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Pietragallo's White Collar Criminal Defense Group

In today's environment, the government has never more aggressively regulated, investigated, pursued and prosecuted white collar crime. If you or your company becomes embroiled in any type of federal or state government investigation, you need experienced trial lawyers who have gone toe-to-toe with prosecutors and government agents.

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    Thursday
    Aug232018

    Shkreli Co-Conspirator Gets 18 Months’ Imprisonment

    What Happened?
    On August 17, 2018, former Katten Muchin Rosenman LLP attorney, Evan Greebel, was sentenced to 18 months’ imprisonment for his role in aiding former pharmaceutical executive, Martin Shkreli, in defrauding Retrophin, Inc.  Greebel was found guilty by jury for conspiring to commit wire fraud and securities fraud.

    The Rundown
    Greebel faced an advisory range under the U.S. Sentencing Guidelines of 108 to 135 months’ imprisonment.  He asked for a probationary sentence, based in large part on his history and characteristics, including his commitment to community services and improving the lives of those less fortunate than him, and the argument that he had been unduly influenced by Shkreli. The defense also focused on the collateral effects that the conviction would have on Greebel, who likely will never practice law again, and his wife and young children.  Greebel submitted nearly 300 pages of character letters to show the strong community support that he enjoyed.

    The government conceded that a guidelines sentence was unwarranted in this case, but it would not agree to probation.  Instead, it asked the Court to sentence Greebel to at least 60 months’ imprisonment, given the nature and seriousness of the offense.  In its sentencing memorandum, the government characterized Greebel’s request for probation as an attempt to “carve out special treatment for white-collar criminals.”   

    Judge Masumoto credited the arguments of both parties but ultimately decided that incarceration was necessary to effectuate the purposes of sentencing set forth in 18 U.S.C. § 3553(a).  She sentenced him to 18 months’ imprisonment and ordered him to pay more than $10.4 million in restitution and forfeit $116,462.

    For the Record
    “He was not feckless, he was not naive, he’s not inexperienced,” Judge Matsumoto said. “He was not led astray by a young, brash CEO. Mr. Greebel made a conscious decision to join in the conspiracies.”

    The Take Away
    Despite the government’s and the Court’s stated desire to ensure that white-collar defendants are not treated differently than other defendants, Greebel received a downward variance of nearly 85% from the bottom of his guideline range.

    Tuesday
    Aug142018

    A Billion Dollar Venezuelan Bribery and Money Laundering Scheme Unfolds

    What Happened?
    The Department of Justice recently announced charges against 17 individuals for their alleged participation in bribery and money laundering schemes which took place at Petroleos de Venezuela S.A., Venezuela’s state owned and controlled oil company. The government found their actions to be clear violations of the Foreign Corrupt Practices Act. This type of activity has undoubtedly contributed to the turmoil Venezuela is currently embroiled in at this time.

    The Rundown
    Venezuela is in a state of crisis; its citizens are left in a state of chaos. Tens of thousands of Venezuelans are fleeing to Ecuador, Brazil, and Argentina in order to survive. How is it that one of the world’s largest exporters of oil and the country with the world’s largest oil reserves is in such a state of despair? Internal corruption at Petroleos de Venezuela S.A. (PDVSA) and massive violations of The Foreign Corrupt Practices Act (FCPA) are partially to blame according to the United States Department of Justice. 

    The Foreign Corrupt Practices Act (FCPA) prohibits all United States persons and entities from making payments, bribes, to foreign government officials to assist in obtaining or retaining business. 15 U.S.C. §§ 78dd-1, et seq. Thus far, 12 individuals have pleaded guilty for their involvement in bribery, money laundering, and embezzlement schemes with officials from PDVSA, PDVSA subsidiaries, and other Venezuelan government agencies in violation of the FCPA.

