Monday, December 19, 2011

Med-Cal Fraud for billing device other than one used

The Second Appellate District in California affirmed a judgment of conviction for a physician who committed fraud for knowingly billing Medi-Cal for use of an expensive and approved medical device when he instead used a cheaper device that was not approved for reimbursement. 

From 2004-2006, the office of OB-GYN Eduardo Guzman billed Medi-Cal for the insertion of 176 IUDs. The billings used the precedure code designated for teh trade name "ParaGard" when in fact he used a cheaper type of IUD manufactured in Mexico.

The court found the evidence at trial was sufficient to show an intent to defraud Medi-Cal.

The case is: People v. Guzman, ___C.A.2nd; Dec. 12, 2011; B232299.

Thursday, December 1, 2011

The Conrad Murray Sentence in the Wake of California’s Prison Realignment Act of 2011

Conrad Murray – to be known forever as the man associated with the King of Pop’s untimely death. Despite being convicted by a jury of involuntary manslaughter, Dr. Murray may never see the inside of a state prison cell. He has the California Realignment Act of 2011 and the United States Supreme Court to thank for that bit of good news (Brown v. Plata was discussed in our last email blast).

Upon his conviction for a violation of California Penal Code § 192(b), Dr. Murray faced a sentence of 2, 3, or 4 years. Prior to the passage of AB 109 (the Realignment Act of 2011), Dr. Murray would have had to serve these years in state prison pursuant to Penal Code § 193. Post-AB 109 – no longer the case. Dr. Murray, sentenced to 4 years on November 29, 2011 by the Los Angeles County judge presiding over the case, will now serve his time in a local county jail, which comes with its own benefits.

California’s Prison Realignment Act of 2011, passed in order to address prison overcrowding per a mandate from the U.S. Supreme Court, dictates that non-violent felons are not required to go to state prison, and can serve their sentence in county jail. Under this act, sentences for most felonies that are non-serious, non-violent and non-registerable sex offenses, if the defendant also has no prior serious, violent, or registerable convictions, will now be served in the county jail. See Penal Code § 1170(h)(2-3). Approximately 60 other offenses, known as Exclusions, will still trigger state prison sentences. These offenses generally involve a weapon or injury or certain prior convictions.

The Realignment Act comes with many, many more revisions to California’s sentencing system, including parole, calculation of conduct credits, and multiple counts, which are too expansive to simplify and explain here, but have been well summarized by Judge J. Richard Couzens. See: http://www.courts.ca.gov/partners/documents/felony_sentencing.pdf.

In Dr. Murray’s case, he can expect to serve half of his 4-year term; that is, unless the Los Angeles County Sheriff releases him even earlier. It is well-known that LA County jails are bursting at the seams, resulting in many inmates being released after doing only 10% of their sentenced time. Thus, the actual length of time Dr. Murray will sit behind bars could range from a few months to two years. One other caveat – Los Angeles County District Attorney Steve Cooley has stated publicly that he is considering an appeal to require Dr. Murray to serve his sentence in state prison. Unless Mr. Cooley can overcome the U.S. Supreme Court’s mandate to reduce state prison overcrowding, Dr. Murray shouldn’t lose any sleep in his county jail bunk over that announcement.

Stay tuned for many more publications and public discussions with respect to the drastic changes in California’s sentencing laws.

Campbell & Jayne LLP is a premier criminal defense firm which offers representation for individuals and small businesses at every stage of a criminal proceeding in state or federal court. The firm provides representation in virtually every area of criminal law, including white collar crime, felonies and misdemeanors, drug cases, and driving-related offenses. Campbell & Jayne LLP practices criminal defense in Federal Courts and in all Bay Area counties, including San Francisco, Alameda, Contra Costa, San Mateo, Santa Clara, Santa Cruz, Marin, Sonoma, Napa, and Solano counties.

For more information, see our new, updated website: www.campbelljayne.com

The Criminal Law Update is a periodic newsletter published by Campbell & Jayne LLP to provide general information and updates on the legal field. It is not intended to provide legal advice or opinion on any set of specific circumstances. Please consult counsel regarding any legal questions you may have concerning your individual situation. For additional information, please contact Campbell & Jayne LLP.

