Houston Federal Criminal Law Blog

The U.S. Supreme Court this week announced that people who have merely been arrested -- not convicted -- for so-called "serious crimes" can be subjected to compulsory DNA cheek swabs and have their DNA profiles submitted to a federal database. The purpose of the mandatory DNA collection, according to a bare majority of the court, is to facilitate solving cold cases.

Justice Anthony Kennedy wrote the 5-4 majority opinion approving the cheek-swab test. He reasoned that the involuntary collection of DNA profiles from people arrested for serious crimes is no more intrusive than the collection of fingerprints or photographs and serves the legitimate governmental purpose of cracking unsolved cases. Kennedy, however, did not at all define the phrase "serious crimes," leaving the question open as to whether those accused of white collar offenses or drunk driving might be forced to contribute their DNA to the database.

Last week, several executives at the hedge fund SAC Capital Advisors -- including the fund's founder -- received grand jury subpoenas in regards to an ongoing insider trading investigation. Earlier this year, SAC agreed to pay a $616 million penalty to settle civil enforcement cases brought by the Securities and Exchange Commission in regards to the same allegations, so the company had been under the impression its legal woes were over.

Indeed not. Instead, the FBI initiated a criminal investigation, not only into the allegations against individual traders already believed to be involved, but apparently also into the activities of SAC's founder and the company itself. So far, no criminal charges have been filed, and SAC's founder and SAC as a company have not been accused of any wrongdoing. However, the case is clearly before a federal grand jury, the purpose of which is to determine if the government has enough evidence to bring those charges.

SAC was aware of the FBI investigation and was cooperating fully, as most companies choose to do in federal investigations. Nine current or former employees of SAC were tied to the alleged insider trading SAC thought it had resolved through the civil penalty. Of those, six were criminally charged and four have pled guilty.

When the grand jury subpoenas were sent to the founder and several executives, something changed. SAC decided not to cooperate unconditionally any longer.

For decades, people have argued that we should end our nation's drug war for a wide variety of reasons. Individuals, advocacy groups, researchers and law enforcement groups, here in the U.S. and from all over the world, have called into question whether our system of state and federal drug crimes -- our aggressive law enforcement and our harsh drug sentences are fair -- or if they're totalitarian or even racist. Until now, however, the primary reason activists wanted to end the War on Drugs was that we've been fighting it since 1969 and marijuana and other illegal drugs are just as widely available and in demand as ever.

It's hard to claim with a straight face that the U.S. War on Drugs has been effective in preventing people from wanting or using illegal drugs. Until recently, however, the fact that it has been ineffective was the most common reason cited for ending it, and it wasn't getting much traction.

The Securities and Exchange Commission has just announced bringing criminal charges against the City of Victorville, California, its municipal airport authority, two city officials, and the firm that underwrote a 2008 airport expansion municipal bond offering. The agency claims that the group intentionally inflated the values of some airport hangars in order to fraudulently secure tax increment financing. The SEC also claims the underwriting firm misappropriated some $2.7 million in bond proceeds for its own use.

The SEC's complaint claims that the airport authority, the underwriting firm, its owner, and an affiliate company committed securities fraud. It also contends that the city, the former assistant city manager, the former economic development director, the underwriting firm and its owner aided and abetted the fraud. If the agency can prove its case, it seeks permanent injunctions to keep the defendants from participating in future bond offerings along with the return of allegedly ill-gotten gains, financial penalties and interest.