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Legal news from Friday, June 19, 2009

Financier Stanford indicted in $7 billion fraud scheme
Jaclyn Belczyk on June 19, 2009 3:40 PM ET

[JURIST] Texas financier Allen Stanford [BBC profile] appeared Friday in the US District Court for the Eastern District of Virginia [official website], after being indicted [text, PDF; DOJ press release] on fraud and obstruction charges related to a $7 billion fraud scheme. Stanford, through his investment companies Stanford International Bank (SIB), Stanford Group Company (SGC) and Stanford Capital Management (SCM), is accused of violating the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940 [texts]. Also indicted Friday were SFG chief investment officer Laura Pendergest-Holt, SFG chief accounting officer Gilberto Lopez, SFG gobal controller Mark Kuhrt, and former administrator and CEO of Antigua’s Financial Services Regulatory Commission Leroy King. Each defendant is charged with one count of conspiracy to commit mail, wire, and securities fraud, seven counts of wire fraud, 10 counts of mail fraud, and one count of conspiracy to commit money laundering. Stanford, Pendergest-Holt, and King are also charged with with conspiracy to obstruct a Securities and Exchange Commission (SEC) [official website] proceeding. If convicted, Stanford faces up to 250 years in prison.

In March, a judge in the US District Court for the Northern District of Texas [official website] indefinitely froze the assets [order, PDF] of Allen Stanford. The judge also issued an order [text, PDF] releasing most customer brokerage accounts over $250,000 that had been frozen since February]. The previous month, a federal judge issued a temporary restraining order [text, PDF] to freeze Stanford's assets, as customers rushed to withdraw their investments from SIB branches in Antigua and Venezuela. Stanford was charged [complaint, PDF; JURIST report] in February with orchestrating a fraudulent $7 billion investment scheme by selling certificates of deposits on the promise of improbably high interest rates.

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Ireland agrees to hold second EU reform treaty referendum after concessions made
Jaclyn Belczyk on June 19, 2009 2:29 PM ET

[JURIST] The Irish government agreed Friday to hold another referendum on the European Union (EU) reform treaty, also known as the Lisbon Treaty [EU materials; text], after EU leaders agreed to certain concessions [presidency conclusions, PDF]. At a conference in Brussels, members of the Council of the European Union [official website] agreed to legal guarantees that the Lisbon Treaty would not affect [Guardian report] taxation, abortion, or military neutrality laws. The presidency conclusions declared:

the Protocol will in no way alter the relationship between the EU and its Member States. The sole purpose of the Protocol will be to give full Treaty status to the clarifications set out in the Decision to meet the concerns of the Irish people. Its status will be no different from similar clarifications in Protocols obtained by other Member States. The Protocol will clarify but not change either the content or the application of the Treaty of Lisbon.
The new referendum is expected to be held in early October.

Last month, the Senate of the Parliament of the Czech Republic [official website] voted to approve [JURIST report] the Treaty of Lisbon, sending the document to Czech President Vaclav Klaus [official website] for ratification. Klaus has refused to sign, to avoid putting pressure on Irish voters. If the treaty is ratified, Ireland would be the only remaining EU country not to have ratified it. An Irish Times poll [report] published in November suggested [JURIST report] that 52.5 percent of Irish voters would approve the Treaty of Lisbon if it were modified so that Ireland kept a EU commissioner and clarified Irish concerns over neutrality, abortion, and taxation. In June, 53.4 percent of Irish voters rejected the Lisbon Treaty [JURIST report] in a referendum. In 2003, Ireland famously conducted a revote on the Nice Treaty [backgrounder] on the institutional arrangements for EU enlargement after initially rejecting it in 2002. Ireland has been the only nation to hold a referendum to approve the Lisbon Treaty. All 27 EU states must ratify the pact for it to become binding.