Tuesday, November 29, 2011

No Challenge of Factual Basis for Plea

Defendants who plead guilty or no contest may not challenge on appear the trial court's conclusion that a factual basis existed for a plea, according to the 6th Appellate District in California.  The court held that a criminal defendant who pleads guilty or no contest is judicially estopped from seeking substantive appellate review of guilt or innocence by challenging a trial court's conclusion that there existed a factual basis for the plea.

The case is: People v. Voit, C.A. 6th; November 18, 2011; H035882.

Monday, October 17, 2011

United States v. Gilchrist: Federal Embezzlement and Bank Fraud


In United States v. Gilchrist, Dwight Gilchrist filed a civil law suit against Wells Fargo Bank after they refused to recover the amount of money that was supposedly stolen from his bank account. Failure to cooperate with Wells Fargo’s investigation on his fraud claim reports prompted a FBI investigation on Gilchrist and his bank accounts. This revealed he was involved in federal embezzlement and bank fraud. He pleaded guilty to those charges and was also sentenced for “obstruction of justice” because he committed perjury during his depositions in his civil law shit against Wells Fargo Bank.

On appeal, Gilchrist believed the district court erred in applying the sentence enhancement for willfully obstructing justice. He argued he was unaware that he was under a federal investigation at the time he committed perjury during his civil law suit against Wells Fargo Bank. 

The court disagreed with his contention and affirmed judgment. In Gilchrist, the Ninth Circuit agrees that “willful means only that the defendant has engaged in intentional or deliberate acts designed to obstruct any potential investigation, at the time an investigation was in fact pending; it does not mean the defendant had to know for certain that the investigation was pending.” 

-This case is: United States v. Gilchrist (9th Cir. October 3, 2011) WL4537789

Monday, October 10, 2011

State Court Plea Used in Federal Court Proceedings


Federal Court proceedings indicted Richard Aguirre for racketeering and conspiracy to distribute narcotics after he pleaded guilty in state court to one count of maintaining a residence for purposes of selling cocaine in People v. Aguirre. Unaware that his guilty plea would be used in Federal Court, Aguirre appealed and entered a motion to withdraw his plea.

During his appeal, Aguirre stated that his plea was not “knowing, intelligent, and voluntary” because he was unaware that it might be used against him in a federal prosecution. He felt the trial court was obligated to tell him about the federal jury proceedings and that the federal indictment was a direct consequence from his plea in state court.

The Second Appellate District affirmed judgment on Aguirre’s case. They were not convinced with Aguirre’s contentions and held that the trial court does not have to advise the defendant that his plea might be used in a federal prosecution. In addition, Aguirre’s argument regarding his lack of knowledge about the federal jury was not sufficient enough for the court to grant him his motion to withdraw his plea.

-California Court of Appeals, 2nd Appellate District, 2nd Div., September 26, 2011; B227019

Wednesday, September 7, 2011

Tip from Informant Helps Police Arrest Wanted Ninja


In People v. Scott, an anonymous informant called the Riverside Police Department to notify them about David Scott, who was strongly suspected to have been involved in the murder of Brenda Kenny. The informant was Scott’s coworker at the movie theatre and told the police that he saw Scott several times dressed in an all black “ninja” outfit with a sword and a knife— the attire described to have been worn by Kenny’s murderer. The informant also stated that Scott told him he had a dream about killing someone, which closely matched the details of Kenny’s murder that the informant read about in the newspaper.

The police felt the informant was a reliable source who did not have any motive to lie. His phone message to the police led to Scott’s arrest and he was charged with murder in addition to rape and other crimes. While he denied being involved in the “ninja” crimes, he told the second interrogating officer the same dream he relayed to the informant. This was said after waiving his Miranda rights.

