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History > 2012 > USA > Federal Justice (I)




Alabama to End

Isolation of Inmates With H.I.V.


December 21, 2012
The New York Times


A federal judge on Friday ordered Alabama to stop isolating prisoners with H.I.V.

Alabama is one of two states, along with South Carolina, where H.I.V.-positive inmates are housed in separate prisons, away from other inmates, in an attempt to reduce medical costs and stop the spread of the virus, which causes AIDS.

Judge Myron H. Thompson of the Middle District of Alabama ruled in favor of a group of inmates who argued in a class-action lawsuit that they had been stigmatized and denied equal access to educational programs. The judge called the state’s policy “an unnecessary tool for preventing the transmission of H.I.V.” but “an effective one for humiliating and isolating prisoners living with the disease.”

After the AIDS epidemic of the 1980s, many states, including New York, quarantined H.I.V.-positive prisoners to prevent the virus from spreading through sexual contact or through blood when inmates tattooed one another. But most states ended the practice voluntarily as powerful antiretroviral drugs reduced the risk of transmission.

In Alabama, inmates are tested for H.I.V. when they enter prison. About 250 of the state’s 26,400 inmates have tested positive. They are housed in special dormitories at two prisons: one for men and one for women. No inmates have developed AIDS, the state says.

H.I.V.-positive inmates are treated differently from those with other viruses like hepatitis B and C, which are far more infectious, according to the World Health Organization. Inmates with H.I.V. are barred from eating in the cafeteria, working around food, enrolling in certain educational programs or transferring to prisons near their families.

Prisoners have been trying to overturn the policy for more than two decades. In 1995, a federal court upheld Alabama’s policy. Inmates filed the latest lawsuit last year.

“Today’s decision is historic,” said Margaret Winter, the associate director of the National Prison Project of the American Civil Liberties Union, which represented the inmates. “It spells an end to a segregation policy that has inflicted needless misery on Alabama prisoners with H.I.V. and their families.”

Brian Corbett, a spokesman for the Alabama Department of Corrections, said the state is “not prejudiced against H.I.V.-positive inmates” and has “worked hard over the years to improve their health care, living conditions and their activities.”

“We will continue our review of the court’s opinion and determine our next course of action in a timely manner,” he wrote.

During a monthlong trial in September, lawyers for the department argued that the policy improved the treatment of H.I.V.-positive inmates. Fewer doctors are needed if specialists in H.I.V. focus on 2 of the 29 state’s prisons.

The state spends an average of $22,000 per year on treating individual H.I.V.-positive inmates. The total is more than the cost of medicine for all other inmates, said Bill Lunsford, a lawyer for the Corrections Department.

South Carolina has also faced legal scrutiny. In 2010, the Justice Department notified the state that it was investigating the policy and might sue to overturn it.

    Alabama to End Isolation of Inmates With H.I.V., NYT, 21.12.2012,






Robert H. Bork, Conservative Jurist, Dies at 85


December 19, 2012
The New York Times


Robert H. Bork, a former solicitor general, federal judge and conservative legal theorist whose 1987 nomination to the United States Supreme Court was rejected by the Senate in a historic political battle whose impact is still being felt, died on Wednesday in Arlington, Va. He was 85.

His death, of complications of heart disease, was confirmed by his son Robert Jr.

Judge Bork, who was senior judicial adviser this year to Mitt Romney’s presidential campaign, played a small but crucial role in the Watergate crisis as the solicitor general under President Richard M. Nixon. He carried out orders to fire a special prosecutor in what became known as “the Saturday Night Massacre.” He also handed down notable decisions from the federal appeals court bench. But it was as a symbol of the nation’s culture wars that Judge Bork made his name.

It is rare for the Senate in its constitutional “advice and consent” role to turn down a president’s Supreme Court nominee, and rarer still for that rejection to be based not on qualifications but on judicial philosophy and temperament. That turned Judge Bork’s defeat into a watershed event and his name into a verb: getting “borked” is what happens to a nominee rejected for what supporters consider political motives.

The success of the anti-Bork campaign is widely seen to have shifted the tone and emphasis of Supreme Court nominations since then, giving them an often strong political cast and making it hard, many argue, for a nominee with firmly held views ever to be confirmed.

Until the end of his life, Judge Bork argued that American judges, acting to please a liberal elite, have hijacked the struggle over national values by overstepping their role, especially in many of the most important decisions on civil rights and liberties, personal autonomy and regulation of business.

He advocated a view of judging known as “strict constructionism,” or “originalism,” which seeks to limit constitutional values to those explicitly enunciated by the framers and to reject those that evolved in later generations. He dismissed the view that the courts had rightly come to the aid of those neglected by the majority. By contrast, he felt that majorities, through legislatures, should be empowered to make all decisions not specifically addressed in the Constitution.

He most notably took issue with the Supreme Court’s assertion in the 1960s and ’70s that the Constitution implicitly recognizes a right of privacy that bars states from outlawing abortion or the use of contraceptives by married couples.

That position, along with his rejection of court-mandated help to minority groups, led a coalition of liberal groups to push successfully for his Senate defeat, motivated in no small part by their sense that he cared more about abstract legal reasoning than the people affected by it. They contended that his confirmation would produce a radical shift on a closely divided Supreme Court and “turn back the clock” on civil and individual rights.

Judge Bork, who was 60 at the time, was sitting on the United States Court of Appeals for the District of Columbia Circuit, often a steppingstone to the Supreme Court, when President Ronald Reagan announced on July 1, 1987, that he was nominating him to the high court to replace Lewis Powell, a moderate justice who was retiring. Within an hour of the announcement, Senator Edward M. Kennedy, the Massachusetts Democrat, set the tone for the bruising contest to come.

“Robert Bork’s America,” Mr. Kennedy said in a speech, “is a land in which women would be forced into back-alley abortions, blacks would sit at segregated lunch counters, rogue police could break down citizens’ doors in midnight raids, schoolchildren could not be taught about evolution, writers and artists could be censored at the whim of government, and the doors of the federal courts would be shut on the fingers of millions of citizens for whom the judiciary is — and is often the only — protector of the individual rights that are the heart of our democracy.”

Judge Bork’s supporters considered every word of that attack a misrepresentation. But the fear that his confirmation would curtail settled rights, especially of blacks and women, created a national reaction.

A National Outcry

An array of groups focused on civil and women’s rights, labor, consumer power and the environment began an extraordinary public campaign against him, arguing that his long and extensive record exposed a range of agendas and made him unfit for the job.

They made their case in full-page advertisements, mass mailings and demonstrations and ceaseless lobbying of their senators. Since there was no question of his integrity or intelligence, the campaign and subsequent hearings by the Senate Judiciary Committee, run by Joseph R. Biden Jr., a Democratic senator from Delaware at the time, focused on whether Judge Bork was “out of the mainstream.”

Two Supreme Court decisions were seen as especially vulnerable to being overturned by a bench with Judge Bork on it: the 1973 Roe v. Wade ruling, which barred states from banning abortion, and the 1978 Bakke case upholding affirmative action. During five days of testimony, much of it televised, Judge Bork declined to comment on how he would rule should those issues come up and argued further that what he had said in his life as a scholar and advocate would have little bearing on his judgments from the bench.

The White House also sought to portray him as a moderate. That, and his own assertion that he would look at the law with a fresh eye, gave off the whiff of hypocrisy, which made it easier for some senators to oppose him.

The American Bar Association’s committee on judicial nominees also split, with four of the 15 members calling him “not qualified,” because of concerns over his “compassion, open-mindedness, his sensitivity to the rights of women and minority persons or groups.”

Judge Bork, a bear of a man with a scraggly red beard and untamed frizz on a balding pate who had an outsize love of food and drink, handled himself poorly in front of the committee and failed to give doubters confidence. As Tom Shales, the television critic for The Washington Post, wrote of his testimony: “He looked, and talked, like a man who would throw the book at you — maybe like a man who would throw the book at the whole country.”

The most contentious part of the hearings occurred under questioning from Arlen Specter, a centrist Republican from Pennsylvania and a former prosecutor. Mr. Specter, who died in October, quoted Judge Bork as having written that under the Constitution, executive power had to evolve. Why then, Mr. Specter wanted to know, shouldn’t other constitutional concepts — like individual liberty — have a chance to evolve as well? The senator accused Judge Bork of selecting evolving rights based on his own preferences rather than neutral principles.

It was an accusation that stuck. So did the notion that the nominee was somehow unfeeling as a judge. This latter was amplified when, asked by a sympathetic senator, Alan K. Simpson, Republican of Wyoming, why he wanted to serve on the Supreme Court, Judge Bork replied that it would be “an intellectual feast.”

The committee voted, 9 to 5, to reject his nomination and sent it to the full Senate, which also turned him down.

After the defeat the White House picked Douglas Ginsburg, of the same federal appeals court in Washington, as its new nominee. But when it was discovered that he had smoked marijuana at Harvard, his nomination was withdrawn and replaced with that of Anthony M. Kennedy, a judge on the Ninth Circuit Court of Appeals in California.

In his hearings, Judge Kennedy, a mainstream, clean-cut conservative from Sacramento, made a point of distinguishing himself from Judge Bork by focusing on compassion and the need to respect Supreme Court precedents. His nomination sailed through the Senate. On the Supreme Court, he became an important centrist swing vote between liberal and conservative blocs and has consistently declined to overturn Roe v. Wade.

Judge Bork inspired a fervent generation of conservative legal thinkers. As America turned more conservative and President George W. Bush chose judges with views similar to his, many of Judge Bork’s acolytes and admirers ended up on the federal bench.

After his defeat, Judge Bork retired from the Circuit Court and took up positions at conservative ideological groups and law schools, writing and speaking against what he saw as the moral decline of the country at the hands of an elite, a theme he explored in a best-selling book.

