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German court: Anti-Nazi swastika OK
Legal World News | 2007/03/16 15:15

A German court has ruled that it is legal to sell anti-Nazi T-shirts that use the swastika.

A lower court had ruled that Jurgen Kamm, who runs a business called "Nix Gut" or "Nothing Good," was in violation of a law against displaying the swastika, giving the Hitler salute or wearing Nazi uniforms. He was fined almost $5,000.

Kamm, who describes himself as left-wing, sells T-shirts, badges and bumper stickers that bear a swastika with a red slash through it or show someone putting a swastika in a garbage can.

The Federal Court of Justice in Karlsruhe found that his wares "clearly and unambiguously" carry an anti-Nazi message, Deutsche Welle reported.



Detroit Man Sentenced for Child Prostitution
Court Feed News | 2007/03/16 15:15

Robert Lewis Young of Detroit was sentenced today to 25 years in federal prison for running a criminal operation prostituting adults and children, Assistant Attorney General Alice S. Fisher of the Criminal Division and Stephen J. Murphy, U.S. Attorney for the Eastern District of Michigan announced.

Following the 25-year sentence in federal prison, Young will face five years of supervised release for operating a prostitution ring spanning from Michigan to Hawaii. Young recruited and directed females – including minors – to engage in prostitution. Young transported women and children and facilitated their transportation across state lines by car and airplane. Young reaped substantial financial benefit and laundered the proceeds of his illegal prostitution activities with the help of co-conspirators.

Young’s sentencing comes after his plea of guilt to 26 offenses including sex trafficking of children, sex trafficking by force, fraud or coercion, transportation of a minor for criminal sexual activity, transportation for prostitution, sexual exploitation of children, possession and interstate distribution of child pornography, threatening interstate communications, possession with the intent to distribute marijuana, felon in possession of a firearm, money laundering, and use of an interstate facility in aid of racketeering. In addition, Young was also convicted of producing and distributing child pornography for his use on a Web site to advertise the availability of his prostitutes including a 17-year-old-girl he exploited.

As part of his sentence, Young was also ordered to forfeit property gained through and used in furtherance of his crimes including computer equipment, furs, clothing, jewelry, electronics and cash.

Young’s co-conspirators have also been convicted of their role in the prostitution operation. Young’s Honolulu associates, Mark Luke White and Hae Sun Kim face sentencing later this year. Jeffrey McCoy, one of Young’s co-defendants pleaded guilty and was sentenced in Hawaii earlier this year. A second Detroit associate, George Abro, who laundered the proceeds and assisted in the prostitution ring, pleaded guilty to federal offenses in October 2006 and will be sentenced later this year as well. A Chicago dentist, Dr. Gary Kimmel, is under indictment and charged with financial offenses related to his support of Young's organization and is scheduled for trial in September 2007.

The investigation is being conducted by the FBI, Michigan State Police, U.S. Postal Inspection Service, IRS, the Detroit Major Crimes Task Force, the Detroit Police Department, and the Macomb County Enforcement Team.

In Hawaii, the investigation was led by the Internet Crimes Against Children Task Force comprised of members from the State Attorney General’s Office, the FBI, Immigration and Customs Enforcement (ICE), the U.S. Postal Inspection Service, and the Honolulu Police Department with substantial assistance from Assistant U.S. Attorney Wes Porter of the District of Hawaii.

The case is being prosecuted by Trial Attorney Kayla Bakshi of the Child Exploitation and Obscenity Section (CEOS) of the Department of Justice’s Criminal Division and Assistant U.S. Attorney John O’Brien of the U.S. Attorney’s Office for the Eastern District of Michigan and Assistant U.S. Attorney Wes Porter for the District of Hawaii. In the spring of 2003, the Violent Crimes and Major Offenders Section of FBI headquarters, in partnership with CEOS and the National Center for Missing & Exploited Children, initiated the Innocence Lost Initiative, designed to address the growing problem of children forced into prostitution. To date, the Innocence Lost Initiative has resulted in 275 open investigations, 697 arrests, 160 informations or indictments, and 136 convictions in the federal and state systems.



Conn. Woman Pleads Guilty for Human Trafficking
Court Feed News | 2007/03/16 15:15

Shanaya Hicks of Hartford, Conn., pleaded guilty today to five counts related to her role in a sex-trafficking ring that involved minors. Hicks is the eighth of ten defendants to plead guilty to federal charges in this case. On August 8, 2006, Hicks, along with nine other co-defendants, was charged in a 64-count superseding indictment. Hicks, and two additional co-defendants were also charged with the sex trafficking of minors and sex trafficking by force, fraud and coercion. Specifically, Hicks has pleaded guilty today to two counts of sex trafficking of minors; two counts of sex trafficking adult women through force, fraud or coercion; and conspiracy to use interstate facilities to promote prostitution. In her plea agreement, Hicks has admitted to causing two juveniles to engage in prostitution and causing two adults to be held in prostitution through fraud and coercion.