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Iran protester arrests may be unlawful: UN rights chief
Christian Ehret on June 19, 2009 1:15 PM ET

[JURIST] The arrests of protesters in Iran may not conform with the law, UN High Commissioner for Human Rights Navanethem Pillay [official profile] said Friday, expressing concern [press release] over the increasing number of reported arrests [JURIST report]. Classifying freedom of expression and assembly as "fundamental human rights," Pillay commended the peaceful and dignified nature of the protests that followed the country's controversial presidential election [BBC backgrounder]. Stating that Pillay is urging Iranian authorities to ensure due process is followed [press release], her spokesman said that the issue raises questions concerning the grounds for the arrests, warrants, denied access to lawyers and family members, and the unknown whereabouts of some of those arrested. Ayatollah Ali Khamenei [official profile; BBC profile], who previously ordered an investigation [JURIST report] into alleged voter fraud, has called for an end to further demonstrations [CNN report] and maintained that the election was not manipulated. Addressing a crowd at Tehran University, Khamenei said that the election turnout was too large to be subject to fraud and that the results accurately represent the voters.

Human rights groups have viewed the arrests as political repression [JURIST report], saying that Iranian forces are using the protests to "engage in what appears to be a major purge of reform-oriented individuals." Calling for authorities to respect and nurture debate, Amnesty International [advocacy website] stressed [press release] Thursday that "healthy debate on issues of fundamental importance to peoples' lives" informs, rather than threatens, policy makers." Following the Ayatollah's ordered investigation, Iran's Guardian Council of the Constitution [official website, in Persian] said Tuesday that it would conduct a partial recount [JURIST report] of the disputed election results. The protests took place [AP report] throughout the country following last weekend's announcement of a victory by President Mahmoud Ahmadinejad [BBC profile; JURIST news archive] over reform candidate Mir Hossein Mousavi [IranTracker profile].

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Federal jury assesses $1.92 million damages in music file-sharing case
Christian Ehret on June 19, 2009 11:40 AM ET

[JURIST] A federal jury in the US District Court for the District of Minnesota [official website] found Thursday that a Minnesota woman had violated music copyrights and assessed damages at $80,000 per song for 24 songs, totaling $1.92 million. In a retrial, Jammie Thomas-Rasset was found to have willfully violated copyright law in sharing songs on the file-sharing program KaZaA [website], which has since become a legitimate music purveyor. Following the announcement of the verdict, Thomas-Rasset told the media that she was not going to worry about the judgment, saying that she is incapable of paying that amount [AP report] as a mother of four. On Tuesday, Thomas-Rasset delivered testimony in the proceedings in which she maintained her innocence [ARS Technica report] and claimed to have never heard of the file-sharing program before the case. Additionally, she admitted that the hard drive turned over to authorities was not the same as the one installed in her computer during the time she allegedly shared the songs in question, contrary to two previous depositions in which she said differently. Recording Industry Association of America (RIAA) [trade website] spokeswoman Cara Duckworth maintained that the association is willing to settle [press release] the case.

In December, the RIAA said that it would discontinue its controversial policy [JURIST report] of suing suspected file-sharers and instead will seek cooperation with major Internet service providers to cut off access to repeat offenders. The recent proceedings against Thomas-Rasset were a retrial of a previous judgment against her, granted by a federal judge on the grounds that the court erred by instructing the jury that making the music available on the KaZaA network was enough to violate the Copyright Act and that the $222,000 in damages [JURIST reports] was excessive. In March, another woman being sued by RIAA sought class action status [amended complaint; JURIST report] for a counterclaim [case materials] against the RIAA, several recording companies, and data investigation company MediaSentry [corporate website] for allegedly using unscrupulous tactics as part of an RIAA anti-piracy campaign.

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Peru congress repeals controversial indigenous land laws
Jaclyn Belczyk on June 19, 2009 11:00 AM ET

[JURIST] The Peruvian Congress [official website, in Spanish] voted Thursday to repeal controversial land laws [press release, in Spanish] that had led to indigenous protests and violent clashes last week when police attempted to disperse groups blocking access routes. Last week, the congress temporarily suspended [JURIST report] legislative decree 1090, the Forest and Wild Fauna Law [text, PDF, in Spanish] and legislative decree 1064, establishing the legal framework for agricultural land usage [text, PDF, in Spanish] in the wake of the protests. The repeal came after negotiations between the Peruvian government and indigenous groups resulted in Peruvian Prime Minister Yehude Simon [official profile, in Spanish] announcing Monday that the Executive Branch would ask the congress to repeal [JURIST report] the laws. On Wednesday, Simon announced that he would resign in the wake of the protests. Peru's largest indigenous organization, the Interethnic Association for the Development of the Peruvian Jungle (AIDESEP) [advocacy website, in Spanish], hailed [press release, in Spanish] Thursday's repeal, saying, "[t]oday is a historic day, we are grateful that the will of indigenous peoples has been heard, and only hope that in future, governments meet and listen to the people..."