    On July 31, 2018, Jose Manuel Gonzalez Testino, a dual U.S. Venezuelan citizen, was arrested while waiting for his plane at Miami International Airport. Gonzalez was charged with bribing a PDVSA official with $629,000 to gain contract priority, payment priority, and payment in U.S. dollars rather than in Venezuelan bolivars. One week earlier on July 24 and 25, 2018, Matthias Krull, a German national and Panamanian resident, and Gustavo Adolfo Hernandez Fieri, a Columbian national and naturalized U.S. citizen, were arrested and charged with conspiracy to commit money laundering for their participation in a scheme that laundered $1.2 billion of embezzled funds from PDVSA using money derived from Florida real estate and false investment schemes.

    On July 16, 2018, Luis Carlos De Leon-Perez, a dual U.S. Venezuelan citizen, pleaded guilty for conspiracy to violate the FCPA and conspiracy to commit money laundering for facilitating bribes of PDVSA officials. De Leon solicited bribes from U.S. and foreign based vendors, and directed said bribes towards PDVSA officials for contracts and payment priority. According to the government, he then conspired to launder the proceeds of the bribery scheme. 

    The Take Away
    The FCPA is in place to ensure that government officials act in the best interest of their country. PDVSA is Venezuela’s primary source of income. The Trump Department of Justice appears to have no hesitation in making these cases. The misconduct of PDVSA officials and their participation in bribery and embezzlement schemes have played a role in Venezuela’s economic collapse.

    Friday
    Aug102018

    Former Representative Chaka Fattah’s Bribery Conviction Overturned by Third Circuit

    What Happened
    The Third Circuit overturned former Pennsylvania representative Chaka Fattah’s bribery conviction. 

    The Rundown
    Fattah was convicted in June 2016 of multiple charges based on his involvement in various schemes to raise money for his unsuccessful 2006 campaign for Philadelphia Mayor and subsequent activities designed to conceal the repayment of unlawful funds and to remedy his personal and political financial problems. The jury convicted Fattah along with multiple associates, including Herbert Vederman, a successful businessman who had served prominent roles in the administrations of Ed Rendell when he was Mayor or Philadelphia and Governor of Pennsylvania. 

    Just six days after the jury returned its verdicts, the Supreme Court issued its opinion in McDonnell v. United States, which limited the definition of “official acts” used in the honest services fraud and bribery statutes under which the jury convicted Fattah and Vederman.  Fattah’s bribery convictions were based on three “official acts” taken on Vederman’s behalf in exchange for things of value: setting up a meeting between Vederman and U.S. Trade Representative Ron Kirk; attempting to secure Vederman an ambassadorship; and hiring Vederman’s girlfriend Alexandra Zionts. 

    A three-judge panel of the Third Circuit Court of Appeals found that McDonnell’s interpretation of the meaning of “official acts” rendered the instructions Fattah’s jury received erroneous, and reversed and remanded his bribery convictions.  In reaching this decision, the panel first reiterated McDonnell’s multistep definition of an “official act:” 

    • Step 1(A) requires the government to identify a question, matter, cause, suit proceeding or controversy (the “Question”) that is a formal exercise of governmental power that is similar in nature to a lawsuit before a court, a determination before an agency, or a hearing before a committee.  Typical meetings, calls, or events arranged by the public official do not qualify as the required formal exercise of government power.
    • Step 1(B) then requires the government to show that the qualifying Question is one that may at any time be pending or may be brought before a public official.  This element requires that the item be one that can be put on an agenda, tracked for progress, or checked off as complete. 
    • Step 2 requires the government to prove that the public official made a decision or took an action with respect to the Question.  Setting up a meeting or phone call, showing general support, or hosting an event cannot prove this element unless the public official intends to exert pressure on another public official or provides advice, knowing or intending the advice to form the basis for an official act. 

    Applying these requirements to Fattah’s conduct, the Third Circuit concluded that Fattah’s arranging of the meeting between Vederman and Kirk clearly did not qualify as an official act under McDonnell.  