In an interview in The American Spectator in 2002, he repeated his view that a liberal elite had hijacked the nation. “Churchgoers aren’t very powerful, given their numbers,” he said. “And the intelligentsia is powerful, far beyond their numbers, because they control the hype of television. They control Hollywood. They control the newspapers. They control the foundations. They control the universities.”


A Change in Philosophy

Robert Heron Bork was born on March 1, 1927, in Pittsburgh to Harry Bork, a purchasing agent with a steel company, and the former Elizabeth Kunkle, an English teacher. He attended the Hotchkiss School in Connecticut and recalled that he spent most of his early years “reading books and arguing with people.”

After a stint in the Marines guarding supply lines in China at the end of World War II, he went to the University of Chicago. Renowned conservative scholars there like Leo Strauss advocated a return to republican principles of “virtue” and hierarchy. Mr. Bork was a New Deal enthusiast, as was his wife, Claire Davidson, a fellow undergraduate whom he married in 1952. But by the early 1950s, while he attended the University of Chicago law school and became impressed with market-oriented conservatism, both had moved permanently to the right.

Mr. Bork discovered economics and became a libertarian opposed to government intervention and regulation. He began to evolve a similar theory of law, seeking what he called “neutral principles.” His major scholarly contribution, a 1978 book called “The Antitrust Paradox,” encouraged mergers and called for less antitrust regulation for efficiency’s sake. Students called a course he taught on the topic at Yale “protrust.”

Out of law school, Mr. Bork was hired by the prestigious Chicago firm of Kirkland & Ellis, where he spent eight years before taking a job teaching antitrust law at Yale in 1962. The Borks packed up their three children, Robert Jr., Charles and Ellen, and moved to New Haven, where he pursued his conservative ideas in a deeply liberal environment, campaigning for the Republican and archconservative Barry Goldwater’s election to the presidency in 1964.

He also wrote a fateful article for The New Republic in 1963 — one that played a key role in his 1987 defeat — condemning the public accommodation sections of the proposed 1964 Civil Rights Act aimed at integrating restaurants, hotels and other businesses. Mr. Bork said he had no objection to racial integration but feared that government coercion of private behavior threatened freedom.

The New Republic took the rare step of writing a reply, rejecting his reasoning and pointing out that restaurateurs were not legally permitted to reject service to well-behaved whites and that the new law intended simply to extend that principle to blacks. The editors also accused Mr. Bork of taking neutral principles out the window — an accusation he would hear more than once in his life.

A decade later, during his confirmation hearings for solicitor general, Mr. Bork said that he had changed his mind and that his 1963 article had been a kind of thought experiment. But during the 1987 Supreme Court nomination battle, many cited the article as evidence that he had always been out of step in a way that harmed minorities.

The upheavals of the late 1960s drove Mr. Bork from libertarianism to social conservatism. Freedom — the cry of student activists — no longer stood as his supreme value. Tradition, order and hierarchy did. In a 1971 article in The Indiana Law Journal, he argued that the First Amendment’s protection of free speech had been wildly extrapolated beyond the intent of the Constitution’s framers. In a starkly narrow interpretation, he said free speech existed to perpetuate the process of self-government; therefore, he wrote, only explicitly political speech about governing was protected.

Mr. Bork worked for Nixon’s re-election in 1972. He was rewarded with the nomination to solicitor general, a post he held for three and a half years and from which he advanced his beliefs on the constitutionality of the death penalty, the illegality of busing to achieve racial balance in schools and the power of the president over Congress.

Mr. Bork’s role in Watergate occurred in 1973, when Nixon wanted to keep a special prosecutor, Archibald Cox, from gaining access to incriminating White House recordings and ordered him fired. The attorney general, Elliot L. Richardson, and his deputy refused and quit. Mr. Bork, as solicitor general, was next in line to carry out the president’s orders, and he did, firing Mr. Cox and his entire staff.

When Jimmy Carter, a Democrat, was elected in 1976, Mr. Bork returned to Yale. But it was a hard time for him. He had grown impatient with academic theorizing, and his wife, Claire, had developed cancer, which was spreading. She died in 1980, and he returned to Washington, first in private practice. After the election of President Reagan, he was nominated to the District of Columbia circuit court.

His five years on the federal bench showed a record of stark conservatism; he often denied plaintiffs the right to a court hearing, showed strong deference to the executive branch over Congress and gave wide latitude to business over government regulation.


A View Made Clear

One of his opinions, in Dronenburg v. Zech in 1984, dealt with the Navy’s power to fire a veteran for consensual homosexual activity. Judge Bork not only granted the Navy that power, but he also took the opportunity to make clear that a right of privacy did not exist in the Constitution. “If the revolution in sexual mores that appellant proclaims is in fact ever to arrive,” he wrote, “we think it must arrive through the moral choices of the people and their elected representatives, not through the ukase of this court.”

In 1982, at an event in which he was speaking, Judge Bork met Mary Ellen Pohl, a conservative activist and former nun. They married five months later. She and his three children and two grandchildren survive him.

Judge Bork laid out his objections to much of what is handed down in American courtrooms in his best-selling book “The Tempting of America: The Political Seduction of the Law” in 1989, describing a number of rulings as “judicial legislation” by inappropriately activist judges. He further said that he had become the symbol that liberals needed to destroy.

In 1996, he published “Slouching Toward Gomorrah: Modern Liberalism and American Decline,” also a best seller. This book took aim at egalitarianism, individualism and other liberal ideas, saying they go against natural law.

“A decline runs across our entire culture,” he wrote, and “the rot is spreading.”


Charlie Savage contributed reporting.

    Robert H. Bork, Conservative Jurist, Dies at 85, NYT, 19.12.2012,






Judges Needed for Federal Courts


December 12, 2012
The New York Times


There has been a severe breakdown in the process for appointing federal judges. At the start of the Reagan years, it took, on average, a month for candidates for appellate and trial courts to go from nomination to confirmation. In the first Obama term, it has taken, on average, more than seven months.

Seventy-seven judgeships, 9 percent of the federal bench (not counting the Supreme Court), are vacant; 19 more seats are expected to open up soon. The lack of judges is more acute if one considers the growing caseload. The Judicial Conference, the courts’ policy-making body, has recommended expanding the bench by 88 additional judgeships.

President Obama must make fully staffing the federal courts an important part of his second-term agenda — starting with the immediate Senate confirmation of the 18 nominees approved by the Senate Judiciary Committee.

A significant reason for the slowdown has been the partisan opposition of Republicans to appeals court and even to trial court nominations, even though almost none of the nominees have backgrounds that raise ideological issues. The Republicans have time and again used the filibuster, the threat of filibuster, holds on nominations and other tactics to block confirmations.

The Democratic majority, led by Senator Harry Reid, can speed up the process by limiting use of the filibuster. He can do so by pushing for a simple majority vote at the start of the January session to alter Senate rules so that every judicial and executive-branch nominee is assured an up-or-down vote within 90 days. Without that change, many judicial nominations will founder.

Even if that rule change is made, the process of identifying, vetting and approving judicial candidates will need greater attention. Senators, who by custom recommend to the president candidates for federal trial judgeships in their states, should put in place more effective steps for making timely recommendations (like setting up merit selection committees) and making a choice within a reasonable period, like within 60 days of an opening.

The White House and the Justice Department, meanwhile, need to commit more resources to keeping up with those recommendations, to verify and nominate candidates for confirmation within, say, 60 days of receiving names. And the administration must be similarly prompt in identifying and nominating appeals-court candidates.

In a critically important court like the United States Court of Appeals for the District of Columbia Circuit, three unfilled vacancies and a fourth expected this winter, out of 11 judgeships, hobble the court’s ability to make expeditious rulings in significant cases about regulation of the environment, financial markets and other social and economic matters. Many statutes channel review of such cases to the federal courts in the District of Columbia for their expertise about administrative law and for geographic convenience.

The circuit court is a stark example of the broken appointment process and the harm caused by the Senate’s inability to do its job.

Mr. Obama and the Senate should also look to broaden the diversity of the judges they appoint. In his first term, Mr. Obama commendably named a higher share of women (44 percent) and a higher share of minorities (37 percent) than any president before him.

Most of the appointees were already judges, prosecutors or private lawyers, with few public defenders or public-interest lawyers from outside government. Expanding the breadth of experience would help ensure that federal courts have jurists who have some real-life understanding of the myriad issues that come before them.

The Constitution requires the president, with the Senate’s advice and consent, to fill federal judgeships. That duty has been terribly neglected and needs to be an absolute priority in the coming year.

    Judges Needed for Federal Courts, NYT, 12.12.2012,






Too Big to Indict


December 11, 2012
The New York Times


It is a dark day for the rule of law. Federal and state authorities have chosen not to indict HSBC, the London-based bank, on charges of vast and prolonged money laundering, for fear that criminal prosecution would topple the bank and, in the process, endanger the financial system. They also have not charged any top HSBC banker in the case, though it boggles the mind that a bank could launder money as HSBC did without anyone in a position of authority making culpable decisions.

Clearly, the government has bought into the notion that too big to fail is too big to jail. When prosecutors choose not to prosecute to the full extent of the law in a case as egregious as this, the law itself is diminished. The deterrence that comes from the threat of criminal prosecution is weakened, if not lost.

In the HSBC case, prosecutors may want the public to focus on the $1.92 billion settlement, which includes forfeiture of $1.26 billion and other penalties, as well as requirements to improve its internal controls and submit to the oversight of an outside monitor for the next five years. But even large financial settlements are small compared with the size of international major banks. More important, once criminal sanctions are considered off limits, penalties and forfeitures become just another cost of doing business, a risk factor to consider on the road to profits.

