Victoria Sprouse and "Outcome Driven" Federal Prosecutors

Recent news from North Carolina that federal prosecutors have imprisoned “scores” of men who apparently broke no laws might have been shocking at one time in our nation’s history, but no more. Misconduct and lawless behavior by federal prosecutors in that state is approaching something of legendary proportions, but the immunity-protected lawbreakers have nothing to fear – unlike the innocent.

According to a USA Today investigation, federal prosecutors in North Carolina, who apparently were ignorant of the law (as were the judges that heard the cases) garnered convictions of men on federal weapons charges even though the law was clear that these men had not committed violations. According to the investigation:

Terrell McCullum did not commit a federal crime by carrying a shotgun and a rifle out of his ex-girlfriend's house.

But he is serving a federal prison sentence for it. And the fact that everyone — including the U.S. Justice Department— agrees that he is legally innocent might not be enough to set him free.

A USA TODAY investigation, based on court records and interviews with government officials and attorneys, found more than 60 men who went to prison for violating federal gun possession laws, even though courts have since determined that it was not a federal crime for them to have a gun.

Many of them don't even know they're innocent. 

That is bad enough, but what follows is worse:

Still, the Justice Department has not attempted to identify the men, has made no effort to notify them, and, in a few cases in which the men have come forward on their own, has argued in court that they should not be released.

Justice Department officials said it is not their job to notify prisoners that they might be incarcerated for something that they now concede is not a crime. And although they have agreed in court filings that the men are innocent, they said they must still comply with federal laws that put strict limits on when and how people can challenge their convictions in court.

"We can't be outcome driven," said Anne Tompkins, the U.S. attorney in Charlotte. 

Indeed, Tomkins added, “We've got to make sure we follow the law, and people should want us to do that.” This is from someone whose prosecutors already did not “follow the law” in gaining convictions of innocent people, yet another example of the “heads I win, tails you lose” system of federal “justice.” It was “their job” to convict these men and have them sent to prison, and now that the incarcerated people are behind bars, federal prosecutors suddenly claim that even if they don’t have to follow the law, people wrongfully convicted are bound by it – in more ways than one.

If anything, federal prosecutors are totally “outcome-driven.” Their survival as federal employees, including promotions and raises, are determined by their conviction rates, the more convictions the better. Because they are protected by “absolute immunity,” they never have to worry about facing lawsuits or criminal investigations for wrongdoing. (Yes, criminal investigations supposedly are on the table, but it is a rare thing for federal officials to investigate themselves.)

Perhaps it is fitting that this latest scandal occur in North Carolina, as that state has been a cesspool of “justice” in both state and federal courts. North Carolina gave us the infamous Michael Nifong, the district attorney who fabricated charges against three Duke University lacrosse players, charges that Nifong knew from the start were false.

While Nifong was disbarred for his actions, one of the few prosecutors in the country ever to be disciplined at all, federal authorities refused even to investigate his actions even though his office made use of thousands of dollars of federal money in order to pursue the fraudulent lacrosse case. (State prosecutors are able to obtain federal money to aid with prosecutions in sexual assault, rape, and child abuse/molestation cases, and Nifong’s office used thousands of federal dollars to provide the false accuser, Crystal Mangum, with living expenses. They also used federal money in helping to pay for the actual investigation.)

Although federal prosecutors in North Carolina see no reason to pursue justice, they are quite zealous when it comes to going after people for non-crimes or “crimes” that are the product of the imaginations of prosecutors. The recent farce of a trial involving John Edwards ended somewhat appropriately when federal prosecutors decided not to retry the former U.S. Senator after comments from a deadlocked jury essentially ensured that getting a conviction would be impossible.

Edwards had huge amounts of personal resources to fight the “novel” charges by the feds (even federal prosecutors admitted they were stretching campaign finance law in order to make their claims) but others in North Carolina are not so fortunate. The vast numbers of wrongfully-convicted people there have no personal wealth by which to pursue appeals and even their actual innocence claims and, as the USA Today article points out, are derided by federal prosecutors not because they are untrue, but rather because prosecutors don’t want to be bothered by the inconvenience.

(The irony here is that the people convicted are expected to know the law backwards and forwards. The people that put them there, however, bear absolutely no responsibility to know the law and are not held responsible for their wrongful actions.)

 It is not just Edwards or the people featured in the USA Today investigation that are on the receiving end of wrongful behavior by federal prosecutors in North Carolina. Three years ago, Candice E. Jackson and I wrote about the wrongful conviction of Victoria Sprouse, a real estate attorney who was railroaded in a federal trial in Charlotte. As noted in that article and another one later, the prosecutorial misconduct was pervasive and dishonest.

(After reading the LRC pieces, lead prosecutor Matt Martens first claimed that I was a fictional character and that Sprouse herself had written the first article. However, to quote Descarte, “Cogito ergo sum,” and I really was the main author. Martens then claimed in court that Sprouse had dictated to me the contents of the piece, telling me what to write. That fell into the “howler” category, as people know better than to do something like dictate such things to me.)

