Linsanity’ Finds its Way Into Federal Court

‘Linsanity’ Finds its Way Into Federal Court">‘Linsanity’ Finds its Way Into Federal CourtCourt

Posted by admin On February - 20 - 2012 0 Comment

Defense attorneys and prosecutors are often likened to a range of athletes, from hard-slugging prize fighters, to tennis players volleying complex legal arguments across the courtroom.

It was only a matter of time before somebody in a big time federal case referenced Jeremy Lin, the New York Knicks’ Harvard-educated point-guard who’s become an unlikely international superstar.

During a hearing in Manhattan federal court Thursday evening, defense attorney Gary Naftalis, who is representing former Goldman Sachs director Rajat Gupta in an insider trading case, explained that co-counsel David Frankel would be making the argument.

Naftalis said the switch was analogous to New York Yankees relief pitcher Mariano Rivera coming to replace starter A.J. Burnett.

Judge Rakoff, who is presiding over the case, said he was surprised the defense chose Rivera for the metaphor, and not the more newsworthy Lin, who got his shot at glory after coming off the Knicks bench to star at point guard for the team.

That’s when lead prosecutor Reed Brodsky stood up and assured Rakoff that if there are any “Jeremy Lins” in the courtroom, they are on the side of the government. The high-priced hurlers– the “Mariano Riveras” of the world — were all on the defense, Brodsky said.

The courtroom had a good chuckle, but Brodsky did have a point. Federal prosecutors make a fraction of the salary of top defense attorneys like Naftalis.

Indeed, the deep-pocketed New York Yankees pay Mariano Rivera $15 million a year, according to the salary tracking company Spotrac. Lin makes a paltry $762,195.

We won’t know if Mr. Brodsky hit any legal three-pointers during the hearing until Judge Rakoff makes his ruling, but Mr. Brodsky did hold his own in “court.”

Correction: Jeremy Lin came off the New York Knicks bench to become a starting point guard for the team. An earlier version of this posting incorrectly said Lin replaced an injured Carmello Anthony.

Judge Orders Juror Arrested In Tax-Shelter Case

Judge Orders Juror Arrested In Tax-Shelter Case">Judge Orders Juror Arrested In Tax-Shelter Case

Posted by admin On February - 20 - 2012 0 Comment

A New York federal judge on Wednesday ordered the arrest of a Bronx woman accused of lying about her legal and criminal background in order to serve as a juror in a tax-shelter fraud trial last year.

The juror failed to appear in court Wednesday morning after she was served with a subpoena to give testimony. The juror was taken into custody and brought to Manhattan federal court, where she is expected to give testimony later Wednesday.

Lawyers for Paugaul Derdas, the former head of Jenkens & Gilchrist’s Chicago office  and Denis Field, accounting firm BDO Seidman’s former chief executive, have asked U.S. District Judge William Pauley III to order a new trial, based in part on the juror’s alleged misconduct.

The judge is conducting a two-day evidentiary hearing to determine whether the juror lied about her background and if any of the defense lawyers knew about this possibility during the trial.

Daugerdas, Field and two others were convicted of criminal charges in May, following a 10-week trial and almost two weeks of deliberations by jurors. Jurors had to restart their deliberations at one point after a sick juror was replaced by an alternate.

In court papers, the defense claimed in part that the juror failed to tell the court during voir dire, or questioning of potential jurors, that she held a law degree and was suspended from the practice of law since 2007.

They also claim she failed to tell the court she had been arrested on several occasions, is on criminal probation for two misdemeanor shoplifting charges and is facing an outstanding warrant for her arrest on a disorderly conduct charge.

The issues were raised following a letter the woman wrote to prosecutors after the trial, praising their work on the case and discussing some of the jury deliberations.

Daugerdas was a successful tax lawyer, once earning millions annually selling tax-avoidance strategies to wealthy clients. Prosecutors had alleged Daugerdas received more than $95 million in income from the sale of the improper tax shelters.

But Daugerdas’s business began to unravel after the Internal Revenue Service started to crack down in the early 2000s on alleged abuses in the booming tax-shelter industry, which had been fueled by fortunes made in the bull market of the late 1990s.

