Attorney to present evidence to a grand jury.  Only time will tell which way it will go. Continue reading

Having the FBI knocking on your door at 6 in the morning can be the most frightening experience in your life.  They enter, start searching through your most personal belongings, take your papers, records, phone and computers and leave.  This is what happened to one of Crotty Saland’s recent clients (we’ll call him “Dave” – not his real name).  He reached out to us a short time afterwards, when we put our experience and knowledge to work.  After some initial investigation, we discovered that the U.S. Attorney’s Office for the Southern District of New York was investigating an international computer hacking ring and that they believed Dave was involved.  They initially intended on charging Dave with the serious felony of Computer Hacking under Title 18, United States Code, Section 1030(a)(i), which carries a potential sentence of 10 years in federal prison.

After a diligent and thorough examination of the evidence and Dave’s background, it became clear that Dave was not an international computer hacker.  Rather, Dave was a down on his luck twenty-something, who had a troubled past.  Dave had a difficult upbringing, growing up in a violence-filled household, child welfare agents constantly around.     Dave witnessed abuse of his mother by his father and his sister’s suicide attempt.  Dave sunk into deep depression.  He spent more and more time and energy on the computer, eventually suffering an addiction to computer gaming and usage.  Dave hit rock bottom when he wandered onto a website that promoted computer hacking – it described how to do it, and sold software that enabled the hacking.  In a weak moment, Dave purchased the software and began to use it to look at other’s computer files, including his girlfriends.  Dave wasn’t proud of his conduct, but because of his addiction, he couldn’t help himself.  Dave didn’t try to steal credit card information, or his victim’s identification.  Rather, he was only falling deeper into his computer addiction. Continue reading

Recently, we discussed the history of the Medicare Fraud strike forces set up by the U.S. Department of Justice, Fraud Section, in an effort to combat what was perceived as rampant fraud in the healthcare system.  Recently, local U.S. Attorneys across the country have copied the structure and format of the strike forces within their own offices.

Take for example David Hickton, the U.S. Attorney for the Western District of Pennsylvania, in Pittsburgh, who created his own “mini-strike force.”  He has enlisted four assistant U.S. attorneys from his office to focus exclusively on health care fraud investigations and prosecutions.  He has support from the Pittsburgh Division of the FBI, which is one of the two federal law enforcement agencies charged with investigating health care fraud.  He has also reached out to the HHS-OIG, the Department of Health and Human Services, Office of the Inspector General, the other federal agency investigating the medical industry, asking them to dedicate special agents to the Pittsburgh area.

The idea is to focus manpower on one of the largest and most complex industries in the country in an effort to gain expertise while eradicating millions, if not billions of dollars of fraud, waste and abuse in the healthcare industry. Continue reading

For years, the New York City Police Department has run the “Cash for Guns Program” in which it will pay $100 to any individual who turns in any handgun, revolver, semiautomatic and automatic pistols, sawed-off shotguns, or assault rifle. The police will not ask any questions about the weapon or ask for any identification, as the identity of every person will remain anonymous.

Over the years, thousands of guns have been taken off the streets of New York City. Even though the program promises anonymity, that does not always happen. Take the case of Robert Lee Miles. Back on January 19, 2011, Miles walked between subway cars and was stopped by police, as that was a violation of New York City law. The police frisked Miles and recovered an unloaded revolver in his waistband. As he was being arrested, Miles told the police that a friend gave him the gun so that Miles could collect money through the Cash for Guns Program and that he was on his way to delivering the gun to the Police Station to collect the $100.

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Last week I wrote about the recent national healthcare fraud takedown by the Department of Justice and its Medicare Fraud Strike Force.  We discussed the four cases brought in Brooklyn by the U.S. Attorney’s Office for the Eastern District of New York – U.S. v. Onyekwere, 14 CR 274; U.S. v. Thornhill, Thornhill and Johnson, 14 CR 278; U.S. v. Margossian; and U.S. v. Ahmed, 14 CR 277.

While these cases concern different offenses and schemes to defraud; one thing in common is the analysis that will be employed by the U.S. Attorney’s Office and the defense attorneys during plea negotiations regarding a potential sentence.

