Criminal Law

Part 1: Criminal Case Brief
Name of case
U.S. v. Madoff, 08-MAG-02735
It should be noted that Bernard Madoff’s scandal attracted several lawsuits. Some of the main cases include SIPC v. Bernard L. Madoff Investment Securities, SEC v. Madoff, and U.S. v. Madoff. This discussion will focus on U.S. v. Madoff, 08-MAG-02735.
Year the crime was committed
Being a Ponzi scheme where investors had invested significant amounts of money over a long period of time, it is estimated that Madoff commenced the fraud in the 1980s. Indeed, in the words of Henshaw (2014), “investigators believe that Madoff’s fraudulent activities extend back to perhaps the early 1980s, and it is possible that his firm was never really a legitimate business” (109).
Place the crime was committed
Investors into Madoff’s investment company came from all over the world and from as many as 136 countries (Cohn, 2018). In essence, a significant percentage of the said victims came from the U.S. New York City, however, was the principle place of business for Bernard L. Madoff Investment Securities.
Who was the perpetrator?
The perpetrator of this investment scandal, which has been branded one of the largest Ponzi schemes in history, was Bernard Madoff. In addition to being the founder of the investment company that served as the frontage of the scam (i.e. Bernard L. Madoff Investment Securities LLC), Madoff was also the company’s chairman.
Who was the victim?
Madoff’s victims included thousands of investors. By some accounts, “as many as 37,000 people…” had invested in Bernard L. Madoff Investment Securities (Cohn, 2018). Other victims included a number of foundations and charities.
List the elements of the crime
The apparent elements of the crime in this case are actus reus (criminal act), mens rea (criminal mind), and causation. When it comes to actus reus, Dauglas, Burgess, Burgess, and Ressler (2011) point out that “before a person may be convicted and punished for a crime, the prosecution must present evidence that the person (acting as a principal, accessory, or accomplice) committed a criminal act as defined by statute” (48). In the case of Madoff, he pleaded guilty to all charges leveled against him during his appearance in a plea proceeding. Madoff was charged with 11 federal crimes including, but not limited to, money laundering, wire fraud, investment adviser fraud, securities fraud, and perjury.
When it comes to mens rea, there has to be criminal intent. According to Henshaw (2014) following a house call by the FBI, Madoff was asked by Agent Theodore Cacioppi whether he perhaps had any innocent explanation concerning the purported Ponzi scheme he had presumably been running. Madoff’s answer was short: “there is no innocent explanation” (Henshaw, 2014, p. 302).
Lastly, with regard to the element of causation, Klotter (as cited in Dauglas, Burgess, Burgess, and Ressler, 2011) points out that “for one to be guilty of a crime, his act or omission must have been the proximate cause thereof” (49). Being the key participant in the scandal, Madoff engaged in criminal acts as has been highlighted above (see actus reus) and was fully aware that he was running a fraudulent enterprise – which means that his conduct was effectively the cause of those crimes for which he was charged.
What penal code was violated?
18 USC Ch. 47
Explain the punishment attached to the offense.
All the 11 charges Madoff was charged with carried a maximum sentence of 150 years. The term consisted of “20 years on each of Counts 1, 3, 4, 5, 6, and 10, 5 years on each of Counts 2, 8, 9, 11, and 11, and 10 years on count 7” (Suk, 2017).
One page summary of the incident
Born in 1938, Bernard Madoff rose to become one of America’s best known hedge fund investment managers. At some point, he even served as NASADQ chairman. However, by age 71, Madoff had been found guilty of running one of the largest Ponzi schemes in history. It all started sometimes in the 1980s when by promising investors into his firm high and steady returns, Madoff was able to attract significant deposits worth of client funds – and thereafter falsify trading activities by way of filing false SEC returns and making fraudulent foreign transfers (Henshaw, 2014). Madoff explained his high returns by citing his unique investment strategy known at the time as a split-strike conversion that largely involved the taking of options contracts on blue-chip stocks he had purchased. This approach, he claimed, could deliver returns as high as 20%. According to Henshaw (2014), at the onset, Madoff developed close association with influential and wealth New York businessmen so as to get as many investors as he possibly could. He would then ensure that the returns he purportedly raked in were significant enough to motivate early investors to add unto their initial investment and/or rope in their friends and associates. This approach worked.