    Whether Fattah’s efforts to secure Vederman an ambassadorship, which included three emails, two letters, and one phone call, constituted an “official act” in light of McDonnell was a closer call.  The Third Circuit concluded that the formal appointment of a particular person to a specific position would qualify as a matter that may be pending under Step 1 of the McDonnell analysis.  With respect to Step 2, because the trial court did not instruct the jury that they could only consider Fattah’s efforts “official acts” if they were impermissible attempts to pressure or advise another official, it could not assume that the jury’s verdict was proper.

    The Third Circuit found that though Fattah’s decision to hire Zionts was clearly an official act because it was pending before Fattah himself and was a focused and concrete action within Fattah’s specific duties of his official position, remand of the bribery counts was still necessary because the court could not rule out that the jury erroneously convicted Fattah and Vederman based on other actions that were not official acts under McDonnell.

    What Happens Next?
    The Third Circuit’s decision upheld Fattah’s racketeering conspiracy, fraud, and money laundering convictions and reinstated two convictions for bank fraud and making false statements to financial institutions that the District Court had overturned under Rule 29.  Thus though the decision today is somewhat of a win for Fattah, he still faces a significant criminal sentence.  Moreover, the Third Circuit rejected the argument that there was insufficient evidence to support a bribery conviction at all, and noted that a properly instructed jury on remand could find more than a single official act.

    Tuesday
    Jul312018

    No Third Trial for Former Bond Trader Litvak

    What Happened?
    After the U.S. Court of Appeals for the Second Circuit reversed former Jefferies Group bond trader Jesse Litvak’s securities fraud conviction for the second time, the government moved to dismiss the indictment against him, thus ending a five-year criminal case.

    The Rundown
    In 2014, Litvak was convicted in the U.S. District Court for the District of Connecticut on multiple counts of securities fraud and making false statements for defrauded a federal program designed to aid the mortgage-backed securities market after the financial crisis. He was sentenced to twenty-four months’ incarceration and a $1.75 million criminal fine, but the U.S. Court of Appeals for the Second Circuit reversed, holding that the district court had committed reversible error by excluding defense expert testimony.

    The government tried Litvak again, and in 2017, a jury convicted him on one count of securities fraud for lying to a portfolio manager for the price he paid for a mortgage-backed bond. The manager testified that he believed Litvak had been acting as his agent and owed him accurate information about the bond’s price.  He was again sentenced to twenty-four months’ incarceration. In May 2018, the U.S. Court of Appeals for the Second Circuit again reversed the conviction. It held that the manager’s testimony was erroneously admitted as his subjective belief as to an agency relationship was both irrelevant and misleading to the jury. The Court ordered Litvak, who had been incarcerated since September 2017, to be freed pending retrial.

    Earlier this month, the U.S. Court of Appeals for the Second Circuit denied the government’s motion for reconsideration. The government thus moved to dismiss the case against Litvak. 

    For the Record
    This case has again been remanded to the Court following an evidentiary ruling by the Second Circuit. Two juries have found the defendant Jesse C. Litvak guilty of securities fraud, the Court and the Second Circuit have twice found that there was sufficient evidence to support those convictions, and the Second Circuit has twice validated the Government’s prosecution theory and held that the defendant’s misrepresentations were not immaterial as a matter of law. Nonetheless, in light of the totality of the circumstances unique to this case, the Government has concluded that the interests of justice would not be served by a third trial.” – Government’s motion to dismiss

    The Take Away
    After two trials, five years of litigation, and months of incarceration as a result of two convictions, Jesse Litvak’s involvement with the federal criminal system has come to an end.  

    Friday
    Jul202018

    Proposed Email Privacy Act Gains Support

    What Happened?
    Technology companies publicly voiced their support for the Email Privacy Act, a new email privacy regulation passed by the House that would require a warrant to access all email content.

    The Rundown
    In May, the House of Representatives approved the Email Privacy Act as an amendment to the National Defense Authorization Act (NDAA). The 1986 Electronic Communications Privacy Act (ECPA) sets out the current state of the law, which does not require warrant protections to access email communications older than 180 days. Further, DOJ has interpreted the ECPA as not requiring warrants to access emails that have been opened. 

