law

By Alexandria criminal defense attorney Karin Riley Porter with Price Benowitz, LLP.

Paul Manafort, President Trump’s former campaign chairman, is accused of laundering over $30 million. Money laundering is charged when an individual takes money from activities which are illegal and redistributes it to legal activities, thereby hiding the true source of the income with the purpose of avoiding taxes or seizure from the government.

This money allegedly was laundered through offshore bank accounts associated with the work that he did internationally in Ukraine. Manafort argued in federal court in Washington last month that the money laundering charge, one of two separate indictments that he is facing, should be dismissed.

He maintains that lobbying for a foreign government is not illegal and not registering as a foreign agent does not make funds that were generated from that activity illegal.

However, in a motion filed on April 4, Robert Mueller’s prosecutors argued that felonies covered under the Foreign Agents Registration Act, or FARA, can initiate charges of money laundering.

FARA states that anyone acting as agents of foreign entities must disclose their relationship and activities with that entity. Mueller’s position is that Manafort controlled funds in his lobbying capacity and he was not properly registered, and that may have been the intent of the engagement with the foreign entity.

“Money laundering charges are complex and they have serious consequences, including up to 35 years of jail time,” said Karin Riley Porter, a federal crimes attorney with Price Benowitz, LLP. “Manafort’s defense must include an understanding of FARA as well as the underlying offenses he may be charged with. Money laundering is commonly associated with criminal organizations as well as illegal wire transfers and other fraud. Tracing the source of the money under investigation will lead to interesting revelations about the nature of Manafort’s work.”

The money laundering trial will begin on September 17.

Manafort’s second indictment, in Alexandria, Virginia, involves bank and tax fraud, and failure to report overseas bank accounts. That trial will begin on July 10.

If convicted, Manafort could possibly spend the rest of his life in jail.

By Memphis employment lawyer Jon Street of The Employment Law Group.

The Supreme Court issued a ruling late in May regarding the use of clauses in employment contracts that would prevent workers from joining together to file a class action lawsuit against their employer. The vote passed by a count of 5-4 and the ruling could very well affect 25 million employment contracts.

Justice Neil M. Gorsuch wrote for the majority, saying that if employees were permitted to join together to file claims, “the virtues Congress originally saw in arbitration, its speed and simplicity and inexpensiveness, would be shorn away and arbitration would wind up looking like the litigation it was meant to displace.”

Writing for the dissenting justices was Justice Ruth Bader Ginsburg. In her writing, Justice Ginsburg said that the decision will cause “huge under-enforcement of federal and state statutes designed to advance the well-being of vulnerable workers.”

The others who voted in the majority included Chief Justice John G. Roberts Jr., Justice Samuel A. Alito Jr., Justice Clarence Thomas and Justice Anthony M. Kennedy.

A brief in support of the employees was submitted by the Obama Administration, representing the National Labor Relations Board. The Trump Administration submitted the brief on behalf of the employers. The general counsel for the labor board argued in favor of the employees.

There were three separate cases that were resolved when the Supreme Court issued its ruling in May. Those cases involved claims that companies were underpaying their employees. The employment contracts for the workers stated that these disputes needed to be solved using arbitration instead of in the court system. The contracts also noted that the employees were to file their cases individually.

“Employment law issues include wage and hour, workers’ compensation, workplace discrimination and various other issues,” Jon Street, of The Employment Law Group, said. “Understanding the laws governing employment is an important part of being in the professional world.”

In all three of the cases that were ruled on by the Supreme Court in May the employees said that the National Labor Relations Act is a law that protects their rights to enter concerted activities and that it bans class waivers. This argument was accepted by federal appeals courts in San Francisco and Chicago but was rejected by a federal appeals court in New Orleans.

By Petersburg criminal defense attorney Nicholas Braswell with Price Benowitz, LLP.

One of the most challenging aspects of any divorce is determining custody arrangements for minor children.

Courts are tasked with weighing the best interests of the child or children and issuing an order that outlines the custodial agreement that the parents are to abide by.