Scott’s incriminating dream was introduced at trial where he was convicted and sentenced to death. Scott challenged the admission of his confession because he felt the pre-advisement questioning coerced him into confession. The Court rejected his contention, finding no evidence that showed Scott’s confession was inappropriately influenced by interrogating officers. Transcripts show that his confession was given well after his Miranda rights were stated. His statement was admitted at trial as a voluntary confession. The California Supreme Court affirmed judgment on Scott’s conviction and did not find error during any part of his case.

-Cal.Sup.Ct.; August 11, 2011; S068863

Tuesday, August 30, 2011

People v. Torres: Transporting and Possessing Alcohol in Prison are Two Separate Criminal Acts


In People v. Torres, the Second Appellate District determined the acts of bringing alcohol into a jail facility and possessing alcohol in a jail facility are two separate punishable crimes that each have its own objective.

Alfonso Torres and Adan Barajas were two inmates at a minimum security prison fire camp who snuck alcohol into the facility with the help from a civilian. A correctional officer saw a car drive onto the facility making a stop at a trash can. The driver got out of the car and placed two trash bags in the trash can. The civilian quickly drove off while honking several times. Moments later, Torres and Barajas ran to the trash can, picked up the trash bags, and ran back to a nearby building.

To prove that Torres and Barajas “knowingly” brought alcohol onto the jail’s facility, the court explained several circumstances that showed they were fully aware of the crime they committed. A civilian cooperated with the defendants to successfully transport the contraband onto the jail’s facility. The trash can was a predetermined location for the civilian to inconspicuously drop off the items using trash bags. Upon driving off the premises, the civilian honked, issuing a signal to the defendants to grab the trash bags before a garbage man or a correctional officer could get a hold of it. Moreover, Barajas was heard saying “Which one is mine”, showing that he already knew what the bag contained. 

Although Torres argued that Penal Code §654 “precludes that no act or omission be punished under more than one provision”, the court explained that there were two separate objectives that distinguish two crimes had occurred. The first crime was completed when the alcohol was transported onto the prison camp. The objective shifted to possession when Torres and Barajas took the trash bags.

The Second Appellate District affirmed judgment on Torres and Barajas’s convictions, holding that there were two crimes that were committed and sentencing them for each crime.

-California Court of Appeals, 2nd Appellate District, 2nd Div., August 15, 2011; B226903

Wednesday, August 10, 2011

Collecting DNA is Ruled Unconstitutional in CA Court of Appeals

 
With the advancement of technology, there has been a controversy in the legal community surrounding the seizure of DNA samples from felony arrestees. California’s DNA Act was amended in 2004, enabling law enforcement officials to take DNA samples from any adult arrested for or charged with a felony. This act led to the recent case of People v. Buza, where Mark Buza was convicted of arson, but still argued that his mandatory cheek swab violated his Fourth Amendment right.
 
In Buza, the Court of Appeals argued that obtaining DNA samples were a violation of the felony arrestees Fourth Amendment right to be free of unreasonable searches and seizures. Justices Anthony Kline, James Lambden and James Richman sided with Buza, deeming DNA sampling unconstitutional. When compared to fingerprinting, Kline dismissed that argument and said they were obtained for “identification purposes and not to solve crimes.” Moreover, Kline stated in his opinion for Buza, “even if DNA testing of arrestees was demonstrably valuable to law enforcement, the effectiveness of a crime-fighting technology does not render it constitutional.”

The First District Court of Appeals agreed with Buza and mandated it unconstitutional for DNA samples to be taken from felony arrestees.

-California Court of Appeals, 1st Appellate District, 2nd Div., August 4, 2011; A125542

Monday, August 1, 2011

Implied Malice Theory

In People v. Canizalez, the Second Appellate District affirmed judgment on the convictions for Robert Canizalez and Martin Morones. On a busy city street, the two defendants engaged in a street drag race that ended in a collision with another car. The other car immediately burst into flames, killing the occupants, whom were a mother and her two young children.


Both Canizalez and Morones appealed, believing there was an insufficient amount of evidence supporting the prosecution’s argument for implied malice. The defendants argued that the elements of the incident did not prove they were aware of the danger involved in their actions and it also did not show they were lacking a conscious regard for life. The court of appeals disagreed, and affirmed judgment from the lower court.

