Two Former Bear Stearns Hedge Fund Managers Acquitted

Did you hear the news yesterday about two former Bear Stearns hedge-fund managers getting acquitted by a jury following a month-long jury trial in federal court in New York on fraud and conspiracy charges? The two men, Ralph Cioffi and Matthew Tannin, had been accused by the government of misleading investors, prior to the collapse of the subprime mortgage market last year. But the jury quickly found them not guilty.

In my opinion, this case illustrates my point that I have made earlier in this blog that, as experienced criminal defense attorneys know, the best criminal defense is to admit the act but deny the intent. The case also illustrates the point that, in white collar criminal cases, sometimes federal prosecutors bite off more than they can chew! Apparently the only thing these two men were guilty of was not having a crystal ball to predict the market collapse.

In this case, government prosecutors also apparently inflated the significance of emails between the defendants in which they allegedly expressed more pessimism about the market than in their conversations with investors. The bottom line is that jurors reportedly decided not to blame the unanticipated collapse of the market last year on these two defendants! While we all may be upset about Wall Street greed and the market collapse, it is good to see that fair-minded jurors could avoid creating scapegoats and render a fair verdict in this case.

What is the Best, Winning Defense Against a Criminal Charge?

As a former career prosecutor for over 26 years, including over 20 years as a white collar crime federal prosecutor, (along with about 5 years as a criminal defense attorney), I have tried literally hundreds and hundreds of criminal cases. And I have seen criminal defense attorneys raise countless defenses, such as alibi, insanity, "the Devil made me do it," immunity, mistake of fact, and just about everything else imaginable. But can you guess the best, most winning defense that I have ever seen offered or utilized against criminal charges?

The answer, in my opinion, is fairly simple: If the government has (falsely) accused you of a crime, then you, (after careful consultation with your defense attorney), should consider raising a defense of admitting the act, (especially if they have overwhelming proof), but deny the intent. That is the best defense that I have seen succeed more often than any other defense! In other words, nearly every crime has two elements: an act and an intent. And generally, the law requires the government to prove both: i.e. not only that you have committed the criminal act, but also that you had the requisite mens rea, or intent, to commit the act. The first element, (i.e. the act), is often easier to prove. But the latter element, (i.e. the intent element), can often be difficult, if not impossible, to prove. For example, in a false billing, Medicare fraud case, the government may sometimes have overwhelming proof, and can easily prove, that you, or your employees, submitted the alleged improper billings. But it may be difficult for the government to prove that you intentionally over billed the government program. In other words, in some cases, maybe unintentional mistakes were made in only a few of the billings, out of numerous legitimate billings that were submitted for reimbursement. Or perhaps you reasonably relied on expert advice that the billings were legitimate and therefore didn't intend to defraud the government. Again, if the government cannot prove the element of intent beyond a reasonable doubt, then the prosecution should fail and you should be acquitted.

Naturally, each criminal case must be carefully analyzed by you and your experienced criminal defense attorney as to its own unique set of facts. But generally speaking, in my opinion, the winning defense in many cases may often be to admit the act, but deny the intent! At least this defense beats blaming the Devil for the crime!