    The House version of the Email Privacy Act now seeks to codify the Sixth Circuit’s ruling in Warshak v. United States, 631 F.3d 266 (6th Cir. 2010), which held that the Fourth Amendment requires the government to obtain a probable-cause warrant before accessing email content. In that case, the government directed Warshak’s email provider to preserve copies of his future emails, which it later subpoenaed. The Email Privacy Act will also extend to protect texts, notes, photos, and other private information in the cloud. 

    More than 50 civil liberties organizations and technology companies filed a joint letter stating their support for the Email Privacy Act and urging that it be included in its current state in the final version of the NDAA. The letter noted that the version of the bill passed by the House already represents significant compromise, as it did not include a key provision that would have required the government to notify individual customers when it served a provider with a warrant for their information. Signatories to the letter included Amazon, Adobe, Facebook, Google, the ACLU, the U.S. Chamber of Commerce, and the American Library Association.

    The Take-Away
    The passage of the NDAA with the current version of the Email Privacy Act, while noteworthy, would likely not change current practices. As the letter notes, post-Warshak, “DOJ and FBI policies already require law enforcement officials seeking content to obtain a search warrant, and many providers will not provide their users’ content without one.” Rather the new Act would serve to ratify Warshak and update the current state of the law, which was enacted years before the public even had access to the internet. Warshak’s codification, however, could take on more significance in light of the current administration’s opportunity to fashion a more conservative Supreme Court. 

    Wednesday
    Jul182018

    Tailoring RFP For Preferred Contractors Leads To Guilty Verdicts Of A State University’s President And Construction Executives

    What Happened?
    On July 10, 2018 a federal jury in Manhattan convicted a State University of New York’s Polytechnic Institute (SUNY Poly) former president and three executives of two construction companies of wire fraud, conspiracy to commit wire fraud and making false statements to investigators for rigging the public competitive process. SUNY Poly is a system of public institutions of higher education which receives federal monies. It created a non-profit entity, Fort Schuyler Management Corporation, for the purpose of engaging contractors in building development projects. Because the non-profit entity was funded with federal monies it must adhere to a competitive process of bidding for construction projects.

    The Rundown
    According to the indictment, Dr. Kaloyeros, SUNY Poly’s president at the time, oversaw the steering of lucrative state contracts worth millions of dollars to two construction companies owned by his co-defendants. The government alleged, and the jury found convincing, that Dr. Kaloyeros used his official position to tailor Requests for Proposals (RFP) to fit the qualifications of the two construction companies. Furthermore, the construction companies worked with a lobbyist to obtain advanced copies of the RFPs and obtained secret information which gave them a distinct advantage over its competitors in bidding. The government successfully argued to the jury that the winners of the RFPs, Kaloyeros’ co-defendants, were selected before the issuance of the RFPs and that the appearance of a competitive bid was a sham. The government was able to prove that Dr. Kaloyeros used his official position and fraudulently represented to the Board of Directors of Fort Schuyler that the competitive process was fair, open and competitive when in fact, was not. Dr. Kaloyeros and the executives of the construction companies are facing a maximum of 45 years in prison.

    For The Record
    Contractors and vendors often develop relationships with government officials and employees when seeking government contracts. It is a common and well-established method for vendors and contractors to establish relationships with potential buyers to sell their wares or gain a contract. While this method of selling goods and services in the private sector is sound and lawful, public employees and officials must be careful. Municipalities and public entities have a duty to prevent waste and the fraudulent use of public funds, therefore, procurement of certain goods and services must be obtained through a fair, transparent and competitive bidding.

    The Take Away
    Public officials and employees must keep communication with potential vendors at arms-length and avoid inappropriate communications or the appearance of inappropriate communications. There should be clear and robust procurement and ethics policies, such as prohibiting all communication with potential vendors or bidders for a certain time during the issuance of an RFP until after the contract has been awarded. Key personnel and potential vendors must be trained on the policies and compliance plans should be adopted and monitored. Failure to establish, train and monitor good governance may lead to a civil lawsuit under the False Claims Act and/or criminal prosecution.

