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In his first argument on appeal, Mullins maintained that the evidence presented at trial was insufficient to convict him on either wire fraud or bribery. With respect to wire fraud, the court found that, while Mullins contended that he merely “expedited time-sensitive contracts” and “did not personally draft proposals or approval contracts,” he in fact “intended to cheat Cook County out of money.” Id. at *4. Mullins' “willful act to receive, deceive, or cheat to cause financial loss to another” occurred when he altered proposals so that they fell under the $25,000 approval threshold, thus making a review by the Board of Commissioners not warranted, and arranged payments for work that was never performed. Id . As to bribery, the Seventh Circuit also found that sufficient evidence existed to uphold Mullins' conviction because “he used his influence corruptly” to alter invoices and receive kickbacks, thus satisfying the requisite elements to prove bribery. Id.

Mullins next suggested that his trial was riddled with prosecutorial misconduct. The Seventh Circuit addressed each instance in turn. First, Mullins argued that his secretary falsely testified that his initials appeared on documents approving the various contracts at issue. However, the court noted that a lay witness's opinion about handwriting was not improper evidence, and, consequently, such testimony was proper. Similarly, Mullins stated that one vendor lied under oath on cross-examination regarding a government threat years earlier to shut down his wife's business that “supposedly came during the government's investigation into public contracts awarded to her business in 2010.” Id. at *2. The vendor denied this allegation when questioned by defense counsel, “leading to the suggestion that [he] was lying.” Id. However, the court noted that the government's clarification of the witness's statement on redirect resulted in properly elicited truthful and sufficient testimony, and therefore such testimony was not perjurious. Next, Mullins argued that the prosecution intimidated a different vendor to convince him to testify, which the court swiftly rejected. The court stated that, while the vendor admitted the pre-trial investigation was “gruff” and “intimidating,” the witness also admitted that the deferred prosecution agreement he obtained was the primary motivation for his testimony against Mullins. Id. at *5.

Finally, Mullins proposed that the prosecutor inaccurately characterized witness testimony during closing argument by stating that “all” witnesses testified that it was against County policy to pay for contracts prior to completion of work. In fact, one witness stated that up-front payment was not per se improper under County rules, but also that, in her experience, prepayment was not the norm. The court discounted this argument for four reasons: the defense immediately objected to the prosecutor's statement, the judge instructed the jurors to rely on their own recollection of the evidence provided rather than the prosecutor's formulation, the prosecutor later amended the statement, and the “misstatement came against the backdrop of the abundant evidence showing that Mullins solicited bribes for contracts and fraudulently altered vendors' proposals and invoices through e-mail to avoid detection.” Id. at * 6. ' Colleen Snow, Mayer Brown

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Dodd-Frank Whistleblower Ruling Sets Up Circuit Split

A divided Second Circuit panel has found that the whistleblower protection provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act extend to employees who file only internal complaints and do not report the alleged corporate wrongdoing to the Securities and Exchange Commission (SEC).

Setting up a split among the circuits, two judges of the U.S. Court of Appeals for the Second Circuit said Daniel Berman could pursue his claim that he was fired for making internal complaints about accounting procedures at Neo@Ogilvy, a subsidiary of WPP Group USA, Inc.

Judges Jon Newman and Guido Calabresi vacated the dismissal of the case of Berman v. Neo@Ogilvy LL , 14-4626, holding that, in interpreting Dodd-Frank, 15 U.S.C. ' 78u-6, ' 21F of the Exchange Act of 1934, the court should defer to an SEC rule adopted to “harmonize” statuary provisions on the definition of whistleblower and the protection given internal reports of wrongdoing. Judge Dennis Jacobs dissented, saying the decision puts this court “on the wrong side” of a circuit split.

Berman, the finance director at the media agency Neo@Ogilvy, discovered practices he claimed amounted to accounting fraud. He complained to management in 2013, saying the practices violated generally accepted accounting principles (GAAP), Dodd-Frank and the Sarbanes-Oxley Act of 2002, the last of which has provisions covering the reporting of internal securities law violations or other improper practices.

He was fired in April 2013 and reported his allegations to WPP's audit committee in August 2013, but it was not until October 2013 that he gave the information to the SEC. Berman sued in 2014, but Southern District Judge Gregory Woods dismissed the case. Oral argument was heard in June 2015, with Alyssa Pyrich of Jardim, Meisner & Susser in Florham Park, NJ, appearing for Berman and Howard Rubin, partner at Davis & Gilbert, representing Neo@Ogilvy and WPP.

The issue for the circuit was Dodd-Frank's retaliation protection provision in 21F(h)(1)(A), which protects employees who report to the SEC, take part in or testify in an investigation or administrative action of the SEC and, finally, under subdivision (iii) “mak[e] disclosures that are required or protected under” Sarbanes-Oxley ' in this case, internal complaints.
' Mark Hamblett, New York Law Journal

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Seventh Circuit: Wire Fraud and Bribery Conviction Upheld for County Director in Illinois

On Sept. 3, 2015, the U.S. Court of Appeals for the Seventh Circuit upheld the conviction of Eugene Mullins, former Director of Public Affairs and Communications for Cook County, IL, and former Chicago police officer, who was convicted of three counts of wire fraud and four counts of bribery for steering government contracts in return for kickbacks. U.S. v. Mullins, No. 14-1701, 2015 WL 512856 (7th Cir. Sept. 3, 2015). Mullins was sentenced to 51 months in prison and was ordered to pay over $34,000 in restitution and forfeiture. In his appeal, Mullins challenged the sufficiency of the evidence to support his conviction, and cited prosecutorial misconduct. The Seventh Circuit affirmed.

