The BLT: The Blog of Legal Times

Former In-House Counsel of Buddy's Carpet Gets Prison for Tax Fraud

The former Cincinnati-based in-house counsel for the retail chain Buddy's Carpet was sentenced Thursday to 18 months in federal prison for his role in a tax fraud scheme, the U.S. Justice Department said.

A jury in 2008 found the lawyer, Alan Koehler, 50, guilty of conspiracy and of assisting in the filing of a false federal income tax return. Koehler, indicted in 2005, was sentenced in the U.S. District Court for the Southern District of Ohio. The former owner of the company, Leif Rozin, 68, was sentenced to about a year in prison.

Prosecutors had sought a 96-month prison sentence, saying Koehler created a tax loss of hundreds of thousands of dollars through the purchase several sham insurance policies from an insurance company in the U.S. Virgin Islands. Government lawyers said the purpose was to provide tax deductions to the company and to the owners.

Koehler, licensed to practice law in Ohio, withheld key facts from investigators after the criminal investigation was disclosed, according to prosecutors. More on the case here from DOJ.

Koehler’s lawyers, Michael Krumholtz of Dayton’s Bieser, Greer & Landis and Dayton solo Lawrence Greger, urged Judge Susan Dlott to sentence Koehler to probation with a condition of house arrest.

“The felony record will remain with him the remainder of his life,” Koehler’s lawyers said in court papers filed in August. “Every application that calls for a response to the question, ‘have you ever been convicted of a felony,’ will yet again reinforce the seriousness of the offense and will continue to promote respect for the law. In some ways this lifetime appellation is more than just punishment for the offense, since it is in effect a life sentence.”

Dlott also ordered Koehler to serve three years of supervised release and pay a $20,000 fine.

The Morning Wrap

Mideast Unrest: Thousands of Egyptian antigovernment protesters continue clashing with law enforcement authorities in Cairo. The protesters are calling for an end to President Hosni Mubarak's 30-year rule. President Obama is urging Egypt not to use violence against the protesters. At least two French journalists have been arrested in Cairo.

Back on the Ballot: The Illinois Supreme Court unanimously reversed a lower court ruling that knocked Chicago mayoral candidate Rahm Emanuel from the ballot, The New York Times reports. The seven justices sharply questioned the lower appellate court ruling, saying the standard for determining a candidate's residency had been resolved for 150 years. Until this week. The Chicago Tribune has this report.

World's Largest: DLA Piper's planned merger with Australian alliance partner DLA Phillips Fox will make the firm, with more than 4,000 lawyers, the largest in the world in terms of the number of attorneys, The American Lawyer reports.

Executing Warrants: The FBI has executed more than 40 search warrants in the United States in the agency's probe of a group of computer hackers who invaded corporate Web sites last year amid the backlash against WikiLeaks, The New York Times reports.

Linking Up: Attorneys from Wilson Sonsini Goodrich & Rosati and Cooley in Palo Alto will help LinkedIn Corp. become the first of several Silicon Valley-based social networking companies to go public.

Let's Meet Up: The Providence Journal reports: "A Facebook encounter led to a meeting, a beating, a robbery and a machete-wielding chase early Friday morning."

Jones Day Adds Two Labor & Employment Lawyers from O’Melveny

Jones Day has brought on two O’Melveny & Myers attorneys for its labor and employment practice in Washington. Thomas Jerman, who chaired O’Melveny’s labor and employment practice in Washington, has joined the firm as a partner, and Aparna Joshi will join the firm on Feb. 14 as of counsel.

Jerman’s practice focuses on representing employers in labor and employment disputes, particularly in the airline industry. He has advised clients on employment class actions; representation proceedings and carrier interference cases before the National Mediation Board; federal court litigation under the Railway Labor Act; system board of adjustment cases; collective bargaining negotiations; and mergers and acquisitions. Among the clients he has represented are U.S. Airways Inc. and United Airlines.

Joshi represents employers in labor arbitrations, mediations, negotiations and litigation under the Railway Labor Act as well as individual and class actions under Title VII, the Americans With Disabilities Act, the Family and Medical Leave Act, ERISA and various state laws. She has represented such clients as FedEx Ground Package System Inc, Western Spray Painting Inc., U.S. Airways Inc., Exelon Corporation Inc., and Options Clearing Corp.

Financial Crisis Archive Stirs Fear of Class Actions

The commission set up by Congress to dig into the U.S. financial crisis is releasing more than its final report today, as it begins putting online a trove of investigative documents.

Lawyers for companies at the center of the crisis have wondered what might become of the documents, given that, as The National Law Journal reported in August, they had been internal to the companies and could be of interest to the plaintiffs’ bar. Many of those companies have already been battling proposed securities class actions.