Hicks waived her right to jury trial in open court before U.S. District Court Judge Christopher Droney. She faces a maximum penalty of up to life in prison and a fine of up to $1.25 million. “Sex trafficking is an abhorrent crime that too often occurs in our own backyards, and too often victimizes children,” said Wan J. Kim, Assistant Attorney General for the Civil Rights Division. “It is a top priority of the Justice Department to root out and prosecute those who so ruthlessly victimize others.”

“The charges to which this defendant admitted her guilt clearly show that prostitution is not a victimless crime,” said, Kevin J. O’Connor, U.S. Attorney for the District of Connecticut. “The federal government is committed to prosecuting sex trafficking crimes, particularly when minors are abused and women are forced to commit sexual acts against their will and under the threat of violence.”

Human trafficking prosecutions are a top priority of the Department. In the last six fiscal years, the Civil Rights Division, in conjunction with U.S. Attorneys’ Offices, has increased by six-fold the number of human trafficking cases filed in court.  In 2006, the Department obtained a record number of convictions in human trafficking prosecutions. The case is being investigated by the Federal Bureau of Investigation, the Hartford and Windsor Police Departments, and the Internal Revenue Service. The case is being prosecuted by Assistant U.S. Attorney Jim Genco and Andrew J. Kline of the Department of Justice’s Civil Rights Division.



The Key Number Is Net Income per Lawyer
Headline News | 2007/03/16 15:13

The only number that is down for Stevens & Lee's 2006 financial performance is its hours billed, as the firm posted double-digit increases in revenue and profit.

The firm saw a 10.3 percent increase in gross revenue, from $102 million in 2005 to $112.5 million in 2006.

The revenue per lawyer grew by 14.8 percent, from $610,000 in 2005 to $700,000 in 2006. The profits per equity partner increased by 16 percent, from $655,000 in 2005 to $760,000 in 2006.

Stevens & Lee has a small non-equity tier, with 13 of the 161 attorneys in 2006 falling into that category. Managing partner Joseph M. Harenza said only about five of those attorneys are income partners, while the others are senior counsel or something similar. Of the attorneys, 99 were equity partners, dropping from 103 in 2005. The average compensation for all partners rose from $635,000 in 2005 to $700,000 in 2006.

Harenza attributes the firm's overall growth to an increase in revenue through a focus on specialized legal work and a simple cost-containment strategy. He said this is the 10th straight year the Reading, Pa.-based firm has seen improved financial results.

The statistic the firm places the most emphasis on, Harenza said, is one The American Lawyer does not calculate for its Am Law survey.

The firm calls it the net income per lawyer, and calculates the number by subtracting expenses from the total revenue with the exception of attorney compensation, Harenza said. The firm reported that number at $557,000, compared to 2005's net income per lawyer of $479,000.

Altman Weil consultant Bill Brennan said his firm looks to RPL and the net income per lawyer as the two most important indicators of a firm's financial health.

Stevens & Lee reported a 69 percent return on the dollar to its partners and an 80 percent return to its lawyers for 2006.

Of the $112.5 million in gross revenue, $75.5 million went to equity partner compensation and another $3 million went to non-equity partners.

There are about 40 nonlawyer professionals in the firm that are paid as employees, Harenza said.

Brennan said the percent return on the dollar for partners could often be a very misleading number because the fewer equity partners there are, the higher the return is for each of them. That isn't the case with Stevens & Lee, which has a much lower leverage than many Am Law 200 firms with about 0.62 non-equity attorneys to every equity partner. For all intents and purposes, non-equity partners and of counsel are counted as associates when calculating leverage.

Harenza said Stevens & Lee's model is different than several other firms when it comes to increasing revenue and profits. His firm, he said, focuses on upping revenue per lawyer and lowering expense per lawyer and then doles out the remaining profits to each attorney tier. Other firms, he said, take what revenue they have left and figure out which attorney fits into which tier.

Harenza said the firm would be able to put its PPP over $1 million if it moved to a 2-to-1 leverage, and up to $1.25 million at a 3-to-1 leverage. Brennan said there is validity to that argument because if the lower paid partners were made associates, the average of the higher paid equity partners would naturally increase.

"Many law firms 'manage' their profits per partner statistic by defining who is an equity partner," he said.

Unsophisticated readers of the Am Law 100, he said, could be easily deceived by that statistic.

A big part of why Stevens & Lee has been able to remain so profitable with low leverage traditionally had to do with its choice of locale. Based in Reading, the firm has offices in places like Pennsylvania's Lancaster, Scranton, Valley Forge and Wilkes-Barre. Harenza said location is no longer the only factor in cost containment.

In the last few years, the firm has opened offices in more expensive markets like Princeton, N.J., Philadelphia and New York City.

Harenza said the expense per attorney in 2003, before the Princeton and New York offices opened, was about $96,000. After the launch of the Princeton office, the cost went up to $101,000, and up even further to $120,000 once the New York office was opened, he said.

