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August 1, 2011

Two notable white-collar rulings from the Second Circuit

The Second Circuit gets August off to a note start with two big (and important?) opinions in white-collar cases.  Here are the basics, with the summaries taken the the start of each opinion:

US v. Ferguson, No. 08-6211 (2d Cir. Aug 1, 2011) (available here): "The defendants, four executives of General Reinsurance Corporation (“Gen Re”) and one of American International Group, Inc. (“AIG”), appeal from judgments of the United States District Court for the District of Connecticut (Droney, J.), convicting them of conspiracy, mail fraud, securities fraud, and making false statements to the Securities and Exchange Commission. The charges arose from an allegedly fraudulent reinsurance transaction between AIG and Gen Re that was intended to cure AIG’s ailing stock price. We vacate the defendants’ convictions and remand for a new trial."

US v. Feldman, No. 10-2275 (2d Cir. Aug 1, 2011) (available here): "Appeal from a judgment of the United States District Court for the Northern District of New York, David N. Hurd, Judge, convicting Jerome H. Feldman of one count of health care fraud, see 18 U.S.C. § 1347; five counts of wire fraud, see 18 U.S.C. § 1343; and sentencing Feldman to 188 months in prison and three years of supervised release. Affirmed."

As the first sentence of this post hints, I cannot tell from a quick read whether either of these opinions are especially jurisprudentially important.  But anytime the Second Circuit reverses a significant white-collar conviction (as in Ferguson) or affirms significant white-collar sentence (as in Feldman), the feds and/or the NY defense bar usually find ways to make the ruling consequential.

August 1, 2011 at 11:35 AM | Permalink


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I do think the GenRE case is significant. Error was introduced by the judge, not caught or commented on by either party and then reversed under plain error review I don't know that it will have wider application but that seems like an amazingly permissive plain error standard when compared to other circuits.

I also suspect that a retrial is not going to go in these defendant's favor, especially with being able to jettison to causation evidence of the stock price drop for merely showing that the players thought the scheme would be material.

Posted by: Soronel Haetir | Aug 1, 2011 12:33:14 PM

The Feldman case is also significant, because it disapproves of blanket alternative sentences -- except in really clear-cut cases, district courts won't be able to immunize their Guideline calculations from appellate review by saying "I'd give the same sentence anyway under 3553(a)."

Also, for what it's worth, Feldman should have got the statutory maximum, and I say this as a defense attorney.

Posted by: Jonathan Edelstein | Aug 1, 2011 8:56:25 PM

If my indigent clients got the level of due process these guys get (both in terms of zealous representation and in terms of careful scrutiny from the courts), we'd be well on our way to solving the mass incarceration crisis.

In a lot of states, you can arrest somebody on a felony charge, stick them in jail for a year or two, where they see a lawyer maybe once, and then either convict them in a 1-day trial or exact a plea (not infrequently taken just to get transferred to prison, where the conditions are better). At the end, the appellate record is thin enough to fit in a manila folder, and any good issues are probably defaulted (no plain error in my state!). Meanwhile, these fat cats get the kind of super due process that was envisioned in that proposed Maryland capital murder bill. Not that I advocate "leveling down" so fat cats can get railroaded too, but it still galls.

Posted by: Anon | Aug 2, 2011 12:10:57 PM

Feds want to equalize white collar cases so that they are equal to indigent defendants. They can do this by seizing all assets ahead of time, under "proceeds" or money laundering theories---and then leave the defendant with no funds to hire competent legal representation.(and case law has found no harm to Sixth Amendment rights if Government finds probably cause to believe that the Defendant's assets may be tainted. See Caplin & Drysdale) Defending complex white collar cases is terribly expensive and time consuming. If anyone can name a single case where a white collar/money laundering defendant was found innocent at trial with a public defender or appointed attorney, I would like to know. Or if you know way to research this, would like to know. My research on internet shows that only 5% of Fed cases go to trial, and of those that go to trial, most are found guilty.

Posted by: folly | Aug 4, 2011 9:27:45 PM

I am a retired US Marine want decent laws and behavior. like particularly now The Warren Jeff's sentencing, I believe that any person such as preachers, pastors, priests, Scout Masters, Counselors, teachers, trusted by young folks and their guardians-parents to care for and provide care and services to young folks- if convicted of sex crimes against a young person: should be injected wth sex hormones o really raise sex libido-or whatever horniness-or Randy-lecherous behavior is called- then and now fix him(assuming it's a male involved and being sentenced! well msybe a ring permenantly implanted and irremovable from the base of his penis even Viagra or Cialis has no effect on or helping and erection! or maybe even removing his penis( Mexicans when I was young in New Mexico had ways and methods of taking rapist, sex molesters down under the Barelas Bridge along side the Rio Grande and removed their testicles, maybe let them handle Warren Jeffs and his type of sex fiends -abuse

Posted by: BougBeaty | Aug 6, 2011 5:22:59 PM

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