Last year, a federal judge overturned Sprouse’s conviction, and federal prosecutors in Charlotte were not pleased, and their revenge was brutal and swift. This past week, Sprouse was arrested and charged with “bankruptcy fraud,” with the charges (while sounding “breathtaking” to the judge) based upon the flimsiest of reasons.

For example, because Sprouse already had lost her law license due to her criminal conviction, she had to do other work while under house arrest. The terms of her house arrest (while her case was being appealed) were draconian and she stayed within them, which meant that she was unable to have enough for living expenses.

Her sister wrote a check from a fund that the sister controlled, so now federal prosecutors are claiming that Sprouse had a “secret fund” that she kept hidden from the court. That is akin to a claim that because the Maryland State government pays me for my teaching at Frostburg State University, I “control” the state treasury.

However, the feds were not satisfied with dumping more felony charges upon Sprouse. She currently is being held without bond in the Mecklenburg County lockup, and is being kept in solitary confinement. To make matters even worse, because of all that was done to her, she was taking medication for depression, anxiety, and to be able to sleep. At the present time, all of those medications have been denied her.

We need to call this by its proper name: torture. Without medication, she will be sleep deprived, and solitary confinement also has been a mechanism used by police and prosecutors to break the will of targeted people and to cause them to lose hope, thus making a plea bargain easier. Federal prosecutors also were able to have her attorney removed because of alleged “conflicts of interest.”

Indeed, as I see it, what is being done to Victoria Sprouse is the epitome of “outcome driven” behavior by prosecutors. Sprouse had the effrontery to win an appeal against her federal masters, and their revenge was brutal and not unexpected. These are people who do things because they can do them, and they will not be satisfied until they either have driven Victoria Sprouse into her grave or into prison.

Justice for James? Certainly not in the LMJC or Hamilton County

Honest and decent people do live in the United States, but they no longer work in the "justice" system. Instead, we are seeing a system that is populated with liars, criminals, bullies, and people who have no place in a decent society.

If there is any place in the USSA where that especially is true, it is in the heavily-churched and supposedly "Christian" area of Northwest Georgia, the Lookout Mountain Judicial Circuit. On Sundays, many of the players in the LMJC go to church and sing about Jesus, and then the rest of the week, they worship their real god, the Devil.

Why do I wrote so graphically? Let me quote Jesus (whom Brian House and Tim Deal claim to worship) who told the Pharisees in John 8:44:

You are of your father the devil, and your will is to do your father’s desires. He was a murderer from the beginning, and has nothing to do with the truth, because there is no truth in him. When he lies, he speaks out of his own character, for he is a liar and the father of lies. (ESV)

 Deal has lied under oath and at least on one occasion, fabricated a document in which he claimed to be somewhere where he was not. House has lied about his ex parte meetings with prosecutors and went along with Chris Arnt when Arnt openly lied to jurors in the closing arguments of the Tonya Craft trial. In other words, both of these men, along with prosecutors like Arnt, Len Gregor, and Alan Norton are all about lies, and according to the Jesus these men claim to follow, Jesus said that people who lie (and lie consistently) have Satan as their father.

All of this leads me to the present situation of James Combs, who agreed to plead guilty to a misdemeanor in House's court because, to be frank, he could not trust House to run a fair trial, Norton and Deal to tell the truth, and a Catoosa County jury to listen to evidence. That is a damning indictment upon the people of Catoosa County and Northwest Georgia, who have put these people into power.

From what I have been hearing, Deal and Norton have tried to get James listed as a "sex offender" in Tennessee (where he lives and will be under probationary supervision) even though the misdemeanor to which he pleaded guilty does not carry the "sex offender" label. Nonetheless, dishonesty rules not only in Catoosa County and the LMJC, but also in Hamilton County, home of gang warfare, brutal (and dishonest) cops, and prosecutors who look the other way when felonies are committed in front of them.

From what I also understand, local cops are constantly harassing the Combs family. What can I say except that this kind of behavior from those who wear the blue costumes can be expected.

When Joal Henke testified in October 2010 in Hamilton County Circuit Court (Judge Marie Williams), he committed perjury and then admitted to having committed mortgage fraud, which is a federal offense. In fact, today, I just signed a paper in which I acknowledged that mortgage fraud is a felony punishable up to 30 years in prison.

So, Henke committed two felonies in Hamilton County, one a state crime and the other federal. But does Bill Cox or the local U.S. attorney care? Well, of course not! Why pursue criminals when one can harass and imprison innocent people?

If people wonder why I am so cynical about Chattanooga and North Georgia, all I can say is to look at the liars and thugs that inhabit "law enforcement" and "justice." I continue to wonder if there are any decent people left in public life in my old hometown, but I am having my doubts.

Amerika, Obama, and Eric the Unjust

To get a sense of what has happened to the "law" in the United States, and especially federal criminal law, the federal persecution of marine biologist Nancy Black tells us what we need to know about what is happening to the innocent. And shame on the federal grand jury that indicted her.

