Justice Served Up Daily

Rod Blagojevich

Justice Served Up December 13 2013

English: Mug shot of Rod Blagojevich.

English: Mug shot of Rod Blagojevich. (Photo credit: Wikipedia)

Here is what we are reading on this Friday the 13th:

Kurt Mix Moves To Have Case Dimissed (Forbes) - The trial of former BP BP -1.13% drilling engineer Kurt Mix is coming to a close as the defense prepares to call three witnesses Friday and have closing statements next Monday.  However, before one defense witness took the stand, Mix’s attorneys, led by Ropes and Gray LLP’s Joan McPhee, asked U.S. District Judge Sandwood Duval, Jr. to enter a judgement of acquittal because prosecutors had failed to prove Mix’s guilt beyond a reasonable doubt.

Insider Trading Arrest Made In U.K. (Bloomberg) -  A 49-year-old employee at William Morrison Supermarkets Plc (MRW) was arrested as part of a U.K. insider-trading probe, according to two people with knowledge of the case.  The man, detained yesterday in Harrogate, England, isn’t a member of the company’s management board, said one of the people, who declined to be named because the suspect hasn’t been identified by regulators.  The U.K. Financial Conduct Authority arrested a man with the help of police in North and West Yorkshire and executed a search warrant, the FCA said, without identifying who was detained.

Will SAC Manager Steinberg Testify (Bloomberg) -  SAC Capital Advisors LP fund manager Michael Steinberg was told by the judge overseeing his insider-trading trial to be prepared to say whether he will testify in his own defense after prosecutors said they expect to finish presenting evidence tomorrow.  Assistant U.S. Attorney Antonia Apps told U.S. District Judge Richard Sullivan in Manhattan today that the government plans to rest its case after its last witness, a former Altera Corp. (ALTR) executive who pleaded guilty to passing illegal tips about his company and Nvidia Corp. (NVDA).

Blagojevich Seeks To Throw Out Corruption Charges (Bloomberg)Rod Blagojevich, the former Illinois governor serving a 14-year prison term for corruption, wants U.S. appeals court to overturn his sentence and throw out the guilty verdicts by two federal court juries.  Blagojevich, a Democrat, was arrested five years ago this week on charges he tried to trade his power to appoint a U.S. Senate successor to then-President-elect Barack Obama for campaign cash or a new job.

Top List of White-Collar Crime Prison Terms (WSJ) -  Keith Simmons is not a household name. His Ponzi scheme, which was uncovered in 2009, cost his victims more than $35 million, a much smaller figure than, say, the $20 billion fraud perpetrated by Bernie Madoff (which came to light five years ago Wednesday) or R. Allen Stanford’s $7 billion scam.  But his conviction was notable outside of North Carolina, where he was prosecuted and received a 50-year prison sentence, one of the longest for a white-collar crime. That number tied him with convicted Ponzi schemers Scott Rothstein and Tom Petters for the tenth-longest prison sentence imposed on a white-collar criminal, according to a search of news releases, court records and other news sources.

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Justice Served Up August 7, 2012

080807 Gibson Guitar Factory (4)

080807 Gibson Guitar Factory (4) (Photo credit: Wikipedia)

Roomy Khan Takes The Stand - The woman who is believed to be the person who was the first to turn as a government informant in the insider trading cases that have been prosecuted in New York for the past 18 months took the stand today in the Doug Whitman (Whitman Capital) trial.  Khan, who had a previous conviction for insider trading, pled guilty in 2009 and is awaiting sentencing.  This marks the first time that the government has used her in a trial.  She made no appearance at the Raj Rajaratnam trial though many thought she would testify.  She told jurors today that she passed inside information on to Whitman, her neighbor for some time, on various companies including Marvell.  She will be on the stand for the next few days.

Muni-Bond Trial Update - Mark Zaino took the stand in the second week of the trial of 3 Ex-UBS investors (Gary Heinz, Michael Welty, Peter Ghavami).  On one transaction, Zaino testified that Heinz told him to "forget about" a transaction involving the Massachusetts Education Financing Authority.  Zaino said he understood that to mean, "...we should come up with a lie with a credible reason for the payments."  This, prosecutors say, was a direct reference to a kickback Zaino would receive for sending business to UBS.