The archive appears on the Web site of the Financial Crisis Inquiry Commission, and hundreds of documents are already up, including testimony and court filings. At a news conference this morning, Phil Angelides, the commission’s chairman and a former California state treasurer, said the commission would be posting more, including “research and investigative documents, audio and transcripts.”

Lisa Rickard, president of the U.S. Chamber’s Institute for Legal Reform, criticized that plan. “The commission’s final report and its pledge to post raw materials — apparently including information obtained from companies as well as other government agencies — is an astounding abuse of process that would effectively create a government-sanctioned Wikileaks,” Rickard said in a formal statement today.

Angelides did not address those concerns during the news conference, and a spokesman did not immediately respond to a request for comment this afternoon.

Last year, U.S. Rep. Darrell Issa (R-Calif.) took aim at one of the commission’s members, Byron Georgiou, and a staff member, Christopher Seefer, because they are on leave from plaintiffs firm Robbins Geller Rudman & Dowd. The firm handles some securities litigation. Georgiou is of counsel there, while Seefer, who was the commission’s director of investigations, is a partner.

At the time, Angelides responded that there was no conflict of interest because commission policies prohibit staff members from disclosing information the commission hasn’t itself released.

Blumenthal, Lee Join Senate Judiciary Committee

The committee that reviews President Barack Obama's judicial and Justice Department nominees and that is considering patent-law changes this year has at least two new members.

Sen. Richard Blumenthal (D-Conn.) will take a seat on the Senate Judiciary Committee, a spokesman for Blumenthal confirmed today. A first-year senator, Blumenthal was most recently the attorney general of Connecticut, and he served as the U.S. attorney for Connecticut in the late 1970s.

Blumenthal will join the committee as another Democrat departs it. Sen. Ben Cardin (D-Md.) said today that he’s leaving the committee to join another, which he didn’t name. At a committee meeting today, he thanked his chief counsel, Bill Van Horne, and pledged to stay involved in judiciary matters.

“We’re going to find ways that we can continue to work with the committee on issues as we move forward,” Cardin said.

On the Republican side, Sen. Mike Lee (R-Utah) will join the committee, according to a news release from Senate Republican leaders. A freshman senator and former Howrey partner, he has been rumored as a potential committee member since before his election because of his vocal opposition to past Supreme Court decisions expanding congressional power.

The selection of Lee is drawing scrutiny from liberals, who note his opposition to many New Deal and Progressive-era initiatives including federal rules about child labor. “Placing Mike Lee in charge of overseeing the Constitution is a bit like putting Dick Cheney in charge of hunting and gun safety,” Ian Millhiser wrote on the Think Progress blog.

Curt Levey, executive director of the conservative Committee for Justice, welcomed Lee. “His experience as both a constitutional lawyer and clerk for Supreme Court Justice Samuel Alito gives him the ideal background for the job,” Levey wrote in an e-mail. “And Lee’s keen understanding of the Constitution’s role in limiting federal power grabs and runaway spending makes him the perfect fit for the times.”

Lee told The Salt Lake Tribune that he is excited about joining the committee. "I’ve got a real intense interest with the federal courts,” he said.

His addition means the committee will have a ratio of 10 Democrats to eight Republicans, a tighter margin than the 12-7 ratio that existed after then-Sen. Arlen Specter (Pa.) switched to the Democratic Party in 2009.

Also today, the committee revealed which nominees it will hear from in its first confirmation hearing of the year. Among them is Caitlin Halligan, picked for the U.S. Court of Appeals for the D.C. Circuit.

Updated at 4:55 p.m. with additional reporting.

The Morning Wrap

On Campus, Sitting Under A Tree: A study and ranking of 200 law school Web sites found that 65 included photos of students in or around trees, The National Law Journal reports. The study was authored by Georgetown University Law Center Associate Law Librarian Roger Skalbeck and Yale Law School Librarian for Emerging Technologies Jason Eiseman. The study concluded photos of students under trees and pictures of Supreme Court justices, moot court competitions and students sitting class aren't necessarily useful.

Stocking the Courts: President Barack Obama on Wednesday nominated to the U.S. Court of Appeals for the 4th Circuit a federal district judge who played a key role in challenging President George W. Bush's indefinite detention program, The BLT reports. Judge Henry Floyd of South Carolina's federal district court gained national attention for his 2005 ruling that said Bush exceeded authority when he held José Padilla without charges.

Just Pretending: A law graduate who pulled a knife on a store clerk will remain without a license to practice despite having finally passed the bar exam after eight attempts. The National Law Journal says The Supreme Court of New Hampshire ruled the law school graduate ineligible for admission because of his criminal record and because he had not repaid nearly $140,000 in student loans.

