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Current Events

July 03, 2008

Onus on defense attorneys to block recording of calls with San Diego inmates

San Diego criminal defense attorneys weren't happy to hear that phone calls between defense attorneys and inmate clients were recorded and made easily accessible to prosecutors.

The San Diego Sheriff's Department said it was an accident and quickly ceased recording all inmate calls a couples weeks ago.

They said that they keep a list of attorney phone numbers in which taping is blocked. The problem was that the list needed to be updated.

San Diego jailers are recording inmate calls again and the new system, as the North County Times reports it, is to place the onus on defense attorneys to make sure the Sheriff's Department has their number listed. Also, the initial warning that the call is recorded will now be followed by another warning a few minutes later.

San Diego County District Attorney Bonnie Dumanis wrote in a statement that she is working with the Sheriff's Department and criminal defense attorneys on fixing the problem and doesn't know of anyone in her office who has listened to a recorded attorney-client call, the North County Times reported.

UnitedHealth agrees to settle federal class action over backdating with $895M payment

UnitedHealth Group Inc., the Minneapolis-based health care provider that was sued over about $2 billion in unexercised backdated stock options, has agreed to pay $895 million to settle a federal class action.

The proposed settlement, crafted by lead counsel Coughlin Stoia Geller Rudman & Robbins, is the largest involving stock options backdating claims in a class action. In re UnitedHealth Group Inc. PSLRA Litigation, No. 0:06-cv-01691 (D. Minn.)

Previously, the largest agreement in a stock options backdating class action was a $117.5 million deal with Mercury Interactive Corp. last fall.

In December, UnitedHealth and several former executives agreed to a $900 million settlement with several pension funds in a derivative case involving its stock options backdating practices. In re UnitedHealth Group Inc. Shareholder Derivative Litigation, No. 0:06-cv-01216 (D. Minn.). Lead counsel in that case was Karl Cambronne, a partner at Minneapolis-based Chestnut & Cambronne.

Today's proposed settlement, which is subject to approval by the court, UnitedHealth Group's board of directors and the board of administration of the California Public Employees' Retirement System (CalPERS), the lead plaintiff, resolves all claims against UnitedHealth and certain of its officers and directors.

UnitedHealth and the individual defendants, who exclude former chief executive William McGuire and former general counsel David Lubben, have not admitted wrongdoing as part of the proposed settlement. McGuire and Lubben, who agreed to settle the earlier derivative action, remain defendants in the class action.

The company also has agreed to implement changes to its corporate governance policies and practices, including a process to elect directors nominated by shareholders, a mandated holding period for options acquired by executives and shareholder approval of stock option re-pricing.

The complaint originally was filed in December 2006. Alaska Plumbing and Pipefitting Industry Pension Trust was the plaintiff class representative.

UnitedHealth also agreed to pay $17 million to resolve a related class action involving violations of the Employee Retirement Income Security Act (ERISA). That suit originally was filed in June 2006 against UnitedHealth and certain officers and directors.

The settlement is subject to final court approval. UnitedHealth and the individual defendants did not admit wrongdoing as part of that settlement.

-- Amanda Bronstad

July 01, 2008

Commission gives many recommendations for "dysfunctional" death penalty system

The death penalty system in California is dysfunctional, a state commission found.

The California Commission on the Fair Administration of Justice released its tenth and final report of the administration of the death penalty in California, yesterday.

The 117-page report is the first comprehensive review of the operation of California’s death penalty law since its initial enactment in 1978, according to the commission. Three public hearings and 72 witnesses testified in the preparation of the report.

Among its findings: (via The Recorder and The Los Angeles Times)

  • For the state to lower the time condemned prisoners spend on death row to the national average, California would need to spend an extra $95 million each year.
  • More lawyers are needed at the state public defender's office and Habeas Corpus Resource Center to reduce death row inmates' year-long waits for lawyer appointments.
  • More money is needed for the state Supreme Court, the attorney general's office and private counsel.
  • Lower courts should hear appeals and constitutional challenges of death sentences, now only heard at the California Supreme Court.
  • Seventy-nine death row inmates don't have lawyers for their first appeals and 291 inmates don't have lawyers to bring constitutional challenges on facts the trial courts didn't hear.
  • On average, inmates must wait 12 years to get a state high court ruling on their first appeals.
  • California doesn't meet the federal standard for paying private lawyer to take death penalty cases and the method of paying these attorneys violates ABA standards

In total, the cost of implementing the commissions' fixes would be more than $232 million, not including the $350 million or more a new death row is expected to cost.

The main report was accompanies by several dissenting statements, including one by eight of the 22 commissioners calling for the abolition of capital punishment.

The main report didn't expressly recommending abolishing the death penalty, but noted that $100 million per year would be saved if life sentences without the possibility of parole were given instead.

LISTEN: "Scathing Report on C.A. Death Penalty Released," KPCC


June 30, 2008

ICE attorney arrested for taking bribes

Watch_knbc_video A senior attorney with U.S. Immigration and Customs Enforcement and his wife were arrested on Thursday for allegedly taking thousands of dollars in bribes from documented and undocumented immigrants.

