U.S. Attorney in Conn. Withdraws Motions to Remand Convicted Execs
By Amir Efrati
Wall Street Journal Law Blog
April 1, 2009
At a time when populist outrage is mounting over alleged greed by financial executives, it’s a strange sight when federal prosecutors allow executives to remain free on bail after they were convicted of perpetrating a massive fraud. (Bernard Madoff wasn’t so lucky.)
The unusual bail saga is taking place in Connecticut in the closely-watched General Re Corp - American International Group fraud prosecution. As LB readers might recall, five insurance executives were convicted at trial last year of helping AIG to improperly boost its financials in a scheme that cost investors more than $550 million.
In December prosecutors from DOJ in D.C. and the U.S. attorney’s office in Connecticut, which handled the case together, filed a motion against giving GenRe’s former CEO bail pending an appeal of his conviction. (The defendant, Ron Ferguson (pictured, left), was later sentenced to two years in prison.) Then in January the government withdrew its motion, and he was granted bail.
Prosecutors repeated the dance in February, when they filed a 25-page motion opposing bail pending appeal for another defendant, a former AIG executive, who had been sentenced to four years in prison. Two weeks ago, prosecutors withdrew the objection. The defendant, Christian Milton (pictured, second from right), and the others will now almost certainly remain free.
After the second about-face by the government, two prosecutors from DOJ’s fraud section, Principal Deputy Chief Paul E. Pelletier and Assistant Chief Adam G. Safwat, withdrew from the case, signaling that there was a spat between Washington and Connecticut prosecutors over the bail issue.
So what does it all mean? Observers of the case suggest that Connecticut prosecutors may have been inclined to go easy on the defendants after a federal judge handed down sentences that were well below the range set by federal guidelines. Prosecutors may have also wanted to avoid a situation in which the judge would rule against the government regarding bail and, in doing so, make a statement or finding that could aid the defendants in their appeal.
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