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At least tell him that he is a sacrificial lamb

By Tom Kirkendall

Regular readers of this blog are familiar with the technique that federal prosecutors used in the post-Enron era to score easy convictions against businesspeople.

Threaten to go Arthur Andersen on a company, offer to let the company off the hook under a deferred prosecution agreement in return for offering up an executive or two as sacrificial lambs to be prosecuted, and then bludgeon the individual?s career, life and family into bits under the sledgehammer of the DOJ?s prosecutorial power.

Jamie Olis was arguably the first of those sacrificial lambs, and there were plenty in connection with the Enron-related prosecutions. Heck, the DOJ is even getting ready to tee up a re-trial of one such case this September.

But check out this example of DOJ brazenness that Ellen Podgor passes along. The DOJ enters into a deferred prosecution agreement with American Express and, as a part of the deal, has AE enter into a side-letter agreement that, absent the DOJ?s prior consent, prohibited AE executive Sergio Masvidal from obtaining employment with an AE unit or any company that bought the AE unit.

Given the DOJ?s heavy-handed approach in such matters, that part of the deferred prosecution agreement is not all that unusual. But one aspect of this particular deal was.

The DOJ didn?t bother to disclose the side-letter to either Masvidal or the District Court that approved the deferred prosecution agreement.

Masvidal eventually found out about it when he was denied employment by the company that bought the AE unit. So, he sued the DOJ, which eventually led to the DOJ?s issuance of the letter below, which admits that the DOJ did not disclose the side-letter to the District Court on purpose and that the DOJ?s investigation ?did not reveal any evidence that Mr. Masvidal had committed any criminal offenses or violated any banking regulations.?

Now, do you still have any doubts that the same bunch was capable of this and this?

 

 

DOJ's Clearing Letter in Sergio Masvidal Case

Full post as published by Houston's Clear Thinkers on July 07, 2010 (boomark / email).