Getting Removed From the Megan’s Law Website in California

Last week, we wrote about certificates of rehabilitation, which relieve you from having to register as a sex offender.

As you may know, California publishes information from its sex-offender registry on a public website. The information includes your name, gender, date of birth, ethnicity, photograph, physical description, and relevant conviction. It also includes your home address or your county and zip code depending on the conviction. For violent or otherwise serious offenses, including those against children, it gives your home address. For somewhat less serious offenses, it gives your county and zip code, but if you have priors, that can change.

In a few cases, even if you can’t end or avoid registration, you can remove yourself from the public website. To do it, you have to apply directly to the California Department of Justice, and you can find the application form here.

To qualify, the state must regard you as a low risk for reoffending, and your only registry-related convictions must be for the following:

  1. felony sexual battery by restraint under Penal Code section 243.4(a);
  2. misdemeanor annoying or molesting a child under Penal Code section 647.6;
  3. some felony child-pornography offenses if all minors were 16 years of age or older; or
  4. an offense for which you’re on probation or have successfully completed probation, where you’re the victim’s parent, sibling, stepparent, or grandparent, and it didn’t involve oral copulation or sexual penetration.

If you qualify, the government must grant your exclusion. By the way, don’t go searching the Megan’s Law website yourself; it’s a misdemeanor.

Feds Arrest Hundreds in Healthcare Raids

Last week, the federal government conducted nationwide raids of healthcare providers and facilities based on $1.3 billion in allegedly false billings.

In one day, the feds arrested 412 people in a coordinated takedown that netted 115 doctors, nurses, and other licensed professionals. The government also brought legal action to exclude 295 providers—including doctors, nurses, and pharmacists—from further participating in federal healthcare programs.

The government says the defendants schemed to defraud Medicare, Medicaid, and Tricare, which is the health-insurance program for veterans, servicemembers, and their families. It alleges that defendants billed for prescription drugs and other treatments or services that were medically unnecessary or never even provided.

The raids were spearheaded by the Department of Justice (DOJ) and the Department of Health and Human Services (HHS). Here’s DOJ’s press release about it, and here’s a factsheet by HHS that tallies up the numbers. The raids were concentrated in Florida, Texas, Michigan, California, Illinois, New York, Louisiana, and Mississippi. But they also captured targets in over two dozen other states across the country.

The New DOJ Policy on Charging Decisions

Two weeks ago, the new U.S. Attorney General announced a new policy for charging and sentencing in criminal cases. Although the policy targets drug cases in particular, it applies to all federal prosecutions.

You can break it down into three parts.

First, prosecutors should file the “most serious, readily-provable” charges in each case. The most serious charges are those that carry the stiffest sentence, including any mandatory-minimum sentence. To deviate from this policy, prosecutors must get approval from a supervisor, document their reasons for it, and be able to point to “unusual facts.”

Second, in most cases, prosecutors should seek a standard sentence under federal sentencing guidelines. If they want to deviate from the guideline sentence, they must get supervisory approval and document their reasons in the file.

Third, prosecutors should discard inconsistent policies of the prior administration. Under prior policy, prosecutors still charged the most serious offense that was consistent with a defendant’s conduct and likely to yield a solid conviction. But they were also encouraged to evaluate cases individually to decide which charges to file, and they were told to seek sentences that were fair and proportional under all the circumstances.

In particular, prosecutors now must ignore two prior policies that tried to reduce harsh sentences in low-level, nonviolent drug cases. Under one policy, they were not to charge a specific drug quantity if it triggered a mandatory-minimum sentence, and they were to avoid charging prior drug convictions that doubled the minimum sentence or put someone in prison for life. We wrote about this before here. Under the other policy, they could not threaten to charge such priors just to force you to plead guilty. I guess that’s fair game now.

The new policy has sparked criticism across the spectrum. Lawmakers from both parties have railed against it. One former U.S. Attorney decried its “stunning lack of faith” in line prosecutors. A coalition of state and local prosecutors has published an open letter against it. And the National Association of Criminal Defense Lawyers had this reaction:

“This Attorney General has taken away the discretion of professional prosecutors to determine what sentence serves justice in any given case. Instead, prosecutors are now required in every case mindlessly to seek the maximum possible penalty…. This policy will lock up non-violent offenders with little or no criminal history, waste untold millions of dollars, devastate families and whole communities, and yet not make us any safer.”

The Straight Scoop on Crime Rates

Want to know the truth?

Here are five facts about crime in America. They don’t come from sound bites, talking heads, internet memes, or bloviating politicians. They come from the Federal Bureau of Investigation (FBI) and the U.S. Justice Department’s Bureau of Justice Statistics (or BJS). And they’re brought to you by the Pew Research Center, a nonprofit, nonpartisan think tank.