Thinking About Death: The Washington Post reports the alleged Tucson gunman, Jared Loughner, researched Web sites covering lethal injection, solitary confinement and political assassinations in the days and weeks leading up to the shooting. The evidence could help prosecutors build a case on federal murder charges that could carry the death penalty.

Obama Nominates Judge Who Ruled in Padilla Case

President Barack Obama on Wednesday nominated U.S. District Judge Henry Floyd for a vacancy on a federal appeals court, selecting a judge who had a key role in challenges to President George W. Bush's system of indefinite detention.

Floyd, of South Carolina, gained nationwide attention for a 2005 ruling in which he wrote that Bush exceeded his authority when he held a U.S. citizen, José Padilla, without charges. Padilla was arrested at Chicago’s O’Hare International Airport in 2002, and the Bush administration detained him as an “enemy combatant,” which Floyd ruled it could not do.

“The Court finds that the President has no power, neither express nor implied, neither constitutional nor statutory, to hold Petitioner as an enemy combatant,” Floyd wrote in the 23-page opinion. He added that Bush may seek that power from Congress.

The decision was a rare judicial rebuke of executive authority in wartime. Although the U.S. Court of Appeals for the 4th Circuit later reversed the decision, the administration charged Padilla in civilian court and a jury convicted him of terrorism-related charges.

In another high-profile case in 2005 and 2006, Floyd ruled the government could detain a Qatari national, Ali Saleh Kahlah al-Marri. Prosecutors said al-Marri was a material witness important to the investigation of the Sept. 11, 2001 terrorist attacks. In 2009, after the Obama administration transferred his case to federal court, al-Marri pleaded guilty to conspiracy.

Obama nominated Floyd to the 4th Circuit. As is usual for nominations, he didn’t go into specific reasons for the choice.

“Throughout his career, Henry Floyd has demonstrated unwavering integrity and a firm commitment to public service,” Obama said in a news release. “I am proud to nominate him to serve on the United States Court of Appeals.”

Floyd’s nomination is an unusual selection of a nominee who was previously appointed by a president of the other political party — in this case by Bush, who nominated Floyd in 2003.

The earlier nomination received widespread support. Floyd had the backing of Sen. Lindsey Graham (R-S.C.) and then-Sen. Fritz Hollings (D-S.C.), and the Senate confirmed him on an 89-0 vote. The State of Columbia, S.C., in 2003 described Graham and Floyd as old friends from Pickens, S.C.

In a statement Thursday, Graham said called Floyd a “solid choice” for the 4th Circuit. “I’ve known him for years and know he is a respected lawyer who understands the role of a judge. He compiled an outstanding record as a federal district court judge and is well-prepared for the responsibilities of the appellate court.”

Floyd was a Democratic state legislator in the 1970s and he was in private law practice until he became a state judge in 1992. “It’s always been my ambition to try some really good and complex cases, and most will be in federal court,” Floyd said in 2003, according to The State.

The Richmond, Va.-based 4th Circuit has jurisdiction over cases in the Carolinas, Maryland, Virginia and West Virginia. He would be one of three South Carolina-based judges on the 15-seat court, and Obama’s fifth appointee, if confirmed.

Updated Jan. 27 with Graham's statement.

Patton Boggs Posts Slight Uptick in Revenue, Profits

Patton Boggs’s gross revenue was relatively flat in 2010, but the firm posted upticks of roughly 5% in revenue per lawyer and profits per partner, according to figures released by the firm today.

Patton Boggs saw its RPL climb from $630,000 to $659,000 last year—an increase of 4.6%. PPP went from $840,000 to $884,000, marking an increase of 5.2%.

Because the Washington firm’s gross revenue climbed by just 1.6% to $337.3 million last year, the increases to RPL and PPP came because there were fewer lawyers at the firm. In 2010, Patton Boggs reported a net loss of 15 lawyers and 10 partners, dropping to 527 and 116 , respectively.

Firm managing partner Edward Newberry said that the firm’s increases came as a result of “steady” showings in the firm’s largest practice: litigation, which accounted for 42% of the firm’s revenue. Newberry said that the firm’s corporate practice, which had been slow for the last two years, saw a “sharp increase” in the last quarter of 2010.

Despite the lag in regulatory work that many firms have seen in the past two years as the Obama administration and Congress failed to implement massive regulatory overhauls, Newberry said that the firm has seen “strong” performances in its regulatory practices. He highlighted the firm’s financial services, technology, communications and energy regulatory practices as examples. Earlier this month, Patton Boggs made a splashy hire for its infrastructure practice in Richard Ornitz, who headed DLA Piper’s American infrastructure practice. Ornitz joined Patton Boggs’ New York office.

