Two well-known Seattle criminal defense lawyers were sentenced today after pleading guilty in connection with a federal grand jury probe into money laundering. One was formerly a judge, and the allegation is that he took a backpack stuffed with $100,000 in cash, and in another incident received a similar cash payout in his chambers while on the bench. In a story that’s rocking through the Seattle metro area Bar, news has also filtered out that the grand jury is investigating several other lawyers for similar activities.

Despite these revelations, Assistant US Attorney Ron Friedman denied that there is any widespread attempt to go after lawyers in particular. “We didn’t go after this case, it came to us”, Friedman stated this evening at the annual year-end meeting of the Washington Criminal Defense Lawyers Association in Seattle. You could tell that Friedman was visibly upset at having to deal with the case, speaking before the group literally just after leaving the sentencing hearing, and he made a heartfelt statement to the audience assuring them that this was an isolated occurrence, the likes of which he’d never seen before and hoped to never see again.

Friedman spoke as part of a hastily put-together ethics panel addressing the issue of currency handling in criminal defense. As I sat in the audience listening to the experts address the topic of how to properly handle big cash fees, I was astonished at the number of questions asked by the audience that indicated a general lack of knowledge of how to handle big cash fees paid by clients. The specific topic under discussion was the legal requirement of reporting via IRS Form 8300 any receipt of cash over $10,000. Most attorneys in the audience (myself included) were not aware of the myriad rules applicable to the various scenarios that regularly come up in practice. Suppose a client pays you a $7,500 Cashier’s Check for pre-trial work today, and 2 months later pays you another $7,500 Cashier’s Check for trial. Does that trigger reporting requirements? Yes, it does, and a violation could net you 5 years in a federal prison. What about credit card payments? No problem there, banks that process credit card payments are responsible for reporting the transactions, you’re off the hook on those. You could hear gasps in the audience as people started calculating in their minds how many violations they might have generated without realizing it. They sure don’t teach you any of this in law school or even in Bar Review courses on Professional Responsibility. But you know what they say about ignorance of the law …

In any case, failing to file a Form 8300 for this kind of oversight is a lot different than taking a backpack full of $100,000 from a drug defendant, and today’s news regarding the sentencing of our two brethren, and the ongoing investigation into other possible cases, has certainly raised awareness of the issue in everyone’s mind.

Read the story here.

RP

This entry was posted on Friday, December 2nd, 2005 at 8:24 pm and is filed under News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.