WILSON PARTICIPATES IN SUCCESSFUL DEFENSE OF FEDERAL SECURITIES FRAUD PROSECUTION

Roger C. Wilson recently participated with lead counsel from the Federal Defender Program, Inc. in the defense of a former Chief Financial Officer in a multi-defendant criminal securities fraud prosecution in federal district court in Atlanta. United States v. Darryl Horton, et al., No. 1:11-cr-00268-TCB-1.  The client, Darryl Horton, of Michigan, former CFO of Conversion Solutions Holdings Corp., a Georgia company, was charged along with the former CEO and the former Chief Operations Officer in a seven-plus-count federal indictment involving alleged securities fraud, wire fraud, and conspiracy.  In addition to those counts against all three defendants, the CEO was charged under the federal Sarbanes-Oxley law with falsely certifying corporate financial statements.  The indictment involved alleged misstatements in corporate financial filings and in corporate press releases regarding the nature and valuation of various firm assets.  The trial lasted two full weeks. Near the end of the trial, the former CEO, Rufus Harris, fled the jurisdiction, leading to a national manhunt for him by federal law enforcement agencies.  At the start of the trial, Harris had chosen to waive his right to counsel, then representing him, and to represent himself in the trial.  After Harris's flight the trial continued to completion in his absence. The federal jury convicted Harris (captured a week later in Utah) of all eight counts charged, and it convicted the former COO on most counts, each of those counts involving possible sentences of 20-years or more imprisonment and very large fines.


However, the former CFO, Mr. Horton, was acquitted on three counts and the jury was hung on the remaining four counts against him, when defense counsel and federal prosecutors resolved the remainder of the case against him.   Substantial testimony and other evidence was presented to the jury that Mr. Horton was at most peripherally and unknowingly involved in the particular events underlying the indictment, in contrast with the other two defendants.  Roger Wilson participated in the defense of Mr. Horton with Jake Waldrop and Thomas Hawker, both attorneys with the Federal Defender Program in Atlanta.


Roger C. Wilson has represented and advised many individuals and companies in connection with governmental investigations and enforcement activity involving alleged or possible violations of federal laws and regulations in the areas of export controls, foreign assets controls, the Foreign Corrupt Practices Act, import regulation and customs laws, and federal banking and mortgage fraud statutes.  In addition to representation of clients in federal and state trials, he has represented such clients before federal agencies, including in resolving possible violations prior to the initiation of government enforcement activity, by voluntary disclosures and similar methods.  He also has advised and assisted companies in designing and implementing corporate compliance programs designed to assist the corporations and their personnel in avoiding possible violations of federal laws in many of these areas.

NEW RULES FOR PRACTICE IN FEDERAL APPEALS COURTS

Recently a number of changes were made in the rules governing practice and procedures in federal courts of appeals generally and in the Eleventh Circuit United States Court of Appeals in Atlanta, in particular.  Amendments to the Federal Rules of Appellate Procedure became effective in December 2009, as did amendments to the Eleventh Circuit Rules and Internal Operating Procedures.  Further changes were proposed in the Eleventh Circuit Rules at that time but have not yet become effective.  Among the amendments that did become effective are important changes in the method of computing time in federal appellate practice, and substantial changes with the new "indicative rulings" procedures.  A more detailed examination of the recent changes is provided in an article by Roger C. Wilson published in the current edition of The Appellate Review, the publication of the Appellate Practice Section of the State Bar of Georgia.   Roger C. Wilson is a member of the Appellate Practice Section and is a member of the managing board of its Federal Practice Committee.

FALSE ADVERTISING/LANHAM ACT: JURY FINDS NAME-BRAND MANUFACTURER LIABLE TO STORE-BRAND COMPETITOR FOR $13.5 MILLION

          In another example of the value of the Lanham Act to businesses whose competitors make false advertising claims, a Virginia jury has found the manufacturer of the Enfamil baby formula, Mead Johnson & Co., liable under the Act for $13.5 million in damages to a competing manufacturer of a similar, store-brand product for what the latter claimed were false statements disparaging of its own product made in the Enfamil  ad campaign.  PBM Products, LLC v. Mead Johnson Nutrition Co.,E.D.Va., No.3:09–CV–269.  The challenged ads were said to imply that Enfamil had health benefits that the store-brand product lacked, stating,  "It may be tempting to try a less expensive store brand, but only Enfamil LIPIL is clinically proven to improve brain and eye development,” and “There are plenty of other ways to save on baby expenses without cutting back on nutrition.”  The jury determined that these statements were false and misleading including in their disparagement by inference of the competing product.  In addition to jury's monetary award to the competitor, PBM Products, the judge ordered Mead Johnson to refrain from further making such claims, and ordered the company to retrieve from the public domain all advertising material containing the claims.

          The Lanham Act provides very powerful remedies to persons or entities harmed by various types of false and misleading activities pertaining to their products or services.  The most widely known provisions of the Act are those prohibiting trademark infringement; but section 43(a)(1)(B) of the Act also provides for remedies more generally when false or misleading statements are made in advertising or promotions that create a likelihood of harm to the the business of another company or person.  Under the Act such victims may obtain court orders stopping the improper activity, and also may recover very considerable monetary damages from the violator, consisting not only of any monetary harm suffered by the victim but also the profits of the violator, as well as the costs of the lawsuit.

