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Fort Dix plot jury seeks trial transcripts
Lawyer Blog News | 2008/12/22 16:43
Jurors considering the case of five men accused of plotting to attack soldiers at the Army's Fort Dix finished their fourth day of deliberations Saturday without reaching a verdict.

The jury, which was being sequestered, agreed to resume deliberations at 8:30 Sunday morning — an hour earlier than they have been starting.

U.S. District Judge Robert Kugler said the jury gave him a note Saturday saying that it was making progress and getting along.

Earlier in the day, the jury asked for transcripts of testimony for the first time since Wednesday, the first day of deliberations, when they also sought transcripts of some testimony.

The jury appeared to be focusing on the time when suspect Serdar Tatar told a police officer and later an FBI anti-terrorism task force member that a man had asked him for a map of Fort Dix. The man in question was Mahmoud Omar, an FBI informant.

Prosecutors have said Tatar was trying to smoke out an informant, while his defense lawyer said he was concerned about a possible attack.

The five foreign-born Muslims on trial face charges including conspiracy to kill military personnel and attempted murder.

Government prosecutors claimed the men — all of whom lived for years in the Philadelphia suburb of Cherry Hill — were armed and preparing to attack the base in spring 2007. Defense lawyers said the men were manipulated by a government informant and weren't planning anything.



Lehman broker charged in insider trading case
Business Law Info | 2008/12/19 16:46
A former Lehman Brothers broker who gleaned tips about pending mergers from his wife, a partner at a high-powered public relations firm, has been charged in a wide-ranging insider trading scheme that earned $4.8 million in profits for several people including a former Playboy model and two lawyers, authorities said.

Federal prosecutors in Manhattan and the Securities and Exchange Commission brought the case Thursday against Matthew C. Devlin, who authorities said enabled clients and friends to make millions of dollars while he was rewarded with gifts including cash, a Cartier watch, a widescreen television and tuition at a Porsche driving school.

"By providing inside information, Devlin curried favor with his friends and business associates and received in return cash, luxury items and other benefits," the SEC said in court papers.

The SEC said those who received tips so treasured the information Devlin took from his wife that they began referring to him and his wife as the "golden goose." Devlin, 35, of Manhattan, also referred to his wife as the "golden goose," the SEC said.

A second ex-Lehman Brothers broker, Frederick Bowers, 40, of Manhattan, was charged in a criminal complaint with conspiracy.

Marc Agnifilo, a lawyer for Bowers, said his client had "a highly minimal role in the alleged insider trading and we're going to fight the case in court and put the government to its proof." He said Bowers had never been in trouble before.

The SEC said Devlin took secrets from March 2004 through last July about more than a dozen pending mergers and acquisitions from his wife, Nina, a partner at Brunswick Group LLC, an international public relations firm.

Attorney Jim Benjamin, who represents Nina Devlin, said her husband obtained the information without her knowledge by being close to her and monitoring her travel schedule.

In a statement, Brunswick Group called the insider trading scheme a "violation of trust between husband and wife." It said there was no indication Matthew Devlin accessed Brunswick's confidential systems.

"We believe she was unaware of her husband's activities and is devastated by these events," the company said, noting that Nina Devlin has not been charged "or implicated in any way."

Brunswick is an international firm that employs more than 400 people, including more than 75 partners, as it advises major companies about financial and corporate communications and opinion research. It has 15 offices in 11 countries.



Madoff scandal could lead to tax losses nationwide
Business Law Info | 2008/12/19 16:45
Even Uncle Sam may get burned by Bernard Madoff.

Investors who lost their fortunes in Madoff's alleged Ponzi scheme will end up paying far less in taxes and may even be eligible for refunds, according to accounting experts.

By some estimates, the Internal Revenue Service could be out as much as $17 billion in lost tax revenue.

"This is one more thing federal, state and local officials will have to deal with," said John Berrie, a tax partner at the law firm Bryan Cave in New York City. "It's another heavy box on their back."

In addition, investors may be counting on a federally mandated insurance fund to bail them out, but that program lacks the money to pay for all the claims that are likely to come.