According to the story in The Economist:

ONE of the unforgettable experiences to be had in California is to go whale watching in Monterey Bay. Nancy Black, a licensed marine biologist, is one of the scientists who lead these commercial outings, besides doing her own whale research. As Lawrence Biegel, her lawyer, tells it, one day Ms Black was in her research boat with assistants when killer whales attacked a pod of grey whales and killed a calf. Its blubber floated to the surface, and the killer whales were about to feed on it. Seizing this opportunity to film their behaviour, Ms Black threaded ropes through some pieces of blubber, then lowered a camera underwater.

The government of Barack Obama and the Department of (In)Justice led by Mr. Perjury Himself, Eric Holder, had this response:

For this, Ms Black might now face up to 20 years in prison and half a million dollars in fines, after a federal grand jury indicted her this month. Little about the charges makes common sense. The federal law in question is the 1972 Marine Mammal Protection Act, which was intended to save dolphins, seals and whales from being killed and harassed. The law also banned feeding these animals, on the theory that doing so might compromise their ability to forage naturally in future. Feeding is what Ms Black is now accused of. She says she was using the protocols she had learned from the federal agencies that are now investigating her to observe a natural feeding that was already in progress.

Just as ridiculous, says Mr Biegel, is the accusation, increasingly common in federal cases, that Ms Black lied to the authorities, which carries its own prison terms. Ms Black always edits the commercial videos of her whale outings to make them more interesting. When investigators demanded footage, she gave them one of these edited videos. Prosecutors now claim that she had tampered with evidence.

So, Ms. Black cooperated with investigators who then decided to interpret an edited film as "tampering with evidence" and "lying to investigators," which is an extreme way of looking at things. For doing these things, an innocent person might go to prison for 20 years, given how federal juries are nothing but lapdogs of federal prosecutors.

Now, how do Obama and Holder deal with federal employees who actually commit real crimes? Oh, they give their com-padres a slap on the wrist. Here are TSA agents who STOLE $40,000 from passengers and what do they get? A few months in jail.

At least we know how Obama and Holder look at crime. Real crime is overlooked and real criminals get a slap on the wrist, but when it comes to a marine biologist who has committed no crime, they want to put her away for two decades.

Now, in their defense, it was not Obama and Holder who did away with the mens rea portion of federal criminal law. No, that was the Supreme Court of Earl Warren and William O. Douglas, both of whom are revered by "Progressives" who believed that the ancient Anglo-American view of criminal law -- that someone must inflict real harm upon individuals or their property -- should be discarded and be replaced by rules that would reflect "the public good." Of course, "Progressives" would be the sole creators of what would be in the "public good" or not.

Harvey Silverglate, who has been a mentor to me for many years, has written a great book Three Felonies a Day and notes that many federal laws are vague and are easily manipulated by prosecutors. Furthermore, because the laws themselves are unclear, juries are forced to INTERPRET the laws as opposed to their historical duties of (1) knowing that a crime has been committed and (2) determining whether or not the defendant committed the crime.

Unfortunately, much of federal law consists of prosecutors charging people with a series of complicated and wordy charges and then leaving it up to the juries to determine if the law even was broken. Under such circumstances, jurors often conclude that if someone has been charged, then that should be proof of guilt.

There is a reason that the USA leads the world in incarceration. This country has some of the harshest laws on the planet and some of the world's worst prosecutors. And it is sad to see the former Constitutional Law professor Barack Obama and Eric Holder carry on that sorry tradition.

Martez Mitchell conviction shows what is wrong with federal criminal law

Former Tyner High School football star Martez Mitchell recently was convicted in federal court in Chattanooga for, according to The Chattanoogan, "drug trafficking and using a gun in connection with drug trafficking." He faces five years for each charge, and the sentences, according to federal law, must run consecutively.

While I doubt that most people will give this a second look, I read the article all the way through because I was curious about the second charge. Did he actually point a gun at someone during a drug trade? Was he uttering threats while waving a gun?

It turns out that the gun was in the house where he lived, and police and federal agents never demonstrated in court that he used the gun to facilitate the selling of marijuana. In other words, "using a gun in connection with drug trafficking," is one of those legal technicalities that the feds use when they want to pile up years in prison on someone.

I will put it another way: the law lies. It is one thing if a person uses a gun to threaten someone else with death in order to make that person hand over money or property or to do something else; it is quite another when the presence of a gun in another room is used as "proof" of "using a gun."

Unfortunately, federal law is full of such technicalities that empower federal prosecutors but undermine the Rule of Law. For example, if Joe were to sell a small amount of marijuana to an undercover officer, and Joe also had an unloaded gun locked in the trunk of his car nearby, the same "using a gun" charge also would be applied to him.

That is correct. Under federal law, one does not have to use a gun to be charged with using a gun. Just another example of how the government turns the law into a lie.

I also would like to say that the jurors should be ashamed of themselves for going along with such a bogus charge in the first place. I'm sure that Judge Curtis Collier explained how the law worked, but jurors did not have to listen to him, and they certainly did not have to listen to prosecutors.

