When I was clerking on the federal district court in
Chicago, there was an insurance dispute involving
whether the insurer would pay under a director's and
officer's liability policy for the defense of a firm
that had pleaded guilty to a criminal antitrust
violation and, as part of the settlement of a
interstate transportation of stolen property (a
custimer list) against two officers, paid a lot of
money to the gov't.
I drafted the opinion, referring to the firm as a
beehive of criminal activity, talking about the
general atmosphere of criminal disregard of the law,
and referring often to the criminal liability and
criminal violations. It was a summary judgment motion,
granted in part, denied in part, they settled, and
then the firm asked the judge to _withdraw her
published opinion_ (with this language). She said, I
don't issue advisory opinions. It's in the F.Supp.
2d., Richardson Electronics v. some or other insurance
co. jks
If they are caught red-handed by the cops, there's
another way -- plead
guilty or negotiate a deferred prosecution agreement
and ask the
government not to publicize the agreement.
We've always suspected that these kinds of secret
settlement side deals
are happening, but never could put our finger on it.
Until earlier this week, when we attended a media
nosh at the
Washington Legal Foundation.
That's the group that takes out ads in the New York
Times ripping into
the Justice Department for prosecuting corporate
criminals.
The title of the session: Is Creative Enforcement of
White Collar
Criminal Laws in the Public Interest?
The message that the corporate-funded think tank
wanted to get out, as
one paper put it: criminalizing business judgment
could stagnate the
U.S. economy.
In the question-and-answer session, we asked the
distinguished panel of
white collar crime defense lawyers whether they
could name a recent
criminal prosecution of a corporation that should
not have been brought
because the theory of enforcement was too
creative.
Ira Raphaelson, a former federal prosecutor, and now
a white collar
defense attorney at O'Melveny Myers, said he had
one, but couldn't
talk about it.
What do you mean, you can't talk about it?
I promised my client that I won't talk about it, he
says.
It was a criminal prosecution and it's on the public
record, right?
Yes, but I'm not going to tell you any more about
it.
Was the case settled?
Yes, he says.
Did the Justice Department notify the press that the
case was settled?
No, he says.
The company completed the negotiations. A lot of
money was paid. I could
tell you about the case, but it would be to the
detriment of my client,
so I won't, he says.
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