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executive mistrials


desdemona

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this article contends this is not a trend, but it seems there's been quite a few mistrials involving all the corporate fraud cases I've seen publicized, I followed up with a reply that adds another one dated after this article.

Despite 2 Mistrials, Prosecutors Rack Up White-Collar Victories

By: Alex Berenson

NYTimes.com. April 4, 2004

_________________________________________________________________________

EXCERPT: Two mistrials do not make a trend. For the second time in less than six months, a prominent white-collar crime case has ended without a verdict. In October, a federal judge declared a mistrial in the trial of Frank P. Quattrone, the former investment banker accused of obstructing justice. On Friday, a New York state judge did the same in the trial of L. Dennis Kozlowski and Mark H. Swartz, who were accused of stealing $600 million from Tyco International and its investors. But even as those two cases stalled, prosecutors have won guilty verdicts and guilty pleas in dozens of other white-collar crime cases, including the conviction of Martha Stewart last month. Last week, Jamie Olis, a former midlevel executive at Dynegy, a Houston energy company, was sentenced to more than 24 years in prison for his role in accounting fraud at the company. The sentence was one of the most severe imposed in a white-collar fraud case, prosecutors and defense lawyers said. Prosecutors, meanwhile, are continuing to investigate current and former executives at several big publicly traded companies, including Computer Associates, the software maker, and the McKesson Corporation, a pharmaceutical wholesaler. On Wednesday, a federal grand jury in San Francisco indicted Richard H. Hawkins, the former chief financial officer of McKesson, on charges of conspiracy to commit securities fraud and making false statements. In addition, a retrial in Mr. Quattrone's case is scheduled to begin this month, and Manhattan prosecutors say they plan to retry the Tyco case. So those cases cannot be counted as victories for their defendants. Indeed, despite the conventional wisdom that juries cannot understand complex corporate fraud cases, prosecutors have not lost a significant case since the recent wave of fraud trials began with the conviction of the accounting firm of Arthur Andersen in 2002, prosecutors and defense lawyers say. "The conviction rate in these cases is 85 percent in federal court," said Ira Lee Sorkin, a New York defense lawyer and former prosecutor. "It's not hard to win these cases." To be sure, some white-collar crime cases are difficult to present to juries, legal experts say. In the trial of Jeffrey K. Skilling, the former chief executive of Enron, which is expected to begin next winter, federal prosecutors will have to explain arcane accounting concepts to the jury. The prosecutions of Bernard J. Ebbers, the former chairman of WorldCom, and Richard M. Scrushy, the former chairman of HealthSouth, may also turn on jurors' understanding of somewhat complicated accounting principles. The trial of Mr. Ebbers is scheduled to begin in November; Mr. Scrushy's is set to start in August. But the charges against Mr. Kozlowski, Mr. Swartz and Mr. Quattrone were relatively straightforward compared with the accounting gimmicks at issue in the Enron, HealthSouth and WorldCom cases. Mr. Kozlowski, Tyco's former chief executive, and Mr. Swartz, the company's former chief financial officer, were accused of taking bonuses from Tyco that they did not deserve. Mr. Quattrone, a former banker at Credit Suisse First Boston, was accused of impeding a federal investigation into initial public offerings by encouraging Credit Suisse employees to destroy documents that investigators had subpoenaed.

http://securities.stanford.edu/news-archiv...02_Berenson.htm

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Mistrial for one of Adelphia defendants

Judge declares mistrial on remaining charges against former Executive VP Michael Rigas.

July 9, 2004: 4:23 PM EDT

By Krysten Crawford, CNN/Money Staff Writer

CNN/Money (NEW YORK) - A day after convicting two former top officials at Adelphia Communications Corp. and exonerating a third on charges of looting the bankrupt cable giant, a jury was still deadlocked on remaining charges against a fourth executive.

As a result, the trial judge declared a mistrial on the remaining charges against Michael Rigas, a son of Adelphia founder John Rigas and a former executive vice president of operations at the company.

Michael Rigas was found not guilty Thursday of committing wire fraud and conspiracy. But the jury could not reach a decision on 17 remaining felony charges against him.

His father and another brother, Timothy Rigas, were convicted Thursday afternoon on most counts against them.

The federal jury cleared Michael Mulcahey, Adelphia's ex-director of internal financial reporting, of any wrongdoing in the collapse of Adelphia, one of the country's largest cable operators.

The father and two sons were accused of concealing, with Mulcahey's help, $2.3 billion in loans and stealing more than $100 million from the now-bankrupt company. They were arrested two years ago and charged with 23 felony counts apiece. At the time, prosecutors called the case "one of the most elaborate and extensive frauds in United States history."

John Rigas, 79, founded Adelphia in 1952 and built it into the sixth-largest cable company before being ousted in an accounting scandal that came to light in 2002 amid a wave of government investigations into corporate chicanery.

During the 18-week trial that began in March, prosecutors sought to show that the Rigas family treated Adelphia like a "personal piggy bank" to pay for luxury condos and a golf course, and to cover personal investment losses. Government lawyers also charged that they lied about Adelphia's revenues and operations.

Defense lawyers insisted throughout the trial that their clients were innocent and had every intention of repaying the company for loans that defense lawyers argued were widely known about within the company.

John Rigas and his sons did not testify in their defense. The only defendant to take the stand was Mulcahey.

The jury deliberated for eight days before returning its guilty verdicts against John and Timothy Rigas and clearing Mulcahey, who broke down in tears upon hearing the jury's decision.

Thursday ended with only Michael Rigas -- found not guilty of 6 charges -- unsure of his fate. John and Timothy Rigas face 20 to 25 years in prison.

Jurors returned to the Manhattan federal courtroom Friday morning to renew their deliberations on the remaining charges against Michael Rigas. They surprised the judge with a note before lunch, declaring they were deadlocked on the counts against Michael Rigas.

The judge urged them to keep trying, but after lunch Friday afternoon they told the judge once again that they could not reach a consensus.

Prosecutors now have the option of retrying Michael Rigas.

The trial's conclusion caps two days of triumphs for prosecutors intent on punishing corporate abuse in the executive suite.

Also Thursday, a federal judge overseeing an obstruction of justice case against Martha Stewart, the founder of the lifestyle media and retail company Martha Stewart Living Omnimedia (MSO: Research, Estimates) denied Stewart's second bid for a new trial. Stewart, who faces 10 to 16 months for lying during an insider trading investigation of her, is due to be sentenced July 18.

Another victory for prosecutors came earlier in the day when Kenneth Lay, the former chairman and CEO of Enron Corp. was indicted on 11 felony counts related to the Houston energy giant's late 2001 bankruptcy. Enron's fall touched off a series of corporate scandals at some of the country's largest companies, including Adelphia, WorldCom, Global Crossing and Tyco International.

"There certainly existed a mindset in the late '90s by some that the corporate till was a personal entitlement," said Jacob Frenkel, a Washington, D.C. lawyer who was once a federal prosecutor and a Securities and Exchange Commission enforcement lawyer.

"These cases have significant policy implications," Frenkel added. "To see two senior executives facing prison terms representing the balance of their lives sends a very strong message," he said, referring to Thursday's conviction of John and Timothy Rigas.

As for Martha Stewart's obstruction of justice conviction, Frenkel said: "Any lawyer can go to their client now and say 'Martha Stewart' and that person knows it means you cannot lie to the government."

http://money.cnn.com/2004/07/09/news/midca...lphia/index.htm

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