As I see it, a "judge" who goes along with this kind of charade is not a judge at all, but rather is nothing more than a shill for bad federal rules. I don't know much about Collier, but this case does not give me any confidence in his dedication to justice.

Yeah, a jobs program for out-of-work lawyers. Just what we need....

As the economy continues to crumble, the editors at the NY Times are becoming increasingly unhinged, and while it is hard to watch the greater collapse, nonetheless I must admit that these folks are providing some grim comic relief. An editorial today demands essentially that Congress create a program for out-of-work lawyers to represent poor people.

At one level, I don't mind seeing people receive legal help, and as I watch poor people being railroaded into prison because of the horrible tactics used by prosecutors as well as the hard fact that public defenders are terribly overworked, I agree that at all legal levels, the poor are getting the shaft. Unfortunately, what we see here is just another clueless suggestion from people who are becoming increasingly clueless themselves.

First, and most important, we need to ask why people in a society that supposedly is free actually need as much legal help as is necessary. Notice that the Progressive NYT never asks that question, given that these people actually believe that the "solution" to our problems is the massive expansion of the state. (A day never passes without the NYT editorializing for the growth of government and further intrusion into our lives.)

While the editorial addresses legal help in the civil arena (as though the help poor people get in the criminal area of law is adequate), nonetheless there is a much larger issue here that needs to be addressed, and that is the proliferation of laws and the increasing use of the courts to solve what used to be small disputes or problems. The Washington Post has highlighted a growing practice in Texas for students who misbehave in class to be made subject to criminal law. That's right, criminal law.

No doubt, people like Bill O'Reilly probably are applauding (O'Reilly's "solution" to everything is expansion of the police state), but as I read through this article, I am horrified at the consequences of what the authorities are doing. For example, a fourth-grade boy got into a fight on the bus and here is how the government handled it:

The child was ordered to do eight hours of community service and take classes in anger management and decision-making, at a cost of $370, Smith said. “I’m a single parent,” she said. “Four hundred dollars? I have two other boys.”

Yes, anger management. The ultimate bureaucratic solution to everything. And these people are serious.

At the federal level, laws are expanding and Congress is demanding that even more people go to prison. As the economy goes further into the tank, we are going to see demands for more criminalization of business failures and even more families destroyed as fathers (and sometimes mothers) are sent away for long prison terms because Congress and Obama want to blame anyone but themselves for the unfolding tragedy.

And what does the NYT do in the face of this? Oh, it comes up with a scheme to employ unemployed law school graduates. Yeah, that will work.

The Wall Street Journal and federal criminal law

Those of us who believe that federal criminal law is itself a crime are not surprised by this recent article in the Wall Street Journal. Federal authorities have eviscerated the old mens rea provision of criminal law -- that the person in question intended to commit a crime -- and replace it with, frankly, legal terror.

I had a similar piece in Regulation last year. Watching these vicious animals called federal prosecutors is very difficult if one has even a shred of humanity. Prosecutors can charge and convict anyone of their choosing, and they love to see people as nothing more than prey to be hunted down and destroyed. THAT is the American legal system, and there is none other.

Roger Roots on The Federal Rules of Criminal Procedure

Roger Roots, who has both a law degree and a Ph.D., has written what I believe to be one of the most insightful and important articles on federal criminal law that I have read in a long time. The article, which appears on Lew Rockwell's site (January 4), lays out just how federal authorities stack the deck -- and call it law.

I recently obtained the latest edition of West’s Criminal Code and Rules, the book containing the rules you need to know if you are ever accused of a federal criminal offense. The book is updated every year, and each new edition supersedes the prior edition. It gets worse every year.

The West’s edition now runs to more than 1600 pages, with abridgments and supplements. In addition to the Rules of Criminal Procedure, the book contains selected federal criminal statutes, the Federal Rules of Evidence, the Federal Rules of Appellate Procedure, and the Rules of the Supreme Court of the United States. On virtually every page are mechanisms to hurt, humiliate, control and enslave people to the government’s will – all presented within a framework of procedural rules.

In theory, these rules provide an accused with avenues to defend himself. But one can judge a scheme of procedural rules by its fruits, and the codification, growth and expansion of the Federal Rules of Procedure (of which most state procedural codes are virtual copies), have produced the world’s highest incarceration rate – and probably the highest incarceration rate ever registered in any society in human history. Even more significantly, the Federal Criminal Code and its procedural rules and guidelines have almost eliminated criminal trials in many jurisdictions, because most defendants are unable to defend themselves effectively under the rules and simply plead guilty. Such is the lopsided nature of the Federal Rules that they produce untold mountains of printed accusations and claims against individual Americans, while facilitating no more than a few sentences (generally at sentencing hearings) in rebuttal in most cases.

