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Legal news from Wednesday, January 26, 2011




Investors sue Bank of America subsidiary for fraud
Daniel Makosky on January 26, 2011 2:21 PM ET

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[JURIST] Twelve plaintiffs on Monday combined to file a lawsuit [complaint, PDF] in the New York State Supreme Court [official website] against Countrywide Financial Corporation [NYT backgrounder] alleging widespread fraud that resulted in substantial financial losses. The plaintiffs invested hundreds of millions of dollars with the Bank of America (BOA) [corporate website] subsidiary between 2005 and 2007, believing the purchases of mortgage-backed securities to be "conservative, low-risk investments." The suit claims that Countrywide "recklessly" misrepresented the stability of the investments and failed to adhere to its stated underwriting and credit analysis procedures, leading the credit ratings of many of the securities to fall significantly. The complaint also names several former Countrywide executives as defendants, and seeks compensatory and punitive damages.

BOA has recently been the target of several lawsuits alleging fraud. Arizona Attorney General Terry Goddard filed a lawsuit in mid-December against BOA for misleading customers [JURIST report] in mortgage modification and foreclosure practices. Earlier in the month, the US Securities and Exchange Commission (SEC) [official website] reached a $137 million settlement agreement [JURIST report] with BOA over fraud charges [order, PDF] in a lawsuit that claimed BOA used anti-competitive bidding processes with 20 state municipalities. In June, BOA subsidiary Countrywide Home Loans, Inc reached [JURIST report] a $108 million settlement agreement [text, PDF] with the Federal Trade Commission (FTC) [official website] in response to a lawsuit that charged it with collecting excessive fees from homeowners facing foreclosure.




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Arizona federal judge declares judicial emergency
Aman Kakar on January 26, 2011 1:13 PM ET

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[JURIST] The US Courts for the Ninth Circuit [official website] announced [press release] on Tuesday that Chief Judge Roslyn Silver of the US District Court of Arizona [official website] has declared a judicial emergency [order; PDF] under the Speedy Trial Act [18 USC § 3161-3174]. Judge Silver's order suspends the time limits set forth in 18 USC § 3161 [text], which require that a federal criminal trial commence 70 days after a complaint or indictment. The judicial emergency allows a federal criminal trial to begin a maximum of 180 days after being charged. The emergency order does not affect the provision requiring filing of an indictment within 30 days of an arrest and it does not affect time limits for those that are awaiting trial. Chief Judge Alex Kozinski [official profile], the chair of the Judicial Council of the Ninth Circuit [official website], expressed hope that Congress would aid the Arizona district courts stating:
The district court in Arizona urgently needs additional resources. Judicial vacancies need to be filled and new judgeships should be given strong consideration. There is also a need for more court staff and facilities.

The order declared the federal emergency would last for 30 days, but at the request of Judge Silver the Ninth Circuit Judicial Council extended the suspension for an additional year. The suspension will last until February 19, 2012.

The judicial emergency was one of the initiatives of Chief Judge John Roll [WSJ Profile], who was among the victims of the recent shooting [JURIST report] in Tucson, Arizona. Arizona federal courts have experienced a drastic increase in their federal criminal caseload due to illegal immigration [JURIST news archive] and drug trafficking. The Arizona federal court currently has three vacancies and is eligible for as many as five judgeships based on its case load. In the Tucson division, which handles the most cases, three judges are handling an average of 1,200 cases each. While the strain on the District Court in Arizona is front and center due to recent events, nationwide there has been a shortage of judges, and various legal groups have called on the President and Congress to make nominations and confirmations a top priority [JURIST report].




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Vietnam court sentences democracy activist convicted of violating national security
Sarah Posner on January 26, 2011 12:33 PM ET

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[JURIST] A Vietnamese court on Wednesday sentenced former communist official Vi Duc Hoi to eight years in prison for advocating democracy and a multiparty system. Hoi was convicted of violating Vietnam's national security for information contained in articles he posted on the internet. According to Hoi's defense lawyer, he was convicted of spreading anti-government propaganda [AP report] on the internet. Hoi joined the communist party in 1980 and became a high-ranking party leader. He began advocating democratic reform in 2006 and was subsequently expelled from the communist party. In accordance with the court's ruling, Hoi now faces eight year in jail with an additional five years under house arrest following his jail term.

Hoi is among several dissidents in Vietnam who have been convicted for anti-government activity. In January 2010 a Vietnamese court sentenced [JURIST report] writer and democracy activist Pham Thanh Nghien to four years in prison on charges of spreading anti-state propaganda. That same month a Vietnamese court convicted four democracy activists [JURIST report] of subversion. Following the one-day trial, human rights lawyer Le Cong Dinh [JURIST news archive] was sentenced to five years in prison. The four defendants were accused of activities aimed at ending communist rule in Vietnam. Dinh admitted to advocating multi-party democracy in Vietnam and joining the banned Democracy Party. Prior to Dinh's conviction, a Vietnamese court sentenced [JURIST report] pro-democracy dissident Tran Anh Kim in December 2009 to five and a half years in prison for subversion.