There is no doubt that the wrongdoing at HSBC was serious and pervasive. Several foreign banks have been fined in recent years for flouting United States sanctions against transferring money through American subsidiaries on behalf of clients in countries like Iran, Sudan and Cuba. HSBC’s actions were even more egregious. According to several law enforcement officials with knowledge of the inquiry, prosecutors found that, for years, HSBC had also moved tainted money from Mexican drug cartels and Saudi banks with ties to terrorist groups.

Those findings echo those of a Congressional report, issued in July, which said that between 2001 and 2010, HSBC exposed the American “financial system to money laundering and terrorist financing risks.” Prosecutors and Congressional investigators were also alarmed by indications that senior HSBC officials might have been complicit in the illegal activity and that the bank did not tighten its lax controls against money laundering even after repeated urgings from federal officials.

Yet government officials will argue that it is counterproductive to levy punishment so severe that a bank could be destroyed in the process. That may be true as far as it goes. But if banks operating at the center of the global economy cannot be held fully accountable, the solution is to reduce their size by breaking them up and restricting their activities — not shield them and their leaders from prosecution for illegal activities.

    Too Big to Indict, NYT, 11.12.2012,






Man Convicted of a Terrorist Plot

to Bomb Subways Is Sent to Prison for Life


November 16, 2012
The New York Times


A man who was convicted of plotting with two friends to carry out a coordinated suicide attack on New York City subways was sentenced to life in prison on Friday.

Federal authorities deemed the plan one of the most dangerous terrorist plots against the city.

The man, Adis Medunjanin, 28, who was born in Bosnia and grew up in Queens, was considered the heart and soul of the plot — though not its mastermind — the one whose increasingly radical beliefs in Islam inspired him and two high school friends to participate in jihad. They went to Pakistan with the hope of joining the Taliban in the fight against American troops and wound up at a training camp run by Al Qaeda.

During the brief sentencing hearing in Federal District Court in Brooklyn on Friday, Mr. Medunjanin, wearing a crumpled black suit, and his long hair swept behind his ears, spent several minutes singing verses from the Koran.

Judge John Gleeson politely interrupted once, telling Mr. Medunjanin that while the life sentence was mandatory for a conviction for plotting to use an explosive device, he had the opportunity to argue for leniency on other counts. But Mr. Medunjanin, who maintained throughout the trial that he was never part of the subway bombing plot, followed his Koran recitations with a description of what he considered the darker sides of American foreign policy: abuse of prisoners at Abu Ghraib, the use of waterboarding and the killing of innocent civilians during the Iraq war. He closed with an exclamation.

“I had nothing to do with any subway plot or bombing plot whatsoever,” he said. “I ask Allah to release me from prison.”

Judge Gleeson, who expressed bafflement that a young man from a good family could take such a violent turn, said he heard Mr. Medunjanin’s claim that he was not involved with the subway plot — saying the government’s evidence was “least strong” on those charges — but pushed the defendant for “recognition on his part on how atrocious these crimes were.” None came.

“You’ve become more of an object, more of an exhibit of the path you chose than the thinking, feeling, loving brother and son that you used to be,” Judge Gleeson said. “You’re asking me to sentence you like the committed, anti-American jihadist you want to be for the rest of your life.”

Judge Gleeson added 95 years to the mandatory life sentence.

Although his two friends, Najibullah Zazi and Zarein Ahmedzay, pleaded guilty to participating in the plot, Mr. Medunjanin maintained his innocence and went to trial. He was convicted of conspiring to use weapons of mass destruction and conspiring to commit murder abroad, as well as of providing material support to Al Qaeda and receiving military training from Al Qaeda, among other charges.

The split between the three friends made for a riveting trial last spring, with Mr. Zazi and Mr. Ahmedzay testifying against their old friend and describing in open court the inner workings of a Qaeda-inspired attack. Mr. Zazi and Mr. Ahmedzay have not yet been sentenced.

In August 2008, Mr. Medunjanin traveled with Mr. Zazi and Mr. Ahmedzay to Peshawar, Pakistan, intent on joining the Taliban in their fight against American solders in Afghanistan. But they were unable to find someone to take them to the front lines, and were instead recruited by senior Qaeda members, who convinced them they would be more useful staging an attack in the United States and taught them how to make bombs with household materials.

The group abandoned the plot days before the attack was to happen, when they discovered that they were under surveillance by law enforcement officials. Mr. Zazi, who had taken a leading role and assembled the explosive materials, was arrested that month, and Mr. Ahmedzay and Mr. Medunjanin several months later, after an investigation by the Joint Terrorism Task Force, which includes members of the Federal Bureau of Investigation and the New York Police Department.

Mr. Medunjanin’s actions before his arrest were held up as a sign of the seriousness of the men’s intent. While driving his car, he called 911 and delivered what prosecutors called a common jihadist motto: “We love death more than you love life.” Moments later, he deliberately crashed into another vehicle on the Whitestone Bridge, in what prosecutors called a failed suicide attack.

    Man Convicted of a Terrorist Plot to Bomb Subways Is Sent to Prison for Life, NYT, 16.11.2012,






Money-Market Pioneer and Son Cleared of Fraud


November 12, 2012
The New York Times


Regulators failed on Monday to win a clear victory over the father-and-son team whose mutual fund collapsed in one of the central blowups of the 2008 financial crisis. It was the latest setback in efforts by regulators to go after individuals responsible for risk-taking that nearly brought down the American economy.

A federal jury in Manhattan rejected the Securities and Exchange Commission’s claim that Bruce Bent, the man credited with inventing a popular investment vehicle known as a money market fund, defrauded investors when his flagship fund failed in September 2008, sowing panic among ordinary investors.

The collapse was a significant turning point because the fund, the Reserve Primary Fund, was pitched to investors as a nearly risk-free alternative to a bank account. The S.E.C.’s lawyers accused Mr. Bent and his son, Bruce Bent II, of falsely assuring investors that the fund could be rescued as it foundered under the weight of hundreds of millions of dollars of bonds issued by Lehman Brothers, which went bankrupt on Sept. 15, 2008. The Reserve Primary Fund ceased operation two days later.

The S.E.C. did convince the jury that the younger Mr. Bent’s statements were negligent, and that the parent company had made fraudulent statements. But the decision clearing the Bents of fraud accusations underscored the difficulty prosecutors and regulators have had in holding financiers accountable for precipitating the financial crisis.

“There is no other way to read this than as a significant loss for the S.E.C.,” said Thomas O. Gorman, a partner at Dorsey & Whitney and formerly the senior counsel for the S.E.C.’s Division of Enforcement.

Regulators are continuing efforts to shore up the money market fund industry against the problems revealed by the collapse of the Reserve Primary Fund. A council of top regulators was set to meet on Tuesday to determine how to impose new rules on the industry after a few S.E.C. commissioners scuttled a previous push to improve the safety and transparency of the funds.

While the S.E.C. imposed some new rules on the industry soon after the crisis, Treasury Secretary Timothy F. Geithner and the Federal Reserve chairman, Ben S. Bernanke, have said that money market funds are still vulnerable to the type of runs that nearly brought the industry down in 2008.

The elder Mr. Bent is widely hailed as the creator of the world’s first money market mutual funds, which since the 1970s have been marketed to small investors as a low-risk investment with an unchanging share value of $1 and the potential to earn a more attractive yield than a bank savings account.

“He did for money market funds what mutual funds did for small investors, bringing Wall Street to Main Street by allowing individuals to participate in what had been the playground of institutions,” said Peter G. Crane, president of Crane Data, which tracks money market mutual funds.

Before the financial crisis, the flagship fund run by the Reserve Management Company loaded up on $785 million of debt issued by Lehman Brothers. The debt, which made up about 1 percent of the fund’s assets, was suddenly worthless after Lehman Brothers declared bankruptcy, and led to the fund’s “breaking the buck,” which is when the value of the assets falls below $1 a share.

During the trial, lawyers for the S.E.C. faulted Mr. Bent for not describing the true extent of the fund’s perilous state during an emergency meeting called on the day that Lehman filed for bankruptcy protection.

In closing arguments, a lawyer for the S.E.C. claimed that the Bents tried to soothe investors’ fears while knowing that they would be unable to avert disaster for the fund.

Hurricane Sandy delayed the jury’s verdict when the courthouse in Manhattan was shuttered for a week.

After the jury announced its verdict, a spokesman for the Bents, Mark Arena, said that the men were “gratified that the jury found” that the men “committed no fraud.” Mr. Arena said that the Bents planned to appeal the jury’s findings that the younger Mr. Bent was liable for negligence.

The Bents have spent their time since 2008 winding down the management company that they privately held. While the funds no longer exist, some assets remain that the court could seek to pay any damages. Mr. Crane said when he last visited Mr. Bent in his nearly empty office near Times Square about nine months ago, he expected him to be withering under the S.E.C.’s case. “But he was unbowed,” Mr. Crane recalled.

Robert S. Khuzami, the S.E.C.’s director of enforcement, emphasized the points on which the commission’s case was affirmed.

“Today’s verdict of liability sends the message that fund executives cannot withhold from investors and trustees key information about their fund’s vulnerability,” he said. “This case, along with our actions against more than 100 other entities and individuals, demonstrates our continuing commitment to pursuing cases arising out of the financial crisis.”

Last month, federal prosecutors brought a case against Bank of America, accusing the bank of scheming, through its Countrywide Financial unit, to defraud the government by producing loans at a manic pace without instituting adequate controls. Critics of the S.E.C. have complained that even in a case where federal prosecutors are charging “brazen” bad acts, no individuals were charged.

