Wednesday, December 31, 2008

Justice Department Extortion Racket-4

"A record $800 million in U.S. fines for bribery allegations levied against Siemens AG on Monday could have been much higher if the German engineering and industrial conglomerate hadn't taken steps to cooperate with prosecutors, officials and lawyers say. When a German government investigation became known in 2006, Siemens quickly turned to New York law firm Debevoise & Plimpton LLP [D&P]. The move highlights a widespread practice in the U.S., where prosecutors encourage companies to hire private-sector investigators and then share the information with authorities. ... In a Friday court filing, the Justice Department said it could have sought as much as $2.7 billion in criminal damages from Siemens. In arguing for a lesser fine, it cited the 'extraordinary' steps taken by Siemens to cooperate with authorities and to beef up its compliance procedures. The filing said Debevoise's 'frequent and extensive reports' to U.S. authorities helped the Justice Department's own investigation 'enormously.' ... Siemens said it paid more than $850 million in fees and expenses to Debevoise and the accounting firm Deloitte & Touche. ... 'An independent law firm is hired to minimize damage to a firm,' said Cuno Tarfusser, a prosecutor in Bolanzo, Italy, suggesting there was a potential for conflict of interest. ... Austrian prosecutors investigating Siemens said Debevoise's role slowed their investigation", my emphasis, David Crawford and Mike Esterl at the WSJ, 16 December 2008.

"The husband of a partner at financial public-relations firm Brunswick Group LLC has pleaded guilty to running a $5 million insider-trading scheme. ... Matthew ... Devlin, a broker at Barclays PLC's Barclays Capital unit, was charged with five counts of conspiracy to commit securities fraud. he allegedly passed along confidential information to several 'clients and friends.' ... The bounty from the alleged conspiracy totaled $4.8 million, according to the authorities", Matthew Karnitschnig and Chad Bray at the WSJ, 19 December 2008.

Instead of paying $2.7 billion, Siemens paid $.8 billion, $1.9 billion less. $1.9 billion pays serious legal and accounting fees. Is the new "discount" 55%, i.e., you pay 45% in fees to the CPAs and attorneys in lieu of Uncle Sam. This seems high. Don't most personal injury lawyers only get 33%? If a case runs this large, perhaps 12%. What were the "extraordinary steps"? Would it be improper to think they were the $850 million in fees which could buy a few partnerships at D&P and Deloitte? We know D&P, that's Mary Jo White's firm! See my 31 January and 22 November 2008 posts. This stinks.

$4.8 million? Less than my Blankfein test. The SEC and DOJ should have ignored this case. What was Devlin's real crime? He's such a small fish he couldn't offer any SDNY AUSA a NY BigLaw partnership. That's a serious crime.

1 comment:

Anonymous said...

Requirement as in the annual income and the sorts... Plus, what are the reputable forex brokers in Australia?
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