Contrary to the defendants’ argument for appeal, the court of appeals provided an overwhelming amount of evidence that supported the implied malice theory. For instance, Canizalez and Morones were well aware of the danger from racing in the streets because they are long time residents of the neighborhood where the incident occurred and are familiar with its traffic conditions. Hours before the collision, witnesses saw Canizalez driving recklessly in the neighborhood, speeding and making sharp U-turns. Both defendants have participated in street drag racing and have adapted their cars to engage in that type of car racing. Moreover, they tried to eliminate evidence that showed they were involved in the crash by pushing one of the cars away and quickly leaving the scene. Canizalez and Morones did not attempt to help the victims or even inquire about their condition. With these given facts, the court of appeals found their actions to be in support of the implied malice theory, rejecting the defendant’s argument.

-California Court of Appeals, 2nd Appellate District, 2nd Div., July 20,2011; B218515

Monday, July 18, 2011

United States v. Evanston: no re-arguing during jury delibrations

In U.S. v. Evanston, the Ninth Circuit Court vacated a district court’s judgment because it allowed attorneys on both sides to re-address arguments after the jury declared its second deadlock. Calvin Evanston was charged with assault on his live-in girlfriend, leaving her with permanent damages on her face. The jury was unsure about the witness’s credibility and how the victim’s injuries were caused. Despite the defense’s objection to this order and two jury deadlocks, the judge gave both sides the opportunity to reargue the issues that were uncertain to the jury. Shortly after, the jury deliberated and reached a guilty verdict.


The court of appeals found the order for additional arguments as an interference with the jury’s role as the sole fact-finder. First, the jury’s deliberative secrecy was violated when they revealed to the judge that they were inconclusive about two particular issues. Secondly, additional arguments from both sides along with the judge insisting to continue after a second deadlock raised speculation of a coerced verdict.

The district court could have explored other options to overcome the two deadlocks without coming into conflict with the Federal Rules of Criminal Procedure and Ninth Circuit model jury instructions. For instance, rereading the original jury instructions or allowing the jury to review the witness’s testimony would have complied with the procedural rules.

The Ninth Circuit found that the district court allowed the attorneys to address and reargue factual concerns expressed by the jury, causing prejudicial error in Evanston’s case. This gave cause for the court of appeals to vacate Evanston’s conviction and remand the action for a new trial.

The case is: United States v. Evanston (9th Cir. July 5, 2011) 10-10159.

Tuesday, July 12, 2011

California State Prison Overcrowding: The U.S. Supreme Court Decision and Its Aftermath

On May 23, 2011, the Supreme Court of the United States gave California officials a strict order to cut its prison population by at least 23%, reducing its inmate population from 143,435 to 109,805. In Brown v. Plata, Justice Anthony M. Kennedy made the concluding 5-4 vote, stating that “needless suffering and death have been the well-documented result” of overcrowded prisons. California must fulfill this order by May 2013 with four deadlines within the two years, requiring a 10,000 inmate reduction for each benchmark. If the state does not meet the deadlines, the courts have the authority to order prisoners released.

Issues stemming from California’s overcrowded prisons were first brought to the court’s attention over two decades ago as a violation of the 8th Amendment, which prohibits cruel and unusual punishment for crimes. What has come to light from these cases is that California’s prisons are designed to house no more than 80,000 inmates, but currently it is housing almost double that amount. Overpopulation has created an array of problems for California’s prisons, but one major concern for inmates is their health. The Supreme Court’s decision is based on two class action suits that exhibit how California’s overpopulated prisons have hindered inmates from receiving proper medical attention.

In Coleman v Brown, filed in 1990, the District Court found inmates with serious mental disorders not receiving the minimal adequate care they needed. Remedial efforts were made but after 12 years, an appointed Special Master declared it did not improve the lack of medical attention mentally ill patients needed. It was reported that conditions became worse after the case was filed and it was found that “the state of mental health care in California’s prisons was deteriorating due to increased overcrowding.”