Gibson Guitar Settles Criminal Charges - Gibson Guitar had illegally imported Madagascar Ebony wood, in violation of the Lacey Act.  Last August, FBI agents stormed the Nashville, TN company in bullet proof vests with guns drawn to confiscate 100 guitars.  The Lacey Act has been criticized by many, including me, for being  too tough on small violations.  The Act was meant to protect endangerd plants and animals but it has turned into arrests of people who had not realized they had even violated a law.  Gibson will pay a fine and move on, sans the Madagascar Ebony wood.

Church Usher Operated Ponzi Scheme - A Georgia man, Joseph Klos, looks like he will be doing some time in federal prison after he pled guilty to charges that he operated a Ponzi-type scheme to defraud victims out of $3 million.  Most of the victims were from his local gym and the church.  He seemed like a trustworthy guy, especially since he was 86 YEARS OLD!!!!!  Sentencing is in December.  Suffice it to say that the sentence will most likely equal LIFE.

Former Illinois Governor Denied Appeal - No I'm not talking about Former Gov. Rod Blagojevich from Illinois .... I'm talking about the other Illinios governor who is nearing the end of his prison sentence on corruption charges, George Ryan.  Ryan had asked the courts to have his sentence reduced.  Next year Ryan is scheduled to complete his 6 1/2 year sentence anyway.  He'll be 79 years old.


Justice Served Up March 16, 2012

Prosecutor Misconduct in Senator Ted Stevens Case - Fascinating story of how prosecutors in Alaska are accused of hiding evidence in the prosecution of Sentator Stevens.  Stevens died in a plane crash 2010.  The investigation into misconduct was ordered after U.S. Attorney Eric Holder had the case dismissed shortly after taking the position in the Obama administration.  Underage prostitution, suicide and lies .... this is as bad as it gets ... and we should all celebrate the findings being brought to light.

MF Global Employees to Testify Before Congress - Perhaps you remember when Jon Corzine gave up the name of Edith O'Brien during his testimony before congress in January....I do.  So it was a matter of time before Ms. O'Brien was called before congress herself, and she is not expected to talk.  Joining O'Brien, who is said to be at the center of commingling funds, will be a group of other women (all women) who worked at MF Global.  Will they speak?

Dennis Kozlowski Back In Manhattan - The former Tyco CEO and convicted felon, is now in a work-release program in New York.  Convicted in 2005 in a New York state court, Kozlowski is set to be a free man later this year.  What will be his next act?

Blago Enters Prison - In this modern age of Twitter, instant messaging, phones with cameras and video, the trip to prison for former Illinois Governor Rod Blagojevich was well documented.  Blago traveled from Chicago to Littleton, CO to begins his 14-year sentence for corruption.  Here is his trip in pictures.


Former Illinois Gov Rod Blagojevich Heads to Prison

English: Official congressional portrait of fo...

Image via Wikipedia

Rod Blagojevich was never one to hold back from saying what was on his mind....and the FBI has the tapes to prove it.  As Blago sets off for a Colorado prison to serve his 14 year prison sentence, he is expected to make a statement...."... just a word before I go."  However, I recently spoke with an expert on what Blago can expect and it wasn't from a person who used to be in prison as an inmate.  Instead, I spoke with former Federal Prison Case Manager Jack Donson who now provides consultations to those sentenced to federal prison.

A federal prison sentence of 168 months (14 years) means that Blago will get some "good time" for being a well-behaved inmate....making him eligible for release after 147 months (12 years, 3 months)....and Blago should get the Residential Drug Abuse Program (RDAP) since he had brought up that he had some issues with alcohol so that takes off a full year (11 years, 3 months)....and then there is halfway house of 6 months which means you may run into Blago behind the counter at the 7-11 (10 years, 9 months).   So my guess is that the first sighting of a thinner, less vocal Blago will be December 2022.  Wow, still a ways out there but less than the 14 years.

So why Colorado?  Donson told me that the Bureau of Prisons, who has the last say on where inmates serve their time, ordinarily designates high profile offenders outside their area to lessen publicity.   Donson recalled that Martha Stewart had originally wanted to serve her time in Danbury, CT but instead was shipped off to West Virginia.   Also, Blago will be assigned the Central Inmate Monitoring (CIM) category of Broad Publicity.  This is added to his classification in the computer system because of the national media attention.  Such a designation may make it more unlikely that the former governor could be eligible for a furlough, or an ability to work in the community near the prison, as some inmates are allowed to do.