Virginia law had previously done little to encourage courts to consider joint custody of children. However, the findings of numerous research projects have concluded that the benefits of some form of shared custody have serious impacts on the overall health and well-being of children.

With this research in mind, Virginia legislators passed, and the Governor signed, a bill that changed the language of the child custody statute to remove any requirement that the court give one type of custody preference over any other, and to require courts to seriously examine the possibility of joint custody as well as sole custody.

“This change to the statute gives the courts more guidance in when it should consider joint custody,” said Nicholas Braswell, a Virginia domestic abuse attorney with Price Benowitz, LLP.

What the law also does is leave in place existing provisions that allow the court to consider a parent’s history of domestic violence or other abuse. Specifically, in situations where one parent has been convicted of a crime involving, among other things, domestic violence or sexual abuse of a child, that parent can be stopped from filing any petitions to alter the custody arrangement for the child for up to ten years, if the court decides that such a limitation is in the best interests of the child.

More than 20 states are currently considering adding or have added laws to their books that encourage this type of co-parenting. As the body of research indicating the advantages children raised by two parents receive due to that consistent parental involvement grows, so too will pressure on state legislatures to adopt laws like these.

By Oklahoma bankruptcy attorney Roellen G. Hasbrook, a partner with Hasbrook & Hasbrook.

RMH Holdings, Inc., one of the largest franchisees for Applebee’s International, Inc., has filed for Chapter 11 Bankruptcy in Federal Court. The company owns 163 restaurants in 15 states across the country. What does that mean for the employees of the restaurants?

According to a spokesperson for RMH, it means very little, as the company is only seeking to reorganize under bankruptcy protection and intends to continue operating all of its locations.

Most people would read “bankruptcy” and assume that no positive outcome is likely. However, there are several different forms of bankruptcy, each of which has different purposes:

• Chapter 11 Bankruptcy. Chapter 11 Bankruptcy is normally used by companies that are facing large debts and payments due, but that still have viable businesses that are operating and generating revenue. Chapter 11 allows a company to put claims by its creditors on hold while it works out a plan under the protection of the Bankruptcy Court to pay off or restructure its debts and work out payment plans. The goal in Chapter 11 is full payment of creditors and emergence from bankruptcy by the company as a going concern.
• Chapter 13 Bankruptcy. Chapter 13 Bankruptcy is only available to individuals and is designed to allow individuals that are working and earning wages but that have incurred large and unsustainable debts the opportunity to work out a plan to repay those debts without needing to liquidate assets.
• Chapter 7 Bankruptcy. Also known as “Chapter 7 liquidation”, this bankruptcy process is utilized by both companies and individuals. Individuals use this process when they have debts that greatly exceed their assets and which they are unlikely to be able to repay. It allows the individual to seek discharge of some or all of those debts and come out of bankruptcy with a clean slate. Corporations, on the other hand, use Chapter 7 Bankruptcy with no real intention of reemerging from bankruptcy. Corporations use Chapter 7 to liquidate corporate assets and pay creditors in an orderly fashion and in a manner that will ensure discharge of liabilities to the extent possible under court supervision.

“RMH, in seeking the protection of Chapter 11, will likely emerge a stronger company. However, to assume that it will have no impact on individual restaurants or employees would be naïve,” said Roellen G. Hasbrook, an Oklahoma Bankruptcy Attorney with the law firm of Hasbrook & Hasbrook in Oklahoma City.

The company may very well, during the course of the reorganization, identify underperforming stores and seek to shed the liabilities associated with it. Bankruptcy is, after all, a determination that some part of the math related to operation of the business does not work. Just what part that is remains to be seen.

By Maryland employment attorney Tom Spiggle, founder of The Spiggle Law Firm.

A law passed in Maryland in April will allow a general contractor to be sued for the failures of subcontractors to pay wages properly.

This change may put general contractors in a position where they must confirm the payment practices of any subcontractor they hire or risk additional exposure to liability.

General contractors are the companies that are hired to run an overall project and to ensure that the goal of the project is reached.