In 2001, Plata v. Brown was filed, once again bringing attention to the increasing population in California’s prisons. This civil case voiced similar health concerns mentioned in Coleman, where seriously ill inmates complained about lacking medical care and it becoming a violation of their 8th amendment right to be free of cruel and unusual punishment. A remedial injunction was ordered but had not been complied with by 2005; therefore a Receiver was appointed to oversee the remedial efforts but it was reported that there were “continuing deficiencies caused by overcrowding.”

Remedial efforts in both cases failed to alleviate the problems inmates were facing when they attempted to receive medical care. Believing that the only solution to relieve medical and mental care for inmates is to reduce overcrowding, the cases were consolidated and moved to a three-judge court empowered by the Prison Litigation Reform Act of 1995 (PLRA). After 6 months of hearing testimony and a review of extensive facts, the Supreme Court ordered California to immediately reduce its prison population. Because it appeared that new construction could not comply with the two-year deadline, California Officials were ordered to come up with an alternative plan to reduce the prison’s population.

Justice Kennedy delivered the opinion of the Court and was critical of the conditions inmates faced in prison. “A prison that deprives prisoners of basic sustenance, including adequate medical care, is incompatible with the concept of human dignity and has no place in civilized society.” Justice Kennedy explained that prisons have the responsibility to provide food, shelter, and necessary medical care for inmates since their rights to provide for themselves were taken away upon being convicted.

With the population steadily increasing, Justice Kennedy also included in his opinion conclusions from Plata. “[I]t is an uncontested fact that, on average, an inmate in one of California’s prisons needlessly dies every six to seven days due to constitutional deficiencies in the [California prisons’] medical delivery system.” California’s overcrowded prisons are affecting inmates’ access to much needed medical care and causing their health to deteriorate. To comply with the constitutional mandate, Justice Kennedy mentioned a few options that included transferring inmates to county facilities or other states, extending design capacity, and possibly releasing parole violators into community based programs.

Justice Antonin Scalia filed a dissent, calling the order a “judicial travesty.” His opinion discusses his argument against the District Court’s conclusion that the governing statute was violated, the bedrock rule, and federal court’s judicial limitations.

Justice Samuel Alito also wrote a dissent wherein he argued that no 8th amendment violation occurred at all and that the constitutional standard is currently met. Moreover, his opinion states that the federal judges overstepped their boundaries and made a radical decision for a state penal system, which the Constitution does not authorize.

In response to the Supreme Court’s decision and mandate, on June 7, 2011, Governor Jerry Brown submitted a plan that he believes would reduce California’s prison population while meeting the stipulations of the order. His plan includes restructuring the parole system, providing inmates with more opportunities to earn early release credits, creating a rehabilitative program for parole violators, and changing the law to increase the threshold for felonies that could be misdemeanors. While releasing inmates is not part of the proposed plan, Governor Brown’s goal is to reduce inmate population while still protecting public safety. He expressed that this is something that can be done properly and effectively with the appropriate support and funding from the Legislature.

Additionally, on June 8, 2011 the California Department of Corrections and Rehabilitation (CDCR) submitted a report to the federal Three-Judge Court updating it on prison crowding reduction measures that the state has taken, or plans to take, stating that, “California has already reduced its prison population significantly over the past several years. Today, we have the lowest crowding levels in California’s prisons since 1995 . . . Our goal is to meet the Court’s order by continuing to reduce prison crowding while still holding offenders accountable.” The CDCR also reported that, “Our current reduction plan does not include the early release of inmates. But it is absolutely critical that the Legislature understand the seriousness of the Supreme Court’s decision and support a variety of measures that will allow us to lower our inmate population in the safest possible way.”

In sum, California’s plan to relieve prison overcrowding includes:

• Transferring 10,000 inmates to out-of-state prisons;

• Building new prisons, health care, and mental health facilities and converting juvenile detentions centers to adult facilities;

• Moving low-level, non-violent offenders to county jails as part of the “Realignment” plan outlined in Assembly Bill 109 signed by Gov. Jerry Brown in April. This would purportedly free up space for the state to focus on incarcerating serious, violent, and sexual offenders.

