November 2010 Archives

Criminal Forfeiture in Federal Cases - An Overview

November 26, 2010, by The McKellar Law Firm, PLLC

Criminal forfeiture of a defendant's assets is another punitive tool that the Government can employ which causes enormous financial damage to the accused. In federal criminal cases, the court procedure for forfeiture is primarily set forth in Federal Rule of Criminal Procedure 32.2 , 18 U.S.C. § 982, and 21 U.S.C. § 853.

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Below is a list of federal crimes that provide for criminal forfeiture:

1. Chemical Weapons (18 U.S.C. § 229B, 22 U.S.C. § 6744)
2. Controlled Substances (21 U.S.C. §§ 853, 970)
3. Espionage and Censorship (18 U.S.C. §§ 793, 794, 798)
4. Food-stamp Program Violation (7 U.S.C. § 2024)
5. Fraud - Access Devices (18 U.S.C. § 1029)
6. Fraud - Aircraft or Space Vehicle Parts (18 U.S.C. § 38)
7. Fraud - Computer Fraud & Electronic Mail (18 U.S.C. § 1030, 1037)
8. Fraud - Identification Documents (18 U.S.C. § 1028)
9. Internal Security (50 U.S.C. § 783)
10. Monetary Instruments (31 U.S.C. § 5317)
11. Obscenity (18 U.S.C. § 1467)
12. RICO - Racketeer Influenced and Corrupt Organizations Act (18 U.S.C. § 1963)
13. Sexual Exploitation and Abuse of Children (18 U.S.C. § 2253)
14. Special Supplemental Nutrition Program (42 U.S.C. § 1786)
15. Stolen Property (18 U.S.C. § 2323)
16. Trade Secrets (18 U.S.C. § 1834)
17. Violation of Act of Congress (28 U.S.C. § 2461)

Criminal forfeiture procedure can often be complex and filled with pitfalls along the way. Make sure to obtain an experienced criminal forfeiture attorney before navigating the land mines of forfeiture law.

Bank Fraud Scheme Results in 30 Arrests in Knoxville Federal Court

November 24, 2010, by The McKellar Law Firm, PLLC

United States Prosecutors unleashed an Indictment last week against 30 defendants from Tennessee and Georgia for an alleged conspiracy to commit bank fraud, in violation of 18 U.S.C. Section 1344. The indictment alleges that the ringleaders of this alleged conspiracy recruited homeless people to cash fake payroll checks in area banks. According to an article by the Knoxville News Sentinel's Jamie Satterfield, Judge Bruce Guyton ordered the alleged ringleader of the conspiracy to be held without bond pending his trial.

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Federal law on Bank Fraud is codified at 18 U.S.C. Section 1344 as follows:

Whoever knowingly executes, or attempts to execute, a scheme or artifice-- (1) to defraud a financial institution; or (2) to obtain any of the moneys, funds, credits, assets, securities, or other property owned by, or under the custody or control of, a financial institution, by means of false or fraudulent pretenses, representations, or promises; shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.

This case is another example of the Government continuing its efforts to prosecute white collar and economic crimes. If you are unfortunate enough to be accused of committing economic crimes, your best move is usually to contact an experienced criminal defense attorney immediately. Oftentimes, the Government has been investigating the alleged crimes long before a suspected defendant is even aware of the Government's involvement. Accordingly, time is of the essence to ensure that your rights are protected.

Additional Resources:
"Alleged Leader of Fraud Scheme Jailed," Knoxnews.com, November 24, 2010
112410ring.pdfUnited States v. Larry Seymore, et al., Indictment
18 U.S.C. Section 1344 - Bank Fraud

Foreign Corrupt Practices Act Continues to Spread Its Wings

November 17, 2010, by The McKellar Law Firm, PLLC

Federal Criminal Defense Lawyers will occasionally encounter clients charged with violating The Foreign Corrupt Practices Act of 1977, 15 U.S.C. §§ 78dd-1, et seq. ("FCPA"), which makes it illegal for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business. In other words, bribing foreign government officials can put a client in jail and/or result in substantial financial penalties.

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Lanny Breuer, Assistant Attorney General for the Criminal Division of the Justice Department, recently said that in the past year, the Justice Department has imposed the most criminal penalties in FCPA-related cases in any single 12-month period ever, including more than $1 billion worth of penalties. He further said that in 2009 and 2010, the Justice Department has charged over 50 individuals and collected nearly $2 billion for FCPA violations and there are currently roughly 35 defendants awaiting trial on FCPA charges.

According to the Department of Justice's Lay-Person's Guide to the FCPA, the following affirmative defenses are available to someone or some entity charged with violating the FCPA:

A person charged with a violation of the FCPA's anti-bribery provisions may assert as a defense that the payment was lawful under the written laws of the foreign country or that the money was spent as part of demonstrating a product or performing a contractual obligation. Whether a payment was lawful under the written laws of the foreign country may be difficult to determine. You should consider seeking the advice of counsel or utilizing the Department of Justice's Foreign Corrupt Practices Act Opinion Procedure when faced with an issue of the legality of such a payment. Moreover, because these defenses are "affirmative defenses," the defendant is required to show in the first instance that the payment met these requirements. The prosecution does not bear the burden of demonstrating in the first instance that the payments did not constitute this type of payment.


