Mass. Atty Gets 2 Years For 'Corruptly' Pushing Pot Bribe Plot - Mr. Mark Smith, LL.M., CLDP

A former Massachusetts attorney "violated his oath corruptly" by bribing a police chief with payments to his brother to win a local marijuana license for a client, a federal judge said Wednesday as he handed down a two-year prison term. During a hearing in Boston, U.S. District Judge William G. Young also ordered Sean O'Donovan to pay a $150,000 fine and serve three years of supervised release, during which time he is barred from attempting to regain his ability to practice law. A jury convicted O'Donovan in October of a fraud and bribery scheme designed to secure one of three retail marijuana licenses awarded by the City of Medford, a suburb of Boston.   The jury was shown multiple secretly recorded videos of O'Donovan meeting with the brother of the Medford police chief. The lawyer's initial request to have the chief simply read the license application submitted by his client, cannabis retailer Theory Wellness, morphed into an agreement that the chief would alter his ranking because O'Donovan promised to pay the brother $25,000, the videos showed. "It is terribly offensive and demeaning conduct in the operation of our government," Judge Young told O'Donovan on Wednesday. "The government must be free from that corruption." O'Donovan's role as an attorney weighed heavily on Judge Young's review of the government's request for 41 months in prison and O'Donovan's proposal for no more than a year and a day behind bars. "This is an attorney," the judge told O'Donovan's counsel, Martin G. Weinberg of Martin G. Weinberg PC. "You've got to deal with that. This is an attorney who has violated his oath, corruptly. I'm deeply troubled by that, not just the public corruption, the fact that this is an attorney." Prosecutors called the scheme "a simple case of old school, old-fashioned, smoky backroom bribery," arguing O'Donovan abused his attorney-client relationship with Theory Wellness to advance the purported bribe. He created a facade to try to convince the chief's brother that Theory Wellness's chief executive was "pulling the strings," all the while keeping the client in the dark about how he was advancing their interests before the licensing body, prosecutors said.  Weinberg told the court that O'Donovan had forfeited his right to practice law, a privilege he may never regain. The defense lawyer added that aspects of the case, including the government's alleged concoction of the bribery offense, counsel against a high sentence. O'Donovan, Weinberg argued, never paid a cent to Medford Police Chief Jack Buckley. While that may not make the ploy legal, it is very different from the "heartland" of political corruption and bribery cases, Weinberg said.  Weinberg added that the government must have been insecure about the case it was building in September 2022 because it had the chief's brother, Michael Buckley, "put to O'Donovan a hardener" — a fictional statement to draw a stark line between his request of having the chief read the application and a quid pro quo that they could build a case on. On that day, Michael Buckley told O'Donovan that Jack Buckley had reviewed the application and had ranked Theory Wellness low on the list of firms vying for the limited slots. But, the brother continued, the chief said he'd change his ranking because of the payment. "He said 'great' instead of the only answer which would have fit the law," Weinberg said, which is to rank the company as he saw fit. Acting U.S. Attorney Joshua S. Levy said in a statement Wednesday that O'Donovan was "driven by greed," and the scheme was undone when the police chief learned of the attorney's overture to his brother and told federal authorities. "Today's sentence should serve as a warning to anyone who thinks they can corrupt government officials for personal gain: your conduct will be uncovered, and will land you in federal prison — regardless of who you are," Levy said. In the lead-up to sentencing, O'Donovan's legal team had argued the conduct amounted to legally protected lobbying, despite how unsavory the arrangement seemed. Assistant U.S. Attorney Jonathan Jacobson said Wednesday the scheme was about O'Donovan lining his own pockets and crossing a bright line to serve his self-interest, namely a generous success fee that Theory Wellness offered if it won the license. Judge Young waved off the lobbying defense earlier in the case and reiterated his view of the alleged conduct. "It's a bribery case in this court's mind," the judge said. "It's not a lobbying case." In the moments before sentencing, O'Donovan stood to address the court. He decried the "terrible decision" he made, adding he has "no one to blame but myself." With the judge's permission, he turned to the courtroom gallery packed with his family and friends, apologizing to them and to his elderly mother for letting them down. "That was one of the most effective allocutions I've heard, and I believed it," Judge Young responded, adding that without it, he would have faced a far heavier sentence.  O'Donovan's attorney declined to comment on the sentence when approached outside the courtroom.  O'Donovan is represented by Martin G. Weinberg of Martin G. Weinberg PC, by Michael Pabian of Michael Pabian Law Office LLP, and by Timothy R. Flaherty. The government is represented by Kristina Barclay of the U.S. Attorney's Office for the District of Massachusetts and Jonathan E. Jacobson of the U.S. Department of Justice's Criminal Division. The case is U.S. v. O'Donovan, case number 1:22-cr-10141, in the U.S. District Court for the District of Massachusetts.