Constantine Kallas, ICE Assistant Chief Counsel, and Maria Kallas were arrested by agents at the ICE Office of Professional Responsibility and the FBI, after allegedly taking a $20,000 bribe from an undercover agent seeking documentation to remain in the United States, according to a press release from U.S. Attorney spokesperson Thom Mrozek. The press release alleges that they used two companies, that they'd set up, to file false employment petitions.

In addition to the Kallas' salary, nearly $1 million was deposited into couples' bank accounts since 2000, according to the search warrant affidavit.

Prosecutors told KNBC that 26 files and $184,000 were found in a floor safe at the Kallas' home, where he allegedly brought immigrants with a promise to push immigration papers through for $10,000 to $20,000.

Maria Kallas provided the English/Spanish translation during these meetings, KNBC reported.

Yorba Linda attorney charged in $154 million medical scam

Watch_cbs2_video Attorney Roy Dickson and his accountant were charged over their alleged role in a $154 million rent-a-patient scam in Orange County. It is the largest medical insurance scam in the country, CBS 2 reported.

Dickson, an attorney at now defunct Unity Outpatient Surgery Center, was arrested on Wednesday for his alleged role in a scheme that to recruit patients to fraudulently bill insurance companies, undergoing unneeded surgeries for money or low-cost cosmetic procedures, CBS 2 reported.

He's charged with 106 counts on charges of grand theft, insurance fraud, make false and fraudulent claims and white collar sentencing enhancements for allegedly laundering up to $3 million.

Dickson was previously sanctioned at other local clinics for similar alleged misconduct, the Orange County Register reported.

He was suspended twice from practicing law, according to the California Bar Journal's web site. It reads that in December 2005 he was "suspended for two years,   stayed, placed on two years of probation with a 75-day suspension and was ordered   to take the MPRE within one year." In October 2001, he was "suspended for six months, stayed, and placed on four           years of probation."

June 26, 2008

Calif. AG sues Countrywide, alleging unfair, deceptive practices

Calif_attorney_general_sues_count_3 Troubled mortgage lender Countrywide Financial Corp. misled borrowers with unfair and deceptive practices that led them to take out risky home loans, according to a lawsuit filed on June 25 by California Attorney General Jerry Brown.

The suit came one day after the Illinois attorney general's office indicated that it intended to file a similar civil suit against the mortgage lender and its chief executive, Angelo Mozilo.

Meanwhile, Countrywide shareholders voted to accept a $3 billion takeover proposal by Bank of America Corp.

The California suit, filed in Los Angeles Superior Court, is People v. Countrywide Financial Corp., No. LC081846.

Countrywide, which lost $2.5 billion in defaults and foreclosures and has come to symbolize the subprime mortgage market collapse, focused a portion of its company on loans to consumers with poor credit by offering adjustable-rate mortgages, allegedly without disclosing that payments would rise rapidly months down the road. This would produce dramatic increases in monthly mortgage payments, according to the suit.

Countrywide avoided the risk of default from the subprime loans by repackaging them and selling them in the larger credit markets.

"Countrywide exploited the American dream of homeownership and then sold its mortgages for huge profits on the secondary market," Brown said.

"Countrywide was, in essence, a mass-production loan factory, producing ever-increasing streams of debt without regard for borrowers," he said.

Califattorneygeneralsue_2 "We are not going to comment on the specifics of the lawsuit, except to say that we are fully cooperating with the offices of the California and Illinois Attorneys General," according to a Countrywide's prepared statement. "Our mission remains to assist our customers. We are particularly focused on working with our customers who are having difficulty making their mortgage payments, or who foresee difficulty with future rate resets."

The company also issued a statement to announce that shareholders had approved its merger with Bank of America with a 69% majority.

The California suit alleges deceptive advertising and unfair competition against the firm, Mozilo and president David Sambol.

Brown pointed to Countrywide's 2006 annual report, which touted rapid grown in its loan production from $62 billion in 2000 to $463 billion in 2006 ­— triple the rate of increase for the U.S. residential loan production market during the same period.

-- Pamela A. MacLean

"
AG Files Suit Against Countrywide," The Recorder
"State attorney general sues Countrywide," The San Francisco Chronicle

Former San Diego U.S. Attorney challenged why DOJ rejected applicant

Before being fired, former San Diego U.S. Attorney Carol Lam inquired into why the Department of Justice rejected a young attorney, KPBS reported (LISTEN).

Lam thought it might be because the attorney clerked for a Clinton appointee and wrote an article about gender discrimination in the military.

Maybe.

A new report finds the DOJ used political ideology as a criterion in its hiring, favoring Republicans.

"Critics seize on DOJ audit as evidence of meddling," Associated Press
"Ideology-Based Hiring at Justice Broke Laws, Investigation Finds," Washington Post
"Report Assails Political Hiring in Justice Dept.," The New York Times

June 25, 2008

Disbarred attorney attacks lawyer in court

 Disbarred attorney Darnel Parker was arrested yesterday for allegedly assaulting a lawyer during a civil proceeding at the Larson Justice Center, KNBC reported.

Family law attorney John Gallegos told KNBC that Parker threatened him in court, angry over previous defeats in the court.

