White Collar Roundup (August 2013)

Author:Day Pitney LLP
Profession:Day Pitney LLP

Down to the Wire (Application) The U.S. Court of Appeals for the Second Circuit in United States v. Goffer examined what to do when the government uses a wiretap to investigate crimes that are not enumerated in the Wiretap Act as predicates for obtaining a wiretap. Title III of the Omnibus Crime Control and Safe Streets Act, 18 U.S.C. §§ 2510 et seq., lists certain predicate crimes for which wiretap orders may be issued. Wire fraud is listed among them; securities fraud is not. The statute allows evidence of nonpredicate offenses to be used in a subsequent prosecution in the absence of bad faith. Goffer stemmed from the investigation into securities fraud in connection with the Galleon Group cases. The government convicted the defendants in part on the strength of wiretap evidence, even though they were charged with securities-fraud offenses, but not wire-fraud offenses. The defendants unsuccessfully sought to exclude the wiretap evidence in the district court. After their convictions, they appealed, arguing the wiretap evidence should have been excluded for two reasons: (1) securities fraud is not a predicate under Title III, and (2) any interceptions of nonpredicates can be admitted only if they were inadvertent. The court of appeals rejected these arguments. In so doing, it noted that the government's wiretap applications were premised on a wire-fraud investigation, but noted that "they expected to uncover evidence of securities fraud (which, they expressly noted, is 'not a predicate offense under 18 U.S.C. § 2516')." This language, the court reasoned, ensured there was no "'subterfuge'" in obtaining the wiretap authorizations. Reprieve Resulting from Skilling Is Not a Slam Dunk In United States v. Caso, the D.C. Circuit vacated the conviction of former congressional aide Russell James Caso, Jr., who had pleaded guilty to honest-services wire fraud. In 2005, a consulting firm had solicited Caso's boss in the House of Representatives to take legislative action on two proposals. The firm then hired Caso's wife to work on those proposals and paid her $19,000 over the course of a few months for de minimis services. As a congressional employee, Caso was required to file a form to report his wife's income over $1,000. He did not include her income on the form, even though he swore under the penalties of perjury that the form was accurate. After being charged with wire fraud on an honest-services theory, Caso pleaded guilty. After the...

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