As the Director of Public Affairs and Communications, Mullins was permitted to approve Cook County contracts valued at less than $25,000, while contracts above that amount were sent to the Board of Commissioners for authorization. As part of his scheme, Mullins, in his County position, helped vendors obtain professional and managerial service contracts, after which they performed no work, by submitting false documents to the County. The fraudulently awarded contracts included a disaster relief contract, an energy grant contract, and two census contracts. In return, Mullins collected nearly $35,000 in bribes. At trial, numerous employees testified that it was County policy to pay the selected vendor only when the work had been completed, a procedure not followed by Mullins. Moreover, to avoid prosecution, several co-defendants and vendors who had been awarded contracts all testified to instances where Mullins demanded thousands of dollars in cash for alleged payments to an unidentified “subcontractor.” These improper payments, it was later discovered, were pocketed by Mullins. In return for their testimony, each of the four vendors were placed on probation and ordered to pay full restitution to Cook County.

In his first argument on appeal, Mullins maintained that the evidence presented at trial was insufficient to convict him on either wire fraud or bribery. With respect to wire fraud, the court found that, while Mullins contended that he merely “expedited time-sensitive contracts” and “did not personally draft proposals or approval contracts,” he in fact “intended to cheat Cook County out of money.” Id. at *4. Mullins' “willful act to receive, deceive, or cheat to cause financial loss to another” occurred when he altered proposals so that they fell under the $25,000 approval threshold, thus making a review by the Board of Commissioners not warranted, and arranged payments for work that was never performed. Id . As to bribery, the Seventh Circuit also found that sufficient evidence existed to uphold Mullins' conviction because “he used his influence corruptly” to alter invoices and receive kickbacks, thus satisfying the requisite elements to prove bribery. Id.

Mullins next suggested that his trial was riddled with prosecutorial misconduct. The Seventh Circuit addressed each instance in turn. First, Mullins argued that his secretary falsely testified that his initials appeared on documents approving the various contracts at issue. However, the court noted that a lay witness's opinion about handwriting was not improper evidence, and, consequently, such testimony was proper. Similarly, Mullins stated that one vendor lied under oath on cross-examination regarding a government threat years earlier to shut down his wife's business that “supposedly came during the government's investigation into public contracts awarded to her business in 2010.” Id. at *2. The vendor denied this allegation when questioned by defense counsel, “leading to the suggestion that [he] was lying.” Id. However, the court noted that the government's clarification of the witness's statement on redirect resulted in properly elicited truthful and sufficient testimony, and therefore such testimony was not perjurious. Next, Mullins argued that the prosecution intimidated a different vendor to convince him to testify, which the court swiftly rejected. The court stated that, while the vendor admitted the pre-trial investigation was “gruff” and “intimidating,” the witness also admitted that the deferred prosecution agreement he obtained was the primary motivation for his testimony against Mullins. Id. at *5.

Finally, Mullins proposed that the prosecutor inaccurately characterized witness testimony during closing argument by stating that “all” witnesses testified that it was against County policy to pay for contracts prior to completion of work. In fact, one witness stated that up-front payment was not per se improper under County rules, but also that, in her experience, prepayment was not the norm. The court discounted this argument for four reasons: the defense immediately objected to the prosecutor's statement, the judge instructed the jurors to rely on their own recollection of the evidence provided rather than the prosecutor's formulation, the prosecutor later amended the statement, and the “misstatement came against the backdrop of the abundant evidence showing that Mullins solicited bribes for contracts and fraudulently altered vendors' proposals and invoices through e-mail to avoid detection.” Id. at * 6. ' Colleen Snow, Mayer Brown

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Dodd-Frank Whistleblower Ruling Sets Up Circuit Split

A divided Second Circuit panel has found that the whistleblower protection provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act extend to employees who file only internal complaints and do not report the alleged corporate wrongdoing to the Securities and Exchange Commission (SEC).

Setting up a split among the circuits, two judges of the U.S. Court of Appeals for the Second Circuit said Daniel Berman could pursue his claim that he was fired for making internal complaints about accounting procedures at Neo@Ogilvy, a subsidiary of WPP Group USA, Inc.

Judges Jon Newman and Guido Calabresi vacated the dismissal of the case of Berman v. Neo@Ogilvy LL , 14-4626, holding that, in interpreting Dodd-Frank, 15 U.S.C. ' 78u-6, ' 21F of the Exchange Act of 1934, the court should defer to an SEC rule adopted to “harmonize” statuary provisions on the definition of whistleblower and the protection given internal reports of wrongdoing. Judge Dennis Jacobs dissented, saying the decision puts this court “on the wrong side” of a circuit split.

Berman, the finance director at the media agency Neo@Ogilvy, discovered practices he claimed amounted to accounting fraud. He complained to management in 2013, saying the practices violated generally accepted accounting principles (GAAP), Dodd-Frank and the Sarbanes-Oxley Act of 2002, the last of which has provisions covering the reporting of internal securities law violations or other improper practices.

He was fired in April 2013 and reported his allegations to WPP's audit committee in August 2013, but it was not until October 2013 that he gave the information to the SEC. Berman sued in 2014, but Southern District Judge Gregory Woods dismissed the case. Oral argument was heard in June 2015, with Alyssa Pyrich of Jardim, Meisner & Susser in Florham Park, NJ, appearing for Berman and Howard Rubin, partner at Davis & Gilbert, representing Neo@Ogilvy and WPP.

The issue for the circuit was Dodd-Frank's retaliation protection provision in 21F(h)(1)(A), which protects employees who report to the SEC, take part in or testify in an investigation or administrative action of the SEC and, finally, under subdivision (iii) “mak[e] disclosures that are required or protected under” Sarbanes-Oxley ' in this case, internal complaints.
' Mark Hamblett, New York Law Journal

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