Many times, the general contractors that are hired do not have the ability to perform all the jobs called for by the project plan. To complete the project, general contractors will “sub out” the work — meaning that they will hire subcontractors to carry out specific tasks.

Subcontractors submit a bid for completing the work, and the amount of the bid is what the subcontractor is paid for the job. The subcontractor is responsible for ensuring that all its responsibilities, including proper payment of employees, are completed.

In most situations, the general contractor has no liability for any acts or failures of the subcontractor. Under Maryland law, this limitation on liability includes the failure of a subcontractor to properly pay its workers or employees. The new law changes that and allows workers who are not paid by a subcontractor to sue the general contractor for payment of those wages.

“A law like this may allow workers who go unpaid to seek repayment from a much larger entity,” said Tom Spiggle, a Maryland Wage and Hour Attorney with The Spiggle Law Firm in Maryland. “Subcontractors tend to be less stable than general contractors, which makes workers more vulnerable. The new law will place some responsibility on the general contractor to hire reputable subcontractors.”

The law should also help encourage compliance from subcontractors, who may fear that general contractors will not use them if there are any reports of failure to pay.

Workers can file claims with the State of Maryland if wages go unpaid, which will then investigate and make findings. However, this only governs work that was performed in the state.

If you are a Maryland resident that worked on a job in Virginia and failed to get paid, Virginia law will govern your claim — not that of Maryland, so be sure you are aware of the labor laws of any state you intend to work.

By Immigration Attorney James O. Hacking, III, founder of Hacking Law Practice, LLC.

Thomas Homan, the acting director of Immigration and Customs Enforcement (ICE), who served under President Obama and continued his service at the request of John Kelly, has announced his intention to retire in June.

A release issued by ICE indicates that Homan’s retirement was based on family and personal reasons, but the reported belief is that he resigned over frustrations with Kristjen Nielson, the Homeland Security Secretary.

Homan had been cut out of negotiations with Congress related to the fate of the Dreamers or individuals who arrived in the United States as children with parents who were undocumented and were therefore undocumented themselves.

Homan was at the helm of ICE during a period where arrests increased 40 percent. He also wrote a memorandum that encouraged the prosecution of undocumented individuals who crossed the border with their children.

However, he also helped steer an Obama-era policy that allowed enforcement agents to use discretion in deciding whether to enforce immigration laws against undocumented individuals who were convicted of minor offenses and undocumented individuals with families.

Homan was also one of the loudest voices opposing so-called “sanctuary cities.”

“ICE has a lot of tools at their disposal to try and find undocumented individuals and have them deported,” said James O. Hacking, III, a Deportation Defense Attorney with the Hacking Law Practice, LLC in St. Louis, MO. “Mr. Homan felt strongly about enforcing those deportation rules using all of the tools available, just as any deportation defense attorney may use all of the tools available to protect someone from deportation.”

Given the current climate as it relates to immigration and immigrant rights, it is unlikely that any individual named to head ICE will be any less aggressive with the enforcement of immigration laws.

Being caught up in the immigration system means facing a system that has a heavy backlog of cases and that can take several months to just hear an initial claim for asylum.

By Criminal Defense Attorney David Benowitz, a partner at Price Benowitz LLP.

In 2014, the District of Columbia legalized the sale and possession of small amounts of marijuana, up to two ounces, for recreational use. The accompanying cannabis boom led to many new businesses focused on providing marijuana and its associated products to the masses.

However, Congress used the authority it has over laws enacted in D.C. to override the District’s decision on legalization of sales and continued to prohibit the sale of even small amounts of marijuana.

The District of Columbia was created by the Residence Act in 1790, which authorized the creation of a federal district that would be home to the federal government.

As D.C. is not part of any state — though its land came from Virginia and Maryland — Congress retains the final say on any rules or laws made or passed in the District. It has a mayor and a city council, that govern the operation of the city, but these individuals and the laws they make are ultimately at the mercy of Congress.

This is where the relationship between recreational marijuana in D.C. and Congress’s final say intersect. Congress, unhappy with D.C.’s decision to legalize a substance that the federal government continues to classify as illegal, decided to override D.C.’s decision to legalize its sale for recreational use.

