Antitrust Law Daily Wrap Up, ANTITRUST NEWS: U.S. opposes release of UBS financial fraud defendants pending appeal, (Jun 16, 2014)
Organizations Mentioned:Bank of America | JPMorgan Chase | UBS AG | UBS, AG
By Edward L. Puzzo, J.D.
The Department of Justice has filed its brief in opposition to the emergency motions of Gary Heinz and Michael Welty for their release pending appeal (United States v. Heinz and Welty, 2nd Cir., Civil Action Nos. 13-3119, 13-3296)
On August 31, 2012, former UBS AG executives Heinz, Welty, and Peter Ghavami (a/k/a Peter Ghavamilahidji) were convicted of fraud. Evidence presented at trial showed that the three individuals, while employed at UBS, participated in separate fraud conspiracies and schemes with a number of financial institutions and with a broker, between March 2001 and November 2006. These financial institutions, or providers, offered a type of contract—known as an investment agreement—to state, county, and local governments and agencies, and not-for-profit entities, which were seeking to invest money from a variety of sources, primarily the proceeds of municipal bonds issued to raise money for public projects.
On August 8, 2013, Heinz, who was found guilty on three counts of conspiracy to commit wire fraud and two counts of substantive wire fraud (but not guilty on one count of witness tampering), was sentenced to serve 27 months in prison and to pay a $400,000 criminal fine. Welty, who was found guilty on three counts of conspiracy to commit wire fraud (but not guilty on one count of substantive wire fraud), was sentenced to serve 16 months in prison and to pay a $300,000 criminal fine.
The federal district court in New York denied defendants’ release pending appeal and ordered them to report to prison on July 17, 2014. Defendants then appealed to the Second Circuit U.S. Court of Appeals. The DOJ disputes defendants' claims that the indictment was untimely, that the jury was instructed incorrectly, that lay testimony was wrongly admitted and that there are substantial questions likely to result in a reversal or new trial on appeal.
Companies: UBS AG; JPMorgan Chase; Bank of America
News: Antitrust AntitrustDivisionNews