GERMANY V. ITALY LAWSUIT TO TEST SOVEREIGN IMMUNITY RULES

          A pending a lawsuit filed late last year by Germany against Italy before the International Court of Justice provides a very interesting occasion for treatment by the Court of the rules of international law pertaining to sovereign immunity.  Germany contends that Italy is violating those rules by permitting (recently via the Italian Supreme Court) the litigation of claims and entry of judgments in Italian courts (and the registration there of foreign judgments) against Germany by Italian citizens and others involving alleged wrongful actions taken by the German military and officials during World War II, such as the forced deportation of such persons to Germany and their subjection to forced labor there during the War.  Briefing is proceeding  pursuant to a Court-ordered schedule, to culminate at the end of this year, with oral arguments and a decision possible next year.  The German contentions are stated in the German application filed with the Court, equivalent to a complaint in domestic US litigation.  Germany claims that these actions of the Italian courts violate rules of international law providing for the immunity of foreign governments in the courts of another countries.

          Historically, the main exceptions recognized to that sovereign immunity have been for claims relating to actions of foreign governments constituting commercial activity.  However, more recently, some countries have also begun to assert jurisdiction over foreign states (and exceptions to sovereign immunity) for claims related to non-commercial activities, such as alleged involvement in terrorism and violations of certain international human rights.  It is on the latter basis that Italian courts have recognized jurisdiction over the claims against Germany, even approving the attachment of Italian real estate owned by German Government entities in connection with enforcement of the judgments obtained against that Government.  A number of commentators have criticized this result, and the courts of other countries have reached the opposite result.  The ICJ itself has previously sustained a sovereign-immunity-based challenge by a country to an assertion of criminal jurisdiction over one of its top national officials by other country based on the alleged involvement of that official in gross human rights violations. E.g., Dem. Rep. Congo v. Belgium.

          The outcome of the Germany v. Italy case will be of particular interest to American international lawyers, as the United States law, particularly in the Foreign Sovereign Immunities Act, (28 USC 1602-1607) and recent amendments thereto contains assertions of extraterritorial jurisdiction, including for attachment of foreign sovereign assets, and corresponding exceptions to foreign sovereign immunity (e.g., for so-called state-sponsored terrorism) that are similar in important espects to those contained in Italian law being challenged by Germany.  An interesting analysis of the pending ICJ case is provided in a recent publication of the American Society of International Law.

SUMMARY JUDGMENT FOR FIRM CLIENTS IN CASE INVOLVING BANKING AND FINANCIAL INSTRUMENTS REGULATIONS

A Fulton County, GA Superior Court judge recently awarded summary judgment to clients of the Roger C. Wilson Law Firm on all claims by those clients in a case involving state and federal banking and financial instruments regulations, and state law rules governing administration of estates.  Judge Alford Dempsey entered summary judgment in favor of Firm clients Mark and Reid Tuvim, acting individually and as administrators of their mother's estate, ruling that a number of financial instruments made by the Tuvims' deceased mother were properly assets of the estate and did not pass to a corporate entity under purported terms of the underlying instruments.  This followed a ruling of the Georgia Supreme Court earlier this year also in favor of the Firm clients, in which the Supreme Court reversed a trial court's earlier rulings and verdict to the contrary.  (The case was transferred to Judge Dempsey after appeal, solely as part of an administrative re-allocation of cases in the Superior Court, having nothing to do with this case.)  In a ruling of first impression in important respects, a majority of the Supreme Court agreed with the Tuvims' argument that to transfer those assets to a corporate entity would in the circumstances of this case directly contravene federal and state banking and financial instruments laws.  The Court also sided with the Tuvims in their arguments that equitable doctrines such as cy pres, constructive trust, and unjust enrichment were not properly applicable to circumvent these state and federal financial rules.  After remand by the Supreme Court, further litigation ensued over certain aspects of these issues.  Upon further briefing and oral arguments, Judge Dempsey ruled in favor of the Tuvims on all claims.

TRAGIC VICTIMS OF OVER-CRIMINALIZATION AND OVER-FEDERALIZATION

Although they occurred in the summer, another review of the videotape of the U.S. Congressional hearings on over-criminalization of conduct and over-federalization of criminal law, and the heartbreaking testimony therein by several individual citizens whose lives were destroyed by a marauding federal criminal law enforcement regime, suggests the need to post a link to those hearings, which makes available the written statements submitted by prominent experts and the oral testimony given by those experts as well as, harrowingly, by two private citizens from Middle America Central Casting.  In addition to the fine analyses provided by the experts, including former high-ranking federal law enforcement officials Richard Thornburgh and Stephen A. Saltzburg, there is the unforgettable testimony of Kathy Norris (beginning at elapsed time 41:50 of the hearings video) and Krister Evertson (beginning at 55:15), the two individuals whose lives were devastated by overreaching federal law enforcement agents and prosecutors.  No one genuinely concerned about individual civil liberties in modern America can watch this testimony without a sinking stomach.

COLUMBUS LAWYER ACQUITTED OF FEDERAL CRIMINAL CHARGES

In a tremendous defense victory, a Columbus, GA lawyer has been acquitted by a federal jury of money-laundering, bribery, drug conspiracy, and other charges brought against him by federal prosecutors, after a six-day trial and twelve hours of jury deliberations in a Columbus federal court.  The jury acquitted the lawyer, Mark Shelnutt, a Columbus criminal defense lawyer, of all thirty-six charges included in the indictment, which were brought against him by prosecutors in connection with his representation of a defendant in an earlier drug case.  Mr. Shelnutt was represented by Savannah lawyer Tom Withers of the Atlanta and Savannah law firm Gillen, Withers, & Lake. See here for a full description of the case and trial. The acquittal occurred just several weeks after the Eleventh Circuit U.S. Court of Appeals ruled in favor of a defendant lawyer in similar circumstances in the case U.S. v. Velez.