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UK government proposes revised control order policy
Daniel Makosky on January 26, 2011 10:57 AM ET

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[JURIST] UK Home Secretary Theresa May [official profile] addressed Parliament [official website] on Wednesday to announce proposed changes [press release] to the country's anti-terrorism policies, including the controversial use of control orders [Guardian backgrounder; JURIST news archive]. Control orders, created by the Prevention of Terrorism Act of 2005 (PTA) [text], impose a variety of legal restrictions on individuals suspected of terrorism-related activity, regardless of the suspect's citizenship status or whether he or she has been convicted of any wrongdoing. May described [text] the existing policy as "draconian," saying:
We are also clear that the current control order regime is imperfect and has not been as effective as it should be. We therefore propose to repeal control orders. Instead, we will introduce a new package of measures which is better focused and has more targeted restrictions, supported by significantly increased resources for surveillance and other investigative tools. Restrictions that have an impact on an individual's ability to lead a normal life should be the minimum necessary, should be proportionate and should be clearly justified. The legislation we will bring forward will make clearer what restrictions can and cannot be imposed.
Under the revised system, suspects may be detained without charges for a maximum of 14 days as opposed to the current 28, though the government may seek an extension under emergency circumstances; new restrictions governing law enforcement's use of its stop and search authority will be imposed; and the use of police surveillance will be limited to investigating offenses carrying a minimum six month prison sentence. Additionally, those subject to the revamped control orders would be afforded greater freedoms than under the current system, though specifics are not yet available. The forthcoming legislation, if approved by Parliament, will be permanent unlike the PTA which requires annual renewal.

In their current form, restrictions can include curfews, limits on internet access, restrictions on travel, and limitations on employment, school, access to bank accounts and contact with other people. Amnesty International (AI) [advocacy website] issued a report [text, PDF; JURIST report] in August calling for an end to the use of control orders against terrorism suspects, characterizing the orders as legal sanctions without trial. A month prior, the UK Court of Appeal [official website] ruled [judgment, text; JURIST report] that two terrorism suspects could sue the government for damages over wrongfully imposed control orders. In June The UK Supreme Court in ruled [JURIST report] that a control order requiring an anonymous appellant to live 150 miles from his family and operate under a 16-hour curfew violated his rights under the European Convention of Human Rights (ECHR) [text]. In September 2009, then-Home Secretary Alan Johnson [BBC profile] said the government would undertake a review [JURIST report] of the system. The UK Law Lords ruled in October 2007 that the government may continue to impose control orders [JURIST report] on terror suspects in lieu of detention, but said that some elements of the orders violate human rights.




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Tunisia issues international arrest warrant for former president
Matt Glenn on January 26, 2011 10:18 AM ET

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[JURIST] Tunisia's Justice Minister Lazhar Karoui Chebbi announced Wednesday that the country has issued an international arrest warrant for ousted president Zine Al Abidine Ben Ali [BBC profile]. Ben Ali, his wife and other family members face allegations that they illegally transferred money [AFP report] out of the country, possessed unlicensed weapons [CNN report] and incited armed violence. Chebbi said some of the former president's family members have already been arrested, though others have traveled to Canada [CBC report] where some of them have permanent resident status. Canada has said it is willing to consider freezing any assets [Toronto Star report] held by Ben Ali or his family within the country. France is also considering freezing the family's assets, and the Paris prosecutor's office has opened an investigation [RFI report] into Ben Ali's assets after three NGO's filed a lawsuit in France accusing Ben Ali of corruption and money laundering.

Last week, UN High Commissioner on Human Rights Navi Pillay [official website] announced that UN experts would be sent to Tunisia [JURIST report] to assess the human rights situation and meet with the country's interim leaders. Earlier in the week, UN Secretary-General Ban Ki-Moon [official website] urged government leaders in Tunisia to initiate dialogue between all sides in an attempt to restore rule of law [JURIST report]. The Tunisia Constitutional Council officially announced earlier this month that Ben Ali had permanently left the office of the presidency after he declared a state of emergency [JURIST reports] and left the country. The council, the country's highest legal authority on constitutional issues, declared that the leader of the lower house of parliament, Foued Mebezza, will assume power [AFP report] until elections are held in two months.