Just how difficult it is to prosecute executives was illuminated in August, when a federal grand jury in New York acquitted a manager at Citigroup who was accused of selling a complex financial security involving residential mortgages. The manager, according to the charges, failed to disclose that Citigroup had made wagers against the investment or to fairly explain to investors how Citigroup had selected the assets in the portfolio.

Despite the headline-grabbing charges, the jury exonerated the manager and found that the bank had already provided details of the investment’s risks. In an unusual move, however, the jury included a message to the S.E.C. with its verdict urging the agency not to lose steam in pursuing charges against individuals.

“This verdict should not deter the S.E.C. from investigating the financial industry, to review current regulations and modify existing regulations as necessary,” the jury wrote.


Julie Creswell contributed reporting.

    Money-Market Pioneer and Son Cleared of Fraud, NYT, 12.11.2012,






Gunman in Giffords Shooting Sentenced to 7 Life Terms


November 8, 2012
The New York Times


TUCSON — Jared L. Loughner was sentenced Thursday to seven consecutive terms of life in prison at a court hearing punctuated by raw emotion as former Representative Gabrielle Giffords and her husband, Mark E. Kelly, for the first time confronted the man who shot her in the head during a rampage last year that left 6 dead and 12 others wounded.

Ms. Giffords, her right arm in a sling, stared at Mr. Loughner as Mr. Kelly delivered his defiant remarks before a packed courtroom, from a dais a few feet from the defendant’s chair.

“By making death and producing tragedy, you sought to extinguish the beauty of life, to diminish potential, to strain love and to cancel ideas,” Mr. Kelly said. “You tried to create for all of us a world as dark and evil as your own. But remember it always: You failed.”

Mr. Loughner’s punishment — in addition to the life terms, he was sentenced to 140 years in prison — came as no surprise. It was a condition of the guilty plea he entered on Aug. 7, admitting to the shootings and bringing to an end a case that had prompted much soul-searching about mental health treatment and the country’s gun laws.

From the bench in Federal District Court, Judge Larry A. Burns said he was not going to make “political statements,” that he was just “a single federal judge” who had “no intention to change the law.” Still, he questioned the wisdom of allowing the unrestricted sale of high-capacity magazines, like the one Mr. Loughner used to carry out his crimes.

“I don’t understand the social utility of allowing citizens to have magazines with 30 bullets in them,” Judge Burns said.

For Mr. Kelly, though, who has been Ms. Giffords’s unrelenting companion and her voice as she has struggled to articulate her words since the shooting, the politics of gun control is the “elephant in the room.” He denounced politicians who are “afraid to do something as simple as have a meaningful debate about our gun laws,” singling out Gov. Jan Brewer, whom he called “feckless,” and the Legislature, which “thought it appropriate to busy itself naming an official Arizona state gun just weeks after this tragedy.”

Mr. Kelly went on, “After Columbine, after Virginia Tech, after Tucson and after Aurora,” the Colorado suburb where a gunman killed 12 and wounded 58 in a movie theater in July, “we have done nothing.”

A spokesman for the governor said in a statement that “on this solemn occasion,” Ms. Brewer “isn’t interested in engaging in politics.”

Ms. Giffords did not say anything, only stroking her husband’s back when they slowly made their way back to their seats.

On Jan. 8, 2011, Mr. Loughner, now 24, arrived at a constituents meeting hosted by Ms. Giffords, then a member of the House of Representatives, in a shopping center parking lot. He had a loaded Glock 9-millimeter pistol and carried 60 extra rounds of ammunition. In less than 30 seconds, he fired 31 shots.

Onlookers tackled and restrained him when he paused to reload. One of them was Pamela Simon, an aide and close friend of Ms. Giffords’s who was shot by Mr. Loughner and was one of seven victims to speak in court.

Ms. Simon, who taught at the middle school Mr. Loughner had attended, said she remembered him as “a kid who loved music.” On Thursday, she told him, “You remind us that too often we either do not notice the signs of mental illness, or we just choose to look away.”

Mavy Stoddard, whom Mr. Loughner shot three times, told him she cradled her wounded husband, Dorwan, in her arms and whispered, “Breathe deeply, honey.”

Ten minutes later, he was dead.

Mr. Loughner stared at each of them, virtually motionless. He slurred his only words, “That’s right,” which he spoke after the judge asked if he had indeed waived his right to address the court.

He had been given a diagnosis of schizophrenia, but was deemed competent to agree to the plea deal, which makes him ineligible for parole or to appeal. He has been held at a federal hospital in Missouri for more than a year, undergoing psychiatric evaluations and treatment. On Thursday, Judge Burns said he should stay “in a place where he can get continual medical treatment.”

His mother, Amy Loughner, sniffled loudly at times, convulsing as people described the horror her son had unleashed. His father, Randy, was also there. Representative Ron Barber, a close aide of Ms. Giffords’s at the time of the shooting who was struck by a bullet in the leg, told them, “Please know that I and my family hold no animosity toward you.”

To Mr. Loughner, he said, “You must pay the price.”


Timothy Williams contributed reporting from New York.



This article has been revised to reflect the following correction:

Correction: November 8, 2012

An earlier version of this article and headline misstated the number of life sentences

received by Jared L. Loughner. It is seven, not six.

The article also misspelled the given name of a woman shot by Mr. Loughner.

It is Mavy Stoddard, not Mary.

    Gunman in Giffords Shooting Sentenced to 7 Life Terms, NYT, 8.11.2012,






New Sentence Is Imposed in Bomb Plot From 1999


October 24, 2012
The New York Times


SEATTLE — A terrorism case that predated the 9/11 attacks, but then became bound up by courts wrestling with the altered post-9/11 landscape of threat and deterrence, was back before a federal judge here on Wednesday. And the judge tried, for a third time, to impose a prison sentence that would stick.

Ahmed Ressam, known as the millennium bomber, was convicted of plotting to detonate a bomb at Los Angeles International Airport on New Year’s Eve 1999. He was sentenced twice before by Judge John C. Coughenour of Federal District Court in Seattle, to 22 years in prison each time; both sentences were overturned by federal appeals court panels.

On Wednesday, Judge Coughenour increased Mr. Ressam’s total to 37 years but refused again to impose the maximum term, life in prison, that federal prosecutors had asked for. In his questions to the lawyers and in the text of his sentencing opinion, the judge had harsh words for the government’s shifting of position over the years — asking for increasingly heavier penalties on Mr. Ressam despite acknowledging the value of his cooperation in providing information about international terrorism and Al Qaeda, the group Mr. Ressam said had trained him in preparing his attack.

Mr. Ressam, 45, an Algerian, was arrested in Washington State in December 1999 with bomb components, which he had transported across the border from Canada aboard a passenger ferry.

“The threat of terrorism is twofold. It threatens our security, and it challenges our values,” the judge said. “Paramount among our values is justice for all persons, no matter how dangerous or reviled.”

The United States attorney for Western Washington, Jenny A. Durkan, declined to say whether the sentence would be appealed.

At a news conference, she said that perspectives on global terrorism had changed since 1999. Prosecutors at previous times asked for a 35-year sentence, a 45-year sentence and finally, in Wednesday’s proceeding, life behind bars. “Our innocence was shattered in September of 2001,” Ms. Durkan said. Mr. Ressam came through the legal system before that, she added, “at a time when we understood the devastating nature of his attack, but we perhaps did not appreciate the potency of Al Qaeda and those that he had sworn allegiance to. That has changed forever.”

The public defender who represented Mr. Ressam, Thomas W. Hillier, said he thought prosecutors would almost certainly not appeal. Mr. Ressam, who has already served almost 13 years in prison, would be 63 or 64 at release, assuming a five- or six-year reduction for good behavior, Mr. Hillier said, and would almost certainly be deported to Algeria at that time.

Prosecutors said that Mr. Ressam had changed during his incarceration. He stopped working with investigators in 2003 and later recanted his previous statements. That suggests, they said, that Mr. Ressam would be a threat once more if released, however old he is.

But Judge Coughenour said in his sentence that he was also taking into account the harsh conditions of solitary confinement in which Mr. Ressam has spent much of the past decade. He said he was convinced that the repudiation of past statements “was not measured obstructionism but a deranged protest.”

If the harsh terms of the punishment changed Mr. Ressam and led to a halt in cooperation — and the judge said he was convinced that it had — then the court had an “ethical responsibility” not to inflict additional punishment because of the consequences of punishment.

“I will not sentence a man to 50 lashes with a whip and then 50 more for getting blood on the whip,” he said.

    New Sentence Is Imposed in Bomb Plot From 1999, NYT, 24.10.2012,






U.S. Marriage Act Is Unfair to Gays, Court Panel Says


October 18, 2012
The New York Times


A federal appeals court on Thursday ruled that gay Americans are a class of people who deserve the same kinds of constitutional protections as many other victims of discrimination.

The 2-to-1 ruling, by the Court of Appeals for the Second Circuit in New York, came as the panel struck down the federal law prohibiting federal recognition of same-sex marriage. It is the first time that a federal appeals court has applied this level of constitutional protection — known as heightened scrutiny — to those unions. The case is now considered by some legal scholars to be the leading candidate for a Supreme Court review of the same-sex marriage issue.

Thursday’s decision was the second by a federal appeals court striking down the Defense of Marriage Act. Now the case, Windsor v. United States, could be considered by the Supreme Court, or the court could choose other cases in its pipeline concerning same-sex marriage. Those include an earlier decision on the act by the First Circuit in Boston and one from the Ninth Circuit overturning California’s ban on same-sex marriage. It could also decide to hear all of them.

“It’s an incredible moment in the struggle for gay rights in this country,” said James D. Esseks, director of the American Civil Liberties Union’s project dealing with lesbian, gay, bisexual and transgender issues.