Therefore, the sale of marijuana for recreational use is still illegal in D.C.. Individuals with cannabis-based businesses have sought other, creative ways to avoid being arrested and charged, including doing “giveaways” where marijuana is given away in connection with the purchase of some item of nominal value.

“Law enforcement officials are not willing to overlook these attempts to skirt the the law and have begun to aggressively pursue individuals involved in such activities,” said David Benowitz, a Washington, D.C. drug charges attorney and partner at Price Benowitz LLP. “Individuals charged with crimes related to marijuana possession should seek out competent legal counsel to defend their rights, regardless of how they may feel about the arrest itself.”

It is important to remember that the possession of two ounces or less of marijuana in D.C. is still legal, so being charged with possession is highly unlikely. However, attempting to sell the drug, regardless of how the sale is structured, exposes the seller to increased potential penalties.

By Washington D.C. Criminal Defense Attorney David Benowitz of Price Benowitz LLP.

A law passed by Congress in April is aiming to combat online sex trafficking by increasing the ability of state and federal prosecutors to charge the owners of websites where trafficking occurs.

The bill, called FOSTA (and the Senate version called SESTA), changes the way in which the responsibility for content posted to websites can be imputed to the owner of the website. Prior to these changes, website owners were almost fully protected from being held responsible for the content posted on its site or servers.

Under the new law, website owners can be held responsible for content posted by others under several theories, but generally speaking, if the website assists, supports or facilitates the prostitution of individuals and does so knowingly, the owners of that site can face charges.

This change is designed to eliminate sites such as backpage.com, which was seized and shuttered after it was determined that it participated in prostitution by providing services to maximize advertising exposure and avoid prosecution, while also recruiting other providers of prostitution services.

“This law’s purpose is to reduce sex trafficking. But it also could create situations where an individual who operates a legitimate website may be charged for content posted on it,” said David Benowitz, a Washington, D.C. Sex Crimes Attorney and partner at Price Benowitz LLP.

Opinion on the changes to the law and the overall impact it will have is split.

Groups in support of it claim that legitimate websites were never in danger of being prosecuted before, and that these changes will not affect legitimate websites going forward, and that any additional responsibilities placed on websites is a small price to pay for the protection of individuals subject to exploitation.

Critics of the law claim that it will do nothing to actually stop sex trafficking — instead, it will send the individuals that participate even farther underground and make them more difficult to track.

Additionally, they claim that the law is already having an impact on legitimate websites by pointing to Craigslist shutting down its “Personals” section in order to avoid any possible issues.

Whether an individual is charged under this federal law or under state law depends upon many factors, including whether the communication took place across state lines. Doing so would place things within the purview of the federal government. But the law’s intent is not to impede or interfere with state investigations or charges in favor of federal ones.

Whether the law reduces sex trafficking remains to be seen, but it certainly creates a new area of liability for website owners that did not exist previously.

By Washington State Family Law Attorney Scott T. Ashby of Ashby Law, PLLC.

The Uniform Laws Commission (ULC) has released its updated version of the Uniform Parentage Act. The 2002 version of this Act had been adopted by 11 states in the Union; however, that version of the law used gendered pronouns and took the approach that marriage was only between one man and one woman.

The Supreme Court’s decision, along with advances in reproductive technology, led the ULC to make several changes to the Act.

Washington State adopted the 2002 Act and has since become the first state to enact the revised version. The primary changes are:

Removal of Language Assuming Marriage Only Between Men and Women

“The previous law used gendered pronouns – man and woman, she and he – because the law at the time indicated that marriage was between a woman and a man, and therefore all of the laws related to parentage assumed one man and one woman would be parents,” said Scott T. Ashby, a divorce attorney with Ashby Law, a Washington State law firm. “With the Supreme Court ruling any law that bars same sex marriages unconstitutional, laws like this are likely unconstitutional as well.”

