One Broadway, May 8, 2008.
Originally the Wickquasgeck Trail, a Native American path running the length of Manhattan, Broadway begins right here. CR
Friday, May 9, 2008
Now you see it, now you don't.
New York State Attorney General Andrew Cuomo is investigating the possibility that hundreds of lawyers across New York State have been granted what he alleges are illegal pension benefits from school districts and other governmental entities that improperly enrolled non-employees in public pension funds. On Thursday, Cuomo announced settlements with Hodgson Russ of Buffalo and attorney Maureen Harris of Girvin & Ferlazzo of Albany. He said that a criminal and civil investigation into the Girvin firm was continuing.
The situation became public in February, when Newsday published an article stating that a private attorney, Lawrence Reich, was listed as a full-time employee of five school districts even as he was listed as a partner at the law firm Ingerman Smith and the districts were paying his law firm for his services. That arrangement allowed Reich to qualify for a public pension of over $60,000 and health benefits for life. The arrangement had come to light when attorney Janet Wilson, who had become embroiled in a lawsuit against one of the school district when it had declined to renew her contract, told another partner at Reich’s firm that she planned to notify the state employee retirement system about Reich’s arrangement.
According to a deputy attorney general, Harris was one of at least twelve Girvin attorneys who were on the public payroll between 1991 and 2008. The firm was given the discretion to determine how many and which lawyers would be placed on the public payroll and set the salary that each lawyer would receive, regardless of whether that lawyer was doing any work for the school district. Harris’s attorney said she regarded the pension benefit as “pursuant to a longstanding relationship” her firm had with the district.
This investigation is an example of how something that is accepted as perfectly fine on one day becomes flavor-of-the-month fraud the next day because a prosecutor decides so. It is particularly important that anyone defending such an investigation learn all there is to know about when someone can be considered a public employee. Even if the lawyers were wrong about an interpretation of when that status can be confirmed, it may constitute a complete defense if they believed in good faith they were entitled to the benefits. CR
Tuesday, May 6, 2008
5-0 fashion.
New York City detectives have a long and storied sartorial tradition. Whether chasing a suspect across the rooftop of a Hell’s Kitchen walkup, or standing in front of a bank of microphones to announce that they have cracked a gruesome homicide case, detectives tend to be a tailored lot and to eschew “business casual.”
There was a wonderful article and accompanying video in the Sunday New York Times about this little-examined aspect of life as a detective in New York City. The article describes how the detectives trade tips, share books like Alan Flusser’s “Dressing the Man: Mastering the Art of Permanent Fashion,” and patronize Stewart Altschuler, known as the “Suit Man,” who addresses the detectives’ unique styling challenges. “For their own safety, a lot of our suits are side-vented and big-shouldered,” he says, “in case they have to move around on the ground.” The suits are specially cut to allow room around the waist so that guns, cell phones, radios, and handcuffs don’t show.
NYPD detectives have to deal with the public when they testify at trials, interview witnesses, and notify family members of tragedies. One retired detective commander called his suits “my psychological armor.” Somewhat incongruously, detectives also wear suits when they chase suspects and wrestle them to the ground and handcuff them. “I try to wear my less expensive suits if I am going out to track a bad guy,” another detective said.
One of the things I love about being a criminal defense lawyer is the style. Even when I was a Bronx Legal Aid attorney, I shopped the Barney’s warehouse sale and scoured the racks at Syms for the stray Armani. Now that I’ve reached a certain stage in my professional life, I’m a Paul Stuart guy.
I remember a talk given by Gerry Shargel, one of New York’s best criminal trial lawyers, in which he described entering a courtroom for the first time. He looked at the prosecution table and saw earnest, hardworking young lawyers wearing drab, ill-fitting suits. He looked at the defense table and saw elegance and style. He knew immediately which table he belonged at. I’m with Gerry, and I like that it’s a trait I share with the detectives of the NYPD. CR
Monday, May 5, 2008
Primetime subprime.
The Wall Street Journal reported today that Ben Campbell, the United States Attorney for the Eastern District of New York in Brooklyn, has formed a task force of federal, state, and local agencies to deepen and extend the criminal division’s ongoing probe into various players in the subprime mortgage meltdown. Campbell told the Journal that the “jury is still out” on whether the sudden decline in the value of securities backed by bundles of subprime mortgage instruments is the result of criminal activity or just market forces, but the scope of this invigorated inquiry is broad. They will be looking at whether the crimes of mortgage fraud, securities fraud, insider trading, accounting fraud, and making false statements have been committed. Mortgage banks, brokers, lenders, investment banks, and hedge funds will be under the prosecutor’s microscope.
The newly formed task force had its first meeting on Friday and includes officials and agents from the FBI's financial-institutions fraud unit known as C3; the U.S. Postal Inspection Service, which investigates mail fraud; financial-crimes investigators from the U.S. Secret Service; and investigators and representatives of the New York State Banking Department, the New York City Department of Investigation, and the Federal Deposit Insurance Corportaion, a federal banking regulator.
It remains to be seen whether this inquiry – along with the many investigations being pursued by other local prosecutors and a potential central Justice Department task force –will yield numerous individual criminal prosecutions. But this ramped-up effort is certainly part of an unmistakable trend that potential targets must recognize. Individual mortgage brokers, bankers, closing attorneys, investment bankers, ratings agency executives, and anyone else involved in the subprime deal flow should take note. The inquiry is bound to intensify in the coming months. Given the losses suffered in the subprime debacle, the potential for significant criminal exposure to serious jail time is high. However, there are market-based explanations for much of what has occurred, and complex accounting and disclosure requirements may provide proof that there was a general lack of intent to defraud on the part of individuals involved.
In the comments to the Journal’s law blog post on the new task force, a reader asks, “Who will defend these companies? Most big law firms are conflicted.” Whether or that is the case, small, savvy firms like ours specialize in the representation of individuals. As the Journal blog post points out, the subprime mess has been called “the latest Full Employment Act for Lawyers.” Now we smaller firms may be seeing the “trickle-down” effect of what is becoming an increasingly larger supply side of companies and individuals in trouble. CR
Subscribe to:
Posts (Atom)