Peruvian President Alan Garcia [official website, in Spanish] decreed the controversial laws under powers to implement a free trade agreement with the US. The laws would open Amazon land to development by international companies. Simon maintained earlier this week that the repeal of the laws would not harm a Peruvian-US free trade agreement [Andina report, in Spanish]. In November 2008, Simon declared a state of emergency [JURIST news report] when violence broke out amidst indigenous protests over a new law reducing revenue to the province from local mining operations. In August 2008, protests over a controversial law [JURIST report] that reduced the majority by which a tribe must agree to sell communal land to oil and natural gas companies led the Peruvian government to declare a state of emergency over widespread indigenous protests.

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Iraq PM creates prison abuse investigatory committee
Christian Ehret on June 19, 2009 10:17 AM ET

[JURIST] Iraq Prime Minister Nouri al-Maliki [official website, in Arabic; BBC profile] created a special committee Thursday to investigate alleged abuse and torture in the country's prisons. Comprised of eight members, the committee reportedly includes representatives [AP report] from human rights and judicial government agencies and security ministries. The panel will report its findings to al-Maliki within two weeks. The decision to create the panel follows the recent charges [JURIST report] against 43 Iraqi police officers for human rights abuses, warrantless arrests, and bribery allegations. The violations were discovered by an investigatory committee formed by Iraq Interior Minister Jawad al-Bolani [NYT backgrounder]. Loyalists to Shiite cleric Muqtada al-Sadr [GlobalSecurity profile] have pressured the Iraqi government [AP report] over prison conditions that they claim include confessions elicited from torture and politically motivated false accusations. The government is attempting to resolve the controversial police behavior issues before the national parliamentary elections scheduled for January 30, 2010 [UPI report].

Hundreds of Iraqi prisoners have recently gone on a hunger strike [PressTV report] to protest torture-elicited false confessions. In August, officials for Iraq's Human Rights Ministry discussed a plan to prosecute those suspected of torturing inmates [JURIST report] in the country's prisons. In 2006, then-UN secretary-general Kofi Annan said that Iraq's detention practices may violate international law and expressed concern [JURIST report] over the failure of Coalition forces to publish the results of their investigation into the torture allegations. In December 2005, then-interior minister Bayan Jabr fired [JURIST report] Nouri al-Nouri, the country's senior inspector handling human rights issues, in connection with a torture scandal involving dozens of prisoners at a Baghdad prison. In November 2005 US troops found 173 prisoners [JURIST report], many abused, in a secret bunker run by the Interior Ministry. Jabr himself has been accused of running secret prisons and controlling death squads, charges he has downplayed or denied [JURIST reports].

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ACLU challenges federal prison solitary confinement units
Christian Ehret on June 19, 2009 8:26 AM ET

[JURIST] The American Civil Liberties Union (ACLU) [advocacy website] filed suit [complaint, PDF] Thursday against the US government, challenging the establishment of isolated cells within federal prisons that were allegedly created in violation of federal law. Filed against US Attorney General Eric Holder [official profile] and two Bureau of Prisons (BOP) [official website] officials, the complaint alleges that the so-called Communication Management Units (CMU) were secretly created in violation of a Administrative Procedure Act provision [5 USC § 553 text], which requires notice of new rules and the chance for interested parties to comment on them. The units were apparently created to detain terrorists but, according to the ACLU, now contain a disproportionate number of Muslim prisoners [press release] who are not all connected to terrorism. The ACLU brought the suit along with the organization's Indiana office [advocacy website] on behalf of plaintiff Sabri Benkahla, who is confined in an isolated unit at an Indiana federal prison. Benkahla was found not guilty [opinion, PDF] of supporting the Taliban and was declared not a terrorist by the sentencing judge. ACLU National Prison Project [advocacy website] attorney David Shapiro addressed the fairness of the units:

The government created CMUs without any opportunity for public comment or oversight in an effort to skirt obligations of accountability and transparency. And after inventing these units behind closed doors, prison officials arbitrarily assigned prisoners to them without providing prisoners any real ability to challenge their placement there.