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Russia parliament approves New START treaty
Matt Glenn on January 26, 2011 9:17 AM ET

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[JURIST] The Russian Federation Council [official website, in Russian] on Wednesday voted to ratify the New START treaty [materials, PDF; JURIST news archive], an agreement between Russia and the US intended to reduce nuclear arms in both countries. The upper house of Russia's parliament unanimously supported the measure, which calls for each country to reduce its nuclear arsenal [RIA Novosti report] by about 30 percent. Under the new treaty, each country will be allowed to have 1,550 warheads as opposed to the 2,200 allowed under the old Strategic Arms Reduction Treaty [materials] that expired in December 2009. Council-member Viktor Evtukhov [official profile, in Russian] said [press release, in Russian], "[t]he conclusion of the START treaty is clearly the achievement of national policy. First, the ratification of the treaty will have a positive impact in all areas of bilateral cooperation—the signing of START-3 completely draws a line under the Cold War. Secondly, the New START treaty fully meets the interests of Russia, who chose a less costly and more rational approach." Russia included non-binding language in its ratification disapproving US plans [AP report] to build a missile defense system in Eastern Europe. Russian Defense Minister Anatoly Serdyukov said that the treaty will not affect Russian plans [RIA Novosti report] to build a missile defense system. Russia's lower house ratified the treaty [RIA Novosti report] Tuesday.

Russia's lower house originally approved the treaty [JURIST report] in December. Earlier that month, the US Senate [official website] voted 71-26 [JURIST report] to ratify the treaty. US President Barack Obama and Russian President Dmitry Medvedev signed the treaty [JURIST report] in Prague in April. The agreement, reached [JURIST report] last February, is the first nuclear agreement between the two nations in nearly 20 years. The US State Department began negotiating [JURIST report] the treaty with Russia in 2009. Nuclear disarmament between the US and Russia, whose nuclear arsenals comprise 95 percent of the world's nuclear weapons, languished during the Bush administration. The treaty is considered a key part of easing tensions between the two countries, which reached a high point after the 2008 Georgia conflict [BBC backgrounder].




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Council of Europe demands Kosovo, Albania investigate organ trafficking
Julia Zebley on January 26, 2011 8:06 AM ET

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[JURIST] The Parliamentary Assembly of the Council of Europe (PACE) [official website] demanded [press release] Tuesday that Albania and Kosovo investigate and prosecute alleged incidents of organ trafficking, inhuman treatment and other crimes by the Kosovo Liberation Army (KLA) [official website] during the 1998-1999 war in Kosovo [BBC backgrounder; JURIST news archive]. In a report [text], compiled by Dick Marty [personal website, in Italian] of the Alliance of Liberals and Democrats for Europe [official website], PACE declared:
The Assembly strongly reaffirms the need for an absolutely uncompromising fight against impunity for the perpetrators of serious human rights violations, and wishes to point out that the fact that these were committed in the context of a violent conflict could never justify a decision to refrain from prosecuting anyone who has committed such acts. There cannot and must not be one justice for the winners and another for the losers. Whenever a conflict has occurred, all criminals must be prosecuted and held responsible for their illegal acts, whichever side they belonged to and irrespective of their political role.
PACE called for EU member states and the Council of Europe to contribute to and support the European Union Rule of Law Mission in Kosovo (EULEX), as well as provide all pertinent information requested. The report was approved unanimously following a debate [transcript] and was the culmination of an investigation announced two years ago [JURIST report]. At that time, Albania refused to investigate [JURIST report] the allegations. In the debate, Marty also contended that Kosovo's Prime Minister Hashim Thaci [official website, in Albanian] headed a splinter group of the KLA and that he "exerted violent control over the trade in heroin and other narcotics" and "ordered—and in some cases personally over[saw]—assassinations, detentions, beatings and interrogations in various parts of Kosovo." Albania and Kosovo now welcome an international probe [Reuters report] but have denied [AFP report] Thaci's involvement. Thaci has also systematically denied the allegations [statement, in Albanian].

Former prosecutor for the International Criminal Tribunal for the former Yugoslavia (ICTY) Carla Del Ponte [BBC profile] alleged in a book [JURIST report] that approximately 300 Serbian and other non-Albanian prisoners were victims of organ trafficking during the 1998-1999 war in Kosovo, but that a 2003 probe by her ICTY team failed to obtain sufficient evidence to prosecute. In response, parliamentarians submitted a motion [text] in 2008 requesting that the Assembly investigate the organ trafficking charges. Del Ponte said reliable sources told her that members of the KLA took the organs of young, healthy prisoners for black-market sales [Kosovo Compromise report]. The Swiss Foreign Ministry later barred Del Ponte from promoting the book because it was inconsistent with her role as the Swiss ambassador. In March of 2008, the office of the Serbian war crimes prosecutor [official website] said that it was investigating "informal statements" [JURIST report] received from ICTY investigators alleging illegal organ harvesting. The next month, Serbia announced [JURIST report] that it planned to officially request that the ICTY resume a probe into the organ trafficking allegations, even though Kosovo Justice Minister Nekibe Kelmendi dismissed the allegations as "fabrications." The same month, Human Rights Watch (HRW) [advocacy website] urged [JURIST report] leaders of Kosovo and Albania to launch an investigation into the allegations, but, as of May, had not received a response.




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