Steve Jobs, the chairman of Apple Computer, still faces the prospect of an investigation by the Securities and Exchange Commission and the Department of Justice, The Times has learnt, even though he did not benefit personally from the repeated backdating of stock options. Apple published its long-awaited annual report yesterday. It contained details of the company’s internal investigation into options backdating.  

The findings appeared to exonerate Mr Jobs, concluding that, although he was aware of options backdating and even chose some of the dates, he was not aware of the accounting implications of the practice.

The report added that Mr Jobs did not benefit financially from the backdating programme because he returned all the stock options granted to him during the period under investigation.

However, the Securities and Exchange Commission, the US market regulator, which is already investigating the stock options scandal at more than 100 companies, including Apple, told The Times that an executive could be found guilty of backdating without benefiting from the award.

A spokesman for the SEC, who was unable to comment directly on the Apple investigation, said: “An executive does not have to benefit personally from stock options backdating to be found to have violated the rules . . . Past cases show that personal gain is not a precondition to any action by this office.”

The SEC would not confirm whether the company or Mr Jobs was under investigation, but it is understood that investigators from the regulator’s enforcement division next month will begin to look into more than one million pages of evidence gathered by Apple during its internal review of the stock options affair.

The Justice Department is also said to be looking into the backdating of options at Apple. It declined to comment.

A report released by the Transactional Records Access Clearinghouse at Syracuse University concludes that the Justice Department increasingly has refused to prosecute FBI cases targeting suspected terrorists over the past five years. TRAC co-director Susan Long said researchers relied on the Justice Department's own numbers to come up with the findngs. The study was based on the most recent data available from the Justice Department's executive office for U.S. attorneys.

The government disputes the findings as inaccurate and "intellectually dishonest."

Prosecutors declined to bring charges in 87 percent, of international terrorist case referrals from the FBI between October 2005 and June 2006, according to the report.

During the 2001 budget year, prosecutors rejected 33 percent of such cases from the FBI. The data "raise troubling questions about the bureau's investigation of criminal matters involving individuals the government has identified as international terrorists," the report said. Also noted in the report, was the fact that while the number of agents and other employees has risen, prosecutions in traditional FBI investigations since 2001 - including drug cases, white collar crimes and organized crimes - have decreased.

The report states, "So with more special agents, many more intelligence analysts, and many fewer prosecutions the question must be asked: What is the FBI doing?"

A Justice Department spokesman, Brian Roehrkasse noted that terrorist hoax cases that were quickly dismissed may have been included in the government data, adding also that while some cases are referred to prosecutors to obtain subpoenas or other legal orders in investigations, they ultimately never result in criminal charges. Roehrkasse disputed the findings of TRAC and said that prosecutors rejected 67 percent of FBI international terrorist cases in the nine-month period - not 87 percent.

John Miller, the FBI's assistant director, said about half of the FBI's resources go to detection and information gathering of terrorist networks in cases that do not always result in arrests, reflecting changes in how investigations have been conducted since the Sept. 11, resulting in what appears to be a low number of cases prosecuted. Miller said, "It's not about the numbers and for TRAC to suggest as much is to be intellectually dishonest. The FBI has been very clear about how we have changed the way we do business since 9/11."

Breaking Legal News.com
Sheryl Jones
Staff Writer

David Boies's memoir should be a bestseller for two simple reasons. First, his spectacular legal career, representing clients as diverse as Al Gore, George Steinbrenner, the U.S. Justice Department, and Calvin Klein, provides ample material for a compelling exploration of the practice of law in its most high-profile glory. And secondly, the book seems bound to sell well simply because most enterprises Boies gets himself involved with, from lawsuits to Las Vegas gambling, tend to pay off big. In Courting Justice, Boies traces the intricacies of numerous cases, such as Bush v. Gore in the hotly contested 2000 Florida recount, Steinbrenner's action against Major League Baseball, and the U.S. Government's antitrust litigation against Microsoft. At the same time he sheds light on the legal profession itself, exploring the politics of the profession and the power plays endemic to it. As though presenting his cases to a jury, Boies lays out the framework and issues of each case in a patient, step-by-step manner that illuminates the nature of the litigation and Boies's strategy while also supporting the narrative arc of the story he's trying to tell. As with many top lawyers, there is more than a dollop of ego and pride in Boies's accounts. Throughout Courting Justice Boies portrays himself as the voice of reason, possessed of a shrewd sagacity that his rivals and peers can only admire with slack-jawed amazement. Then again, when you look at the numerous legal triumphs and precedent-setting cases he was involved in, especially during the late 1990s, his arrogance is perhaps well earned. Regardless, it lends confidence to his outstanding ability to turn a phrase and tell a story, which, combined with the numerous stories he has to tell, makes David Boies's latest effort a success once again. --John Moe (Amazon.com)

The Justice Department today settled a lawsuit against the city of Saraland, Ala., alleging housing discrimination against individuals with disabilities.

