United States

How Brits View our Justice System - Chris Tappin (65), a retired U.K. citizen, was escorted to the United States over the weekend to stand trial for his role in exporting military-grade batteries to Iran.  He was caught in a fictitious company sting operated by U.S. Immigration officials.  The U.K. is in an uproar over Tappin's extradition to face trial in El Paso, TX.  This is going to be an interesting story that I'll be covering in Forbes.

Federal Prisoners Soon To Be Allowed To Have MP-3 Players - Many federal prisoners have small radios, Walkman, which is primarily used to watch television.  There are multiple televisions in a large viewing room and each television transmits a low-grade signal to the local viewing audience/inmate.  It makes for civil discourse by not fighting over volume to view a show.  Now the Bureau of Prisons is considering a policy of allowing inmates to have their own MP3 players with music they download on a local computer at the prison.  The BOP says that it will not cost the tax payers any money....meaning that inmates will foot the bill for the device and the music they buy.  Some company is making money off of this, so don't think this is being done for the benefit of inmates.  A BOP spokesman said it will help inmates overcome "stress and boredom."

Allen Stanford Defense Team Rests - The trial of Allen Stanford came to a close yesterday when the defense team rested its case without calling its promised, star witness....Mr. Stanford.  Many defense attorneys claim that they will put their client on the stand but in the end claim that since the prosecution presented such a weak case that it was not necessary.  Closing arguments are set for Wednesday and the jury could get the case by the end of the week.

Michael Douglas in Wall Street III - In a short public service announcement, Michael Douglas (aka Gordon Gekko), encourages people who have knowledge of insider trading activity to step forward.  The FBI was behind the ad and did not pay Douglas for the appearance.  The commercial is part of the latest move by prosecutors to step up enforcement of securities laws that have led to 64 people being arrested in cases brought in the Southern District of NY (Operation Perfect Hedge).  In related news, the FBI says that it has a five-year backlog on investigations on insider trading as a result of the cases they have brought to date.  More sleepless nights for some hedge fund managers!

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Bill Clinton (Image via RottenTomatoes.com)

If you are a convicted felon and have faced lost opportunities because of that felony (lost job opportunities, inability to vote or own a gun, etc.) then you know how much of a benefit it would be to have that felony removed...forgiven...by the President of the United States.  There is not a higher form of forgiveness under the law and a pardon by the president means new opportunities.  But presidential pardons are few and far between.

There are high-profile cases like President Clinton's pardon of Marc Rich, who was in Switzerland at the time of his indictment (saw it coming) and never returned to the U.S....so that pardon was a complete waste.  Then President George W. Bush pardoned VP Dick Cheney's chief of staff, Scooter Libby, after he was sentenced to 30 months in prison for obstruction of justice charges related to a case of identifying a CIA informant, Valerie Plame.   However, most pardons are for lame cases that go back years.  As I wrote for Forbes last January, Obama, considered very liberal in his views, has been noted for his pardons of Ronald Lee Foster who was sentenced in 1963 to one year of probation and a fine of $20 for "Mutilation of Coins".  Who would have known that the hole I drilled in a nickel to make a necklace in 5th grade could have landed me with a felony?

Anyone who asks for a pardon is going to have a difficult time.  The White House receives thousands of applicants and then officials review their personal, professional, marital and financial history.  FBI agents will even interview friends, business associates, spouses (former spouses) and even review criminal records for minor violations since the felony (yes, even speeding tickets).  It is tough.  So do the people who get pardons represent the only ones who are worthy of a pardon?  One would hope, but it appears politics and money play a part.

Propublica put together two excellent articles on the pardon process.  In the first they looked at the pardons granted over the past 10 years (Bush and Obama) and found that white criminals were four times as likely to succeed as minorities in gaining a pardon.  Disturbing.  Of the 1,918 pardon cases sent to President Bush (2001-2008), he pardoned about 10% of those applicants (189)...7 were for African-Americans, 4 Hispanics, 1 Asian...the rest were white.  Certainly Obama did better than that!  Well, NO!  Obama has pardoned 22 people of which 2 were minorities.