After months of debate and partisan bickering, California found a way to fund Governor Brown’s solution. Passed the day before the beginning of the new fiscal year, without Republican support, the new budget that Governor Brown recently signed on June 30th redirects five billion dollars from state sales and vehicle taxes to the local governments that will house the reassigned inmates. In addition to providing the requested funding, lawmakers delayed the program for three months in order to give the state time to coordinate with the counties.

Accordingly, after October 1, 2011 local officials will be given jurisdiction over offenders convicted of non-violent crimes and will also have the responsibility of parole and rehabilitation. While this appears to be progress and a tangible plan, it is questionable and perhaps overly ambitious to conclude that the state will meet the December 27th deadline set by the Supreme Court to reduce the state prison population by 10,000 inmates by the end of the year.



Campbell & Jayne LLP is a premier criminal defense firm which offers representation for individuals and small businesses at every stage of a criminal proceeding in state or federal court. The firm provides representation in virtually every area of criminal law, including white collar crime, felonies and misdemeanors, drug cases, and driving-related offenses. Campbell & Jayne LLP practices criminal defense in Federal Courts and in all Bay Area counties, including San Francisco, Alameda, Contra Costa, San Mateo, Santa Clara, Santa Cruz, Marin, Sonoma, Napa, and Solano counties.

For more information, see our new, updated website.
The Criminal Law Update is a periodic newsletter published by Campbell & Jayne LLP to provide general information and updates on the legal field. It is not intended to provide legal advice or opinion on any set of specific circumstances. Please consult counsel regarding any legal questions you may have concerning your individual situation. For additional information, please contact Campbell & Jayne LLP.

Tuesday, March 8, 2011

Insider Trading Roundup: Wall Street on Trial

This week marks the start of the criminal trial against Galleon Group LLC co-founder Raj Rajaratnam in federal court in Manhattan. Rajaratnam is the central figure in the largest crackdown on hedge-fund insider trading in U.S. history. He is accused of making $45 million from confidential information leaked by corporate insiders and hedge fund traders. He faces up 20 years in prison if convicted of securities fraud. Rajaratnam has denied wrongdoing and has argued that investment advisers routinely speak to company insiders as they do research. The anticipated 10-week trial will determine whether his conversations (many, recorded) and subsequent trades were illegal or not.

Since the indictment of the Galleon case in 2009, the Justice Department and the SEC have brought insider trading cases against numerous hedge fund managers, consultants, bankers, lawyers, and individuals at “expert network” firms.

Just last week, the SEC filed a civil action against Rajat Gupta, a former Goldman Sachs Group director, alleging that he leaked inside information about the investment bank’s results to Mr. Rajaratnam. The SEC alleged that Gupta provided inside information to Rajaratnam, including news of Berkshire Hathaway Inc.’s $5 billion investment in Goldman Sachs, Goldman Sachs’s earnings as well as earnings at Procter & Gamble Co. At the criminal trial, it is expected that prosecutors will allege Gupta was a conspirator with Rajaratnam in the insider trading scheme.

A key co-defendant in the Galleon case, Danielle Chiesi, pled guilty in January 2011 to three counts of conspiracy to commit securities fraud. She was caught making incriminating statements on a wire tap. To date, 19 out of 26 people charged in the Galleon-related insider trade probe have pleaded guilty.

Beyond the Galleon case, the Government has investigated and brought at least a dozen charges in connection with its crackdown on specialists in the financial industry who supposedly pass along inside information about companies to hedge funds and attempt to pass it off as legitimate research. For example, in February 2011, prosecutors announced charges against a group of hedge fund managers and a hedge fund analyst. The case drew particular media attention due to the suspects’ involvement in shredding documents and computer destruction. In that case, Samir Barai, of Barai Capital Management is alleged to have “cheated” in transactions involving Marvell Technology, Fairchild Semiconductor, Nvidia and AMD, among others. Barai is additionally being charged with obstruction of justice after a phone conversation was recorded and it was found that Barai destroyed information and disks. In a conversation with technology analyst Jason Pflaum who worked with Barai, Mr. Barai supposedly instructed Pflaum to, “Just go into the office…shred as much as you can.” Pflaum, who has since pleaded guilty, is now cooperating with prosecutors.

