The National Attorneys General Training & Research Institute
CEPI Newsletter September 2017
This monthly compendium of news reports about corruption and ethics issues is brought to you by the Center for Ethics and Public Integrity (CEPI). Neither the National Association of Attorneys General nor the National Attorneys General Training & Research Institute express a view as to the accuracy of news accounts or affirm any position taken by the authors of the hyperlinked articles.
Registration is open to attorneys general office staff for the first ever CEPI Ethics Summit. The Summit will be in Savannah, Georgia, from October 23-24, 2017.
State AGs Press High Court to Take on Microsoft Warrant Row: A bipartisan coalition of nearly three dozen state attorneys general have signed an amicus brief urging the Supreme Court to grant the U.S. Department of Justice’s request for certiorari in Microsoft v. United States, a Second Circuit decision holding that the software company was not required to comply with a search warrant because it chose to store relevant data in Ireland and the statutes under which the search warrant was obtained did not have an extraterritorial reach.
AG Issues Reminder about Selma Gun Mill Case: Alabama Attorney General Steve Marshall has asked the public to be careful when buying second-hand guns, as they could be those stolen from the Selma Police Department. Former Selma police evidence technician Adrianne Michelle Canterbury, her husband, and a second woman were charged in May of this year with stealing hundreds of weapons. One of the stolen guns was used in an April 2017 shooting, which resulted in the death of a 19-year old.
Ex-Kingman Employee Pleads Guilty to Embezzling $1.1 Million: Diane Maxine Richards, who was budget analyst and interim finance director for the town of Kingman, Arizona, has pled guilty to stealing more than $1 million from the town she was supposed to serve. Richards, who was prosecuted by the Arizona Attorney General’s Office, was able to carry out the scheme because she gave herself authority to both initiate and approve transactions.
Husband Pleads Guilty in Attempted Tax Evasion Case, Wife's Charges Dropped: In a case brought by the Guam Attorney General’s Office, husband Mario Fernando J. Cortez and wife Elaine Cortez were indicted on federal tax evasion charges. After the husband pled guilty, prosecutors agreed to dismiss the pending charges against his wife. Because of 48 U.S.C. § 1421i(h), Guam prosecutors filed the case in federal court.
Rome Common Councilor Convicted of Stealing $20k in Unemployment Insurance Benefits: Louis DiMarco, Jr., a common councilor in Rome, New York, pled guilty to stealing nearly $20,000 in unemployment insurance benefits and resigned. In a case brought by the New York Attorney General’s Office, DiMarco admitted that he filed for unemployment benefits for nearly a year despite being employed as a member of the Rome Common Council.
Ex-City Councilman Cries as He’s Sentenced Up to Six Years in Prison for Stealing $30G from Queens Community: Ruben Wills, a now-former New York City councilman, was sentenced to two to six years of state prison after being convicted of stealing taxpayer money. Wills was ordered to pay over $37,000 in restitution and fines. Wills, who used some of the money he stole to buy a $750 Louis Vuitton bag, asked during his sentencing “If I say I maintain my innocence or disagree with the verdict, will that give me more time?” Wills was also prosecuted by the New York Attorney General’s Office.
Libor Traders’ Appeal Win Could Chill U.S. Cross-Border Cases: The Second Circuit Court of Appeals reversed convictions of two London-based traders who had been convicted of manipulating the LIBOR benchmark rate. Regulators in the United Kingdom compelled testimony from defendants Anthony Allen and Anthony Conti, and then provided that testimony to Paul Robson when it filed an enforcement action against Robson. Robson was later charged in the United States and agreed to cooperate with federal prosecutors; his expected testimony was then used to charge Allen and Conti, and Robson was called to testify at trial against Allen and Conti. The Circuit found that the Government could not, as required by Kastigar, show that Robson’s review of the compelled testimony didn’t shape, alter, or affect the evidence used by the Government to charge and convict Allen and Conti. As a result, the Court of Appeals ordered the trial court to dismiss the indictment. This case has clear ramifications for cross-border prosecutions by United States prosecutors, as it suggests that prosecutors must be aware that evidence obtained in a manner permitted by a foreign jurisdiction (but not by the U.S.) could taint a U.S.-based prosecution.
HCC Board Member Hires Consultant, Attorney to Investigate His Own Board: Houston Community College (HCC) Trustee Dave Wilson announced that he’s paying for an investigation into his own board of trustees after another HCC trustee pled guilty to bribery for accepting more than $12,000 in exchange for a promise to help the briber secure contracts with HCC. Wilson has hired a former investigative reporter and Keith Gross, an attorney who has represented Wilson personally in litigation about his trustee position, to investigate allegations of a “pay-to-play” system used by the trustees when awarding construction and other contracts. There are allegations that the system includes kickbacks to firms that employ politicians who passed legislation supporting HCC. This investigation will apparently run parallel to a separate investigation funded by HCC, which has hired a former county commissioner and former U.S. Attorney to examine its procurement system.