Blago will start his sentence at a Low security facility (has a fence) because of the length of his sentence (over 10 years).  Offenders with over 10 years are not eligible for camp (the lowest security facility) placement.  Donson said that the Bureau of Prisons can waive this requirement for added security for some inmates, but rarely do.  However, give Blago a few more years and he'll be camp eligible anyway.

Once Blago arrives in Colorado he will begin filling out various paperwork on his health, people he would like to have on his email, phone and visitation lists (sure those lists are shorter these days).  He will be stripped of all of his clothes and jewelry, save a wedding band so long as it is not crested with jewels.  A uniform, boots, under garments and bedding will be standard issue.  His bed will most likely be on the upper-level of a bunk (a prized position as a child, but as an adult, not so much).  With time, he will gain seniority to get better accommodations (one of the many small advantages of doing a long prison sentence).

Then family members and friends will have the opportunity to send some money into Blago's commissary account, which funds phone calls, email, stamps and various things available for purchase at a prison store once a week.  His wife and children will be able to visit on the first available visitation day, but distant family and friends may have to wait a few weeks.

Life will be different, but even that will become routine after a while.  Many thanks to Jack Donson for his input.


Blagojevich Seeks Drug Treatment In Prison

English: Mug shot of Rod Blagojevich.

Image via Wikipedia

Former Illinois Governor, now convicted felon, Rod Blagojevich was sentenced to 14 years in prison this month and was due to report to prison in mid-February.  Blagojevich needed more time to get his family affairs in order and asked for, and received, a delay in reporting to prison in Littleton, CO....he's now showing up on March 15.

So why would a resident of Illinois want to go to prison in Littleton, CO....over 1,000 miles from home?  Because the prison in Littleton has a Residential Drug Abuse Program (RDAP), which could cut over a year off of his sentence.  Blagojevich is one of many white-collar felons to take advantage of a successful, touted by the Bureau of Prisons, program that addresses drug and alcohol abuse among felons (NFL Quarterback Michael Vick participated in this program to gain early release).  The program is 9 months in duration and is conducted by counselors inside the prison to address addiction and abuse issues with inmates.  After completion of the program, inmates are eligible to receive 12 months reduced off of their sentence and receive a full 6 months of halfway house (community level security that usually results in home confinement).  It is the only way to get out of prison early since there is no probation in the federal system.

To qualify for the program their has to be a demonstrated abuse of person convicted.  This is usually documented in the Pre-Sentencing Report (PSI).  The PSI is prepared by the government and provides background on the person prior to a judge pronouncing a sentence.  For the person going to prison, it is an opportunity to qualify to the judge all the good attributes one has to offer family, friends and society...in hopes of getting a reduced sentence.  But there is one area where not having such a clean record could actually help in reducing the sentence....drug and alcohol abuse.  The documented abuse usually gets inserted into the PSI through investigations done by the government through interviews with family members of the felon....even spouses like Mrs. Blagojevich, who tell the investigator about the constant drinking or drug abuse.  Since there are protections from the government getting at medical records that may or may not actually document any abuse, the interview is proof enough that a person could be eligible for the RDAP program.  This information is sent on to the judge and the defense lawyer usually makes mention of the alcohol abuse at the sentencing hearing and the judge "recommends" the RDAP program....as was done for Blagojevich.

RDAP is a good program, and for every white-collar felon that applies for the program due to a "martini" problem, there are many who have hard addiction problems that contributed to their stay in prison (Blago only wishes he were drunk on the tapes that had him asking for cash).  The presence of educated people like Blagojevich in the program only helps, mentors, other inmates who come from less advantaged backgrounds.  Even Blagojevich has something to offer.

Here is a calculation and impact of the RDAP program on Blagojevich's sentence:

Original Sentence = 168 months (14 years....ouch)

Time off for Good Behavior = - 22 months (if Blago behaves, he earns 22 months of good time off of his sentence)

Time off for RDAP= - 12 months

Time in halfway house= - 6 months

Total Time in Prison = 128 months (a little over 10 and half years)

So 14 years gets down to a bit over 10 years.  One can call it gaming the system, but others besides Blagojevich will benefit as well....let's hope he passes on only the good things he knows to the other inmates.

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