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Attorneys representing two former executives of Computer Associates, the Long Island, N.Y., company caught up in a massive accounting scandal, argued last week that federal prosecutors are misusing a criminal statute revised as part of the Sarbanes-Oxley Act, possibly leading to severe prison sentences — up to 20 years — that were not intended by federal legislators. The dispute involves the prosecution of Sanjay Kumar, the former chairman and CEO of Computer Associates, and Stephen Richards, a former sales executive, on various fraud and obstruction charges. The defendants are seeking to dismiss two counts brought against them under the amended statute, 18 U.S.C. �1512(c). Prosecutors in the Eastern District of New York accuse both men of lying to the government and lying to their company’s outside counsel, Wachtell, Lipton, Rosen & Katz, which was conducting an internal investigation of the company’s accounting practices. Kumar also faces charges that he coached other employees to lie. The purpose, the government alleges, was to steer government investigators and the SEC clear of a scheme in which Computer Associates booked revenue in 35-day months, effectively boosting its quarterly and yearly numbers. Several Computer Associates officials, including its former general counsel, Steven Woghin, have pleaded guilty to related charges. The company itself reached a $225 million settlement with government regulators in order to restore some funds to investors. Kumar and Richards, however, continue to contest the charges against them, and now find themselves in a fight over the meaning and scope of 18 U.S.C. �1512(c), which was amended as part of the Sarbanes-Oxley Act. The act, passed in 2002, made wholesale revisions to the securities law. While defense attorneys argue that �1512(c) is a narrow statute that applies only to physical evidence, such as documents, the government contends it reaches beyond that to any conduct that could obstruct an official proceeding. In the government’s view, the statute essentially provides a tool for prosecuting vast frauds, like the one alleged at Computer Associates, under one statute, rather than with piecemeal charges from various sections of the law. The statute reads: “Whoever corruptly — (1) alters, destroys, mutilates, or conceals a record, document, or other object, or attempts to do so, with the intent to impair the object’s integrity or availability for use in an official proceeding; or (2) otherwise obstructs, influences, or impedes any official proceeding, or attempts to do so, shall be fined under this title or imprisoned not more than 20 years, or both.” In arguments last week before Eastern District Judge I. Leo Glasser, Christopher J. Gunther of Skadden, Arps, Slate, Meagher & Flom, which represents Richards, and Denis J. McInerney of Davis Polk & Wardwell, which represents Kumar, argued that �1512(c)(2) is merely a residual clause. As such, they contended, it plugged a gap in the statute with the phrase “otherwise obstructs,” as in tampers with physical evidence in a way not enumerated in �1512(c)(1). Both Gunther and McInerney strongly objected to the government’s contention that “otherwise obstructs” applies to any conduct that obstructs any official proceeding, whether or not physical evidence is involved — including alleged false denials to Wachtell, the SEC and, in Kumar’s case, prosecutors. Under that interpretation, they said in arguments and in court papers, �1512(c) would swallow up other specific obstruction provisions of �1512. It would also subject many defendants to twice as much time in prison, from 10 years to 20. In an animated presentation, McInerney also noted that the Justice Department, in alerting its prosecutors to the changes in the law, did not advocate a broad interpretation of �1512(c) in a memo to staff. Considering the government’s argument in this case, he said, one would have expected the Justice Department to proclaim that Congress had given it “the Stradivarius of all obstruction statutes.” As one of its chief cases the defense cites Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001), which discusses the principles of ejusdem generis (“of the same kind of class”) and noscitur a sociis (“it is known by its associates”) in statutory interpretation. In Circuit City, the U.S. Supreme Court quoted the definition of ejusdem generis as “[w]here general words follow specific words in a statutory enumeration, the general words are construed to embrace only objects similar in nature to those objects enumerated by the preceding specific words.” Assistant U.S. Attorney Eric Komitee presented a straightforward argument in rebuttal: The statute was clearly written and left little to argue about. The “otherwise obstructs” language made sure that defendants who obstructed an official proceeding could not escape the statute. He also noted that opinions expressed or not expressed by the Justice Department did not bind U.S. Attorneys in their interpretation and use of criminal law, or afford defendants any rights. Judge Glasser did not rule on the matter, but he clearly suggested that he was leaning toward the government’s position. Several times he cited a principle from Ratzlaf v. United States, 510 U.S. 135, that is stressed in Circuit City: “We do not resort to legislative history to cloud a statutory text that is clear.”

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