Dean Skelos Lawyers Cite Silver Reversal in Appeal: Defense attorneys have argued that former State Senate leader Dean Skelos’s arguments for a new trial on McDonnell grounds are strengthened by the Second Circuit’s decision to reverse the conviction of New York State Assembly Speaker Sheldon Silver. The Government cited the Circuit’s decision less than a week before the Silver reversal to affirm the conviction of William Boyland, a former assemblyman whose conviction was affirmed after the Court of Appeals concluded that the errors in his jury instructions were harmless.
Chinese Billionaire Ng Lap Seng Convicted in United Nations Bribery Case: A Chinese billionaire who paid hundreds of thousands of dollars in bribes to United Nations ambassadors in an effort to secure their support so he could build a UN center in Macau was convicted in the Southern District of New York. During closing arguments, the Assistant United States Attorney prosecuting the case said that Ng Lap Seng “corrupted the United Nations.” The case had substantial litigation over whether McDonnell applied to the Foreign Corruption Practices Act and to other charges Ng faced.
Must DOJ Lawyers Follow State Ethics Rules? New Mexico Asks SCOTUS to Decide: In June 2016, the Tenth Circuit concluded that New Mexico’s Rule of Professional Conduct limiting when prosecutors may subpoena defense attorneys to present evidence about past or present clients was preempted by federal law. As a result, the court held, federal prosecutors in the Tenth Circuit were not bound by more-restrictive state ethics rules governing lawyers. New Mexico’s Supreme Court has now filed a request for the U.S. Supreme Court to require federal prosecutors to comply with state ethics rules. The American Bar Association, National Association of Criminal Defense Attorneys, and the Association of Corporate Counsel have submitted amicus briefs in support of New Mexico urging the Court to accept cert.
After Trial Error, Medicare And Visa Fraudster Gets Probation: Richard Tinimbang, who was accused of leading a $45 million Medicare fraud scheme and subjecting an immigrant to forced labor, has been sentenced to a year of probation several months after he pled guilty in the middle of a trial that had been tainted by disclosure issues. Federal prosecutors had neglected to turn over grand jury minutes of key witnesses until after those witnesses testified, and the fall-out from those late disclosures resulted in the government offering a lenient plea agreement to the defendant.
Former AG Kane Takes Fifth in Wiretap Case: Former Pennsylvania Attorney General Kathleen Kane, who is free on bail while she appeals her state conviction for perjury, has invoked her Fifth Amendment right not to testify during a hearing of another defendant who seeks to suppress a wiretap obtained by her office. That defendant, Price Montgomery—who has been charged with murdering a female witness against him as she was on her way to talk with federal prosecutors—was intercepted on a wiretap authorized by Kane’s office in 2014. Because of a “feud” between Kane and one of her deputies, Kane refused to sign routine paperwork that authorized that deputy to make key decisions in her absence. The deputy nonetheless approved the 2014 wiretap at issue in Montgomery’s case and used an autopen that signed Kane’s signature to sign the wiretap application. During the hearing, the deputy said Kane approved the wiretap during a call from the airport; as noted, Kane opted to plead the Fifth.
Mayor Joe Ganim Files Lawsuit to Gain Funding for Gubernatorial Run: Bridgeport, Connecticut Mayor Joseph Ganim, who was convicted in federal court of corruption offenses related to an earlier term as mayor, has filed a lawsuit seeking access to state funds for his next campaign—to be the state’s next governor. Ganim’s 2003 trial for racketeering, extortion, honest service mail fraud, bribery, and other offenses revealed several schemes he used to financially benefit from the powers afforded him as mayor and resulted in a 108 month sentence. Ganim argues that the Connecticut statute providing that felons do not have access to state grants for political campaigns violates his First Amendment right to free speech.
Appeals Court Orders New Look at Files in Lehigh DA's Defamation Lawsuit: A Pennsylvania appeals court has reversed and remanded a trial court’s decision ordering Lehigh County District Attorney Jim Martin to provide case files from six drunk driving cases Martin’s office handled, along with Martin’s own tax returns and state bar disciplinary history. Martin sued Allentown, Pennsylvania, blogger Bill Villa, whose daughter died in a 2006 alcohol-related crash, after Villa referred to Martin online and on a local radio program as “crooked” and “corrupt,” and said that Martin’s office “fixes” criminal cases. The appellate court found that the trial court had neglected to consider if the records it ordered produced were covered by privilege.