Pfizer, Moderna Spar Over Trial Date In COVID Vaccine IP Case - Mr. Mark Smith, LL.M., CLDP

Moderna and Pfizer are battling over setting a trial date in a dispute in Massachusetts federal court over COVID-19 vaccine patent infringement claims, with Pfizer looking to schedule a trial after summary judgment motions are decided, while Moderna is arguing a firm trial date is needed now and should be set for this fall. Pfizer, alongside BioNTech, is hoping that the District of Massachusetts will wait on scheduling a trial start date until after summary judgment motions are ruled on in the summer and its attorneys are freed up from other conflicts. Meanwhile, Moderna claims that the case is on track for a September 2024 trial and that pushing it back would create scheduling conflicts with its witnesses.   "The longer that this case proceeds without a firm trial date, the greater the opportunity for the court, the parties, and the witnesses to fill their calendars with other commitments," Moderna said in its Tuesday motion. "As BioNTech and Pfizer have already informed Moderna, their lead trial counsel have previously-scheduled trial conflicts that would make a trial date in 2024 under the present schedule impossible," Pfizer and BioNTech countered in their Tuesday response. Moderna filed its motion first, stating that the case could start as early as September 2024, and adding that it couldn't be held any later than January 2025 under the court's rules. According to the Massachusetts-based biotechnology company, Pfizer's point about possible conflicts actually illustrates the need to set a trial date "sooner than later," as both the court and witnesses' schedules could fill up. In addition, Moderna said summary judgment is not a good reason to delay scheduling the trial because there are no issues brought up that would make a trial unnecessary, and even if there were, setting a trial date wouldn't affect the court's ability to resolve the summary judgment. Moderna said it was worried that Pfizer was angling to slow the trial, as it told the Patent Trial and Appeal Board in a related matter that it wasn't expecting the trial to occur until next spring. "Moderna is concerned that defendants are seeking to delay trial in this case," Moderna stated. "In two recent filings submitted to the Patent Trial and Appeal Board, Pfizer and BioNTech have suggested that trial in this case will not occur until 'around April 2025,' and that it was 'speculative' and 'willfully naive' to expect the court to schedule trial sooner." However, Pfizer said in its response that it is the court's "established practice" to set trial dates after deciding on summary judgment motions, which in this case is set for July, and there is no reason to deviate from that. "The scope and length of the trial, and the time necessary for trial, will depend on the outcome of the summary judgment motions," Pfizer and BioNTech said. "At this time, the parties are proceeding into expert discovery and nothing has changed to warrant departure from the established practice." According to the two biotech companies, several members of their trial counsel have other trials scheduled throughout October and December 2024 that would make any trial dates in 2024 impossible. Pfizer said that if the court did decide to schedule a trial date ahead of summary judgment, sometime in early 2025 would be appropriate, as it would reduce scheduling conflicts and would not prejudice Moderna. Moderna first sued in August 2022, claiming that Pfizer and BioNTech could have steered clear of Moderna's patented technology in developing their COVID-19 vaccine, but instead infringed two key components of Moderna's platform. According to the suit, they used the same chemical modification and encoded their vaccine for the same coronavirus protein — the full-length spike protein — that Moderna says it pioneered long ago. Counsel for Moderna did not immediately respond to a request for comment. Counsel for Pfizer and BioNTech declined to comment. The patents in-suit are U.S. Patents Nos. 10,993,127; 10,702,600; and 10,898,574. Moderna is represented by William F. Lee, Emily R. Whelan, Kevin S. Prussia, Andrew J. Danford and Amy K. Wigmore of WilmerHale. Pfizer is represented by Thomas H. L. Selby, Stanley E. Fisher, A. Joshua Podoll, Kathryn S. Kayali, Michael Xun Liu, Michael Mestitz, Julie Tavares, Ayelet M. Evrony, Derrick M. Anderson and Haylee Bernal Anderson of Williams & Connolly LLP, and Lee C. Bromberg, Erik P. Belt and Wyley Proctor of McCarter & English LLP. BioNTech is represented by Bruce M. Wexler, Eric W. Dittmann, Young J. Park, Ashley N. Mays-Williams, Scott F. Peachman, Karthik R. Kasaraneni and Ryan Meuth of Paul Hastings LLP, and Jeffrey S. Robbins, Joseph D. Lipchitz and Gregory M. Boucher of Saul Ewing LLP. The case is ModernaTX Inc. et al. v. Pfizer Inc. et al., case number 1:22-cv-11378, in the U.S. District Court for the District of Massachusetts.