The new case was brought on behalf of Edith Windsor of New York City, who married her longtime partner, Thea Clara Spyer, in 2007 in Canada. When Ms. Spyer died in 2009, Ms. Windsor inherited her property. Because the Internal Revenue Service was not allowed, under the Defense of Marriage Act, to consider her a surviving spouse, she faced a tax bill of $363,053 that she would not have had to pay if the marriage had been recognized.

Because the Supreme Court now has disagreement among circuits on a major issue of law involving the Defense of Marriage act, “this makes it more likely” that the Supreme Court will take up the cases, said Douglas NeJaime, an associate professor of law at Loyola Law School in Los Angeles. He said the most important justice in consideration of marriage cases was likely to be Justice Anthony Kennedy, who has sided with the liberal majority on such cases as Lawrence v. Texas, in which he wrote the opinion that struck down state sodomy laws.

As Justice Kennedy has proved mindful of federalism issues, Professor NeJaime said, he might be reluctant to take a case in which federal courts have struck down a state law like Proposition 8, in California. The Defense of Marriage Act cases, by contrast, struck down a federal law, and any decision by the Supreme Court would have an effect only in states that allow same-sex marriage. “This is the kind of case that would appeal to Justice Kennedy for the court’s first intervention on same-sex marriage,” he predicted.

It could also be a likelier case for the court to take instead of the First Circuit case because it could be heard by the full court, Professor NeJaime said. Justice Elena Kagan might recuse herself from hearing the First Circuit case because of her former role as solicitor general, leaving the possibility that the other justices could find themselves in a 4-4 tie.

Congress passed the Defense of Marriage Act in 1996, and in 2010 a federal judge in Massachusetts struck down the law as unconstitutional, declaring that restrictions on same-sex marriage had no rational basis and failed even the most lenient test for constitutional scrutiny. That decision was upheld in May 2012 by the Court of Appeals for the First Circuit, which also declared the act unconstitutional.

The Obama administration initially defended the marriage act under the Department of Justice’s traditional role of defending acts of Congress as presumptively constitutional. In February 2011, however, the Justice Department declined to defend the act in court, though the government continued to enforce the law. The House created what it called the Bipartisan Legal Advisory Group to take on the case under the leadership of Paul Clement, a former solicitor general in the administration of President George W. Bush.

Mr. Clement did not respond to requests for comment.

The majority opinion on Thursday was written by Judge Dennis Jacobs, the chief judge of the circuit; he was appointed by the first President Bush. The decision was joined by Christopher F. Droney, who was appointed by President Obama. Judge Chester J. Straub, appointed by President Bill Clinton, filed a partial dissent in which he argued that the issue of same-sex marriage “is not for the courts to decide, but rather an issue for the American people and their elected representatives to settle through the democratic process.”

The court in the Windsor case parted ways with previous courts by elevating the standard of review for laws restricting same-sex marriage to what is known as “heightened scrutiny,” and which is based in large part on whether the people subject to the law have been discriminated against.

“It is easy to conclude that homosexuals have suffered a history of discrimination,” the court wrote. Thus they are part of what the law refers to as a “quasi-suspect” class that deserves any law restricting its rights to be subjected to such “heightened scrutiny.” Because the law could not pass that test, Judge Jacobs wrote, it is unconstitutional under the equal protection clause of the Constitution.

Ultimately, Judge Jacobs wrote, the court’s legal analysis “sidesteps the fair point that same-sex marriage is unknown to history and tradition,” but those are questions concerning “holy matrimony,” not the civil status recognized under the law. “A state may enforce and dissolve a couple’s marriage, but it cannot sanctify or bless it,” he wrote. “For that, the pair must go next door.”

Ms. Windsor, speaking on Thursday afternoon at a news conference, proclaimed herself “thrilled” by the decision. Ms. Windsor, who is 83, said that she found it “so offensive that this woman that I lived with and adored, and had loved me, that they treated her as if she was a stranger in my life.”

Ms. Spyer, she said, is “here with me in spirit and would have been so proud to see how far we’ve come.”


Alex Vadukul contributed reporting.

    U.S. Marriage Act Is Unfair to Gays, Court Panel Says, NYT, 18.10.2012,






Citizen Held After 9/11 Wins Right to Be Tried


September 28, 2012
The New York Times


A federal judge in Idaho has ruled that the United States, after the Sept. 11 terrorist attacks, wrongly imprisoned an American under a law designed to keep trial witnesses from fleeing and that since there was evidence that the government may have willfully misused the law against him, his case should go to trial.

Judge Edward J. Lodge, who was appointed by President George Bush, issued his rulings late on Thursday in the longstanding case of Abdullah al-Kidd, an American who was seized at an airport in 2003, imprisoned for 16 days, repeatedly strip-searched and left naked in his cell. The Justice Department had sought to have his trial request summarily dismissed and denied having misused the law in detaining him.

Mr. Kidd’s lawyer, Lee Gelernt of the American Civil Liberties Union, welcomed the ruling, saying, “It will finally put the government on trial for its post-Sept. 11 practices.”

A Justice Department spokesman declined to comment. The department could appeal the decision or seek a settlement with Mr. Kidd.

Mr. Kidd, who was born Lavoni T. Kidd and was a star football player at the University of Idaho before converting to Islam and changing his name, was detained under the argument that he was needed as a witness against a former classmate, Sami Omar al-Hussayen. But Mr. Kidd was never called in that case and he has accused the government of using it as a pretext to hold and question him on suspicion of terrorism.

Judge Lodge’s ruling affirms a June decision by United States Magistrate Mikel Williams that stated: “The circumstantial evidence supports the inference that al-Kidd may have been detained for reasons in addition to securing his testimony at trial.”

Magistrate Williams, who granted the Federal Bureau of Investigation the warrant to arrest Mr. Kidd while he was at Dulles Airport outside Washington on his way to Saudi Arabia in 2003, also said that the information given to him to justify the arrest was misleading. He was told that Mr. Kidd had a first-class one-way ticket and had received more than $20,000 from Mr. Hussayen. In fact, Mr. Kidd had an economy-class round-trip ticket, and the payment was salary for work he had done for Mr. Hussayen’s company.

In addition, the F.B.I. agent failed to mention that Mr. Kidd was a citizen, born and raised here, that his wife and son and many family members were in the United States and that he had never failed to cooperate with the F.B.I. Mr. Kidd was on his way to Saudi Arabia to work on his doctorate in Islamic studies, not to escape trial testimony.

Magistrate Williams wrote in June, “Considering the affidavit as a whole, the information included about the plane ticket, coupled with the information chosen to link al-Kidd to al-Hussayen, is misleading and highly suggestive of illicit involvement with criminal activity, inferring a motive to flee.”

Judge Lodge added that the affidavit “evidences a reckless disregard for the truth.”

Last year, the Supreme Court rejected Mr. Kidd’s attempt to hold John D. Ashcroft, the attorney general at the time, liable for alleged misuse of the statute, the federal material witness law. The justices said Mr. Ashcroft had immunity, but four of them raised questions about the actions of the F.B.I.

The case was returned to federal court in Idaho.

Mr. Kidd, who described himself as “anti-Bin Laden, anti-Taliban, antisuicide bombing, antiterrorism,” said he suffered enormously from his treatment by the government. He lost his scholarship to Saudi Arabia and his marriage fell apart. He is currently living in Saudi Arabia, teaching English and coaching a group of young men in American football, according to Mr. Gelernt, his lawyer.

    Citizen Held After 9/11 Wins Right to Be Tried, NYT, 28.9.2012,






Competence Was Linchpin for Both Sides in Tucson Case


August 5, 2012
The New York Times


PHOENIX — From the outset, the case against Jared L. Loughner carried risks for both the prosecution and the defense.

Legal experts said there was ample evidence to prove that Mr. Loughner was the man behind last year’s shooting rampage in Tucson, which killed six people and wounded 13 others, including Gabrielle Giffords, a member of the House of Representatives who was holding a constituent event in the parking lot of a supermarket.

But a conviction was far from certain. Even if Mr. Loughner was deemed legally sane to stand trial, jurors could conclude that he was not when the shootings occurred, the legal experts said.

His lawyers were hoping to push for an insanity defense, but if convicted, Mr. Loughner, 23, would most likely face a death sentence. Instead, he is scheduled to plead guilty on Tuesday, after psychiatric evaluations and notes from his court-ordered treatment at a federal psychiatric hospital in Springfield, Mo., established that he was fit to stand trial, according to two people briefed on the developments who were granted anonymity to discuss a legal proceeding.

The plea would bring an abrupt resolution to a case that for some time seemed ensnarled in doubts over Mr. Loughner’s mental health and a seemingly steadfast resolve among prosecutors to bring him to trial.

“I think everybody concluded it’s a better resolution,” said A. Bates Butler III, a former federal lawyer in Arizona who has been closely following the case.

A plea deal would carry none of the costs, dangers or emotional toll of a trial, he said, and would probably spare Mr. Loughner from the death penalty.

“He’s alive,” a favorable outcome for his lawyers, Mr. Butler said, “and from the government’s point of view, he’ll be off the streets.”

Several of the people who were wounded in the shooting on Jan. 8, 2011, declined to comment on Sunday, saying they would rather wait to see what might happen in court on Tuesday. Others, like Patricia Maisch, a constituent of Ms. Giffords’s who was not wounded and wrested a magazine of bullets from Mr. Loughner as he tried to reload his pistol, seemed surprised by the developments.

“I have just heard that news from the media,” Ms. Maisch wrote in a text message.

Representative Ron Barber, a senior aide to Ms. Giffords who was hurt in the shooting and won a special election in June to fill the remainder of her term after she retired, did not return telephone messages. Ms. Giffords is vacationing in Europe with her husband and did not respond to an e-mail on Sunday.