In essence, however, Madoff was using funds from new investors to pay off old investors in an undertaking that had all the hallmarks of a pyramid scheme (Henshaw, 2014). In a pyramid scheme, the relevance of recruiting new participants cannot be overstated as it is the new funds injected into the fraudulent company that give the entire scam some semblance to a legit enterprise. Following the aftermath of the 2008 global economic crisis, an unexpected number of investors wished to redeem their investments. Unable to handle the requests, time had finally come for Madoff to own up. He first made a confession to his family members on the nature of business he had been running and later on to a lawyer friend who got law enforcement involved. From there on, it was downhill for Madoff.
Was the perpetrator convicted? If so, what was the sentence?
Yes, the perpetrator was convicted. For his guilty plea “to 11 counts of securities fraud, investment advisor fraud, wire and mail fraud, money laundering, making false statements, perjury, filing false documents with the SEC and theft from employee benefit funds”, Madoff received the maximum prison sentence prosecutors had sought, i.e. 150 years (Suk, 2017).
Part 2: Wrongful Convictions
Introduction
It is important to note, from the onset, that in the criminal justice system, the problem of wrong convictions has been prevalent for a long time. Although the situation is in some instances arrested early enough through eventual acquittal, instances of wrong conviction could be irreversible in some scenarios. This is more so the case when it comes to the death penalty. Founded in 1992, the Innocence Project seeks to exonerate those who have been convicted wrongly. This it does through various approaches such as DNA testing as well as championing for the reformation of the criminal justice system. In an attempt to demonstrate the need for efforts to exonerate persons who have been convicted wrongly in the past, while at the same time seeking to demonstrate the need to embrace strategies means to ensure that there are no future wrong convictions, this text will not only review a wrongful conviction case, but also suggest the various approaches that could be adopted in an attempt to rein in wrongful convictions.
Discussion
In basic terms, wrongful conviction has got to do with the conviction of an individual for a crime he or she did not commit. The fact that an individual was convicted for a crime he did not commit is often discovered as a consequence of subsequent investigations. In the words of Gross, O’Brein, Hu, and Kennedy (2014), “in the past few decades a surge of hundreds of exonerations of innocent criminal defendants has drawn attention to the problem of erroneous conviction” (7231). One such case involved Kirstin Lobato – a woman who spent a total of 11 years and 9 months in jail for a crime she did not commit.
It all begun in 2001 when at 18 years of age, Lobato was attacked by an individual unknown to her. The attack took place at a time when Lobato was living at a Las Vegas motel. Lobato managed to ward off of her attacker (who had the intention of raping her) using a pen knife that she had in her possession (Turvey and Cooley, 2014). It is important to note that although Lobato did not report the unfortunate event to the police, she did tell a number of friends that a black man had attempted to attach her and that she had managed to get away by slashing his groin. Two months later, the lifeless body of a man who later on came to be identified as Duran Bailey was found. The man’s throat had been slashed and his manhood severed. Apparently, one person who had overheard of Lobato encounter notified the police. Lobato was interviewed and promptly arrested by the police. Police utilized her confession of the fact that she had slashed an attacker’s groin months earlier as evidence that Lobato had indeed murdered Duran Bailey (Turvey and Cooley, 2014). The fact that the man had attacked her first and she had retaliated by severing his manhood demonstrated criminal intent. Lobato had presented an alibi for the moment the crime took place. After a jury conviction for first-degree murder, Lobato received a 40-100 years prison sentence for the murder of Bailey.
A new trial was, however, ordered by the Nevada Supreme Court two years later, and in Sept 2006, Lobato underwent a second trial. Despite glaring inconsistencies, like the absence of Lobato’s DNA at the scene and the maintenance of her alibi, Lobato was found guilty of manslaughter – a lesser charge – and sentenced to a jail term of a minimum of 13 and a maximum of 45 years (Turvey and Cooley, 2014). In 2017, Lobato’s defense team managed to make a strong submission to the appellate court indicating that the jury had in both instances erred by not taking into consideration Lobato alibi at the time of Bailey’s death. The other factors that contributed to Lobato’s exoneration include inadequate legal defense, misleading forensic evidence, and false confession (Turvey and Cooley, 2014). The prosecution dismissed the charges thereafter with prejudice.