    Monday
    Jul162018

    New Initiatives Announced by DOJ in Opioid Response

    With the opioid crisis showing no signs of abating, Department of Justice officials are undoubtedly feeling pressure to take additional steps to address it.  The Trump Department of Justice has taken several steps over the past year including, in August 2017, the creation of the Opioid Fraud & Abuse Detection Unit to target opioid-related over-prescribing and healthcare fraud through the use of data analytics.  The Unit enlisted government attorneys and agents from the hardest-hit jurisdictions in the United States, including western Pennsylvania and southern West Virginia.

    More recently, in December 2017, DOJ created a director-level role at DOJ dedicated solely to opioid enforcement, titled Director of Opioid Enforcement and Prevention Efforts.  Long time DOJ prosecutor Mary Daly is in that position.

    Just last week, DOJ announced two new initiatives regarding opioid enforcement:

    • July 11, 2018: DOJ announced the finalization of regulatory steps designed to improve the DEA’s ability to reduce drug diversion through control of opioid production. Initially announced in April, the DEA will be empowered to limit the amount of opioids that manufacturers produce in a given year if the DEA believes that a particular opioid or a particular company’s opioids are being diverted for misuse. The regulation also requires DEA to share notices of proposed production limits to state attorneys general. In certain instances, it also allows for a hearing to resolve an issue of fact raised by a state in objection to production limits if related to a legitimate United States’ need.
    • July 12, 2018: DOJ announced Operation Synthetic Opioid Surge (“S.O.S.”), a new program to reduce the supply of synthetic opioids in jurisdictions hardest hit by the opioid crisis.  Through Operation S.O.S., DOJ will launch an enforcement “surge” in ten federal judicial districts with some of United States’ highest drug overdose death rates. The surge will involve a coordinated DEA Special Operations Division operation to insure that leads from street-level cases are used to identify large scale distributors.  Additionally, the Organized Crime Drug Enforcement Task Forces (“OCDETF”) Executive Office will provide additional Assistant U.S. Attorneys to each participating district to assist with these prosecutions.  The ten districts participating in Operation S.O.S. include the Western District of Pennsylvania, Northern and Southern Districts of West Virginia, and Northern and Southern Districts of Ohio.
    Obviously, the Department of Justice – and the Trump Administration as a whole – is identifying new strategies and initiatives to address the opioid crisis.  We undoubtedly haven’t seen the last initiative on this important topic.
    Monday
    Jun112018

    Medical Marijuana in Pennsylvania: A Primer

    What Happened?
    Although signed into law in April 2016, Pennsylvania’s Medical Marijuana Program is still very much a work in progress.  Pennsylvania Patients have only recently been able to receive medical marijuana at approved dispensaries – and only for approved “serious medical conditions.”  There are 17 – soon to be 21 – approved conditions which include ALS, autism, cancer, Crohn’s, glaucoma, HIV/AIDS, multiple sclerosis, Parkinson’s and PTSD. 

    The Rundown 
    Interested patients must register by completing an online profile on the Pennsylvania Department of Health’s website called the “Patient and Caregiver Registry” – before obtaining a physician’s certification stating that he or she has one of the approved conditions. This month, opioid addiction disorder was approved by the Department of Health as a “serious medical condition” for use of medical marijuana. Pennsylvania is one of the first states to approve medical marijuana for opioid addiction.

    With physician certification, the patient returns to the Registry to purchase a medical marijuana identity card. The card will allow the patient, or his or her caregiver, to obtain medical marijuana from an approved dispensary. Caregivers needing to provide medical marijuana to a minor follow a similar process, but may also request a Safe Harbor letter.

