The VLW Blog

A Pennington Gap dentist convicted of defrauding Medicaid is the beneficiary of a new interpretation of the federal money laundering statute. U.S. District Judge James P. Jones reads the recent Santos opinion from the U.S. Supreme Court as requiring a higher standard of proof when someone is accused of using ill-gotten gains to promote an illegal enterprise.

In this opinion and order, Judge Jones dismisses seven money laundering convictions in the case of Dr. Roy Shelburne. Jones found that payments for rent and dental supplies were not shown to have come from “proceeds” of Medicaid fraud. He also held that Shelburne’s own salary payments did not constitute “promotion” of illegal activity.

The Bristol Herald Courier quotes Tony Giorno, the U.S. assistant attorney who prosecuted the case, as saying that his team may appeal the decision. He described the U.S. Supreme Court ruling on the money laundering statute as a “sea change” in the law, saying “we knew we would have problems with that.”
By Peter Vieth

We are scratching our heads trying to understand the theory of liability in this bribery case arising from Buchanan County flood damage. It’s well-established that county officials solicited and accepted bribes, including a coon dog, from contractors in exchange for flood clean-up contracts. As reported by the Bristol Herald-Courier, it is undisputed that the contractors performed quality work when they got the contracts. There is no claim that the contractors overbilled.

The county says the federal government did not pay enough reimbursement for all this work, although there is no evidence as to why. Now, the county wants to make the contractors pay the difference.

Perhaps when he gets back to his blog, the county’s attorney will write a post explaining it all.

It’s a banner week for Newport News lawyer Len Bennett. He’s on the winning side in two federal decisions interpreting the Fair Credit Reporting Act. The big news is the 4th Circuit’s opinion in Saunders v. Branch Banking and Trust Company of Virginia, where the court affirms an award of $80,000 in punitive damages even though the jury declined to award any actual damages. The Times-Dispatch notes the decision here.

In the other FCRA decision this week, Richmond federal district Judge Henry Hudson ruled that the limitations clock starts over every time that a consumer disputes a credit report and the report is not properly handled by a creditor.

Apparently, there are a lot of cases coming out of the Cumberland Gap National Historic Park, because the federal judges are calling for back-up in this order posted on the Western District’s website.

John Brownlee, the U.S. Attorney for the Western District of Virginia, will step down in a month after seven years as the region’s top federal prosecutor. He confirmed today that he is considering a bid for the Republican nomination for Virginia Attorney General, but has not made any final determination.

Julie Dudley, now First Assistant U.S. Attorney, will serve as U.S. Attorney when Brownlee steps down on May 16.

Fairfax State Senator Ken Cuccinelli is the only announced candidate for the GOP Attorney General nomination. Brownlee joins a field of potential candidates that includes Mechanicsville State Senator Ryan McDougle and former Delegate Paul C. Harris.

Walter D. Kelley Jr. is thinking about leaving the federal district bench less than four years after he was appointed to the court.

At a hearing in a patent case last week in Norfolk, Kelley told the attorneys before him that he has been offered a partnership in the Washington office of Jones Day. The remarks were in the context of a case scheduled for trial in April, and he mentioned that it might be the last case he presides over.

Asked today about the remarks, Kelley acknowledged that he had made them but would not elaborate on them. He said he has not written to the White House announcing his resignation and added that any comment before he does so would be premature.

A native of Norfolk and a graduate of Washington and Lee University and its law school, Kelley was nominated in October 2003 to the seat vacated by Judge Henry C. Morgan. The Senate confirmed him in June 2004, and he received his commission two months later.

At the time, he was a partner in the Norfolk office of Troutman Sanders LLP. He specialized in commercial litigation, with particular emphasis on intellectual property and antitrust cases.

As a judge, he has presided over dockets heavy on drug and firearm cases with relatively little in the way of the business disputes he handled as an attorney.

President Bush has nominated David J. Novak and Mark S. Davis for federal judgeships in Richmond and Alexandria, respectively.

Novak is an assistant U.S. attorney who worked on the trial of Zacarias Moussaoui, the convicted Sept. 11 conspirator. Davis is a circuit judge in Portsmouth.

Both men were on the list of candidates submitted by Sens. John Warner and Jim Webb to the White House. The Richmond Times-Dispatch has more details.

March Madness is in full swing, and once again many an office worker with a basketball jones will be trying to sneak a peek at his team’s game over the Internet. Unless he works for the federal court system.

Once again our friend and source in the Eastern District (identified here only as “Shallow Throat”) has sent along a warning memo from the court IT guys. Last year, the bandwidth was nearly maxed out, and the no b-ball forces would block any streaming sports site they discovered, a tactic they’re using again this March.

But the IT guys have a graver warning this time around: Watching sports could sacrifice security. During the Super Bowl, hackers managed to get into the live feed from Dolphin Stadium, where the game was played. Anyone who watched the game on the computer got a surprise present: A keylogging program embedded in the feed.

The courts memo concludes with a sniff: “Judiciary personnel are reminded that it is inappropriate to use judiciary resources to the detriment of business processes.” No doubt the IT guys will be pleased when March Madness is over.