But the real performer, Newberry said, has been the firm’s lobbying practice. That practice was aided by the June acquisition of the Breaux Lott Leadership Group. According to the 2009 Influence 50 survey, The National Law Journal’s annual ranking of lobbying shops by revenue, the bipartisan firm led by former Sens. John Breaux (D-La.) and Trent Lott (R-Miss.) brought in revenues of $11.2 million. The Breaux Lott Leadership Group’s clients included Chevron USA Inc., Citigroup, Diageo, FedEx Corp., Goldman Sachs Group and a host of others. Patton Boggs’ existing lobbying practice has such clients as AT&T Services Inc., the Association of American Railroads, Bloomberg L.P., Bristol-Myers Squibb Co., Burger King Corp. and the city of Los Angeles.

“Our lobbying group was up over the previous year before the addition of the Breaux Lott Group,” Newberry said. “But that group’s strong performance was added to the top of that.”

Newberry said that the firm has also seen upticks in its realization rate of bills sent to clients. He said that while the firm is still “just shy” of its historical averages, last year’s realization rate was “better than the previous year.”

As for the coming year, Newberry said that the firm plans to make hires in a number of practices, including in its litigation and public policy practices. He said that continuing to increase the firm’s presence in New York is a “top priority.” The firm has 22 lawyers in New York.

“We feel we had a very solid year in 2010 and are positioned to have another very solid year in 2011,” Newberry said.

Following a change in our methodology for the 2011 Am Law 200, Patton Boggs’ 2009 numbers have been recalculated to reflect a full-year head count. All year-on-year percentage changes are based on those recalculated numbers.

Deputy AG James Cole Appoints Front Office Lawyers

The Justice Department's deputy attorney general, James Cole, announced the appointment today of two front-office lawyers, naming Stuart Goldberg as his chief of staff and Lisa Monaco as the principal associate deputy attorney general.

Monaco, a former federal prosecutor who served on the Enron Task Force, had been serving as acting principal associate deputy attorney general since 2010. She was chief of staff to FBI Director Robert Mueller III before joining the deputy attorney general’s office.

Goldberg has served since 2005 as the first assistant U.S. attorney in the U.S. Attorney’s Office for the District of Maryland. Goldberg supervised more than 85 federal prosecutors. Goldberg began his career at DOJ as a trial attorney in the department’s Public Integrity Section in 1988. Before government service, Goldberg was a civil litigator at New York-based Roger & Wells, which merged with Clifford Chance in 2000.

“Lisa and Stuart are veteran career prosecutors who have served the department in a number of capacities over the years and I am grateful that they will continue their service in the Deputy Attorney General's office,” Cole said in a formal statement this afternoon. Cole said Monaco and Goldberg have “unrivaled commitment” to the department and will be “key assets” in protecting Americans and in ensuring the fairness of financial markets.

An Akin Partner’s Native American Mishap

What happens when a Big Law partner spouts off on a blog on issues that may offend some of the firm’s clients? At Akin Gump Strauss Hauer & Feld, it means a flurry of apologies and a rethinking of the firm’s social media policies.

According to The Careerist, an online sibling of The National Law Journal, the trouble began when Paul Mirengoff, a Washington-based employment partner at Akin, posted his thoughts on the memorial service for the victims of the recent shootings in Tucson, Ariz. In particular, Mirengoff criticized the prayer delivered by Carlos Gonzales, a member of an Arizona Native American tribe.

Mirengoff wrote on the conservative blog Powerline, “It was apparently some sort of Yaqui Indian tribal thing, with lots of references to ‘the creator’ but no mention of God. Several of the victims were, as I understand it, quite religious in that quaint Christian kind of way (none, to my knowledge, was a Yaqui). They (and their families) likely would have appreciated a prayer more closely aligned with their religious beliefs.”

Usually law firms don’t mind when their lawyers post their thoughts online. But in this case, Akin happens to have a large Native American practice.

The firm fired off several apologies and James Meggesto, a partner in the Native American practice at the firm, posted the following on Akin Gump's Web site:

As an enrolled member of the Onondaga Nation; as an attorney who has dedicated his life and law practice to the representation of Indian tribes, tribal organizations, and tribal interests; and as a partner in the American Indian law and policy practice at Akin Gump Strauss Hauer & Feld LLP, I was shocked, appalled and embarrassed by a recent Web posting by another Akin Gump partner, Paul Mirengoff....As soon as I and the firm became aware of this posting, the firm took immediate action to deal firmly with this unfortunate situation. Accordingly, Bruce McLean, chairman of the firm, issued the following statement: “We sincerely apologize for the blog entry posted by Akin Gump partner Paul Mirengoff on his personal blog, powerlineblog.com. Akin Gump is neither affiliated with, nor a supporter of, the blog. We found his remarks to be insensitive and wholly inconsistent with Akin Gump’s values.

Mirengoff also issued an apology.

The Careerist reports that the firm is now reviewing its social media policy. Read the full story here.