It is simply unfair to force Sabri Benkahla to serve his sentence in a horrifically isolated housing unit designed by the government to hold terrorists when he has never been convicted of any crime of terrorism. The Bureau of Prisons should be held accountable for these units and the people like Sabri who are wrongfully held there.
The ACLU ask the court to order the defendants to implement the statutory notice and comment requirements immediately, to enjoin the further operation of the solitary units at the Indiana facility, and to establish visiting hours for prisoners detained in the units.

Benkahla was abducted by Saudi authorities in 2003 the night before his wedding and held in a small cell without notice to his family. The FBI took custody of him and brought him to the US, charging him with supporting the Taliban and a firearms violation. Benkahla was then convicted of perjury in connection with his testimony before a grand jury and sentenced to 121 months in prison. Last week, the US Department of Justice (DOJ) [official website] released a fact sheet [press release] summarizing the detainment and prosecution of terrorism suspects in the US criminal justice system. The release specified that the BOP currently detains 216 inmates [JURIST report] with connections to international terrorism.

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House denies Guantanamo closure funds, restricts detainee transfers
Matt Glenn on June 19, 2009 7:57 AM ET

[JURIST] The US House of Representatives passed a spending bill [HR 2847 materials] Thursday that denied the Obama administration's request for $60 million to close the Guantanamo Bay [JURIST news archive] detention center and placed limits on the government's ability to transfer detainees to the US and release detainees to foreign countries. The first 2010 spending bill, which was approved by a vote of 259-157 [roll call], also prohibits funds from being used to release detainees from Guantanamo into the US. The legislation would require the president to submit to Congress a detailed plan documenting the costs and risks of transferring a detainee to the US for trial or detention at least two months before the detainee is to be transferred. Additionally, the president would have to notify the governor and legislature of the state to which the detainee is to be transferred at least 30 days before the transfer and must show that the detainee does not pose a security risk. The bill also requires that the president submit a report to Congress before releasing a detainee into his country of origin or last habitual residence unless that country is the US. Thursday's bill, which must now go before the Senate, is the first of 12 spending bills [AP report] House Democrats hope to pass by August.

US President Barack Obama has requested funding to shut down Guantanamo Bay, but Congress has repeatedly refused. The House Appropriations Committee Subcommittee on Commerce, Justice, Science, and Related Agencies [official website] approved an earlier version [JURIST report] of Thursday's bill that also denied Obama the funds to close the facility. In May, Obama defended his plan [JURIST report] to close down Guantanamo Bay and try its detainees in federal courts and modified military tribunals. Obama's speech came a day after the US Senate passed an amendment [JURIST report] eliminating $80 million intended to be used for the closure of Guantanamo until the president provides a "comprehensive, responsible plan" to do so.

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Senate passes resolution apologizing for slavery, racial segregation
Benjamin Hackman on June 19, 2009 6:58 AM ET

[JURIST] The US Senate [official website] unanimously passed a resolution [S Con Res 26 text, PDF] Thursday apologizing to African-Americans for slavery and racial segregation. Senator Tom Harkin (D-IA) [official website] introduced and sponsored the concurrent resolution, which will next be voted on by the US House of Representatives [official website]. The resolution reads in part:

The Congress—
(A) acknowledges the fundamental injustice, cruelty, brutality, and inhumanity of slavery and Jim Crow laws;

(B) apologizes to African-Americans on behalf of the people of the United States, for the wrongs committed against them and their ancestors who suffered under slavery and Jim Crow laws; and

(C) expresses its recommitment to the principle that all people are created equal and endowed with inalienable rights to life, liberty, and the pursuit of happiness, and calls on all people of the United States to work toward eliminating racial prejudices, injustices, and discrimination from our society.
The resolution contains a disclaimer indicating that it does not authorize or support any claim against the United States.