Footnotes are found on virtually every page of the Federal Rules, tracing dates of amendments and the steady progression of punishments over time. In general, Congress has ratcheted up sentences, expanded the limitation periods in statutes of limitations, expanded rewards for those who cooperate with the government, and limited or eliminated avenues for people to challenge government accusations and court judgments. One is hard pressed to find crimes described in the book as misdemeanors, even if they were misdemeanors long ago. Today, most federal crimes are felonies, and conviction brings more or less automatic prison time.

He continues:

The book seems to provide dozens of separate laws exposing unwary Americans to federal prison for simply filling out paperwork wrong. (Note that these provisions are almost never applied to people in government, who regularly fill out paperwork incorrectly.) There are provisions subjecting Americans to life in prison for cocaine possession. There are open-ended provisions which may (or may not) criminalize pouring a cup of coffee on the ground (and thus violating the Clean Water Act) or accidentally catching certain breeds of fish from the oceans. It remains only for a savvy prosecutor to fill in the blanks and add to the list of crimes that Congress may (or may not) have created.

Few people are aware that the Federal Rules (not just of criminal procedure but of civil procedure, appellate procedure, bankruptcy procedure and Supreme Court procedure) are riddled with provisions that grant more time to the government to file and respond to pleadings and briefs, greater privileges of appearance, and greater ease of prosecuting and defending litigation than individuals in the private sector. The governing advisory committees that produce these rules of procedure have offered no explanation for these filing requirement disparities.

In other words, what he describes is a stacked deck masquerading as law. This has been going on for some time, but it now is getting worse. Unfortunately, most Americans don't know -- and don't care -- about what is going on.

This is partly due to the fact that Americans for years have been told that the law favors criminals and is not tough enough to deal with wrongdoers. Writes Roots:

When neoconservatives gripe that federal courts coddle defendants (or would coddle "terrorists"), they are depicting a fictional court system that exists only in their imaginations. In practice, the federal courts overwhelmingly favor the government, and the rules of procedure are loaded with tricks and traps for the poor and the unwary. Anyone who faces the federal government in court knows that these "protections" are elusive, far-fetched, and in some cases illusionary.

Most so-called defense lawyers shiver in fear at the thought of trying to actually "defend" a client from a federal prosecution. Most begin their "defense" by seeking a plea bargain.

Roots also presents this article from New York Magazine, which goes into detail about why criminal defense lawyers are leaving the field, as it is too discouraging for anyone with a conscience. Roots ends with this warning:

What makes the Federal Criminal Code truly despicable is its disguise as a code of fair and equal procedural protections. Indeed, this deception makes West’s Federal Criminal Code and Rules worthy of inclusion among other infamously cruel books of human history. It deserves a place on the shelves next to the Communist Manifesto, Mein Kampf, and Keynes’ General Theory of Employment, Interest, and Money. The Federal Criminal Code documents the advancement of coordinated, systematic scheme of state tyrannical control – with a procedural overlay.

The Criminalization of Making a Bank Deposit

A couple days ago, I wrote about Congressional hearings on the "over criminalization" that seems to be endemic in U.S. "law" these days. One of the "crimes" that has been created in the past few decades and expanded by federal agents has been "structuring," which is another way of describing a simple action: depositing money in a bank. (The slang term is called "smurfing.")

In 1970, tales began to circulate of drug dealers buying cars and houses with suitcases full of cash in an attempt to "launder" the money they had made through illicit deals. (That is, selling a product of which the government disapproves.) Congress, which always advertises itself as being "tough on crime," responded by passing the Bank Secrecy Act that required banks to report currency transactions of $10,000 or more to the government, which then "investigates" whomever made the deposit.

Since people don't like to be investigated (Imagine that!) and treated like criminals by federal officials (Imagine that!), there are times when people will either deposit or withdraw funds under the $10,000 threshold. However, Congress has a law against that, too, the "structuring" law. The idea behind the "structuring" law is that people might have something to hide, such as illegal activity, so the commission of an underlying crime (such as drug dealing) might try to deposit or withdraw money in amounts less than $10,000 in order to avoid detection of their illegal acts.

Unfortunately, federal officials have dispensed with the "underlying crime" reasoning and have decided just to arrest people because they are not depositing all of their money at once. Last year, I wrote about the case against Johnny Gaskins, a North Carolina attorney who had the effrontery to convince a jury not to order the execution of a man convicted of killing a cop. For that "crime" (doing his job as a defense attorney), the "Thin Blue Line" vowed revenge and the feds did their job.

Mr. Gaskins often had been paid in cash and kept the money in a safe in his house, but when he realized that he was a target for robbery, he decided to deposit his money in a bank. Keep in mind that he had reported all of his cash earnings to the IRS and had paid taxes. The money was legal, but because he did not want to have to deal with yet another federal investigation (read that, harassment because he did not willingly give up his client to the executioner), he made a series of deposits of around $9,000 each.

For that, the feds indicted him, and a North Carolina federal jury convicted him. While some people, like columnist Ruth Sheehan of the Raleigh News & Observer were highly critical of the feds, most journalists engaged in their usual worship of federal prosecutors.