In the United States alone, there is a significant number of people found guilty of various crimes but later on legally exonerated for lack of evidence. Further, there are also those whose exoneration has not been done formally, but are generally considered to be innocent (at least factually) of the various accusations leveled against them (Leo, 2016). Over time, various organizations have been established with an intention of reducing the number of wrongful convictions. The Innocence Project is one such organization. As Zalman (2017), points out, the policy influence of the Innocence Project has been impressive. Some of the reforms that have been undertaken in this direction include, but they are not limited to, “state laws giving inmates access to DNA evidence; federal grants assisting post-conviction DNA searches; more states enacting exoneree compensation laws; increased compensation for wrongfully convicted federal prisoners..” etc. (Zalman, 2017).
As has been indicated in Figure 1 below, dozens of convictions in the U.S. have been overturned as a consequence of inconclusive DNA evidence. I am of the opinion that more could be done in an attempt to remedy instances of wrongful convictions. Simple reforms to the system could be undertaken in this regard. In addition to efforts like the Innocence Project, police departments can also play an active role in seeking to minimize wrongful convictions. This they could do by, amongst other things, adopting a culture of continuous learning – in which case instances of wrongful convictions in the past are used as learning opportunities to prevent wrongful convictions in the future.
Figure 1: DNA Testimony and the Exoneration of Wrongfully Convicted Americans (Column Five, 2013)
Conclusion
In the final analysis, it should be noted that wrongful convictions impact not only those who are wrongly convicted, but also the entire justice system. With every wrongful conviction, the public faith in the ability of the criminal justice system to dispense justice fairly and in a reliable manner is shaken. Further, wrongful convictions impact public safety. This is more so the case given that convicting an innocent person for a crime he or she did not commit means that the real criminal still roams freely and probably continues to commit crimes. Towards this end, therefore, the relevance of reigning in wrongful convictions cannot be overstated. Winning the war against wrongful convictions will, however, require a multifaceted approach roping in both the justice system and organizations like the Innocence Project. Whereas organizations such as the Innocent Project push for the exoneration of those already convicted wrongly, police departments could embrace approaches that could ensure that no innocent person is sent to jail.
References
Cohn, S. (2018). The Stories of Madoff's Victims Vary Widely, as the Fraud Continues to Unwind 10 Years Later. Retrieved from https://www.cnbc.com/2018/12/10/the-stories-of-madoffs-victims-vary-widely-a-look-10-years-out.html
Column Five (2013). The Path to Innocence for Wrongly Convicted Americans [Digital image]. Retrieved from https://www.good.is/infographics/infographic-the-path-to-innocence-for-wrongly-convicted-americans#open
Dauglas, J., Burgess, A.N., Burgess, A.G. & Ressler, R.K. (2011). Crime Classification Manual: A Standard System for Investigating and Classifying Violent Crimes. Hoboken, NJ: John Wiley & Sons.
Gross, S.R., O’Brein, B.O., Hu, C. & Kennedy, E.H. (2014). Rate of False Conviction of Criminal Defendants Who are Sentenced to Death. PNAS, 111(20), 7230-7235.
Henshaw, J.M. (2014). An Equation for Every Occasion: Fifty-Two Formulas and Why They Matter. Baltimore, Maryland: JHU Press.
Leo, R.A. (2016). The Criminology of Wrongful Conviction: A Decade Later. Journal of Contemporary Criminal Justice, 33(1), 170-176.
Suk, J. (2017). Sentencing Transcript in U.S. v. Madoff. Retrieved from https://h2o.law.harvard.edu/collages/44935
Turvey, B.E. & Cooley, C.M. (2014). Miscarriages of Justice: Actual Innocence, Forensic Evidence, and the Law. New York, NY: Academic Press.
Zalman, M. (2017). Wrongful Convictions and the Innocence Movement. Journal of Contemporary Criminal Justice, 33(1), 212-218.