White-collar crimes are appearing more regularly in district courts, straining a court system historically unfamiliar with cases that have typically landed in federal court.
A Twin Cities area hedge fund manager was convicted in federal court this month for investing millions in the state’s largest fraud scheme, while a Brooklyn Park couple was sentenced in Ramsey County District Court in an attempted $114 billion fraud case. The scenario is increasingly common as intricate and expansive federal cases that require more time send lower-level cases to district courts.
“We are reaching our tipping point,” Ramsey County Attorney John Choi said of his office’s capacity to charge financial crimes.
Assistant Ramsey County Attorney John Ristad, the sole lawyer dedicated to financial crimes in the office, said he’s reviewing about a dozen white-collar cases for possible charges.
Hennepin County had 37 white-collar cases presented to the office for charging in 2010, and 74 in 2012. Through April of this year, the office has been presented with 47 cases, up dramatically from the 17 cases it had by April 2012. (Approximately 90 percent of the cases each year were charged.)
U.S. attorney’s spokeswoman Jeanne Cooney said white-collar cases in federal court are growing bigger and more complex, and, “We don’t have the resources here to handle every case.” As a result, more cases are finding their way to district court.
Cooney wouldn’t give a firm dollar amount, but said the size of a case and amount lost affect which prosecutions go into federal court, which is charging fewer white-collar defendants. The Minnesota U.S. attorney’s office charged 116 white-collar defendants in 2010 and 92 in 2012.
“[Federal courts] pick the biggest and the most complicated ones, and that’s left more for the county attorneys’ offices to deal with,” said William Mitchell College of Law Prof. Ted Sampsell-Jones. “It seems to me like there’s no systematic approach to this.”
In response to the growing white-collar case load, Choi created a fraud and financial crime unit in 2011, appointing Ristad. Two years later, Choi is ready to add more attorneys — if he can secure the funding.
Hennepin County has for several years dedicated a number of prosecutors to white-collar cases, and currently employs five.
“We don’t have the resources we like, but we’re doing everything we can,” said Hennepin County Attorney Mike Freeman.
Choi, Freeman and the U.S. attorney’s office formed a working group last year to meet regularly to discuss white-collar crime.
One consequence is that state public defenders’ offices are bowing under the pressure of the document-heavy cases. Criminal attorneys in state court, public defenders and prosecutors, typically don’t have the deep financial experience to tackle cases that were historically prosecuted on the federal level.
Public defenders said they get the raw end of the deal. Many defendants end up in their office because their assets are frozen. The already financially strapped and overburdened offices don’t have the expertise to handle financial crimes, they said, and often dip into its budget to hire private attorneys or finds itself “begging” for attorneys to do pro-bono work.
The problem, public defenders said, is that prosecutors typically have broad access to experts from state and federal agencies — from the Minnesota Financial Crimes Task Force to the FBI — that investigate the cases.
“We’re not in a position where we’re capable of providing defense or hiring expert witnesses in this area,” said Fred Friedman, chief public defender in Duluth. “We’re over our heads on this one. It’s going to get worse and worse.”
Criminal cases typically come with a few dozen pages of reports and documents, while it’s not unusual for white-collar cases to involve a few thousand to half a million pages of records. It’s increased the workload for state public defenders, whose numbers have steadily dropped from 421 attorneys in 2008 to 371 this year. The Minnesota Board of Public Defense’s budget has grown little in that time, from $66.3 million in 2008 to $67.8 for fiscal 2013.
“It has not had a profound impact in delaying the criminal calendar,” said Pat Kittridge, chief public defender in Ramsey County. “It just means our lawyers are stressed to provide service to their traditional case load as well as accommodate the specialized needs of these cases.”
Kittridge and William Ward, chief public defender in Hennepin County, said they’re trying to catch up with the trend by providing training. The state public defender’s office is also hoping to add a financial crimes attorney to its trial team, which responds to the most-complicated cases across Minnesota, by the end of the summer.
“If we’re not trained to do these types of cases,” Ward said, “it’s a disservice to our client.”
Prosecutors are also rapidly trying to build expertise.
“A big part of it is not to be intimidated by a big pile of papers and not being afraid to say to the investigator, ‘Huh?’ ” said Ristad, who did not have specialized training before he took over Ramsey County attorney’s financial crimes cases. “It’s been a challenge, but it hasn’t been insurmountable.”