The latest news of this madness comes from Baltimore, where the Korean owner of a liquor store was indicted for "structuring" cash deposits under $10,000:

According to the indictment, Park repeatedly made bank deposits from September 2008 to February 2010 in amounts less than $10,000. The deposits were generally made at bank branches in Glen Burnie and Severn for amounts between $8,500 and $9,500.

Prosecutors allege Park illegally deposited a total of $2,150,375 under this structuring scheme.

The newspaper also breathlessly reports that Mr. Park faces up to 40 years in prison, simply for depositing money in a bank. Unfortunately, people really don't understand what is happening, as is expressed in this comment from a reader named Doug Jones from Severna Park, Maryland:

First, the feds do not indict people for a one-time mistake. This guy must have been laundering money.

Second, when someone goes into a bank and plops down more than $10,000 in cash, the bank is required to notify the feds. Therefore, people who launder money, i.e., crooks, will "structure" their deposits to avoid the bank reporting them to the federal government. The crime is attempting to avoid the reporting of the transaction by putting the 10k in the bank piece-meal, instead of at one time.

Third, my understanding is that 98% of people charged federally are convicted. The feds typically do not charge innocent people. I suspect the story just lacks the details of everything this person was involved with.

This falls into the "not exactly" category, as it depends upon one's view of how federal law works. As the great Harvey Silverglate points out in Three Felonies a Day, federal criminal law is written in a way that most of us probably commit federal felonies or do something of which the feds could find a creative way to indict us. That includes the above Mr. Jones (who probably works for the government).

What about people who actually commit the underlying crimes that lead to structuring, people who "structure" precisely because they are wanting to hide criminal actions? Surely the feds will indict them, right?

Uh, ever hear of Elliot Spitzer, the erstwhile "Client # 9" who was involved in prostitution while he was first attorney general and then later governor of New York? It seems that Spitzer made bank withdrawals of less than $10,000 precisely to hide the fact that he was paying money to a prostitution ring, and prostitution is illegal, and to engage in activities with a prostitution ring that is operating over state lines clearly violates federal law.

So, surely the feds threw the book at Spitzer, given he was committing crimes in his own state and also elsewhere, violating state and federal laws. Surely the feds came down hard on the man not only for "structuring," but also for breaking the law, which is ironic, since the media feted Spitzer as a "law and order" guy, a 21st Century Elliott Ness, and he let them down.

Not exactly. No, the feds did nothing. The U.S. Department of Justice, which wants to throw Mr. Park into prison for 40 years because he deposited money in a bank in a way that the feds did not like, completely overlooked Spitzer's transgressions as though they never happened.

Why? I think we know. Some call it "professional courtesy," and some call it hypocrisy. I call it the present state of American "law," in which some are charged and convicted, while others who have the requisite government contacts or wear the appropriate government costumes are given a free pass.

Free Sholom Rubashkin!

This week, Sholom Rubashkin, who was the CEO of what was once the largest kosher meat processing supplier in the world, will be sentenced to federal prison for “financial fraud.” Prosecutors will ask for essentially a life sentence, while a lot of other people, including a number of former U.S. attorneys general, are asking for leniency.

I will go against all of them. Sholom Rubashkin, in my view, does not need “leniency.” He needs to be freed, period, for the man is not a criminal, which is more than I can say for the people who hounded and prosecuted him and destroyed his business, Glatt kosher Agriprocessors of Postville, Iowa. Let me begin.

Rubashkin is a Hasidic Jew, his family having fled the U.S.S.R. after the Nazi invasion. They came to the United States and set up a butcher shop in New York City. After marriage , he and his new bride moved to Atlanta on shlihut to do kiruv (Jewish outreach). At about the same time, Rubashkin’s father started a kosher meat processing business in Postville to better enable Jews living outside of main Jewish centers to be able to obtain kosher meat.

Before Glatt kosher Agriprocessors began to expand its business, Jewish families could only purchase kosher meat from small butchers and specialty stores that catered to Jews. This made things more difficult for Jewish families who did not leave near these kinds of stores, but by expanding the amount of kosher meat for sale, the firm was able to bring kosher meat to regular grocery stores, which was not a small development for jewish families.

Soon, Rubashkin joined his father’s company and the family moved to Postville. As the Jewish Daily Forward declared (more about the Forward later), the Rubashkins literally changed how Jewish people in the United States eat. Like many others who practice Hasidism, the Rubashkins were generous to people in the community, both Jews and non-Jews, and generated a lot of good will as a major employer in that area.

Unfortunately, being successful in the United States these days does not garner praise; it makes one a target of people who specialize in promoting strife and envy. In this Age of Envy and dominance by the state, it seems that the only entrepreneurship that is acceptable is political entrepreneurship, and the Rubashkins did not fall into that category. (Public Choice economists call such political entrepreneurship “rent seeking.”) The Rubashkins made their living from processing meat, and that meant slaughtering animals according to Jewish dietary laws that are thousands of years old, and that attracted the attention of the People for the Ethical Treatment of Animals.