Parker was held at Indio jail on suspicion of misdemeanor assault, disturbing a court proceeding, violating a restraining order and being under the influence of a drug. He was released without having to post bail and given an August 26 court date.

An arrest warrant was also issued against Parker yesterday for allegedly disturbing another courtroom in mid-April, KNBC reported. Parker was disbarred in December 2006.

Broadcom co-founder enters guilty plea

The co-founder and former chief technical officer of Broadcom Corp., Henry Samueli, pleaded guilty to making a false statement to the Securities and Exchange Commission during an investigation of stock options backdating at the company.

Samueli is the latest executive at the Irvine, Calif.-based broadband communications manufacturer to be indicted in a criminal stock option backdating case that lead the company to restate more than $2.2 billion in January 2007. Earlier this month, Henry T. Nicholas III, the other co-founder and former chief executive, and William Ruehle, the former chief financial officer, were indicted in the stock options backdating case.

Both have pleaded not guilty.

Nancy Tullos, former executive vice president of human resources at Broadcom, pleaded guilty last year to obstruction of justice charges. She is cooperating in the case.

Samueli, who pleaded guilty to one felony count, admitted lying to the SEC in May 2007 about his involvement in granting stock options to Broadcom’s top officers. He denied such involvement when, in fact, he helped determine in January 2002 that Broadcom should “go with” the stock price on Oct. 19, 2001.

Under the plea deal, Samueli has agreed to a sentence of five years of probation, a $250,000 criminal fine and another $12 million payment to the federal government. He is scheduled to be sentenced on Aug. 18.

"Both parties have agreed this is a fair resolution of this issue, and we believe it is inappropriate to comment further until the judge rules," said Bill Furlow, a spokesman for Gordon Greenberg, a partner in the Los Angeles office of McDermott, Will & Emery, who represents Samueli.

-- Amanda Bronstad

June 24, 2008

Kozinski's authority as chief judge limited until Web site issue is resolved

Prominent Kirkland & Ellis white-collar defense specialist Mark C. Holscher will defend Chief Judge Alex Kozinski in the pending discipline investigation under review at the 3d U.S. Circuit Court of Appeals, the 9th Circuit has confirmed.

Kozinski, who presides over the 9th U.S. Circuit Court of Appeals, faces potential discipline for keeping sexually explicit photos on a personal website, alex.kozinski.com, that he has said were for private use.

The appointment of the 3rd Circuit special investigative committee also triggered — for the first time since the 1980 judicial discipline law was enacted — provisions that limit Kozinski's administrative authority as chief judge until the issue is resolved.

Under the act, 28 USC sec. 359, Kozinski is barred from serving on the 9th Circuit Judicial Council, the policymaking body of the circuit, or on the Judicial Conference of the United States, which sets policy for the judiciary nationally.

Kozinski did not attend the 9th Circuit's council meeting last week, according to Circuit Executive Cathy Catterson. The most senior active judge, Sidney Thomas, presided in Kozinski's place and will likely continue until the discipline issue is resolved.

He must also recuse himself from the long-running discipline investigation of U.S. District Judge Manuel Real in Los Angeles, which he has done, according to Catterson.

Kozinski cannot sit on a special investigative committee in discipline cases under the rules.

Whether Kozinski must also step aside from the role of initial reviewer of all judicial discipline cases until his own case is resolved remains to be seen. Catterson said that legal question is still under review.

The law does not affect Kozinski's ability to continue hearing and deciding appeals. He presided over an 11-judge en banc argument in Pasadena on June 23.

The national Judicial Conference of the United States meets only twice a year and has not had a session since the questions were raised about Kozinski's conduct.

The conference is composed of one chief judge from each circuit court and the International Court of Trade, and one district judge from each circuit.

"The statute is very specific about what it applies to and which functions [Congress] thought were OK to participate in and which are not," said Arthur Hellman, a professor at the University of Pittsburgh School of Law who has studied and written about the 9th Circuit and judicial discipline.

Hellman said when Congress limited administrative functions for judges under investigation it may not have anticipated special investigations of sitting chief judges, with a host of administrative duties unrelated to discipline.

Holscher, with Kirkland & Ellis, was out of the country and could not be reached for comment, but the firm and Catterson confirmed that Kozinski brought Holscher in for his defense before a five-judge panel designated to review the his conduct.

The disclosure of the contents of Kozinski's Web site June 11, forced the judge to declare a mistrial in a Los Angeles obscenity case he was overseeing in Los Angeles. Kozinski then recused himself from further participation in the case.

Holscher is a former federal prosecutor in Los Angeles from 1989 to 1995 and was appointed a special attorney in the corruption investigation of former Arizona Governor Fife Symington.

Holscher joined Kirkland in 2007 after 12 years with O'Melveny & Myers in Los Angeles. He worked on the defense team for former Congressman Randall "Duke" Cunningham and as one of the trial lawyers for Jeffrey Skilling in the criminal case stemming from the collapse of Enron Corp.

He also successfully defended Los Alamos Nuclear Scientist Wen Ho Lee against espionage charges.

-- Pamela A. MacLean

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