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Pensions and Restitution
Being a white-collar defendant is very expensive. Just the cost of putting up a serious defense is more than most business executives can bear, and whether companies must pay their ex-employees' legal fees has been hotly litigated in the much discussed KPMG tax shelter case in the Southern District of New York. After Judge Lewis Kaplan ruled that the government had violated the defendants' Fifth and Sixth Amendment rights by using the threat of prosecution to pressure KPMG to cut off the defendants' legal fees, United States v. Stein, 435 F. Supp. 2d 330, 374 (S.D.N.Y. 2006), the ongoing KPMG saga has focused on whether the defendants could force KPMG to pay their fees and the appropriate procedure and forum for resolving that question, or, conversely, whether dismissal of the indictment is the only appropriate remedy.
Meanwhile, an important en banc decision of the Ninth Circuit addresses the financial impact on individuals at the other end of the criminal process: whether pension trust funds may be reached to satisfy a criminal judgment of restitution.
The Novak Decision
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