In July 2008, the House of Representatives approved a resolution [JURIST report] apologizing to African Americans for slavery and Jim Crow laws [backgrounder]. Previously, Congress had apologized to Japanese-Americans detained during World War II and Native Hawaiians [texts] for the conquest of Hawaii.

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Former HealthSouth CEO found liable for $2.88 billion
Matt Glenn on June 19, 2009 6:53 AM ET

[JURIST] Former HealthSouth [corporate website] CEO Richard Scrushy [defense website; JURIST news archive] was found liable [opinion; order, PDF] to the company's shareholders for fraud Thursday by Judge Allwin Horn of Alabama's 10th Judicial District [official website] and ordered to pay $2.88 billion. The plaintiffs claimed that Scrushy encouraged others to purposefully inflate company profits [JURIST report] in order to qualify himself and other executives for bonuses, directed company contracts towards other companies he owned, traded the company's stock based on insider information, and misused other company resources for his own benefit. HealthSouth released a statement [press release] approving of the verdict and promising to vigorously attempt to collect the money Scrushy owes the company. Scrushy's lawyers claim Scrushy lacks the money [WSJ report] to pay the judgment and said they plan to appeal [WBRC report].

On Wednesday, the US Court of Appeals for the 11th Circuit [official website] rejected [JURIST report] Scrushy's challenges to a $445 million settlement against HealthSouth. In 2007, the US Securities and Exchange Commission [official website] settled its accounting fraud claims [JURIST report] against Scrushy for $81 million. In 2005, Scrushy was acquitted [JURIST report] of criminal charges of wire and mail fraud, money laundering, conspiracy, and violations of the Sarbanes-Oxley Act. In 2003, HealthSouth conceded that its prior financial statements had overstated its income and assets by a substantial amount. Several class action suits were subsequently filed by investors against the company and its officers for alleged violations of the Securities Act of 1933 and the Securities Exchange Act of 1934. The actions were consolidated and, in 2006, the $445 million settlement was reached. Last month, the Eleventh Circuit denied Scrushy's petition [JURIST report] for an en banc rehearing of his conviction for unrelated federal bribery and corruption charges for paying campaign debts of former Alabama governor Don Siegelman [official profile] in exchange for a seat on a state-operated review board that regulates Alabama hospitals.

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Serbia court sentences ex-paramilitary officers for Kosovo killings
Benjamin Hackman on June 19, 2009 6:08 AM ET

[JURIST] The War Crimes Chamber of the Belgrade District Court [official website, in Serbian] on Thursday convicted [judgment, DOC, in Serbian] four former members of a Serbian paramilitary group [case materials, in Serbian] for the killings of 14 Kosovo Albanians in 1999, handing down sentences ranging from 15 to 20 years. The court concluded that Zeljko Djukic, Dragan Medic, Dragan Borojevic, and Miodrag Solaj, members of a paramilitary group called the Scorpions, intended to kill [BETA report] when they fired upon 19 civilians in northern Kosovo in March 1999. The court sentenced Djukic, Medic and Borojevic to 20 years in prison and sentenced Solaj to 15 years in prison because he was younger than 18 [Reuters report] when the killings occurred. Five children who survived the shooting testified at the ex-Scorpions' trial, which began in September 2008 and lasted 33 days.

Last week, Amnesty International (AI) [advocacy website] marked the 10-year anniversary of the conflict's end by reporting that many human rights abuses that occurred during the war in Kosovo [USDOS backgrounder] have gone uninvestigated and unpunished [JURIST report]. However, prosecutors have secured several convictions. In April, four Serbian ex-policemen were convicted [JURIST report] of killing of 48 Albanian civilians during the war in Kosovo in 1999. In October 2008, the Court of Bosnia and Herzegovina [official website] sentenced ex-policeman Vaso Todorovic to six years in prison [JURIST report] for the capture and detention of 40,000 Bosnian Muslims in 1995. Earlier that month, four Bosnian Serbs were arrested for the killing [JURIST report] of 200 civilians in Koricanske Stijene.

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For more legal news check the Paper Chase Archive...


Unprecedented Notice of Warrantless Wiretapping in a Closed Case
Ramzi Kassem
CUNY School of Law

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