Civil suits by clients of Daugerdas contributed to the downfall of his former law firm, Jenkens & Gilchrist, which once numbered 600 lawyers and ranked among the biggest and most successful firms based in Texas.

Jenkens & Gilchrist closed its doors in 2007 after the firm entered into a non-prosecution agreement with prosecutors and agreed to pay a $76 million IRS penalty.

Ecuadorean Plaintiffs Want Judge Off US Racketeering Case">Ecuadorean Plaintiffs Want Judge Off US Racketeering Case

Ecuadorean Plaintiffs Want Judge Off US Racketeering Case">Ecuadorean Plaintiffs Want Judge Off US Racketeering Case

Posted by admin On February - 20 - 2012 0 Comment

Steven Donziger, the U.S. legal adviser to a group of Ecuadoreans suing Chevron Corp., and the Ecuadoreans have asked a U.S. judge to step aside from a racketeering case  the oil company brought against the Ecuadoreans in New York.

As a quick recap, the Ecuadoreans have sued Chevron in long-running litigation over environmental damage in that country’s Amazon region. An Ecuadorean court issued an $18 billion judgment against Chevron last year, which is being appealed.

Shortly before the judgment was entered Chevron filed a lawsuit against the Ecuadorean plaintiffs, their lawyers and Donziger in the U.S., claiming the 18-year-old litigation was little more than an elaborate shakedown scheme.

Fast forward to today, Donziger has asked U.S. District Judge Kaplan, who is presiding in the U.S. case, to step aside because “the court has not hesitated to express either its antipathy to Donziger or its partiality to Chevron’s overreaching legal arguments.”

“These attacks on Donziger will haunt the remaining proceedigns, casting dobut on the fairness, impartiality and propriety of everything the court does from her on out,” said John W. Keker, a lawyer for Donziger, and James Tyrell Jr., a lawyer for the Ecuadorean plaintiffs, in a court filing.

“Donziger therefore requests that the court consult its conscience and ask itself whether it can both be and appear to be fair and impartial when adjudicating Cheveron’s remaining claims against him.”

“The motion is unwarranted,” said Kent Robertson, a Chevron spokesman. “They’ve tried this tactic before and failed.”

Last year, Kaplan issued a preliminary order barring the Ecuadorean plaintiffs from pursuing Chevron’s assets outside of Ecuador. However, a U.S. appeals court in September threw out the injunction.

Appeals Court: Ex-Body Armor Exec Must Pay Legal Fees">

Appeals Court: Ex-Body Armor Exec Must Pay Legal Fees">Appeals Court: Ex-Body Armor Exec Must Pay Legal Fees

Posted by admin On February - 20 - 2012 0 Comment

The founder of a body-armor maker convicted of insider-trading in 2010 will have to pay more than $200,000 in attorney’s fees in a dispute with his former lawyer, a federal appeals court has ruled.

David H. Brooks, the former chief executive of DHB Industries, allegedly stopped paying his former lawyer, Richard Ware Levitt, before his eight-month trial concluded two years ago and hired new lawyers to assist in his post-conviction motions.

After Brooks hired new layers, Levitt moved to withdraw as counsel and sought a judgment of $224,956.16 to cover the unpaid legal fees. Brooks opposed Levitt’s motion but didn’t contest the amount owed.

A federal judge in Central Islip, N.Y., ruled in Levitt’s favor in March 2011. On Tuesday, the U.S. Second Circuit Court of Appeals upheld the district court’s decision.

“We’re reviewing the decision now and evaluating whether or not there’s a basis to seek further review,” said Andrew J. Goodman, a lawyer for Brooks.

Brooks, who left the company in 2006, was convicted in September 2010 of insider trading and other charges in an alleged $190 million scheme to overstate the company’s financial performance and to misappropriate millions of dolalrs in corporate funds.

He allegedly used company money to pay the expenses for his horse-training business and to live a lavish lifestyle, including overseas vacations for his family and $40,000 on leather-bound invitations for his son’s Bar Mitzvah, prosecutors said.

Before his trial was over, Brooks, 57 years old, sought to release funds that were subject to forfeiture, saying he had depleted the funds available to pay for his defense. At the time, he said had outstanding bills of about $1.5 million and that he expected signficant ongoing costs related to post-trial proceedings.