    The Pennsylvania Department of Health is quick to emphasize that participation in the Medical Marijuana Program does not provide immunity from federal prosecution. As readers likely know, the federal government still lists marijuana as a Schedule I substance, like heroin and cocaine – indicating their view that marijuana has no legitimate medical use and a high potential for abuse. However, Pennsylvania Department of Health literature also notes that criminal investigations and charges or civil enforcement actions, “may be unlikely” as long as the patients, physicians, dispensaries and growers/processors are in conformance with the Medical Marijuana Program’s laws. The Department points to U.S. Department of Justice guidance for that statement which can be found here.

    Physicians interested in certifying patients under the program follow a similar process. They register on the state’s Physician’s Registry, which triggers a validation of the physician’s medical license. The physicians must then complete a mandatory 4-hour training course provided by an approved Department of Health provider. The last step is a final review and approval by the Department of Health to become an approved “Practitioner” able to issue patient certifications for the approved serious medical conditions.

    Medical marijuana will only be dispensed from approved dispensaries, not pharmacies. The approval process requires aspiring dispensaries to obtain a permit through demonstration of sufficient controls to prevent diversion, abuse, or illegal conduct, sufficient capital (at least $150,000), a diversity plan, and payment of a non-refundable fee of $5,000 and a $30,000 fee thats refundable if the permit isn’t granted. Successful permit applicants must complete a 2-hour training course. Growers and processors use a similar process to obtain a permit by showing sufficient controls, proof of at least $2 million in capital and payment of a $100,000 non-refundable fee and a $200,000 fee that is refundable if the permit isn’t approved.

    The Take Away
    As of this writing, there are over 10,000 approved patients, 200 approved physician “Practitioners,” 16 approved dispensaries, and 12 approved growers/processors. 

    Wednesday
    Jun062018

    In the War Against Opioid Prescriptions, Health Care Providers Should Know their Rights

    What Happened?
    In the past several years the prescription and distribution of opioids have been increasingly scrutinized by federal and state law enforcement agencies, insurance companies, the media and the medical profession itself. The Department of Justice (DOJ) is using everything in its toolbox to fight the opioids crisis – from criminally prosecuting low level drug dealers to prosecuting medical professionals for prescribing pain killers. Numerous grand jury indictments have been presented charging physicians, nurses, pharmacists and others in the industry with distribution of narcotics, conspiracy, health care fraud, mail fraud, bribery, anti-kickback laws, RICO and other related charges. In addition to the aggressive criminal prosecutions, in its latest intervention, the Department of Justice filed a motion to participate in settlement discussions in civil litigation filed by numerous cities and counties in the United States against drug manufacturers and distributors. It seeks to provide expertise to the court and help craft non-monetary remedies to fight the opioid epidemic.

    In addition to DOJ’s aggressive prosecutions, the Center for Medicare and Medicaid (CMS), who is Medicare and Medicaid’s watchdog, has been heavily criticized for its lack of supervision over the prescriptions of opioids under the Medicare and Medicaid programs. On May 29, 2018 U.S. Senator Pat Toomey, who chairs the U.S. Senate Committee on Finance’s Subcommittee on Health Care, convened a hearing in Bensalem, PA where a number of health care professionals and government personnel testified about Medicare and Medicaid’s oversight, or lack of oversight, over opioid prescription. Testimony revealed that CMS failed to identify more than 90 percent of patients who were at risk for addiction. It should be expected that CMS will be more diligent in their supervision of the Medicare Part D and Medicaid and refer more cases of suspected fraud or abuse to the Department of Justice for criminal enforcement. 

    The Rundown - What to do if law enforcement comes knocking at your door
    With the increase in criminal, civil and administrative enforcement, medical professionals need to understand their rights in case of an investigation. There are many ways a medical provider who has become a “target” or “suspect” of an investigation learns of an ongoing investigation. He or she may hear from a third party that law enforcement officers, such as the FBI or DEA, has been visiting the medical provider’s employees or business associates and inquiring about his or her business practices. He or she may hear from the Medical Board about an investigation. In some instances, law enforcement may make a surprise “friendly” visit to the medical provider’s office or home. Other times, law enforcement may arrive at the medical provider’s office or home with a platoon of agents and armed with a search warrant. Many times when search warrants are executed, the information is leaked to the press and targets of investigations find themselves on the six o’clock news.