Co-defendant Donald Longueuil, a former manager at SAC, is being charged with conspiracy to commit securities fraud, conspiracy to commit wire fraud, and obstruction of justice for chopping up his flash drive and external drives before putting the pieces in plastic bags and tossing them in four different garbage trucks around New York City. Noah Freeman, who was cooperating with the government while Longueuil did this, is also alleged to have utilized a network of sources to obtain insider information in the tech and semiconductor industries. He has entered a guilty plea.

From Barai’s computer files, the government discovered recorded consensual telephone conversations with Winifred Jiau, a former Primary Global Research consultant, who was criminally charged last year. She is accused of providing inside information about technology companies, including Marvell and Nvidia, to hedge funds while working as a consultant. She, among others, are billed to firms as “expert network” providers. Expert network firms arrange conversations between public company employees freelancing as consultants and hedge and mutual funds seeking an investment edge. Overall, such consultants are allowed to divulge general information, but are prohibited from disclosing confidential, non-public information.

Ms. Jiau is among five investment consultants for Primary Global who have been charged by prosecutors in New York. One consultant and one employee have already pled guilty. The SEC has also filed civil charges against former Primary Global consultants, alleging that they leaked confidential information to Primary Global’s investor clients.

One such client of Primary Global is Level Global Investors, now closed. In the wake of the government’s sweeping investigation, the hedge fund run by David Ganek (a former associate of Steven Cohen of SAC) which managed $4 billion in assets, said the “cloud of uncertainty” created by the probe undermined its ability to operate. SAC has been raided by federal agents, but not charged with any wrong doing. The firm has stated it is cooperating with the investigation.

Bankers have been linked to the investigation as well. For example, a Morgan Stanley banker, Kamal Ahmed, is under investigation for allegedly leaking information about an upcoming merger involving AMD to Rajaratnam. It is still unclear if any charges will be brought against Ahmed. He is purportedly cooperating with the investigation. Morgan Stanley is also cooperating with the Government.

In February, Manhattan U.S. Attorney Preet Bharara testified on behalf of the Justice Department at a hearing of the U.S. Sentencing Commission in support of stiffer penalties for insider trading suspects. Mr. Bharara told the commission that “the nature and scope of insider trading activity has evolved,” while the sentencing guidelines regarding these offenses have not. Currently, the sentencing rules are based on the profits earned by the suspects.

Bharara, whose office has led the charge on these insider trading cases, has publicly stated that, with respect to arrests, “we are far from finished.” While that may be the goal of the Justice Department, the outcome of the Rajaratnam trial, one way or another, will undoubtedly shape the Government’s next steps with respect to insider trading cases.
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Campbell & Jayne LLP is a premier criminal defense firm which offers representation for individuals and small businesses at every stage of a criminal proceeding in state or federal court. The firm provides representation in virtually every area of criminal law, including white collar crime, felonies and misdemeanors, drug cases, and driving-related offenses. Campbell & Jayne LLP practices criminal defense in Federal Courts and in all Bay Area counties, including San Francisco, Alameda, Contra Costa, San Mateo, Santa Clara, Santa Cruz, Marin, Sonoma, Napa, and Solano counties.



For more information, see: www.campbelljayne.com



The Criminal Law Update is a periodic newsletter published by Campbell & Jayne LLP to provide general information and updates on the legal field. It is not intended to provide legal advice or opinion on any set of specific circumstances. Please consult counsel regarding any legal questions you may have concerning your individual situation. For additional information, please contact Campbell & Jayne LLP.