Chicago-Based Attorneys to Withdraw from Anthony Garcia Case: After the guilt phase but before the penalty phase in death penalty litigation related to Nebraska quadruple-murderer Anthony Garcia, members of the Motto Law Firm have requested to cease representation of Garcia. Father and son Motta—already reduced in number after the son’s wife, who also represented Garcia, was suspended from the practice of law in Nebraska for lying to the press about DNA tests in the case—are requesting to formally withdraw from the case. This is just the last disruption associated with the Garcia case, as previous ethical missteps by the Mottas, who are from Chicago, caused their local counsel to withdraw in 2016. Replacement local counsel, Jeremy Jorgenson, was himself recently suspended from the practice of law. The impact, if any, of this turmoil on the legitimacy of Garcia’s conviction—which was for Garcia’s revenge murders of 11-year old Thomas Hunter and 57-year old Shirlee Sherman in 2008 and the murders of Dr. Roger Brumback and his wife, May, in 2013, after he blamed the Hunter and Brumback families for his inability to become a doctor—is unclear.
Appeals Court Says Facebook Friends Aren't Always Friends: In Florida, two intermediate courts of appeal have provided inconsistent guidance to judges who are Facebook friends with the attorneys in cases before them. In one Miami-Dade County case, a court ruled that a judge who was Facebook friends with a lawyer appearing before her was not required to recuse herself from a case in which that lawyer represented a party; in Palm Beach, however, a different court required recusal.
Stealing a City: Lessons from Bell, California: The Global Anticorruption Blog, through the lens of the prosecutions of eight top officials from the city of Bell, California, suggests ways to prevent, deter, and uncover municipal wrongdoing through transparency, automatic data monitoring, and electoral oversight.
FinCEN Targets Shell Companies Purchasing Luxury Properties in Seven Major Metropolitan Areas: The Financial Crimes Enforcement Network (FinCEN) has issued Geographic Targeting Orders (GTOs) that require U.S. title insurance companies to identify the person behind shell companies for seven metropolitan areas in the United States. Those areas are: all boroughs of New York City, the Miami metropolitan area, five counties in California (including Los Angeles, San Francisco, and San Diego), the Texas county that includes San Antonio, and Honolulu, Hawaii. FinCEN has also published an Advisory to provide financial institutions and the real estate industry with information on the money laundering risks associated with real estate transactions, which may be of interest to corruption prosecutors and investigators.
Ex-Banker Gets 7 Years in Prison for Taking Bribes While African Minister: Mahmoud Thiam, the former Minister of Mines in Guinea, was sentenced to seven years in U.S. federal prison and ordered to forfeit $8.5 million. In handing down the lengthy sentences, the judge who sentenced him remarked “I sense no acknowledgment of the deep injury he has done to Guinea and to the rule of law.” In a lengthy sentencing memo, federal prosecutors outlined Thiam’s acceptance of $8.5 million of bribes from two Chinese companies, and his subsequent laundering of those funds in the United States and elsewhere. The memo also noted that, at the same time Thiam was buying a $3.75 million estate in upstate New York and a Steinway grand piano, the average citizen in his home country of Guinea lived on less than $2.00 per day, and only 7% of the population had access to plumbing and electricity.
MACC Arrest of Senior Official Came After Petronas Internal Probe: After completing its own internal investigation, Petronas, an oil and gas company in Malaysia, provided information about one of its employees to the Malaysian Anti-Corruption Commission (MACC). As a result of that information, MACC has arrested the employee and two others on charges that they were responsible for the submission of nearly $6 million U.S. dollars worth of false invoices.
Report on Mexican Attorney General's Ferrari Drives Corruption Debate: Media reports that the Attorney General of Mexico, Raul Cervantes, owns a $218,000 Ferrari that is registered to the address of an unoccupied house (to which two other Ferraris and an Audi are also registered) have been cited by those who object to Cervantes being named the head of a new anticorruption agency. Cervantes blamed the registration of the car on the business that imported the car for him and said that he bought the car with money he made in private practice. In other recent news about Mexico, journalists and others have allegedly been the victims of spy software provided to the Mexican government on the condition that it be used only to hack into the cellphones of terrorists and other high-level criminals.
Amie Ely is the Director of the Center for Ethics & Public Integrity and the Editor of the CEPI Newsletter and may be reached at 202-326-6041. The CEPI Newsletter is a publication of the National Association of Attorneys General. Any use and/or copies of this newsletter in whole or part must include the customary bibliographic citation. NAAG retains copyright and all other intellectual property rights in the material presented in this publication. For content submissions or to contact the editor directly, please e-mail email@example.com.