The government's complaint alleged that the city violated the federal Fair Housing Act when it refused, for explicitly discriminatory reasons, to allow the Lewis Community Care Facility Inc. to open a home for ten mentally disabled adults in a residential neighborhood of the city. These residents were to be screened and referred by the Mobile Mental Health Center and were to share living space and common facilities in a home staffed 24 hours per day and regulated by the state of Alabama.

"Today's settlement sends a clear message that the rights of persons with disabilities will be vigorously protected in accordance with federal law," said Wan J. Kim, Assistant Attorney General for the Civil Rights Division. "All Americans, regardless of disability, have a right to fair housing in their communities."

"It is important for the people of Alabama to know that the civil rights of all our citizens will be protected by the United States Department of Justice, particularly when, as in this case, those individuals are among our most vulnerable," said Deborah J. Rhodes, U.S. Attorney for the Southern District of Alabama.

The settlement order, which must be approved by the U.S. District Court for the Southern District of Alabama, resolves the government's case as well as a consolidated lawsuit filed by the Fair Housing Center of Alabama on behalf of Lewis Community Care and its owners, Shannon and Orin Lewis. Under the settlement, the city has agreed to allow the Lewises to operate their home as planned, and to pay $65,000 in damages and attorneys fees to the Lewises and a civil penalty of $7,000 to the government. The settlement also mandates that certain city employees undergo training on the requirements of the Fair Housing Act, and that the city maintain records relating to future proposals for housing for disabled persons and submit periodic reports to the Justice Department.

The case began when the Lewises filed a complaint with the Department of Housing and Urban Development (HUD). HUD referred the complaint to the Justice Department, which conducted an investigation and filed suit in May 2005.

The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. Since Jan. 1, 2001, the Justice Department’s Civil Rights Division has filed 212 cases to enforce the Fair Housing Act, including 97 based on disability discrimination. More information about the Civil Rights Division and the laws it enforces can be found at http://www.usdoj.gov/crt.

WASHINGTON - (USDOJ) In a federal indictment unsealed today, two former supervisors at the Winston-Choctaw County Regional Correctional Facility (WCCRCF) in Louisville, Miss., were charged with criminal civil rights and obstruction of justice violations. The indictment alleges that the officers assaulted two inmates and shocked one of them with an electric device referred to as a 'shock stick' in October 2001. Former Deputy Warden Scotty L. Graham and former Captain David G. Mitchell are charged in the indictment with assaulting an inmate and violating his civil rights; with conspiring to obstruct justice; and with obstructing justice by providing false statements about the assault. The indictment also charges defendant Mitchell with a second civil rights violation for assaulting another inmate on the same date. If convicted, the defendants face maximum penalties of 10 years in prison on each of the civil rights and obstruction charges, and five years in prison on the conspiracy charge.

In a related case, former WCCRCF Officer Marcus Coleman pleaded guilty to a felony civil rights violation for assaulting and shocking an inmate in October 2001. During a hearing before U.S. District Judge Michael Mills on September 28, 2006, Coleman admitted that he and defendant Mitchell assaulted the inmate and that defendant Graham encouraged them to continue the assault in a location where there would not be any witnesses. Coleman has agreed to cooperate with the government's prosecution of the other defendants. Coleman faces a maximum penalty of 10 years in prison for the civil rights offence.

An indictment is merely an accusation, and defendants are presumed innocent unless proven guilty.

The Civil Rights Division is committed to the vigorous enforcement of every federal criminal civil rights statute, such as those laws that prohibit the willful use of excessive force or other acts of misconduct by law enforcement officials. Since fiscal year 2001, the Department of Justice has convicted 50 percent more defendants for excessive force and official misconduct than in the preceding six years.