In virtually all Federal criminal cases, the Judge must consult the United States Sentencing Guidelines – this is a book that determines the seriousness of each offense as well as the criminal history of the defendant through a point (or “level”) system.  The idea is to make sure similarly situated defendants are treated virtually the same by all Federal Judges throughout the country.

In determining the seriousness of the offense, the Guideline establishes a “base offense level” for every Federal crime.  It then calculates “specific offense characteristics” – things that may or may not be a part of each case.

For purposes of Healthcare Fraud cases, the 2010 Patient Protection and Affordable Care Act (commonly referred to as “Obamacare”) changed, quite significantly, how that calculation is made. Continue reading

Much has been written over the last week about the purported FBI “insider trading” investigation into the purchase of Clorox stock options by legendary golfer Phil Mickelson and infamous sports gambler William Walters.  If this story didn’t involve famous people such as Mickelson and Carl Icahn, it wouldn’t be much of a story – or a criminal case – at all.  Here’s why:

On July 15, 2011, billionaire Carl Icahn announced his interest in taking Clorox, a public company, private in a deal worth approximately $12.6 million.  Four days earlier, there was unusual trading involving Clorox options; presumably involving Mickelson and Walters.  After the announcement, Clorox’s stock price went up considerably – from about $70 per share to $75 per share — providing Mickelson and Walters (and presumably a lot of other people) with a quick, substantial profit.

In our last post, we discussed the history and tactics of the Department of Justice’s Medicare Fraud Strike Force.  We also talked briefly about the recent Healthcare Fraud nation-wide “takedown.”  But as we also mentioned, this was not one giant case involving 90 defendants, but rather dozens of cases, scattered throughout six different cities.  Each one of those cases has a different history; a different story.  From a practical perspective, it can be instructive to take a look at all the cases charged in a particular Strike Force city to get a feel or a sense of what types of cases are being brought there and how the government investigates healthcare fraud differently in different places.  In this installment, we’ll start off by looking at the four cases brought in the Eastern District of New York in Brooklyn.

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In March 2007 the Medicare Fraud Strike Force originated in South Florida as a ground-breaking joint effort between the U.S. Department of Justice’s Criminal Division Fraud Section, the U.S Attorney’s Office for the Southern District of Florida, Health and Human Services Office of Inspector General, as well as state and local law enforcement agencies to prosecute individuals and businesses that did not provide legitimate health care services, but existed and operated for the sole purpose of stealing money from the Medicare coffers.

Over the last seven years, this first-of-its-kind strike force in the health care arena has become a model of innovation in terms of strategy, methodology and practice, but also quite some controversy.  According to the Department of Justice, as of early 2014, the Strike Force, now in nine cities, has charged more than 1400 defendants, who have collectively billed the Medicare program for more than $4.8 billion.  In addition, hundreds of millions of dollars have been returned to the Medicare Trust Fund through restitution and forfeiture.  The question has been asked, however, whether the government has overreached in some of these healthcare fraud investigations and prosecutions.  This aggressive approach smells from governmental over-reach, and requires anyone charged in a Strike Force case to seek out a Federal Criminal Attorney well experienced in Healthcare Fraud matters to present an effective defense.

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When it comes to the criminal law, many people become obsessed with theoretical loopholes and “get out of jail free” cards. While prosecution of the guilty is a noble purpose of government, sometimes there are other, competing governmental interests (such as avoiding a Police State and governmental violations of an individual’s Constitutional rights) that are more compelling. One of those compelling issues is the concept of Diplomatic or Consular Immunity. This comes into play in New York more than almost anywhere else in the country.

New York is the largest city in the United States and one of the political capitals of the world, as home to the General Assembly of the United Nations. All 194 member and observer countries have permanent delegations to the United Nations. New York is also home to 116 nations’ consulates-general. What this means is that there are more foreign diplomats in New York City than almost anywhere else in the world. By some estimates there can be between 3,000 and 10,000 foreign dignitaries in New York at any one time. Not surprisingly, there are occasions that either the State or Federal government will charge a foreign dignitary with a serious crime.

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