In order to combat those rising costs, Harenza said he continues to invest in technology to lower the need for support staff and continues to strive for higher-end work to increase revenue.

Harenza said the firm saves on expenses by centralizing its marketing and technology teams into one office as opposed to having a representative from each group in every office, as many large firms do.

He said large firms with offices all over the world are going to start moving in the direction of centralized support functions.

Stevens & Lee is spending money on technology training in order to reduce costs in the long run, and is working on the demographics of the firm. Harenza said the firm is seeing some of the more senior attorneys migrate out and has a need for first- and second-year associates and fifth- to eighth-year associates.

Harenza said he is trying to make every lawyer specialize in an industry segment and possibly in a sub-specialty with the hopes of commanding higher rates.

"My job is to get higher yield and rates from clients," he said.

Although the firm's geographic locations have been a draw for clients because of lower rates, Harenza wants to increase those rates through higher-end work, and says he has the room to do it. The firm's rates are currently substantially lower than those of Philadelphia and, particularly, New York firms, he said.

More than just looking to increase the rates he charges now, Harenza wants to handle specialty work that automatically commands higher fees and he thinks clients are willing to pay for that specialization.

Stevens & Lee works off a pyramid chart that breaks legal work into three sections: commodity work, experiential work and unique or specialized work. As clients have consolidated, the rates for everyday, commodity work have become more price-sensitive, Harenza said. That phenomenon has even pushed some of the more sophisticated experiential work into the commodity section of the pyramid, he said.

The ultimate goal for Stevens & Lee is to achieve as much of that 5 percent of the legal work that is at the top of the pyramid, he said.

"What I'm trying to do is move this entire business, business by business, up that curve," he said.

In 2005, Stevens & Lee saw a 12.7 percent increase in gross revenue over 2004's financial performance, a 9 percent increase in revenue per lawyer and an 8.3 percent increase in profits per equity partner.



Felony charges dropped in HP 'pretexting' case
Lawyer News | 2007/03/15 16:10

A California state judge on Wednesday dropped the felony charges against four defendants in the Hewlett-Packard (HP) pretexting scandal after the defendants pleaded no contest to misdemeanor charges of fraudulent wire communications and agreed to complete 96 hours of community service and pay restitution by September. The four defendants, including former HP CEO Patricia Dunn, could still be prosecuted by the federal government, but no federal charges have yet been brought.

Along with Dunn, former HP ethics director Kevin Hunsaker and private investigators Ronald DeLia, Joseph DePante and Bryan Wagner were charged with using false or fraudulent pretenses to obtain confidential information from a public utility, unauthorized access to computer data, identity theft, and conspiracy.

All of the charges stem from their roles in the illegal information gathering scandal that broke last month when HP admitted in an SEC filing that it had been investigating boardroom leaks using pretexting, a fraudulent investigative technique where the investigators impersonated board members, employees and reporters to uncover who was leaking confidential information from board meetings. HP announced Dunn's resignation from its board on September 22. Dunn and Hunsaker pleaded not guilty to the felony charges in November. A fifth defendant, private investigator Bryan Wagner, pleaded guilty to the charges and agreed to assist federal investigators with their case.



Court upholds ban on medical marijuana
Court Feed News | 2007/03/15 16:04

A California woman with an inoperable brain tumor may not smoke marijuana to ease her pain even though California voters have approved its medicinal use, a U.S. appeals court ruled on Wednesday. In a much-watched test case, the 9th U.S. Circuit Court of Appeals found there is no fundamental right to marijuana for medical purposes. The ruling agreed with a 2005 U.S. Supreme Court decision.

The split three-judge opinion from Judge Harry Pregerson expressed sympathy for some arguments by plaintiff Angel Raich, 41, an Oakland resident whose doctor testified she could die if she stopped smoking pot. But the ruling backed the 1970 federal Controlled Substances Act barring marijuana.

Raich, who suffers from many ailments, says marijuana keeps her alive by easing pain and bolstering appetite.

"Today I found out I am basically a dead man walking," Raich, who once worked as an accountant and massage therapist, told Reuters. "Today the court said I don't have the constitutional right to basically stay alive."

The mother of two said U.S. officials had never moved to arrest her or bar her from using marijuana and said she would continue to do so every two hours. "I'm damned if I do, damned if I don't," she said.

Raich said she would lobby Congress in Washington to change U.S. law. The court said use of the drug for medical purposes was gaining support but federal law still banned it.

"We agree with Raich that medical and conventional wisdom that recognizes the use of marijuana for medical purposes is gaining traction in the law as well," the judge wrote.

The ruling acknowledged the law could change if legislators reconsider the issue.

"Although that day has not yet dawned, considering that during the last 10 years 11 states have legalized the use of medical marijuana, that day may be upon on us sooner than expected," Pregerson said.

Voters in California, the nation's most populous state, became the first to approve medical marijuana in 1996, putting it in direct conflict with federal law. Gov. Arnold Schwarzenegger has admitting using marijuana in the past.



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