Three of the shooting’s survivors — Ms. Maisch; Pam Simon, another Giffords aide; and Bill D. Badger, who helped subdue Mr. Loughner — star in a new advertisement sponsored by Mayors Against Illegal Guns, a bipartisan coalition. In the ad, which began airing on Sunday, they urge President Obama and Mitt Romney, the presumptive Republican presidential nominee, to reveal their plans to reduce gun violence.

Mr. Loughner faces 49 criminal charges, including first-degree murder. A 9-year-old girl, Christina-Taylor Green, and a federal judge, John Roll, were among the people killed.

The guilty plea would require approval by Judge Larry A. Burns, who is presiding over the case in Federal District Court in Tucson, and would be likely to result in a life sentence.

Mr. Loughner had pleaded not guilty, but on May 25, 2011, Judge Burns halted the legal proceedings by ruling him incompetent to stand trial. Psychiatrists who had interviewed Mr. Loughner said he had random and disorganized thoughts, offered nonsensical answers to questions and appeared to suffer from schizophrenia. He delivered a loud and angry rant that day before officers dragged him out of the courtroom.

Four months later, he sat still and expressionless during a hearing that lasted seven hours, seemingly under the effects of the psychotropic drugs he had been forced to take. The psychologist who has been treating him, Christina Pietz, said at the time that Mr. Loughner was still not fit for trial, but that she thought he could improve if his treatment proceeded.

The hearing on Tuesday had been scheduled for weeks as just another step toward a trial. On July 19, though, Judge Burns ordered the defense to turn over the personal notes kept by Dr. Pietz on Mr. Loughner’s treatment. Defense lawyers had argued that the notes could “inform the government’s decision whether to seek the death penalty,” according to Judge Burns’s ruling.

Before a guilty plea is accepted, federal court rules require that Mr. Loughner answer questions from the judge in open court to make sure he understands his decision.


Reporting was contributed by Steven Lee Myers and Michael S. Schmidt

from Washington, and Sarah Garrecht Gassen from Tucson.

    Competence Was Linchpin for Both Sides in Tucson Case, NYT, 5.8.2012,






5 Jailed in ’95 Killing of Cabby Didn’t Do It, U.S. Inquiry Says


August 2, 2012
The New York Times


Amid a rash of murders of taxi drivers in New York City, the killing of Baithe Diop in 1995 still attracted attention. He was shot in his livery cab, left to die as his car rolled down a street in the Bronx, not stopping until it struck a trash hauling bin.

Six people were tried; five were ultimately convicted. An article in New York magazine that focused on the investigation carried the headline, “How to Solve a Murder.”

But now, 15 years after the criminal trials, federal authorities have concluded that all five of those now imprisoned for the murder were innocent of the crime.

The United States attorney’s office in Manhattan, which conducted an exhaustive review of the case, reported its findings in June to the Bronx district attorney’s office, which had prosecuted the defendants over the course of two trials and defended their convictions on appeal.

The new findings suggest that there was a colossal breakdown in the criminal justice system. Robert T. Johnson, the Bronx district attorney since 1989, said through a spokesman on Thursday that his office had been notified of the new evidence discovered by federal prosecutors but had not yet been able “to resolve all of the questions that have been raised by this evidence.”

Paul Casteleiro, a lawyer for one defendant, Cathy Watkins, would not discuss the new findings but, like other lawyers in the case, said he would soon file papers asking that his client’s conviction be vacated based on newly discovered evidence and her actual innocence.

“It’s a mind-boggling case,” Mr. Casteleiro said. “She’s stone cold innocent.”

The murder of Mr. Diop, in January 1995, came at a time when cabdrivers were being attacked regularly in the city, with nearly 70 drivers killed in 1993 and 1994. Mr. Diop, a 43-year-old Senegalese immigrant, was working for New Harlem Car Service; on his last fare, he made a pickup at West 141st Street in Harlem and headed to the Bronx, where he was robbed and killed.

All of those arrested in Mr. Diop’s murder pleaded not guilty, but jurors in two separate trials returned convictions. In the first trial, four men were tried for the Diop murder and a second killing, two days earlier, that was said to be related: the execution-style shooting of Denise Raymond, a Federal Express executive, in her apartment.

Three men — Devon Ayers, Michael Cosme and Carlos Perez — were convicted of the Diop murder (a fourth, Israel Vasquez, was acquitted); all four men were convicted in the Raymond killing. Jurors accepted the theory advanced by prosecutors and the police that Mr. Diop’s murder was part of an elaborate plot to distract the police from the intended crime: the theft of $50,000 worth of cocaine from a passenger in Mr. Diop’s car.

In a second trial that focused only on the Diop murder, two more defendants — Ms. Watkins and Eric Glisson — were convicted. The defendants all received long prison sentences.

Then, in late May, federal prosecutors received a letter from Mr. Glisson at Sing Sing prison in Ossining, N.Y. Mr. Glisson again professed his innocence, saying he had been wrongfully imprisoned for the murder of a cabdriver in 1995 in the Soundview section of the Bronx.

He added that he had heard that the killing had been carried out by members of a Bronx narcotics gang called Sex Money and Murder, or S.M.M. He cited the names of several gang members.

The letter had been addressed to a prosecutor who was no longer in the office, and was then redirected to John O’Malley, an investigator in the office’s violent crimes unit who had once been a homicide detective in the Bronx.

Mr. O’Malley immediately recalled that Mr. Glisson’s description of the crime matched a version of a confession that he had heard in 2003 — from two former S.M.M. members, Jose Rodriguez and Gilbert Vega, who had agreed at the time to cooperate with prosecutors against their former gang.

Mr. Rodriguez and Mr. Vega had independently told investigators, including Mr. O’Malley, that they were involved in an armed robbery of a livery driver in the Bronx in late 1994 or early 1995. They had said they believed they had killed the driver but had left the scene quickly and were uncertain. They recalled that they had just come from a woman’s apartment in Harlem and had gotten into a livery cab with an African driver to return to Soundview.

At some point during the ride, Mr. Rodriguez and Mr. Vega said they decided to rob the driver; when the driver argued and struggled, the men said they both shot him. Each man separately recalled jumping out of the moving livery car.

Mr. O’Malley went to Bronx homicide detectives in 2003 to try to corroborate the confession, but no records could be found of a homicide that matched. Because there was no proof of death and no identified victim, Mr. Rodriguez and Mr. Vega pleaded guilty to serious but lesser charges related to the taxi robbery.

Upon receiving the letter from Mr. Glisson in May, Mr. O’Malley phoned Mr. Vega and Mr. Rodriguez, and both reaffirmed their accounts of how they shot Mr. Diop. On June 15, Mr. O’Malley met with Mr. Glisson at Sing Sing.

He eventually prepared a detailed affidavit, which is dated Monday and has not been made public, presenting his findings in support of a potential motion by the defendants for a new trial.

“I believe the evidence is overwhelming that Vega and Rodriguez, acting alone, robbed and shot Baithe Diop on Jan. 19, 1995, causing his death,” he wrote.

The defendants who seem likely to benefit most quickly from the new findings are Ms. Watkins and Mr. Glisson, who were convicted solely in Mr. Diop’s murder. The other imprisoned defendants — Mr. Ayers, Mr. Cosme and Mr. Perez — were also convicted of the murder of Ms. Raymond, on which Mr. O’Malley’s investigation does not focus.

But the findings by Mr. O’Malley, who worked closely with a senior prosecutor, Margaret M. Garnett, would seem to raise serious questions about the convictions in Ms. Raymond’s killing because the Bronx prosecutor’s office relied on the same key witnesses and said the two murders were related.

“We certainly believe that a serious issue like this must be resolved as soon as possible,” Mr. Johnson, the Bronx district attorney, said through a spokesman about Mr. O’Malley’s findings. “Therefore, we are attempting to rapidly gather further information from our own files and those of the United States attorney.” The office of United States Attorney Preet Bharara declined to comment on Thursday.

Claudia Trupp, a lawyer for Mr. Perez, said he “has been consistent throughout our representation that he’s innocent of these crimes.”

Mr. Vasquez, the defendant acquitted of the Diop killing but convicted in the Raymond murder, had his conviction overturned by a state appeals court that said the theory of the case against him was “based on speculation unsupported by any credible evidence.”

Earl S. Ward and Julia Kuan, lawyers who are representing him in a civil-rights lawsuit, said in a joint statement, “It was in pursuing Israel Vasquez’s civil rights claims that it became obvious to us that everyone who was convicted in both of these crimes was innocent.”

As for Mr. Glisson, the inmate whose letter to federal prosecutors prompted the new review, he was “overjoyed” when Mr. O’Malley visited him at Sing Sing and told him of his findings, his lawyer Peter A. Cross said.

Mr. Cross said Mr. Glisson, describing the meeting, said Mr. O’Malley had “outright apologized,” and said, “We know you’re innocent and we’re going to do everything we can to get you out of jail.”


Jack Styczynski contributed reporting.

    5 Jailed in ’95 Killing of Cabby Didn’t Do It, U.S. Inquiry Says, NYT, 2.8.2012,






Court Upends 9-Year Fight on Housing Mentally Ill


April 6, 2012
The New York Times


A federal appeals court, ruling on procedural grounds, struck down on Friday a judge’s order that New York State transfer thousands of mentally ill adults in New York City from institutional group homes into their own homes and apartments. In doing so, the court brought a nine-year legal battle to an abrupt end without resolving the underlying issues of how the state cares for such patients.

Though the lower court judge had ruled the current system violated federal law by warehousing people with mental illness in far more restrictive conditions than necessary, the appellate panel said the nonprofit organization that began the litigation, Disability Advocates, did not have legal standing to sue.

The panel, comprising three judges of the United States Court of Appeals for the Second Circuit, acknowledged that its decision essentially reset the long-running battle to its starting point.

