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July 27th, 2018

7/27/2018

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TWO ATLANTA BUSINESSMEN SENTENCED EACH TO A DECADE IN PRISON IN FEDERAL SECURITIES FRAUD CASE; WILSONLAW CLIENT SENTENCED TO 24 MONTHS IN SAME CASE

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www.ajc.com/news/local/doj-two-metro-atlanta-men-convicted-million-fraud-scheme/H6MJ5ITBIEuYS4VaCpjRUL/?icmp=np_inform_variation-control
Two metro-Atlanta businessmen, William Goldstein and Marc Bercoon, were sentenced each to ten years in prison this week after their convictions for securities fraud and related crimes in federal court in Atlanta.  A third defendant in the case, Peter Veugeler, was represented by The Roger C. Wilson Law Firm, PC, which negotiated a resolution of the case for him with prosecutors before trial.  As a result of that resolution, Wilson client, Mr. Veugeler, was sentenced to 24 months, two days after the other sentencings.  United States v. Marc Bercoon, et al. 1:15-CR-00022 (US Dist Ct ND Ga).   
 
Atlanta entrepreneur Goldstein and his business colleague, and Atlanta lawyer, Bercoon, were convicted by a federal jury in February of twelve counts of conspiracy, securities fraud, mail fraud, and wire fraud.  Pursuant to the resolution of the case for him, Mr. Veugeler pled guilty to a single conspiracy count.  All three men were charged in connection with several groups of transactions in which newly issued stock of a formerly private company was sold to public investors on the over-the-counter market.  The indictment charged that the men illegally marketed and sold the shares, in ways improperly designed to increase the demand for and sale prices of the stock.  Prosecutors asserted losses of well over $4 million, although that amount was challenged by all three defendants and ultimately was determined by the Court to be significantly lesser.
 
Common sense might suggest that for a company selling its stock into the public market, doing so in ways that would increase the demand for and trading prices of the stock (and thus of the money raised by the equity financing) would be not only an acceptable but also a universal approach.    But however common it may be, prosecutors charged that the transactions in this case violated the federal prohibition of so-called “manipulative trading” under the federal securities laws.  That prohibition is very broad and applies to share placement and trading practices that have the intent and result of affecting the trading price or volume of the stock, or of giving an inaccurate impression of a broader interest or activity in the stock than actually exists.
 
Roger C. Wilson practices extensively in the area of federal white collar criminal defense.  He has represented numerous persons charged with a variety of financial crimes, including securities fraud, bank fraud, and loan and mortgage fraud, in negotiating resolutions of the charges and in representing such persons at trial.

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July 22nd, 2018

7/22/2018

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ALL CHARGES DISMISSED AGAINST DEFENDANT LATE IN FEDERAL BRIBERY TRIAL UPON DISCOVERY THAT FBI AGENT GAVE FALSE TESTIMONY BEFORE THE GRAND JURY

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Late in a federal bribery trial in Birmingham, Alabama, just before the case went to the jury, all charges were dismissed against one of the three defendants after it was uncovered that an FBI agent had lied in her testimony before the federal grand jury that produced the indictments leading to the trial.
 
The dismissed defendant, Steven McKinney, was one of three men on trial in a federal prosecution contending that they had sought to bribe a former Alabama state legislator in connection with the potential liability of a corporation client for environmental violations.  At the time, McKinney and one of the other two defendants were lawyers for a large, prominent Birmingham-based law firm, Balch & Bingham.  The third defendant was an executive of the client company involved, the Drummond Company.  All three were alleged to have sought to bribe the former legislator to assist them in negotiations with environmental regulators on behalf of the company client.
 
THE GRAND JURY PROCESS
 
The Fifth Amendment to the United States Constitution mandates that no person may be charged with a felony except by indictment for it by a grand jury.  The operation of grand juries in the federal system is governed by Rule 6 of the Federal Rules of Criminal Procedure.  Grand juries (comprised of between 16 and 23 members) meet in secret and receive and consider evidence and arguments provided to them by prosecutors in deciding whether to charge (“indict”) a person being targeted by the prosecutors in the grand jury proceedings.  If the grand jury (by a vote of at least 12 of the grand jurors) decides to indict the person (and grand juries almost always do when requested to) then the person is charged with the crime, and ultimately faces a trial on the charges before a regular jury.  All testimony before grand juries is given under oath.  If a person testifies falsely under oath to a grand jury, the person is susceptible to being prosecuted for perjury.
 
THE BIRMINGHAM CRIMINAL TRIAL
 
 During the Birmingham jury trial, one of principal FBI agents in the case admitted that she had testified falsely to the grand jury in obtaining the indictment of the three men, at least with respect to McKinney.   The agent had testified to the grand jury that all three men had met with the legislator in advance of a meeting with state regulators.  However, on cross examination by McKinney’s lawyer in the jury trial, the agent admitted that she had no evidence that McKinney had ever met with the legislator.  Apparently as a direct result of this revelation by McKinney’s counsel, the Judge dismissed McKinney from the case, likely under Rule 29 of the Federal Rules of Criminal Procedure, which provides a mechanism for the charges against a defendant to be dismissed at the end of the government’s case, or later before jury deliberations begin, either by motion of the defense lawyer or by the court on its own initiative.

McKinney will not be susceptible to being re-prosecuted by the government, because of the nature and timing of the dismissal of the charges against him.

However, after the dismissal of him the trial continued, to jury deliberations and verdict, for both of the other two defendants, who reportedly did attend the meetings with the state legislator.  The jury found both of those other two defendants guilty of all charges.


Here are local media reports on the events:

www.al.com/news/birmingham/index.ssf/2018/07/charges_dropped_against_one_ba.html

www.al.com/news/birmingham/index.ssf/2018/07/verdict_reached_in_federal_bri.html

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