Ill. Jury Convicts Trader Of $30M Bond Fraud

An Illinois federal jury on Wednesday convicted a former bond trader of tanking his Atlanta-based former employer by claiming inflated commissions on his trades and entering false and unauthorized trades that caused $30 million in losses. The jury deliberated for about six hours before it found former IFS Securities Inc. trader Keith Wakefield guilty of securities and wire fraud over trading activity between 2017 and 2019 that Wakefield testified was not an effort to enrich himself but rather cover his hedges and fix significant mistakes he'd made while trading U.S. Department of Treasury and municipal bonds. The government claimed during trial that Wakefield, IFS' former head of fixed income trading, caused IFS and its customers to bleed money by claiming "hugely inflated" commissions on secondary bond market trades he brokered and using IFS' money to enter false and unauthorized trades that "wildly exceeded the firm's risk limitations." Wakefield tried to recoup initial losses by making more bond trades, but those just resulted in further losses, prosecutors said. Wakefield also embezzled about $820,000 from IFS by reflecting false commissions, the government claims. In one instance, the former trader claimed a $64,000 profit for one of his trades when the actual profit was only $1,848. The inflated claim caused IFS to pay him thousands of dollars in unearned commissions, the government said. The government's case centered largely on a recorded August 2019 phone call between Wakefield and former IFS technology chief Kristiaan Sheedy, in which the former trader told Sheedy to "think fraudulent" as he explained his trading activity. Wakefield testified during trial that he wasn't acknowledging that he'd been engaging in fraud but was simply trying to explain his trades in a way Sheedy could grasp. Wakefield also testified that his trades preceding IFS' demise stemmed from efforts to cover a multimillion-dollar buy he couldn't enter by the end of a trading day and to correct a "fat-finger" ticketing error that he still struggles to understand or explain. While on the stand, the former trader said his multimillion-dollar buy mistake happened because he'd sold about $40 million worth of 10-year bonds into the market intending to buy them back at the end of the day when prices had spiked and interest rates had decreased. He testified that an all-day meeting with IFS' investment banker and a public official tied him up for several hours, and the market had closed by the time he returned to his desk to buy the bonds back. Wakefield also claimed on the stand that wearing multiple hats at work and juggling personal family concerns led him to log a trade in June 2019 as though its price per share was thousands of dollars different from its actual contract price, which made IFS' trading account seem as though it had $1.8 million in it and "was wrong from the moment [he] saw it." He said he tried to enter another trade to create the opposite effect of his "fat-finger" trade, and eventually turned his 10-year bonds into 30-year bonds, but neither approach worked to fix his mistake because market prices continued to move unfavorably. However, no one sought those details or considered those factors before IFS executives and government officials "jumped to conclusions" about Wakefield's trading, his attorney, James Vanzant of Blaine & Vanzant LLP, asserted during closing arguments. Instead, the government based its charges on an "imperfect understanding" of IFS' trading system and incorrect assumptions about the nature of Wakefield's trades, the attorney argued. Assistant U.S. Attorney Sean Franzblau called those assertions "nonsense" during trial closings, saying Wakefield's testimony was simply an effort to confuse the jury because he knew he couldn't explain the trial evidence in a way that made sense. The government also blasted the former trader's argument that IFS could have prevented its losses by closing its positions differently or looking at certain reports, saying the assertion was like "an arsonist lighting a forest fire and then complaining that the fire department was wasting water putting it out." Wakefield is represented by Holly N. Blaine and James G. Vanzant of Blaine & Vanzant LLP. The government is represented by Sean Franzblau and Bradley Tucker of the U.S. Attorney's Office for the Northern District of Illinois. The case is USA v. Keith Wakefield, case number 1:21-cr-00614, in the U.S. District Court for the Northern District of Illinois.