First, PETA charged in magazine articles that the Rubashkin plant was a veritable house of horrors, something out of an Upton Sinclair novel. (Notice, I say that The Jungle is a novel, since it was written as socialist propaganda and had as much veracity as did PETA’s charges.) The organization charged that the place was a filthy hellhole with unsanitary (at best) facilities where animals were tortured and worse, and filed a complaint with the U.S. Department of Agriculture.

Second, while it was clear that PETA’s charges were false, nonetheless the organization managed to put the kosher meat facility in the public eye, thus making it a bigger target for federal authorities. The next organization to go after Glatt kosher Agriprocessors was the United Food and Commercial Workers Union, which had been unsuccessful in organizing the plant. Part of the problem was its workforce, and anyone who has been near a meat or chicken processing plant will know that a lot of immigrants from Mexico and Central America work there, as well as Asian immigrants.

Work in these plants is hard and low-paying, but low-skilled workers nonetheless are able to band together and make enough money to live in the United States and send money back home to relatives. However, they clearly were not candidates for union membership, which not only enraged the union leadership, but also caught the attention of liberal Jewish groups that don’t much care for the ultra-orthodox Hasidim, including the publishers of the Jewish Daily Forward.

The Forward ran a number of articles (sourced by the UFCW, of course) that claimed Rubashkin was hiring not only illegal immigrants, but also was exploiting child labor. At the same time, political conservatives such as Wesley Pruden of the Washington Times, were mounting a huge campaign against illegal immigration, and the Bush administration decided to make an example out of Agriprocessors and staged an extremely public raid on the facilities in 2008.

Keep in mind that the government went full-scale paramilitary on its raid, complete with a Blackhawk helicopter, and heavily-armed police carrying submachine guns and other weapons. The raid was no surprise; in fact, days earlier, Rubashkin knew the raid was coming and personally contacted the federal authorities and promised to cooperate with them.

Not surprisingly, the Bush administration did things its way, and its way was to be as brutal as possible. More than 300 workers were rounded up, denied legal representation, and forced to plead guilty to a number of charges. They were imprisoned for up to five months, and then deported. The feds then seized all of the company’s records and went on a fishing expedition.

Ultimately, the government charged Rubashkin with financial fraud, claiming that the company had faked invoices and other financial documents in order to inflate its financial assets in order to qualify for larger loan amounts from First Bank of St. Louis. In fact, Rubashkin’s firm had overstated its revenues, but that is much more common than one might think and generally does not land one in a criminal trial.

I will give an example that most readers can understand, a personal example. Last year, we refinanced our mortgage, and an appraiser came to our house to see if we would qualify for the best deals. There was a “magic” number for our house’s value, and he asked me at least twice if I believed that our place qualified.

My answer always was the same: “I have no idea. That is up to you.” Now, I was hoping that he would see to it that our house met the so-called value threshold, although I had serious doubts that we actually could sell our house on the open market at that price, and I was not going to say anything that legally could get me into trouble later on. In fact, during the refinancing boom of the last decade, appraisers generally overstated the market value of houses so that the owners or perspective buyers could qualify for certain loans.

Was this fraud? Legally, it was. How far did the fraud go, and who perpetrated it? It would determine who the feds wished to target before that decision could be made. For example, if the feds wished to crucify the homeowner, they can get the appraiser to testify and the homeowner lied to them, and, no doubt, the bankers would testify that they never would have approved the jumbo-sized loan had not the homeowner or perspective buyer defrauded them.

That would be a lie, but federal prosecutors regularly suborn perjury, something I have documented in dozens of articles over the years. For that matter, if the feds wished to nail the bankers or the appraisers, they would “convince” the others in that chain to testify to whatever would be the most damning testimony. It would not matter as to what really happened, as federal prosecutors famously create their own reality, or at least a reality that the courts, the political classes, and the media will swallow.

In the case of Agriprocessors, the loan was a revolving $35 million payout that enabled the company to keep a steady cash flow, meet payroll, and pay its bills. The firm was not arrears in payment, and all indications were that the company would be able to meet its obligations to the bank.

Because the federal courts have eviscerated the ancient doctrine of mens rea, which means that prosecutors needed to prove that a person charged intended to commit a crime, intent to defraud no longer matters. In fact, one can argue that Agriprocessors did not “defraud” First Bank at all, and there are indications that the bank knew that Agriprocessors was overstating its revenues and underestimating its costs (something the federal government does every year, but never results in anyone’s arrest), but did not care because its good customer paid its bills on time. The company was profitable, and so was the bank.

That was not all, according to the feds. Apparently, certain suppliers of cattle and other things are required by a little-known (and almost never enforced) law from the 1920s to be paid within 24 hours. No one had complained about the late payments, to my knowledge; instead, it was yet another of those “legal technicalities” that federal prosecutors use when they want to convict someone on something.

I won’t dwell on Sholom Rubashkin’s trial, except to say that there were some highly-prejudicial aspects that should be mentioned. Certainly, Hasidim are to people in Iowa what Old Order Amish might be to people from New York City: alien creatures from outer space. Hasidic Jews live a separate life, although it is clear to many people in Postville, Rubashkin, his family, and his company were heroes and important to the community and its well-being.