This case was investigated by the Oxford Division of the Federal Bureau of Investigation, and is being prosecuted by Civil Rights Division Trial Attorneys Jeff Blumberg and Ed Caspar.

WASHINGTON - Columnist Armstrong Williams has reached a settlement with prosecutors regarding payments he received by the Education Department to promote President Bush's agenda.

The settlement brings to a close a yearlong investigation after reports emerged that the Education Department contracted with several radio, television and print commentators to promote the No Child Left Behind Act.

Under the settlement, Williams admits no wrongdoing but will have to pay $34,000 that prosecutors determined he had been overpaid. The deal was reached last week by Williams, the Education Department and its subcontractor, Ketchum Communications.

"The department is happy to see this matter come to a close," Katherine McLane, a spokeswoman for Education Secretary Margaret Spellings, said Sunday. "One of the first steps Secretary Spellings took when she came to office is to establish guidelines to prevent future occurrences of this type of situation."

Lawmakers criticized the contracts as an improper use of taxpayer dollars. Congressional auditors concluded the department engaged in illegal "covert propaganda" by hiring Williams without requiring him to disclose he was paid.

In the settlement, the Justice Department examined whether Williams actually performed the work that was promised in his $240,000 contract signed in late 2003 and cited in his monthly reports to the Education Department.

Ultimately, prosecutors determined that Wiliams was overpaid $34,000. Their review did not examine whether he improperly promoted the Bush administration's agenda.

The settlement had been reported by The Washington Times and by USA Today on its Web site.

Breaking Legal News
Staff Reporter
Robin Sheen

WASHINGTON – The Justice Department today announced that Sung Bum Chang, a Korean American man who owned and operated the nightclub, “Club Wa,” in Dallas was sentenced to 10 years in prison for forcing young Korean women to work as club hostesses.  He was ordered to pay $37,000 in restitution to the victims.  On June 12, 2006, Chang pleaded guilty to one count of forced labor and one count of conspiracy to commit forced labor.

“Sung Bum Chang imported innocent young women from South Korea and forced them to work at Club Wa under terrible conditions of fear and violence,” said Wan J. Kim, Assistant Attorney General for the Civil Rights Division. “Today’s sentencings demonstrate the Justice Department’s unprecedented commitment to aggressively prosecute these human trafficking cases.”

“Today’s sentences should resonate loud and clear throughout our immigrant community. We, in law enforcement, will continue to aggressively pursue those who exploit and prey on vulnerable immigrants who come to America’s shores seeking a better life,” said Richard B. Roper, U.S. Attorney for the Northern District of Texas. “I am grateful to the Attorney General for choosing the Dallas-For Worth area to receive $1.35 million in federal grant funding so that we may continue to enhance our human trafficking programs by identifying and assisting victims of human trafficking and apprehending and prosecuting those engaged in trafficking offenses.”

“The Changs have demonstrated the depravity common in human smugglers and human traffickers,” said John Chakwin, special agent-in-charge of the Immigration and Customs Enforcement (ICE) Office of Investigations in Dallas. “They have shown that human slavery is an ugly crime not just relegated to the pages of history. It exists in the 21st Century, and in the cities and suburbs of America. Our ICE agents are committed to bringing such criminals to justice. I hope Changs’ victims receive some solace with today’s sentencings, which end a long ICE and law enforcement cooperative investigation.”

Chang utilized a smuggling network that recruited young women in South Korea with promises of good jobs in the United States.  Chang paid the victims’ smuggling debts, took the women’s passports, and told them they could not leave until they had paid off their debts to him.  Chang forced the victims to live in the upper floor of his home, where he restrained their freedom by monitoring them inside the home with interior surveillance cameras and by posting a Club Wa employee at the front door of the home as a guard.  Chang required the women to work six nights a week drinking with customers, often until they became sick or passed out.  Chang threatened to “sell” the women to other clubs if they disobeyed.  One victim escaped the Chang home by leaping from a second-story bathroom window and fleeing with the help of a local pastor, who later reported the case to local authorities.

Human trafficking prosecutions are a top priority of the Department. In the last six fiscal years, the Civil Rights Division, in conjunction with U.S. Attorneys’ Offices, has increased by six-fold the number of human trafficking cases filed in court, quadrupled the number of defendants charged, and tripled the number of defendants convicted.  In 2006, the Department obtained a record number of convictions in human trafficking prosecutions.