    If you learn of an investigation - don’t panic. Contact an attorney who has experience with government enforcement actions and who can adequately advise you. If law enforcement agents pay you a “friendly” visit, please remember that they have a purpose to that visit. They want information that they may use against you at a later date. You should politely thank them for their visit, ask for their business cards and tell them that your attorney will contact them. They may try to convince you to speak to them by telling you that you have nothing to worry about. Again, be polite and tell them that your attorney will be calling them. You do not have to speak to them.

    If law enforcement arrives with a search warrant, read the warrant and make sure it is for your premises. Once you have determined that the search warrant is accurate, allow them to enter and conduct the search. You are not required to speak to them. Advise them that you would like to contact your attorney. Some agents will allow you to use the phone. If so, contact your attorney immediately and he/she should instruct you on what to do. If your attorney does not practice in the area of federal criminal law, or if the agents do not allow you to call an attorney, advise the agents that any questions they may have will be handled by your attorney at a later date. Again, take their contact information and allow them to conduct the search.

    The Take Away
    You may not be present when the government comes knocking at your door with a search warrant or a “friendly visit”. Have a plan of action for your employees to follow. Your staff should be trained on that plan. Information gathered by government officials at any meetings with you, your employees or family members can serve as a weapon against you. Being well informed of your rights and knowing what to do in case you are a target or subject of an investigation will protect you from overzealous prosecution.

    Monday
    Jun042018

    Supreme Court Update – A “DIG” in Fifth Amendment Case City of Hays, Kansas v. Vogt

    What Happened?
    Back in February, I wrote on the blog about the Supreme Court oral argument in City of Hays, Kansas v. Vogt, which sought to address whether the government’s introduction of a compelled statement at a probable cause hearing violated the Fifth Amendment.  Last week, the Supreme Court issued a one-sentence order dismissing the case as improvidently granted (known as a “DIG”). 

    The Rundown
    During Vogt’s application process for a job with the Haysville Police Department he disclosed that he had kept a knife he obtained in the position he held at the time with the Hays PD.  Vogt told the Hays PD about the knife because Haysville conditioned his job offer upon the requirement that he do so, and Hays then demanded that Vogt provide more information or else he would lose his job.  Vogt provided the additional information and then accepted the job with Haysville, which rescinded his offer after he was charged with a crime in connection with the information he told Hays.  The state introduced Vogt’s statement to the Hays PD at his preliminary hearing, but it ultimately dropped the charges against him.

    Vogt sued both Hays and Haysville, claiming that the use of his compelled statements against him in his preliminary hearing violated the Fifth Amendment.  The trial court granted the defendants’ motion to dismiss and the Tenth Circuit reversed.

    The discussion anticipated at the February 20th oral argument would have focused on the Fifth Amendment’s use of the term “criminal case,” and whether previously held compelled statements can be introduced at various types of proceedings, including for example, preliminary hearings and suppression hearings.  But the Supreme Court, however, emphasized throughout the argument that the case’s procedural posture was odd, and hinted that some information outside of the record called the truth of Vogt’s factual allegations into question.  Those concerns, combined with the gravity of the constitutional issue at question, which Justice Ginsburg suggested had the potential to “shrink” the Fifth Amendment to “almost a vanishing point” since courts resolve most criminal cases without a trial, may have led the Court to dismiss the case. 

    The Take-Away
    The Supreme Court’s DIG means the Tenth Circuit’s finding that the Fifth Amendment applies to preliminary hearings stands, leaving open a circuit split.  Additionally, the three month delay between the argument and the Court’s eventual DIG may indicate discord between the Justices on substantive Fifth Amendment issues that could eventually come to a head if another petitioner presents a more factually clear and developed petition to the Court.