None of that mattered to the jury located in Sioux Falls, South Dakota, where the trial was held, and federal jurors quickly returned guilty verdicts. According to the New York Times, the damning testimony came when…

Former Agriprocessors employees testified that Mr. Rubashkin had personally directed them to create false invoices to show First Bank, which is based in St. Louis, that the plant had more money flowing in than it really did.

Knowing how federal prosecutors operate, I have no idea if any of those witnesses told the truth. Federal prosecutors are well-known for suborning perjury and are especially known to do it in high-profile cases, such as this one. One can be sure that the people who testified was told that if they did not testify according to a certain script, then the feds would levy fraud charges against them, too. (If the readers wishes to gain some insight into how federal prosecutors lie in order to gain testimony they want, read this link to what the feds did in the trial of Jeffrey Skilling of Enron. Because no federal prosecutor ever has to worry about being charged with suborning perjury, one can bet that this kind of behavior is the norm, not the exception, among U.S. attorneys.)

On another front, the State of Iowa originally charged Rubashkin with more than 9,000 counts of child labor law violations and he recently stood trial. Even after prosecutors amended the charges to just 83, they could not win a single conviction. (While state courts are known to be corrupt, unlike the federal courts, evidence generally matters in state trials.)

Unfortunately, there is more. After the feds originally charged Rubashkin with fraud charges, the prosecutors argued that he was a “flight risk” and should be imprisoned. Their reasoning? Rubashkin is a Jew and the nation of Israel grants expedited citizenship to Jews around the world. They further stretched the story by pointing out that Rubashkin kept about $20,000 in cash, as well as his passports and other documents in a lockbox in his home.

There are two aspects to that story. First, most of us keep some cash and papers in lockboxes, and we are among that “criminal” crowd that likes to keep these things in a single place just in case we need them. Second, one of the Rubashkin children is autistic, and the family knew they needed to keep certain papers secure in a place where that child would not be able to find and disturb or scatter them, not realizing what they were. Obviously, this is something that would affect literally every Jew charged with a crime, given that the vast majority of them are considered to be “citizens” of Israel, even if very, very few of them actually would do such a thing. (For that matter, anyone with a passport and cash would be considered a “flight risk” to somewhere, given those standards.)

There is another, more troubling, aspect of this case to me, and it goes to the heart of federal criminal law and how it is enforced. Bernie Madoff was guilty of fraud; he ran a Ponzi scheme, and no Ponzi scheme – including those run by the government – can survive over time. Madoff knew that sooner or later, his investors would lose their money, and that is exactly what happened.

Fraud goes to intent. One defrauds someone else if one purposely charts a course of action that will negatively affect the other party, while promising to give that party positive results. For example, if I borrow money in order to start a business, but then use those funds instead for a Caribbean cruise, that is fraud.

However, Sholom Rubashkin intended to pay back his loans, as he always had done, and he intended his business to continue to provide kosher meat to people who wanted to buy it. He had no plans to abscond with the money he borrowed, with people showing up to work one day and finding the place padlocked and Rubashkin and his family on a secret cruise to Israel.

There was no fraud in the historic sense of the word. If there was misrepresentation of his funds, that was a civil and contractual matter between Agriprocessors and First Bank, and, let’s face it, had the feds not invaded his plant and shut down the operation, Agriprocessors still would be in operation today and most of us never would have heard of Sholom Rubashkin.

To understand federal criminal law today, one must remember that it is something far removed from the roots of what criminal law used to be in the United States. In the past, a crime designated real harm done by one party to another, whether it was robbery, murder, assault, rape or something in which it was obvious that one party clearly injured another.

Today, however, most federal criminal law falls into the “public welfare” category, in which a person charged has failed to perform a certain so-called public duty, or has failed to follow a set of rules which often are arbitrarily set up and even more arbitrarily administered. Not surprisingly, we have seen federal criminal law put to an increasing number of political applications. The legal language might be similar to what it was in the past, but now it is describing certain things that might have political meaning, but describe simple disobedience from the federally-prescribed way of doing things.

The irony is that the feds are calling this a huge “fraud,” but the only people really being defrauded are the victims of this federal assault. Let us look at the real damage that the feds have inflicted upon people:

• A thriving business has been shut down, and hundreds of people now are out of work, and a town is reeling economically and financially;
  

• A woman will be deprived of her husband for many years, and a number of children will not have a father;

• First Bank was heavily damaged by this action in a way that never would have been the case had the feds not decided to “rescue” the bank from its “fraudulent client;”

• Kosher meat is more expensive and much less available than it was before the government destroyed Glatt.

No doubt, federal authorities consider this whole affair to be a great victory, and they are telling the rest of us how they are protecting us from fraudsters and exploiters. In truth, the real fraudsters and exploiters here are the federal agencies that took part in this action, and the various groups that were cheerleaders for it.

Literally, thousands of people were harmed by what the government did. However, no one from the federal government lost a dime.