Monday, March 7, 2011

Court Reverses Decision on Cold Stone Creamery Caller

The State of California Court of Appeals has reversed a decision by the trial court in the case People v. Powers. The original decision in January 2009 charged David Thomas Powers with one felony count of criminal threats against a Cold Stone Creamery employee along with several misdemeanor charges of making annoying calls to an employee. The court, at first, found Powers incompetent for trial at the time and ordered him to be committed to a state hospital. Following treatment, the court dropped the felony charges against Powers and the case was continued in a trial court, whereupon Powers testified on his own behalf. The trial court found Powers guilty of four misdemeanors.

In the fall of 2008, David Thomas Powers left recorded messages after calling Cold Stone Creamery regarding his complaints and discontent with the service and other customers in the store. Powers claimed that he was being “ripped off” and continued to use profanity throughout the several messages he left after he also claimed he “didn’t know what else to do." The messages contained what Cold Stone Creamery deemed as threatening comments such as, “[if] I ever have a problem with them …I’ll take my fist and beat their faces in.” The company never returned any of Powers calls and instead made a complaint to the police.

The trial court found Powers guilty and placed him on probation, ordering him to serve jail time and to pay fines. However, the State of California Court of Appeals has recently reversed the charges. In the opinion handed down by Judge Yegan, he began with stating, “An employee who listens to consumer complaints should have a thick skin." The court found that there was no substantial evidence that the threats were made directly to the recipient of the call or that Powers used any obscene language in a lewd manner. Furthermore, the court found that the calls were not private and therefore did not target anyone specifically. As a result, the court did not find these messages intrusive or in direct violation of privacy. Although the messages may have been annoying, the court affirmed, the vulgarities used by Mr. Powers could not be described as obscene, nor did they cross the line.

The case is: People v. Powers, 2nd Dis, Division 6, March 2, 2011; B218687

Monday, February 14, 2011

Court Stands Strong Behind Sharp Tactics

The Ninth Circuit Court of Appeals has once again stood behind prosecutors’ tactics of fueling minimums in drugs cases in which defendants refuse to snitch. The court upheld, for the second time, the conviction of a drug dealer who refused to act as a government informant and was therefore subject to a higher minimum. The panel of three judges unanimously upheld this conviction.


Convicted drug dealer Jay Kent refused to act as a government informant after being caught with crack in July, 2008. The Assistant Federal Public Defender tried entering into a guilty plea for his client before the government filed the 851 information, triggering steeper penalties based on prior drug convictions. However, the guilty plea had to be withdrawn after the Assistant U.S. Attorney revealed the copies of the bolstered charges and the Court accepted the 851 information. This raised the exposure from five to forty to ten to life.

The appeals court later held that there was no evidence to support the claim that the government acted vindictively and also held that the court was right to accept the new charge information under federal and local rules governing proper filing procedure. Furthermore, the court held that it is reasonable for prosecutors to carry out threats of increased charges from failed plea negotiations. Kent's defense attorney criticized the opinion by stressing that he believed the judges did not see the clear evidence of vindictiveness and for its definition of plea bargaining. A rehearing is still uncertain.

The case is: United States v. Kent, 9th Cir, February 8, 2011; 10-10011

Thursday, February 3, 2011

US v. Morris: Judge Patel Reversed

The 9th Circuit Court of Appeals reversed a district court judgment - that of Judge Patel. The court held that the government's decision to carry out an earlier threat to increase a defendant's potential sentence following his refusal to cooperate as a witness in a trial of a confederate did not violate the defendant's due process rights.  In other words, the court upheld the government's ability to threaten a defendant with the filing of his 21 U.S.C. §851(a)(1) priors if defendant would not cooperate against co-defendants and/or plead guilty.


The case is: United States v. Morris, 10-10009.

Monday, January 10, 2011

Defendant Granted Deferred Entry of Judgment Couldn't Be Terminated Based Solely on Inability to Pay Program Fees

In this case, Judge Cantil-Sakauye of the California Third Appellate District, held that a defendant granted deferred entry of judgment could not be terminated based solely on the inability to pay program fees of the drug diversion program she had been referred to.  She presented evidence of her inability to pay.  She should not have been terminated from durg diversion on this basis.

The case is: People v. Trask, C.A. 3d, Dec 29, 2010; C0684804