The timing couldn't be worse. Unemployment has surged, meaning fewer workers are paying payroll taxes. And housing prices have dropped, reducing property taxes.

The recession so far has cost the federal government $200 billion in tax revenues for the 12 months that ended in November, according to estimates by Moody's Economy.com.

The Madoff case, which reportedly involves $50 billion, adds another layer to the fiscal crisis gripping the nation.

In New York, for instance, where thousands of workers have lost jobs on Wall Street and big-name investment firms have tallied massive losses, State Comptroller Thomas P. DiNapoli has estimated tax revenues will be down at least $3.5 billion by March 2010.

In wealthy enclaves nationwide, Madoff's investors are desperately seeking ways to get some of their money back. Some refunds might come from the Securities Investor Protection Corp., an industry-funded organization set up by the government to protect investors from fraud. Investors who qualify could get as much as $500,000 from the SIPC.

But that will not replace the millions of dollars than many lost, and such payments, if they come, will not happen fast. SIPC officials this week said the books of Bernard L. Madoff Investment Securities LLC are in complete disarray. It could take six months or more to untangle them.

In addition, there are concerns that SIPC does not have enough money to pay out claims. It currently has $1.6 billion to make payouts, though the agency can tap a $1 billion line of credit and a $1 billion injection from the Treasury Department to get more money.

That's why some investors are considering the option of reporting "theft losses" under the IRS rules. Taxpayers who are defrauded by investment advisers or brokers can claim a deduction, as well as offset tax liabilities from the past.

Under the rules, an investor who lost $20 million with Madoff and whose adjusted gross income was $10 million can claim a theft loss of about $19 million.

To calculate the theft loss, investors must reduce the amount of the loss by 10 percent of their adjusted gross income plus $100, according to Robert Willens, an expert on tax and accounting issues for Wall Street clients.



Feds rights to baseball drug tests back in court
Legal Career News | 2008/12/19 16:45
Federal appeals judges voiced skepticism Thursday that prosecutors had the right to seize urine samples of more than 100 major league players not originally involved in the BALCO drug investigation.

In a case dealing with the government's search-and-seizure power in the digital age, an 11-member panel of the 9th U.S. Circuit Court of Appeals must decide whether prosecutors legally seized the names and urine samples of 104 players during a raid in April 2004.

"There has to be limits when the government seizes vast amount of information on a computer," Major League Baseball Players Association lawyer Elliot Peters said.

The federal agents who took the material from the Long Beach-based Comprehensive Drug Testing Inc. had a search warrant for the test results of just 10 players, but discovered on a computer spreadsheet the test results of additional players.

The players' association went to court, and lower-court judges ruled the additional names were seized illegally. A three-judge panel of the 9th Circuit reversed those decisions twice in 2-1 votes, but the entire 9th Circuit set the reversal aside and decided to hear the case en banc.



Prominent NY law firm seeks bankruptcy protection
Headline News | 2008/12/19 10:46
The receiver assigned to run a prominent Manhattan law firm after its founder was charged in a massive fraud says the firm will seek bankruptcy protection.

In a recent letter to a federal judge, the receiver said founder Marc Dreier also may seek protection too.

Prosecutors have accused the 58-year-old Dreier of tricking hedge funds into making bogus investments. They say losses could top $380 million.

He ran a mid-size law firm that has represented celebrities including retired football star Michael Strahan and former News Corp. publishing executive Judith Regan.



Mass. court reprimands judge libeled by newspaper
Legal Career News | 2008/12/18 16:46
Massachusetts' top court has publicly reprimanded a judge who wrote threatening letters to the publisher of the Boston Herald after he won a $2 million libel judgment against the paper.

The Supreme Judicial Court's punishment for Judge Ernest Murphy is slightly less severe than the public censure and $25,000 fine recommended by the state's Commission on Judicial Conduct. The SJC did order Murphy to reimburse the commission for its costs.

The case began in 2002, after the Herald published a series of stories depicting Murphy as soft on crime. Several quoted Murphy as saying a young rape victim should "get over it."

Murphy won his lawsuit, then wrote threatening letters to the Herald publisher demanding payment.

Murphy agreed in August to step down from the bench, citing health problems brought on by the stress of the case.



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