The rate of violent crime has fallen sharply over the last 25 years. Both the FBI and BJS data show a steep decline in the violent-crime rate since the early 1990s.

So has the rate of property crime. This category includes things like theft, burglary, and vandalism. Generally, they’re a lot more common than violent crime.

We, the public, can’t seem to handle the truth. Time and again in opinion polls, a majority of Americans say they believe crime is up, even when it’s down by double-digit percentages.

There are big differences in crime rates depending on where you live. This may not surprise you. The FBI attributes it to factors like population density and economic conditions, among others.

Many crimes go unreported. That may not surprise you, either. Although the FBI does not track unreported crime, the BJS does. We get the most complete picture by studying both data sets. According to the BJS, there are a variety of reasons why people don’t report crime. These include a feeling that police would not or could not do anything to help or that it was a personal issue or too trivial to report.

Federal Court Puts a Stop to Medical-Pot Prosecutions

In a resounding decision last week, the country’s largest federal court of appeals forbade the Justice Department from prosecuting people who comply fully with their states’ medical-marijuana laws. The court’s decision consolidated ten separate appeals from cases in Washington and California. The decision also applies in Oregon, Alaska, Montana, Nevada, Hawaii, and Arizona. It doesn’t apply in Idaho because Idaho has no such law.

The defendants’ appeals were based on a congressional spending bill that we wrote about eighteen months ago. That bill blocked the Justice Department from using any funding to interfere with medical-pot laws. It has since been extended through September 2016.

Based on the bill, each of the defendants had moved to dismiss their cases or restrain the government from further prosecuting them. But the trials courts denied them.

On appeal, the court agreed that Congress had spoken.

Thus the executive branch could not spend funds to prosecute the defendants if their conduct were permitted by their states’ laws and they complied fully with those laws. The executive could not spend funds on such cases because doing so would violate the Appropriations Clause of the Constitution, which commands that no money be paid out of the Treasury except by act of Congress. If the executive were spending money without authorization, it would violate the separation of powers. The defendants had standing to try to prevent it from doing so, and the courts were required to intervene.

Therefore, the court sent the defendants’ cases back to the trial courts with instructions that if the Justice Department insisted on prosecuting them, they were entitled to evidentiary hearings to determine whether they had complied with state law.

The court also warned, however, that “Congress could restore funding tomorrow, a year from now, or four years from now, and the government could then prosecute individuals who committed offenses while the government lacked funding. Moreover, a new president will be elected soon, and a new administration could shift enforcement priorities to place greater emphasis on prosecuting marijuana offenses.”

Double, Triple Whammies and Rewards

Speaking of the False Claims Act, get ready to buckle up.

Starting Monday, an interim final rule by the U.S. Justice Department will nearly double the statute’s civil monetary penalties for each false claim. The minimum penalty will go from $5,500 to $10,781, and the maximum penalty will go from $11,000 to $21,563.

For defendants, this means you’re looking at a minimum fine of $10,781 for every allegedly false claim. Multiply that by hundreds or thousands of bills that the government may deem suspect, and you quickly run up some big numbers.

Already, the FCA’s penalties have implicated the Eighth Amendment’s ban on excessive fines in cases where they’ve far surpassed the government’s actual losses. In many of those cases, the Justice Department has avoided the constitutional question by forgoing or reducing the penalties it sought under the statute.

Now throw these new penalties in with the specter of treble damages, which means the government can recover three times its actual losses in addition to the penalties, and you’ve got double and triple whammies for government contractors—with corresponding rewards for the whistleblowers who sue them.

The new rule was required by the Bipartisan Budget Act of 2015, which directed all federal agencies to update their civil monetary penalties every year to account for inflation. For the False Claims Act, this first update catches up on inflation since 1986, which was the last time the Justice Department raised the penalties in such cases. Actually, that’s not true; the last time was 1999, but the new rule disregarded that because the Bipartisan Budget Act had repealed the underlying legislation.

The DOJ’s new penalties apply in both its civil and criminal division and across constituent agencies like the Drug Enforcement Administration (DEA), the Federal Bureau of Investigation (FBI), and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).

The rule may also budge many states to conform their own penalties to federal law. That’s because the federal government lets states keep ten percent more than their pro-rata share of a Medicaid-fraud recovery when they bring a case under state law. To be eligible, however, a state’s civil penalties must meet or exceed the federal ones.

The new rule is effective August 1, and it will apply to all cases that allege false claims after November 2, 2015, which is when the Bipartisan Budget Act became law. Although the Justice Department is soliciting public comment through August 29, the rule is already final and will go effective next week.

An Open Letter to the District Attorney of Orange County

Mr. Rackauckas: Just what is going on in your office, sir?

