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Honest Services - U.S. Supreme Court limits prosecutor tool in fraud cases Fair Sentencing Act - Congress acts to reduce sentencing disparity between crack and powder cocaine
January 6th, 2010 The New Orleans Magazine listed Ben Bagert as one of
U.S. Supreme Court limits prosecutor tool in fraud cases For years federal prosecutors have used the vague “honest services” statute (18 U.S.C. § 1346) as a tool to convict defendants who did not directly obtain money or property. The statute functioned as an expansion of the definition of fraud to include schemes to “deprive another of the intangible right to honest services.” In Skilling v. United States, the U.S. Supreme Court significantly limited the government’s reliance on this favored prosecutorial tool unless the government can demonstrate that the defendant received a bribe or a kickback. As a consequence, the government will no longer be able to use this statute to prosecute white collar cases involving breaches of fiduciary duty and self-dealing under an “honest services” theory where the defendant does not receive a bribe or kickback . The principle issue in Skilling was whether 18 U.S.C. § 1346 was unconstitutionally vague in denouncing conduct that deprives another of the “intangible right of honest services.” The Court held that the reach of Section 1346 must be confined to cover only those fraud cases in which bribery and kickback schemes are involved. Writing for the Court, Justice Ginsburg stated that “Skilling’s vagueness challenge has force,” but refused to invalidate the statute in its entirety. The Court held that Skilling did not violate Section 1346 because the prosecution did not allege that he solicited or accepted bribes or kickbacks, but instead that he conspired to defraud Enron’s shareholders by other means. Construing the statute very narrowly, Mr. Skilling’s honest services fraud conviction was vacated. The Court left open on remand whether the error was harmless, given the other allegations of fraud. The Court further left open on remand whether reversal on conspiracy would necessitate reversal on other counts. Justice Antonin Scalia, joined by Justice Clarence Thomas and Anthony M. Kennedy, concurred in part and concurred in the judgment. Scalia reasoned that Section 1346 is unconstitutionally vague and should therefore be struck in its entirety. Justice Samuel A. Alito, concurring in part and in the judgment, stated that the “impartial jury” requirement, set forth in the Sixth Amendment, requires only that “no biased juror is actually seated at trial.” Justice Sonia Sotomayor, joined by Justices John Paul Stevens and Stephen G. Breyer, concurred in part and dissented in part. Sotomayor agreed with the majority’s resolution of the “honest services fraud” claim; however, she disagreed that Skilling received a fair trial based on the hostility that emerged in Houston after the collapse of Enron.
Congress acts to reduce sentencing disparity between crack and powder cocaine Congress has changed a quarter-century-old law that punished crack cocaine offenders with far greater severity than powder cocaine offenders. The Bagert Law Firm believes that correction of this disparity was long overdue. The former law (21 U.S.C. § 841(b)(1)(B)), a result of the Anti-Drug Abuse Act of 1986, was enacted in response to public concern that crack cocaine was especially addictive and inherently caused violence. However, time and technology have proven that the assertions about the differences between crack and powder cocaine were exaggerated and many scientists believe that the two drugs are chemically identical. Under the former law, a person convicted of mere possession of 5 grams of cocaine base (crack) would receive a mandatory minimum sentence of 5 years in prison which could not be suspended by the sentencing judge. However a person convicted of possessing the same weight of cocaine powder was subject to no more than 1 year in jail and that sentence could be suspended. Under the new law, simple possession of both crack and powder cocaine are treated the same – a one year maximum imprisonment that may be suspended. However, even under the new law a penalty disparity remains for those convicted of distribution of crack as compared with powder. Under the old law, the severity ratio between crack and powder distribution was 100:1. For example, a person convicted of distributing only 5 grams of crack was subject to the same minimum sentence as a person convicted of distributing 500 grams of powder – not less than 5 nor more than 40 years without suspension of sentence. Under the new law distribution of 28 grams of crack (instead of 5 grams) will invoke the 5 year minimum sentence. Federal criminal defense lawyer, Ben Bagert stated: “The new law is a step in the right direction, but Congress still needs to overhaul its sentencing policies for non-violent drug offenders who are serving very lengthy periods of incarceration at great taxpayer expense.
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