The major criminal trial was in New York City, in the Southern District of New York, where many large financial and securities crimes are prosecuted. The SDNY indictment contained the ubiquitous conspiracy charge as Count One and various other substantive counts. The conspiracy alleged was a conspiracy related to securities and bank fraud. The defendants were convicted and sentenced to substantial terms (more on that later).
Following the SDNY convictions, the Government pursued charges against the Rigas Defendants in the Middle District of Pennsylvania for various alleged tax and related crimes related to their alleged looting of Adelphia. (Note the venue rules for tax charges require or encourage prosecution closer to home.) Again, the ubiquitous conspiracy count appeared as Count One, alleging conspiracy to commit tax offenses and a Klein (defraud the IRS) conspiracy, presumably both as objects of the single alleged conspiracy relating to tax matters.
In a prior interim appeal in this MDPA case, the Third Circuit held that the Rigas Defendants had made a substantial claim that this tax conspiracy charge was within the scope of the conspiracy alleged and tried in the original SDNY trial. United States v. Rigas, 605 F.3d 194 (3d Cir. 2010) (en banc), here. The consequence of that claim, if ultimately accepted, would be that the Rigas Defendants would be subject to double jeopardy in the second criminal case, requiring that the count be dismissed. The Court remanded for the trial court to reconsider that issue. For more detail on this holding, see my prior blog. En Banc Rehearing in Rigas - Scope of Conspiracy, Totality, and Double Jeopardy (5/14/10), here.
On remand, on January 18, 2012, the district court sustained the Rigas Defendants' argument on the conspiracy charge being within the scope of the earlier SDNY charge and thus held that they were subjected to double jeopardy on the conspiracy count, with the result that the conspiracy count was dismissed. The Government could still prosecute the Rigas Defendants for the substantive tax counts. But, at the point, the Government got practical (some might suggest, as did the judge that the practicality was late in coming). What was the point of further prosecution of the Rigas Defendants?
By order dated January 26, 2012 (see order imbedded in the WSJ Law Blog cited above), the Judge granted the Government's motion to dismiss all charges and noted:
As a result of their previous convictions in in the Southern District of New York for conspiracy to commit securities fraud, making false statements in SEC filings, falsifying books and records of a public corporation and bank fraud, John Rigas, age 86, is serving a 12 year prison sentence and Timonth [sic - Timothy] Rigas, age 55, is serving a 17 year prison sentence. [Per the footnote, the projected release dats January 23, 2018 and June 22, 2022, respectively]
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It is obviously not for this Court to query why the Government initiated this prosecution. However, it has become increasingly clear to us during the over half decade it has pended on our docket that this endeavor is a highly questionable use of the increasingly scarce resources of the federal government. To wit: if an already 86 year old man who will be approximately age 92 if he lives to his projected release date based on his sentence in the Southern District of New York is convicted in this Court, what sort of punishment could we possibly mete out that makes sense? As Kenny Rogers sang in his hit song The Gambler, “You got to know when to hold ‘em, know when to fold ‘em.” Today, the Government has appropriately decided to fold ‘em, and has blessedly elected to end this aspect of the unfortunate Rigas saga. It is a commendable decision, and one that we fully endorse and adopt.The Court did note that the Government would pursue the tax issuses in civil and administrative proceedings.
As I get more detail, particularly on the order dismissing the conspiracy charge that preceded the dismissal of all charges, I will post here.
I will have to say here that the point of the Kenny Rogers' song was to know when you have a losing hand. I don't think the Government thought it had a losing hand on the substantive tax counts that it voluntarily dismissed. The only point was that a win appeared to pointless.