I’m not talking about the fight that broke out in a county courthouse three weeks ago between one of your investigators and a defense attorney. Never mind that if a defense attorney did this to a cop, he’d be arrested so fast his head would spin. (Full disclosure: I met this lawyer two weeks ago at a bar association event and had lunch with him on Monday. Although he’s told me his side of the story, he wasn’t trying to sell anything, and I wasn’t looking to buy, either.) But that’s not the issue here.

I’m not even talking about the jailhouse snitch scandal that led to the fight and that has roiled your office—and my county—for two years now since it’s come to light. Plenty of ink has already been spilled about it, including in a letter to the U.S. Attorney General last November by a coalition of legal authorities, who called on the Justice Department to investigate the scandal. But that’s not it, either.

No, I’m wondering about your office’s response to the scandal, and specifically, the way it has retaliated, systematically, against the trial judge who ordered the hearings that brought the misconduct to light.

I couldn’t believe it at first.

More than once after the scandal broke, I had attended events at which some of your senior deputies expressed both regret and resistance over the news. By turns, what I heard from them was that, yes, some mistakes were made, and we understand your concern, but please don’t blow it out of proportion, give us the benefit of the doubt, and by the way, we’re already doing better and will continue to do better.

Then I learned that, in December, a supervising judge of the superior court had to take your office to task for repeatedly using a procedural tool to disqualify the trial judge from 94% of the murder cases that he’s been assigned to since he began scrutinizing your misconduct. That’s 46 out of 49 murder cases, sir. Your office never did that before, and this to a judge who’s among the more experienced, independent, and respected on the felony trial panel. (Full disclosure: I have a white-collar case pending before this judge.)

The supervising judge found that your office had violated the separation of powers under the state and federal constitutions, and he rightly called it an attempt to punish, silence, and intimidate the trial judge as well as send a signal to the rest of the bench. It’s a national story, and the Orange County Bar Association has taken a stand against it.

I’m wondering if you think this demonstrates good faith by an office whose mission is to “enhance public safety and welfare and create a sense of security in the community through the vigorous enforcement of [the] laws in a just, honest, efficient, and ethical manner.”

Sometimes, the right thing to do is take your lumps and stand down, but instead, your office has chosen to appeal the supervising judge’s order, taking the position that you did not direct your deputies to retaliate against the trial judge.

But either you directed them, sir, or you are not sufficiently in command of your office.

Which is it?

The SEC Wants You to Self-Report

At a conference in November, the SEC’s Director of Enforcement, Andrew Ceresney, announced that, from now on, you must self-report violations of the Foreign Corrupt Practices Act if you want the Enforcement Division to recommend a non-prosecution or deferred-prosecution agreement. Even then, Mr. Ceresney warned, you may not get an NPA or DPA, but the Division won’t even consider it if you fail to self-report. To self-report, in other words, is now a necessary, threshold condition to negotiating an NPA or DPA.

On the heels of that announcement, last month, one company that had self-reported its FCPA violations was able to resolve civil and criminal charges on relatively favorable terms.

First, the company settled the civil SEC investigation that commenced after it reported that two of its subsidiaries were making improper payments to foreign officials to win business. The improper payments included non-business-related travel, gifts, and entertainment that totaled $1.5 million over five years. To settle the case, the company agreed to cease and desist from further violations and to surrender $14 million in profits.

Next, the company settled the parallel, criminal investigation by entering into an NPA with the Justice Department. The three-year NPA requires the company to pay $15 million in fines, improve its compliance program, and report on its progress to the government.

Finally, one of the company’s employees earned a three-year DPA of his own based on his substantial cooperation during the SEC investigation. It was the Commission’s first DPA with an individual in an FCPA case.

To be clear, self-reporting has long been a factor in the Commission’s framework for evaluating cooperation by people or businesses. Generally, the SEC will credit your cooperation based on how much you helped, how important the case was, how culpable you were personally, and how much of a threat you continue to pose.

But going forward, self-reporting appears to carry significantly more weight with the agency, at least in FCPA cases.

 

The Principles of Federal Prosecution of Business Organizations

They are the roadmap to a federal prosecutor’s discretion in charging your business with a crime. The why, when, and how. You can read them yourself on the Justice Department’s website. They apply to all business organizations: corporations, limited liability companies, partnerships, sole proprietorships, and even public entities, or anything in between.

Here are the highlights.

Generally, prosecutors should not treat businesses any more harshly or leniently than people, so they must consider the same things in their charging decisions as they do with individuals. These include the sufficiency of the evidence, the likelihood of success at trial, the probable deterrent effect of a conviction, and the adequacy of non-criminal remedies.

But the prosecution of businesses brings special considerations into play. The following nine illustrate those considerations but don’t exhaust them. Some may not apply to your case, and one factor may even override the others. But here they are.