“We are not unsympathetic to the concern that our disposition will delay the resolution of this controversy and impose substantial burdens and transaction costs on the parties, their counsel and the courts,” the opinion said.

The long-term implications for the mental health system are unclear. But it immediately removes the pressure on the state to move more than 4,000 people with mental illness who live in the city’s large group homes into what is known as supportive housing, in which patients live alone but continue to receive specialized treatment and services.

Josh Vlasto, a spokesman for Gov. Andrew M. Cuomo, said in a written statement that the administration was reviewing the decision. “The governor’s commitment to improving the quality of care for vulnerable populations and supporting opportunities for community living for people with disabling conditions is clear,” Mr. Vlasto said in the statement.

Cliff Zucker, the executive director of Disability Advocates, who less than two years ago was celebrating the lower court’s order for immediate changes to the system, said he would now seek to reach a settlement with state officials. “We are hopeful that this administration has recognized that this is a problem that needs to be solved and we’ll be able to solve it without recommencing litigation,” he said.

Barring such a deal, it is also possible that the Justice Department, which intervened late in the case on behalf of the plaintiffs, could file a new lawsuit, Mr. Zucker said.

Disability Advocates brought the lawsuit in 2003 after a series of articles in The New York Times described a system in which residents were poorly monitored and barely cared for, left to swelter in the summer and sometimes subjected to needless medical treatment and operations for Medicaid reimbursement.

After a five-week nonjury trial in 2009, Nicholas G. Garaufis, the Federal District Court judge overseeing the case, ruled that the practices violated the Americans With Disabilities Act. In a series of subsequent decisions, he ruled that the state must immediately begin moving patients out of the group homes and into supportive housing.

The plan, limited to New York City, would have given nearly all current and future adult home residents the opportunity to move into supported housing scattered throughout the boroughs, where they would live independently while also receiving help like case-management services and visits from psychiatrists and nurses. The plan was drawn from a proposal presented by advocates for mentally ill people that was backed by the Justice Department.

The state, which has vigorously defended the current system, argued that the advocates had overestimated the demand for supported housing and underestimated the cost, making a quick transition for the bulk of the population in adult group homes unfeasible. The state appealed the ruling.

The appellate court suspended the order to begin transferring patients immediately, later lifted the suspension and finally stopped the order again, leading to the ruling on Friday.

Although Judge Garaufis’s order to transfer thousands of people was not addressed in the ruling, the appellate court said it did “have concerns about the scope of the proposed remedy.”

“If this controversy continues, and if the renewed litigation reaches the remedial phase, the parties and the district court will have another opportunity to consider an appropriate remedy,” the court said.

But the heart of the ruling was on the procedural matter over whether Disability Advocates, a private nonprofit organization contracted to provide services for people with mental illness, had the legal standing to sue state agencies and officials on their behalf. On this point the appeals court ruled that Judge Garaufis was wrong.

In a statement celebrating the ruling, Jeffrey Edelman, the president of New York Coalition for Quality Assisted Living, which represents adult homes, defended the current system for housing people with mental illness and “the rights of these adults to live in the homes of their choice, rather than becoming the targets of others’ dangerous social experiments.”

    Court Upends 9-Year Fight on Housing Mentally Ill, NYT, 6.4.2012,






Robert R. Beezer,

Conservative Voice on Liberal Court,

Dies at 83


April 4, 2012
The New York Times


Judge Robert R. Beezer, who brought a conservative voice to one of the more liberal federal appeals courts in the United States, the Ninth Circuit, and who wrote influential opinions on capital punishment, copyright law on the Internet and Anna Nicole Smith’s claim to a huge inheritance, died on Friday in Seattle. He was 83.

The cause was lung cancer, his family said.

Judge Beezer heard more than 10,000 cases in his 28 years on the nation’s largest federal appeals court, the United States Court of Appeals for the Ninth Circuit. He was appointed in 1984 by President Ronald Reagan after 28 years in private law practice. The capital punishment opinion came in 1994, when Judge Beezer, writing for the majority in a 6-to-5 decision, said that hanging was an acceptable form of execution.

The ruling was in the case of Charles Rodman Campbell, a death row inmate who had been convicted of killing two women and a girl and who objected to the method of execution to which he had been sentenced: by hanging. He contended that hanging amounted to cruel and unusual punishment. Washington State offered lethal injection as an alternative form of execution, but only if the condemned person requested it. Mr. Campbell said his religious convictions would not permit him to choose between methods.

Judge Beezer ruled that when it hanged people, the state exercised proper safeguards against slow death by strangling and other possibilities of unnecessary cruelty. “Campbell is not entitled to a painless execution, but only to one free of purposeful cruelty,” the judge wrote.

Judge Beezer sometimes departed from conservative orthodoxy. In 1991, in a 2-1 decision in which he wrote the opinion, he revised the standard for determining sexual harassment involving a woman, saying the test should be what a “reasonable woman” would construe as offensive behavior. The earlier standard had been gender-neutral, or what “a reasonable person” would consider harassment.

“We believe that a sex-blind reasonable-person standard tends to be male-biased,” Judge Beezer wrote.

In 2001, Judge Beezer wrote the unanimous opinion for a three-judge panel largely affirming the ruling of a lower court that Napster, a company whose business was allowing millions of people to copy music from the Internet free of charge, violated copyright law. Legal analysts said the decision extended traditional copyright protection to a medium in which creative works of many sorts can be traded widely with the click of a mouse. Napster ended up ceasing operations, eventually becoming a fee-based service under new ownership.

One of Judge Beezer’s most widely reported opinions concerned the case of Ms. Smith, the Playboy model and television personality who in 1994 married a Texas multimillionaire; she was 26, and he was 89. After he died 14 months later, she and his son fought an immensely complicated battle over his fortune. Her husband, J. Howard Marshall II, had not mentioned Ms. Smith in his will, but she contended that he had promised her a large inheritance.

The legal tangle began when Ms. Smith, whose legal name was Vickie Lynn Marshall, filed for bankruptcy in California. The bankruptcy court, a federal entity, was considering whether the inheritance she claimed was an asset that should be considered in the case. In 2000, the bankruptcy judge, ruling on accusations of fraud and malfeasance, awarded her $475 million in damages, essentially the amount she had sought from the estate.

Days later, however, a Texas probate court ruled that Ms. Smith should get nothing.

The case, stretching over years, went to the Ninth Circuit several times, and Judge Beezer wrote the opinion in two important rulings in the case. In one he vacated the bankruptcy court’s judgment, saying it was a matter for the state probate court; in the other, he affirmed that it was the probate court’s proper role to decide on the merits of fraud and malfeasance accusations. Last June, the United States Supreme Court upheld the judgment, which legal experts said refined how legal power is apportioned in bankruptcies.

Both Ms. Smith and Mr. Marshall’s son, E. Pierce Marshall, died before the case was decided. Chief Justice John G. Roberts Jr. in his majority opinion upholding Judge Beezer, compared the case to “Bleak House,” Charles Dickens’s novel about a lawsuit that never ends.

Robert Renaut Beezer was born in Seattle on July 21, 1928, attended the University of Washington and transferred to the University of Virginia, where he earned a bachelor’s degree in 1951. He served in the Marine Corps for two years, and later in the Marine Corps Reserve, retiring with the rank of lieutenant colonel. He graduated from the University of Virginia School of Law in 1956.

He is survived by his wife of 54 years, the former Hazlehurst Plant Smith; his sons, Robert and John; his daughter, Allison Beezer; his sister, Allison Tyree; his brother, Arnold; and two grandsons.

    Robert R. Beezer, Conservative Voice on Liberal Court, Dies at 83, NYT, 4.4.2012,






A Judge Turns on the Light


April 2, 2012
The New York Times


A federal judge took an important step toward ending secret donations to big-spending political groups, striking down regulations that permitted some groups to hide their donors. Unfortunately, the ruling probably came too late to flush this corrupting practice from this year’s elections — though there is still time for Congress to do so.

The secret-donor problem began in 2007 when the Supreme Court, in the Wisconsin Right to Life case, ended restrictions on corporate and union political spending by advocacy groups in the weeks prior to an election. A few weeks later, the Federal Election Commission, naïvely suggesting that some corporate donors to those groups might not have intended to give for political purposes, said that only those donations explicitly earmarked for political purposes had to be disclosed. The loophole was obvious: Just don’t declare any donation to be political, and they can all be secret.

The rule does not apply to modern “super PACs,” which exist for political purposes and must disclose their donors. But it allowed groups that accept money for other purposes, like the United States Chamber of Commerce, to collect millions of undisclosed dollars to buy ads that criticize candidates who differ with their pro-business agenda.

During the 2010 Congressional elections, political operatives like Karl Rove helped set up a variety of purported charities or educational groups to provide a shield to anonymous political donors. Along with the chamber, these groups took in more than $138 million in undisclosed money that year, 80 percent of which was spent supporting Republican candidates. Many of the same secretive groups have already begun running ads in this year’s campaign, and the flood will shortly begin in earnest.

A year ago, Representative Chris Van Hollen, a Democrat from Maryland, filed suit against the F.E.C., saying its 2007 regulation violated the intention of Congress when it passed the McCain-Feingold campaign finance reform act in 2002. That law makes it clear that donations greater than $1,000 to advocacy groups have to be disclosed.

On Friday, District Judge Amy Berman Jackson in Washington agreed. She ruled that the F.E.C. overstepped its boundaries in requiring disclosure only of explicit political donations. “Congress spoke plainly” in requiring full disclosure, she wrote, and even the Citizens United decision called for disclosure of the unlimited corporate and union donations it permitted.

