U.S. Supreme Court Finds That SOX’s Anti-Shredding Provision Does Not Apply To Fish

Snell & Wilmer – Ahron Cohen – When one thinks of the Sarbanes-Oxley Act of 2002 (SOX)—a law created to restore trust in the financial markets following the collapse of Enron—red grouper is not usually the first thing that comes to mind. Nevertheless, the Supreme Court recently decided whether the polychromatic ocean fish is considered a “tangible object” under SOX’s document shredding provision.

In 2007, an officer with the Florida Fish and Wildlife Conservation Commission boarded John Yates’ fishing vessel off the Florida coast in the Gulf of Mexico and found Mr. Yates had illegally reeled in a number of undersized red grouper. The officer ordered Mr. Yates to segregate and preserve the undersized fish from the rest of the catch and proceed to port where he would be issued a citation for his transgression. Once the officer departed the vessel, Mr. Yates had the diminutive fish thrown overboard and replaced with properly sized fish. The officer uncovered Mr. Yates’ actions, and Mr. Yates was charged with destroying, concealing and covering up the undersized fish to impede a federal investigation, in violation of § 1519 of SOX.

SOX’s § 1519, known as the “anti-shredding provision,” provides that a person may be fined and/or imprisoned up to 20 years if he or she “knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or make a false entry in any record, document or tangible object with the intent to impede, obstruct or influence” a federal investigation. (Emphasis added.) Clearly, shredding financial documents to cover up a white collar crime fits within § 1519.

Over the past several years, however, federal prosecutors have applied an expansive interpretation of § 1519 to charge individuals outside of the white collar criminal context with destroying physical evidence to cover up a crime. For instance, federal prosecutors have prosecuted a wide array of crimes—ranging from terrorism to violations of workplace safety laws—under § 1519 for covering up various forms of physical evidence unrelated to objects used to preserve or record information (e.g., destroying cash, automoniles, guns, etc.)

The issue before the Supreme Court was whether the meaning of “tangible object” within § 1519 should be limited only to things used to preserve or record information or, as the government contended, all physical evidence. While the Court acknowledged that the dictionary meanings of “tangible” and “object” would evoke the more expansive interpretation, the Court went on to affirm that the phrase must be read within the context of SOX’s intent. The Court reasoned that SOX’s clear focus and intent was to deter and remedy corporate and accounting malfeasance and cover-ups. Upon this rationale, Justice Ginsberg, writing for the Court in a five-four decision, concluded that the meaning of “tangible object” within § 1519 applies only to those objects used to record or preserve information.

While fisherman around the country can now rest easy knowing that they will not be prosecuted under SOX for destroying evidence of undersized fish by throwing them overboard, the ruling serves as a reminder to those in the corporate and accounting worlds that § 1519 still applies to them if they destroy hard drives, documents and other recording and preservation devices with the intent to cover-up wrongdoing and impede, obstruct or influence a federal investigation. Justice Kagan’s dissent further highlighted § 1519’s “tangible object” definition following the Court’s ruling: a fisherman who dumps undersized fish overboard to avoid a fine cannot be punished under § 1519, yet a fisherman who shreds his vessel’s catch log to avoid a fine for the same reason is culpable under § 1519.
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How Did A Top Lawyer (And Classmate to the Chief Justice) Wind Up Living On The Street?

Alfred postell homeless

How did a smart lawyer holding three degrees and who once counted Chief Justice John G Roberts as one of his class mates wind up haunting a Washington DC intersection and carrying his belongings in a plastic bag wind up as a homeless man?

It’s a sad tale of a highly educated, talented man who fell to earth through being a schizophrenic, becoming DC’s most academically distinguished homeless person.

Alfred Postell’s life fell apart after working for the Big Law firm Shaw Pittman following a “psychotic break” according to his mother and a report in the Washington Post.

As The Post report: Listening to him talk about his life is like dive-bombing into a dream. Everything at first sounds normal. But things quickly fall into disorder. The chronology hiccups. Incongruous thoughts collide.

Postell is a 1979 Harvard law graduate who once worked at accounting firm Lucas and Tucker as well as the firm known as Shaw Pittman Potts & Trowbridge. He has degrees in economics and accounting. His Harvard law classmates included Chief Justice John G. Roberts Jr. and former Sen. Russ Feingold of Wisconsin.

“You get into a firm, it’s prestigious,” Postell tells the Post. “And when you lose that position, it’s like suicide. It’s all over. It’s atrophy. Or as accountants say, it’s to be obsolete. You know what that means? Obsolescence. Beyond your useful life. I was beyond my useful life.”

He also received testimonials to his abilities and intellect.

“It seems like every couple of years I would become aware of a new achievement or plateau that you have reached,” wrote E. Burns McLindon, a prominent Bethesda accountant who instructed Postell at Strayer, in a letter Postell framed. Strayer had just given Postell its Outstanding Alumni Achievement Award. “Your example,” wrote McLindon, who died in 2012, “serves as a true example to our young people today to gather up within themselves the determination and ambition to succeed.”

But regrettably his illness, for which he receives support from mental health services in Washington, continued.

As The Post reported, “He worked extremely hard and was extremely disciplined,” says classmate Piper Kent-Marshall, a longtime senior counsel with Wells Fargo.

And he was immaculately dressed and groomed. “I wouldn’t have been surprised if someone told me he manicured his nails,” another classmate says.

That’s why the Harvard grads were so surprised to learn what had become of Postell. How could this man — so articulate, so elegant — end up eking out an all-but invisible existence on the fringes of the nation’s capital?

“It is an in­cred­ibly tragic and sad story,” Kent-Marshall says, “because in law school, he was one of the top students and a very, very, very bright and charming man.”

The illness that descended upon him and put him on his new path on the street was something unforeseen.

Even his mother, now 85, can’t explain what happened. A darkness one day fell over her son, Priest says. He kept talking about getting arrested. He thought the police were after him. Then he had a bad breakup with a woman he loved. Shortly afterward, Postell had his psychotic break.

Read more at The Washington Post

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