Thursday, June 19, 2008

Melvyn Weiss and the DOJ Extortion Racket

"When Christopher J. Christie, New Jersey's top federal prosecutor, gave a multimillion-dollar no-bid corporate monitoring contract to John Ashcroft, the former attorney general, it looked like an isolated case of favoritism. Now the [DOJ] has revealed that at least 30 former government officials have been riding the same patronage train. The [DOJ] is increasingly using 'deferred prosecution' agreements for corporate wrongdoers. Under pressure from Congress, the [DOJ] released documents last week showing that of 40 corporate monitors appointed since 2000, at least 30 were former government officials, and 23 were former prosecutors. ... When prosecutors pick people who appear to be cronies ... it raises questions about whether prosecutors are deferrring prosecution because it is in the public interst--or because it creates a rich payday for a friend", Editorial at, 25 May 2008.

"Melvyn Weiss was sentenced to 30 months in prison for his role in a scheme in which he and his partners used kickbacks to gain an advantage in lucrative cases. ... In handing down a sentence near what prosecutors sought--33 months--Judge John Walter noted the seriousness of the offense, which he said involved a 'nationwide conspiracy that continued for decades.' ... Some 275 letters in support of Mr. Weiss before the hearing marked 'a showing that I don't think I've ever seen' on the bench, the judge said. The letters 'attest to the life of an extraordinary man.'... 'Weiss was widely recognized as the king of the plaintiff's securities bar,' said Jacob Frenkel, a former federal prosecutor now in private practice in Maryland. 'He has taken the same fall as the corporate executives who put greed before their shareholders'," Houston Chronicle, 3 June 2008.

The NYT failed to add, "and creates an expected rich payday for the prosecutor when he leaves the DOJ as the system will continue and he'll get his payoff from future deferred prosecutions by future AUSAs". Neat. See my 17 and 31 January, 28 February and 12 March 2008 posts.

This is a joke. One Weiss "crime" was doing the SEC's job for it. This is the thanks he gets. Among other things Weiss was charged with racketeering. Frenkel, how do you analogize Weiss actions to those of a say, Ken Lay or Andrew Fastow? Who is the victim? Another Weiss "crime": Milberg Weiss did not have any $2 million-a-year partnerships to hand out to former AUSAs.

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