Additional Resources
Dept. of Justice Site on FCPA
"FCPA: Strong and Getting Stronger," Wall Street Journal (Online), November 16, 2010

Tennessee Doctor Guilty of Illegally Dispensing Drugs, TennCare Fraud, and Attempted Tax Evasion

November 16, 2010, by The McKellar Law Firm, PLLC

Chattanooga Tennessee Doctor pleaded guilty earlier this month to writing illegal prescriptions for Oxycodone, defrauding TennCare, and for attempting to evade taxes. Dr. Samuel Ashby admitted to writing prescriptions which were not withing the accepted standards of medical care. Accordingly, TennCare paid benefits for prescriptions which were not necessary, which was fraudulent.

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As with many investigations involving pain clinics and pain management practices, the investigation was launched in response to complaints by citizens about the doctor operating a "pill mill." In response to those complaints, the Tennessee Bureau of Investigation and the Internal Revenue Service launched a joint investigation. One of their first steps was to execute a search warrant to obtain medical records from Dr. Ashby's office.

Dr. Ashby's sentencing hearing is scheduled for March 21, 2011. He faces faces a up to 20 years in prison for illegal distribution of a controlled substance; up to 10 years in prison for healthcare fraud; and up to five years in prison for the tax crimes.

As I have explained to clients in the medical field before, the Government treats doctors who write illegal prescriptions as drug dealers. U.S. Attorney for the Eastern District of Tennessee Bill Killian echoes this position when he states in regards to Dr. Ashby's case:

This case demonstrates our office's commitment to addressing the ever-growing problem of prescription drug abuse. Increasingly we are finding unscrupulous healthcare professionals involved in illegally distributing drugs. When a doctor steps outside the bounds of professional practice and prescribes narcotics without medical justification, he or she becomes simply a drug dealer.

Additional Resources
"Fayetteville Doctor Pleads Guilty," The Chattanoogan.com, November 3, 2010

Affirmative Defenses to Child Pornography Charges

November 11, 2010, by The McKellar Law Firm, PLLC

Child pornography charges are among the most serious allegations that a federal criminal defense lawyer can handle. As part of any good defense, an attorney must be aware of any affirmative defenses that the law provides to protect one's clients.

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18 U.S.C. Section 2252 is one of many laws addressing sexual exploitation of minors. 18 U.S.C. Section 2252(a)(4)(b) specifically says:

(B) knowingly possesses, or knowingly accesses with intent to view, 1 or more books, magazines, periodicals, films, video tapes, or other matter which contain any visual depiction that has been mailed, or has been shipped or transported using any means or facility of interstate or foreign commerce or in or affecting interstate or foreign commerce, or which was produced using materials which have been mailed or so shipped or transported, by any means including by computer, if-- (i) the producing of such visual depiction involves the use of a minor engaging in sexually explicit conduct; and (ii) such visual depiction is of such conduct; shall be punished as provided in subsection (b) of this section.

However, this same statute also provides statutory affirmative defenses in subsection (c) as follows:

It shall be an affirmative defense to a charge of violating paragraph (4) of subsection (a) that the defendant-- (1) possessed less than three matters containing any visual depiction proscribed by that paragraph; and (2) promptly and in good faith, and without retaining or allowing any person, other than a law enforcement agency, to access any visual depiction or copy thereof-- (A) took reasonable steps to destroy each such visual depiction; or (B) reported the matter to a law enforcement agency and afforded that agency access to each such visual depiction.

If you believe that any of these affirmative defenses may apply to you, contact an experienced criminal defense attorney immediately. Perhaps more than any other type of case, moving quickly in a child pornography case is of utmost importance to a successful defense.

Tax Structuring Crimes Carry Stiff Penalties

November 3, 2010, by The McKellar Law Firm, PLLC

Tax structuring is one method employed by alleged tax criminals to avoid the payment of taxes to the Government. The Internal Revenue Code (Section 6050I) requires that cash payments of $10,000 or higher be reported to the IRS via Form 8300. If you fail to do so and have the intent to evade payment or assessment of taxes, you may be guilty of tax structuring.

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A typical tax structuring scheme involves persons making multiple deposits below the $10,000 mark in order to avoid having to fill out IRS Form 8300 and report said receipts to the IRS.

The statutory penalties for violation of the structuring transactions can be severe and are contained in 31 U.S.C. § 5324(d) as follows:

(d) Criminal Penalty.--

(1) In general.-- Whoever violates this section shall be fined in accordance with title 18, United States Code, imprisoned for not more than 5 years, or both.

(2) Enhanced penalty for aggravated cases.-- Whoever violates this section while violating another law of the United States or as part of a pattern of any illegal activity involving more than $100,000 in a 12-month period shall be fined twice the amount provided in subsection (b)(3) or (c)(3) (as the case may be) of section 3571 of title 18, United States Code, imprisoned for not more than 10 years, or both.

Further, a typical tax structuring charge will be accompanied by charges for failure to file tax returns or filing false tax returns, with these charges each containing their own set of punishments.