The ULC, Ashby said, decided that it needed to update the act to ensure states had a corrected version that would not run afoul of the Constitution. However, Ashby added, “it is still up to the states to adopt the updated version.” (more…)

By criminal defense attorney Dayne Phillips, who is barred and practices in Columbia, South Carolina.

SunTrust bank, based in Atlanta, said that a former employee compromised 1.5 million customer accounts in a data breach, sharing the data with a criminal third party.

The bank has more than 1,400 branches, 2,100 ATMs in eleven states, including South Carolina, plus Washington D.C. The breach, which accessed customer contact lists, included the customers’ names, addressed account balances and phone numbers; it did not include social security numbers, drivers license numbers, account numbers or passwords.

The bank is working closely with the police and investigators. “Theft, including identity theft, is a serious crime that can severely affect the victims’ financial well-being, and it can be difficult to prove without concrete evidence linking the former employee to the breach,” said Dayne Phillips, a theft lawyer practicing in South Carolina. “SunTrust is responsible for keeping their customer account files secure and confidential. A former employee having access to this sensitive data is inexcusable.”

The bank learned of the breach in February but waited until April 20 to alert the public. According to the bank, it thought the information was not exposed externally until that date. As soon as they found out, the bank made the announcement that they have been working closely with law enforcement.

However, it seems prudent that the sooner the bank lets their customers know of the possibility of any fraudulent activity, the sooner they could have made arrangement to protect their information and identity and prevent any possible identity theft, which can take years to rectify.

Data and cyber breaches are prevalent, and we need to protect ourselves.

In 2016, according to the Identity Theft Resource Center (ITRC) and CyberScout, there were 1,091 data breaches, a 40 percent increase over reported breaches in 2015. In 2017 that number reached 1,579, a 44.7% increase over 2016. As of May 1, 2018, there have been a total of 383 breaches, exposing 12,918,657 records of unsuspecting customers.

This problem is not going away.

According to the bank, no fraudulent or unexplained activity has been detected, and customers can enroll in identity theft protection, IDnotify by Experian, for free. The product includes an annual credit report, credit monitoring, identity theft insurance up to $1 million, help in restoring their identity and monitoring of the dark web.

Customers will not be held responsible for any fraudulent activity in their accounts.

By DWI and criminal defense attorney Gary L. Medlin, who is barred and practices in Tarrant County, Texas, with The Medlin Law Firm.

The House Ways and Means Committee held votes on 12 Internal Revenue Service (IRS) reforms on Wednesday, April 18 that are aimed at improving the customer service and information technology departments of the agency. Ironically, the vote was held on the new Tax Day, which was pushed back one day due to technical difficulties of the online filing system.

One of the bills that passed with a unanimous vote was created to improve customer service and enforcement. The bill would wind up permanently extending the program that offers free filing for taxpayers who are low-and-middle income.

This same bill would also create a permanent office for independent appeals, rename the IRS commissioner to IRS administrator, and then require said administrator to submit a plan for reorganization to Congress by September 30, 2020.

Another bill that passed, this one by a vote of 414-3, has a focus on updating the information technology and cybersecurity of the agency. The reforms from this bill would allow the IRS to accept debit and credit card payments and expand the systems for electronic tax-filing.

A bill was also passed during the Wednesday vote that would allow the Justice Department to create an expedited review process for identity-theft issues that involve IRS agents being impersonated. This reform bill was passed by a vote of 403-3.

All the bills passed on Wednesday will be added to the package that is sent to the Senate for a vote. There is no date set yet for the Senate to vote on these reforms passed by the House.

“Tax reform continues to occur as the latest set of bills make their way to the Senate,” Gary L. Medlin, a Fort Worth Identity Theft Lawyer of The Medlin Law Firm, said. “It can be challenging to keep up with all of these changes, but it’s important to know how the tax law changes affects how you file in the coming years.”

There were some smaller bills that were passed using voice vote in the House. These bills would provide updates to how identity theft victims are handled by the agency, turn the voluntary income tax assistance program into a permanent one, and require that the agency give 90 days’ notice should it decide to close an assistance center.