Propublica's second piece concentrated on the those fortunate enough to get a pardon and how they got it (assuming there was no racial profiling).  One pardon they dug into was for Dale Critz, Jr. of Savannah, GA.  The Critz family has a successful car dealership in Savannah and their family is known for the community service and honest business dealings.  However, a felony conviction of a young Critz, Jr. during his 20s (altering loan documents for car loans at another, unrelated, dealership) would prove to be a problem later in life.  That conviction got Critz one year probation after pleading guilty and cooperating with authorities....he did the right thing.  But despite doing the right thing and paying his debt to society, Critz still had a felony record....and that would be a problem when he applied to take over the Critz dealership in Savannah that was owned by his father.  A pardon would resolve the problem....so Critz reached out to family friend Jack Kingston (Republican congressional representative in Georgia). 

Kingston became and advocate for Critz at the White House and, in time, Bush granted the pardon in December 2006.  At the age of 48 then, Critz became one of the youngest people pardoned by Bush....but he got his pardon, and the dealership.

People like Dale Critz, Jr, Scooter Libby and coin mutilator Ronald Lee Foster deserve the pardons they received.  But so do tens of thousands of others who exit prison each year and go on to live responsible lives.  There are over 40,000 inmates leaving the federal prison system each year....a stadium full of people.  However, few of these will ever have the opportunity to clean their felony record even though they have paid their debt and cleaned up their act.  More people need to be eligibale for pardons, not just those with money or who are politically connected.  We should not damn the pardons that were given, no matter the means, but encourage a more expansive process.  It's time to take a look at the pardon process so that it is equal for everyone.

Image by Getty Images via @daylife

When Moody's Investor Services analyst Deep Shah got wind that the FBI wanted to arrest him in November 2009 on charges related to insider trading, he fled to Mumbai.  Shah, it was alleged by the government, worked at Moody's and gave insider information to Roomy Khan, who cooperated with authorities which led to the downfall of hedge fund titan Raj Rajaratnam.  Rajaratnam is heading to prison on December 5, 2011 for ten years, Khan has yet to be sentenced, and Shah is still a fugitive.

According to Bloomberg, Shah was found alive and well in Mumbai earlier this year and he had no intention of returning to the United States.  The Securities and Exchange Commission (SEC) had a local law officer in Mumbia deliver documents stating that it had filed charges against him for insider trading....but Shah, a resident of Mumbai, did not answer the door and it appears the authorities did not look much further than that.

When people are convicted of non-violent crimes, who also have dual, or another, citizenship, should the courts impose larger bail amounts after their arrest to keep them from fleeing as Mr. Shah did?  It would appear so.

In a case of a Canton, MI (near Detroit) pharmacist, Babubhai Patel, who is charged with running at $57 million prescription drug billing scheme, no bail was set even though Patel, who has citizenship in India, had no prior conviction and has yet to be found guilty by a jury.  Another man in the Detroit area, Zafar Mehmood, a wealthy Pakistani businessman, has been charged with Medicare fraud...he is being held without bail.

In the case of billionaire hedge fund manager Raj Rajaratnam (Sri Lankan citizen as well as U.S.), he was able to secure bail to keep his freedom from the time of his arrest in late 2009 until his eventual reporting to prison in December 2011...but it cost him.  Raj's bail was set at $100 million, the largest in the history of the U.S.  So what happens if you don't have that kind of money, you sit in jail.

Winifred Jiau (Taiwan and U.S. citizen) was arrested in December 2010 for her role in an insider trading scheme related to tips derived from so-called "expert networks".  Jiau was arrested at her home in California and she made several attempts to gain her freedom through bail hearings so that she could work on "defending herself," she told me in an interview earlier this year about her situation.  She was never granted bail because New York prosecutor, Avi Weitzman, argued successfully that Jiau had ties to Taiwan, which has no extradition treaty with the United States.  Jiau's case went to trial with a court appointed attorney and she lost...she was sentenced to 48 months in prison and has been in federal prison since the day of her arrest in California.  She is currently in transit to a federal prison camp in California and is imprisoned at a "holding" facility (high security) prison in Nevada after being transferred from New York, the site of her trial.  Jiau has no prior criminal history.

While there should be more consideration for bail amounts (if at all) to people who might make a run for it to another country, couldn't authorites take away passports and put the person on an ankle bracelet?  Perhaps the decision to imprison those who are citizens of other countries and accused of a crime is an admission that our borders, coming and going, are too porous.