  1. The nature and seriousness of the offense, including the risk of harm to the public and the Department’s priorities for particular categories of crimes. The Tax Division, for example, aims to prosecute people, rather than businesses, for corporate tax offenses. The Antitrust Division, to use another example, gives full cooperation credit only to the first cooperating business.
  2. The pervasiveness of misconduct within your business, including management’s complicity in it. The government will look at the number and kind of people with substantial authority who participated in, condoned, or stayed willfully blind to the misconduct. It may judge the pervasiveness of misconduct at your business as a whole or at one of its units.
  3. Your business’s history of similar misconduct in civil or criminal proceedings, which may include the history of any separate divisions, subsidiaries, or affiliates. Criminal prosecution is more likely if prosecutors believe your business has not responded adequately to prior warnings, charges, or sanctions.
  4. Your business’s timely, voluntary disclosure of facts from any internal investigation and its willingness to cooperate in the investigation of its agents, officers, directors, or employees, including senior executives. This was the crux of a policy memorandum issued earlier this month that emphasized the prosecution of the people through whom businesses act over just the entities themselves.
  5. The effectiveness of your business’s preexisting compliance program, if any, including how management enforces it.
  6. Your business’s remedial efforts to cooperate, pay restitution, discipline wrongdoers, or implement or improve a compliance program.
  7. The collateral consequences of prosecution, including any disproportionate harm to innocent investors, pensioners, employees, other third parties, or the public. Since every conviction of a person or business harms innocent third parties, the effect alone is not enough to ward off prosecution. But if the collateral consequences would be significant, the government may consider an alternative.
  8. The adequacy of any prosecutions of responsible individuals.
  9. The adequacy of alternative, civil or regulatory remedies.

Once prosecutors decide to charge your business, they will generally charge the most serious offense that’s likely to result in a sustainable conviction. Just like their cases against people, they will consider whether various possible charges fit the circumstances of your case, serve the ends of justice, and maximize the impact of federal resources. And just like their cases against people, they will then want a guilty plea to the most serious, readily-provable charge they filed. Their plea offer may impose substantial fines, restitution, compliance measures, court-appointed monitors, or regulatory exclusion, suspension, or debarment. And they will generally not accept your business’s guilty plea in return for cutting its officers or employees loose.

Individual Accountability for Corporate Wrongdoing

Another day, another collar, and another notable policy shift from the Justice Department.

Two weeks ago, it was the arguably-more-important decision to require search warrants before federal agents could use certain, mobile tracking-and-hacking devices in the field.

Last week, it was a policy memorandum that made a splash in the world of white-collar enforcement and defense. The policy was circulated internally on September 9 and unveiled publicly the next day in a speech by Deputy Attorney General Sally Yates.

Titled, Individual Accountability for Corporate Wrongdoing, the policy prioritizes and emphasizes the prosecution of people and not just business organizations. It applies to both the Department’s civil and criminal divisions, and it prescribes the following six points.

First, to receive even partial credit for cooperation, an organization must disclose all relevant facts regarding the individuals responsible, regardless of their position, status, or seniority. Cf. U.S.S.G. § 8C2.5, comment. (n. 13). Only once an organization does that does it become eligible for cooperation credit, and its failure to follow through and make good on that may trigger stipulated penalties or a material breach of its settlement agreement. The same goes for civil enforcement actions, including civil actions brought under the False Claims Act. See, e.g., 31 U.S.C. § 3729(a)(2) (defining cooperation sufficient to reduce the statutory penalties).

Second, the Department’s investigation of a business organization should focus on individuals from the beginning, because it helps prosecutors climb the organization’s ladder by flipping those on the lower rungs.

Third, attorneys in the civil and criminal divisions who handle such investigations should routinely talk to each other in order to maximize recoveries and take advantage of the full range of remedies available to the government—including imprisonment, fines, penalties, damages, restitution, forfeiture, and regulatory exclusion, suspension, or debarment.

Fourth, absent extraordinary circumstances or an approved policy, the Department will not agree to cut people loose from civil or criminal liability in order to resolve a case against their organization. When government lawyers resolve a case against a business, they should preserve their ability to pursue its officers or employees, and they should not agree to dismiss charges against, provide immunity for, or release civil claims against them. Or, if they do, the agreement must be approved by the appropriate United States Attorney or Assistant Attorney General.

Fifth, the department’s lawyers should not resolve a case against a business without a clear plan to resolve any related cases against individuals, and they should explain their decision to prosecute or decline such cases in a formal memorandum that must be approved by the relevant U.S. Attorney or Assistant Attorney General or their designee. Furthermore, if they reach a tolling agreement with the business to avoid blowing the statute of limitations, they should take care to resolve any individual cases before the statute runs or get tolling agreements there, too.

Sixth, the department’s civil division should consistently focus on people as well as businesses, and its lawyers should consider suing culpable individuals in order to punish and deter wrongdoing, even when they may not be able to pay a large judgment.

The memorandum closes by directing all components to incorporate these points into their everyday work, beginning with a training conference tomorrow in Washington, D.C.

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