Judge Jackson’s clearsighted opinion is a win for clean elections. But it will probably be appealed, which could delay a final decision by months or years. If it were a functioning body, the F.E.C. would change its regulations to comply with the court ruling, but its three Republican commissioners have repeatedly blocked attempts to require disclosure.

Congress could quickly resolve the issue if it were truly interested in cleaning up campaign finance. Mr. Van Hollen has introduced a new version of the Disclose Act that would go even further than the court decision in making donations transparent, requiring the names of top donors to appear in ads, and imposing stronger reporting requirements for super PACs. Republicans filibustered a similar bill last year in the Senate, and no Republicans have stepped up to support this version. In the meantime, the grim tide of secret money keeps rising.

    A Judge Turns on the Light, NYT, 2.4.2012,






A Rejection of Discrimination


March 12, 2012
The New York Times


When Texas lawmakers were writing one of the nation’s most restrictive voter-identification laws last spring, they rejected a proposal to allow voters to use other forms of ID beyond a narrow list. They rejected another suggestion to help voters without an ID card apply for one. And when a lawmaker offered an amendment to offer free access to birth certificates in order to get a card, instead of charging $22, they rejected that, too.

So it was no surprise on Monday when the Justice Department did the right thing and forcefully rejected the state’s voter-ID law entirely. The department said the law clearly disadvantages Hispanic voters, who lack photo ID’s at a much higher rate than the state’s overall population. The Voting Rights Act requires that states and counties with a history of racial discrimination prove that new voting laws don’t discriminate in purpose or effect, and Texas was unable to meet that test.

The department’s action comes after it also blocked a similar law in South Carolina in December, a demonstration that it is serious about overturning a growing body of politically inspired legislation that could make it harder for people in more than a dozen states to vote. (It has also blocked Florida’s decision to curtail early voting and third-party registration drives.) These laws, pushed by Republicans, would erect barriers to minorities, students and the poor, all of whom tend to vote for Democrats.

In a letter to Texas elections officials, the Justice Department said the state submitted no evidence that it is suffering from a voter-impersonation problem that would be solved with an ID requirement. But, at the department’s request, Texas did submit data showing how the requirement would affect Hispanic voters, and the numbers were disturbing. Nearly 11 percent of Hispanic registered voters lack a driver’s license or government-issued card, compared with nearly 5 percent of non-Hispanic voters. (Hispanics were the only minority group analyzed because it was easier to identify their last names.)

That means that as many as 800,000 Hispanic voters in the state could be disenfranchised if they cannot get a government ID. And the department notes that the state did nothing to make that task easier, refusing to open more driver’s license offices (lacking in 81 out of 254 counties) or even to extend the hours of the existing ones.

Another blow against discrimination on Monday came from a Wisconsin judge who ruled that the state’s voter-ID law violated the State Constitution. The judge, Richard Niess, wrote that the people most affected by the law “would consist of those struggling souls” who are qualified to vote but the lack the financial or physical resources to get an ID card. What right does the government have, he wrote, to “simply cast aside the inherent suffrage rights of any qualified elector” in the hopes of preventing some unqualified people from voting?

The challenges to these two state laws will now move through the courts, which will have an opportunity to restore a basic constitutional right to those who have lost it.

    A Rejection of Discrimination, NYT, 12.3.2012,






Stanford Convicted by Jury in $7 Billion Ponzi Scheme


March 6, 2012
The New York Times


HOUSTON — A federal jury on Tuesday convicted R. Allen Stanford, a Texas financier, on 13 out of 14 counts of fraud in connection with a worldwide scheme that lasted more than two decades and involved more than $7 billion in investments.

Mr. Stanford listened to the verdict silently, barely tilting his head down while closing his eyes. His mother and other family members wept, while investors watching in the gallery also cried while expressing relief. He now faces a possible life sentence.

The jury decision followed a six-week trial and came three years after Mr. Stanford was accused of defrauding nearly 30,000 investors in 113 countries in a Ponzi scheme involving $7 billion in fraudulent high-interest certificates of deposit at the Stanford International Bank, which was based on the Caribbean island of Antigua.

Prosecutors argued that Mr. Stanford had lied for more than two decades, promoting safe investments for money that he channeled into a luxurious lifestyle, a secret Swiss bank account and business deals that consistently lost money.

The prosecutors heavily relied on James M. Davis, Mr. Stanford’s former roommate from Baylor University, who served as his chief financial officer. Mr. Davis testified that the Stanford business empire was a fraud complete with bribes for Antiguan regulators and schemes to hide operations from federal investigators. He described how Mr. Stanford had sent him to London to send a fax to a prospective client from a bogus insurance company office to reassure him that his investment would be safe.

The ruling came after jurors on Monday sent the judge a note, one of several since deliberations began Feb. 29, saying they had been unable to reach a unanimous verdict on all 14 counts. The judge ordered them to continue deliberating.

In the end, the jury cleared Mr. Stanford of only one of several counts of wire fraud, but found him guilty of every other count of conspiracy to commit mail fraud, launder money and obstruct justice.

“We’re disappointed in the outcome and we expect an appeal — absolutely,” said Ali Fazel, one of the defense lawyers.

Cassie Wilkinson, an investor who said that she and her retired husband had to go back to work because of their losses, cried after the verdict was announced.

“I’m just relieved, happy and I’m sad,” she said. “As an investor, you have to wonder whether you were just stupid or taken advantage of. This removes the doubt. It is a vindication.”

Mr. Stanford, who wore a charcoal suit and no tie in court on Tuesday, is no longer the swaggering financier who only three years ago had an estimated fortune of over $2 billion, a knighthood awarded by Antigua and a collection of yachts, jets and mansions. He owned his own professional cricket team and stadium and, according to prosecutors, he treated Antigua like his personal business haven, with politicians and regulators in tow, through bribes and political campaign contributions.

“There really is no dispute that Allen Stanford lied,” a federal prosecutor, William J. Stellmach, told the jurors in his closing argument, “lining his pockets with billions of dollars of other people’s money.” Another prosecutor, Gregg Costa, compared Mr. Stanford to Bernard L. Madoff, who is in a federal penitentiary for orchestrating an even larger Ponzi scheme until his empire collapsed four years ago.

The defense denied those charges, basing its case on the fact that Mr. Stanford’s clients had been paid on schedule until the Securities and Exchange Commission made the first accusations three years ago, destroying the value of his businesses.

His lawyers repeatedly pointed out that his investment literature said a loss of principal was possible and that Mr. Stanford’s assets still had value when his businesses were shut down by the federal government. In their opening arguments, they suggested that Mr. Stanford would testify in his own defense, but after days of preparing him, the defense decided to rest its case without putting Mr. Stanford on the stand.

His lawyers sought to portray Mr. Stanford as detached when it came to financial details, which he ostensibly left to Mr. Davis, who pleaded guilty to charges of fraud and conspiracy to obstruct an S.E.C. investigation into the Stanford business.

Defense lawyers argued that Mr. Davis had often acted without Mr. Stanford’s knowledge even as they argued that the Stanford bank had been fulfilling its promises to investors until the government stepped in and shut the firm down.

“The government wants you to believe it was all a fraud,” said Robert A. Scardino, one of Mr. Stanford’s lawyers. “That’s just not what happened.”

In his testimony, Mr. Davis portrayed his former boss as a charismatic, bullying manager who had manipulated him to lie and cheat investors. He described how Mr. Stanford had invited him to drive with him in his new Mercedes-Benz on a highway outside Houston and floored the accelerator until the car reached 170 miles an hour. “He instilled intimidation and fear,” Mr. Davis said.

During cross-examination, Mr. Scardino accused Mr. Davis of manipulating financial statements and requesting that bribes be sent to an Antiguan auditor without Mr. Stanford’s knowledge. Mr. Davis countered that it was Mr. Stanford who engineered the fraud for more than two decades. Near the end of his testimony, he shook his finger at Mr. Stanford and said that anyone who wanted to know the truth about the Stanford enterprises had only to “follow the money, just follow the money.”

For the prosecution, the Stanford case was a Ponzi scheme in which he and five conspirators had given investors false financial statements indicating that the certificates of deposit were invested in conservative assets when $2 billion was actually lent to Mr. Stanford. All the while, auditors, along with the head of Antigua’s Financial Services Regulatory Commission, had received bribes to cover up the scheme and misinform the S.E.C., prosecutors said.

To Mr. Stanford’s lawyers, the financier has been a victim of an overly aggressive federal government willing to imprison him before proving his guilt. While Mr. Madoff was released on $10 million bail before his trial, prosecutors successfully argued that Mr. Stanford, who also held an Antiguan passport, could flee before a trial.

It took three years to bring Mr. Stanford to trial because he was severely beaten in a 2010 brawl with another federal inmate in a prison outside Houston and then became addicted to prescription antistress drugs. He underwent a year of therapy before Judge David Hittner of United States District Court ruled that he was fit to stand trial. The defense said he could not properly defend himself because he had lost much of his memory.

For Mr. Stanford, the verdict was the end of a remarkable career that began with a Texas fitness club. After it went bankrupt, he tried offshore banking and lived a life of glamour. In the end, his case was overshadowed by the Madoff scandal and he is believed to be virtually penniless.

“I don’t find the verdict surprising,” said Adam Gershowitz, a criminal law professor at the University of Houston, “given the extensive paper record and the fact that the record was brought to life by important witnesses like the chief financial officer.”



This article has been revised to reflect the following correction:

Correction: March 6, 2012

An earlier version of this article published online misidentified a defense attorney who said R. Allen Stanford would appeal his fraud conviction. It was Ali Fazel, not Robert A. Scardino, another defense attorney quoted elsewhere in the article.

    Stanford Convicted by Jury in $7 Billion Ponzi Scheme, NYT, 6.3.2012,




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