Spouses Ran PPP Fraud In Secret, Ga. Defendants Tell Jury - Mr. Mark Smith, LL.M., CLDP

A Georgia man and woman standing trial for charges that they helped orchestrate a scheme to illegally obtain $11 million in Paycheck Protection Program loans were unwittingly implicated in the fraud by their respective spouses, the defendants' lawyers told a federal jury Wednesday. Attorneys for Teldrin Foster and Carla Jackson, whom prosecutors say were instrumental in the 22-person fraud ring, argued during opening statements that both had in fact been bystanders, wrongly accused thanks to their close connections to the real perpetrators. Jackson's attorney, David Marshall, said that despite "all of these lawyers" the government assembled, he was confident there was "no evidence" his client — who is accused of using her business to help launder the proceeds of the loans — played any part in the scheme. Instead, Marshall continued, it was Jackson's ex-husband John Gaines who kept "secrets upon secrets upon secrets" from her. Not only did Gaines hide his involvement with the scheme, he said, but he also cheated on Jackson and fathered children out of wedlock prior to their divorce. "Carla Jackson committed no crime," Marshall said, adding the planned testimony of Gaines — who pled guilty to his role in the scheme last week — would "inject into this case more than the reasonable doubt required" to acquit Jackson. This week's trial is the culmination of a nearly 4-year-old investigation into the fraud ring the government said was masterminded by Duluth, Georgia's Darrell Thomas. According to prosecutors, Thomas recruited a wide cast of accomplices to file PPP loan applications during the first months of the COVID-19 pandemic. The program, enacted as part of 2020's CARES Act, was designed to provide immediate relief to business owners by doling out hundreds of billions of dollars so they could keep workers on their payroll during the initial shutdown from the virus. Thomas pled guilty to profiting immensely from the initiative using forged IRS papers for front businesses, raking in more than $14.7 million from the PPP and other pandemic relief programs. Originally set to begin Monday, the proceedings were delayed after Jackson and Foster's co-defendant Jerry Baptiste failed to appear in court. Federal marshals were dispatched to track down Baptiste, but he remained unaccounted for as of Tuesday morning, when U.S. District Judge J.P. Boulee elected to move into jury selection without him. The U.S. Department of Justice did not immediately have an update on Baptiste's status. In presenting the government's case Wednesday, the DOJ's Siji Moore painted a portrait of a sophisticated criminal enterprise with Thomas at its head. Below Thomas were operatives like Foster, Moore added, who helped prepare falsified IRS documents, while other members recruited agents to register front businesses. The proceeds were then laundered by businesses like Jackson's "that only existed on paper"; Moore said it had no bank transactions in the first months of 2020, a period of inactivity abruptly followed by a series of six-figure deposits. "This case is about Teldrin Foster and Carla Jackson's decision to participate in fraud during a time of national crisis," Moore told the jury, a contention backed up by "a long paper trail" of bank records, computer files and digital communications. Foster and Thomas had a relationship predating the scheme, Moore said, but key to its success was the fact that Foster's wife worked for the Internal Revenue Service. Gena Pyfrom-Foster — who pled guilty to using her post to further the conspiracy and is due to begin a 41-month prison sentence this summer — served as the group's inside contact who worked with Foster to create the fake documents, he said.  But Foster's attorney, Leigh Ann Webster, argued it was Foster's wife whose dirty hands stained her client. In Webster's telling, Pyfrom-Foster and Thomas engaged in the scheme behind Foster's back. Both had access to Foster's email account, which the government says was used to communicate the details of the fraud, constituting "significant evidence" that Foster was never involved. Thomas reportedly owed Foster tens of thousands of dollars from prior business ventures together, Webster said, leaving Foster to assume any money he received from the scheme was simply a belated repayment of those debts. "From the government's perspective, this story is simple," Webster said, adding "there's more — a lot more — to this story." The government is represented by Siji Moore of the U.S. Department of Justice's Fraud Section and Nathan Parker Kitchens, Tal C. Chaiken, Radka T. Nations, Sekret T. Sneed and Samir Kaushal of the U.S. Attorney's Office for the Northern District of Georgia. Carla Jackson is represented by David D. Marshall. Teldrin Foster is represented by Saraliene Durrett of Saraliene Smith Durrett LLC and Leigh Ann Webster of Strickland Webster LLC. The case is USA v. Thomas et al., case number 1:20-cr-00296, in the U.S. District Court for the Northern District of Georgia.

A federal jury in Maryland on Tuesday found former Baltimore State's Attorney Marilyn Mosby guilty of lying on mortgage applications for one of her two Florida vacation homes, but not guilty on the application for the other home. After a more than two-week trial in Greenbelt, Maryland, the jurors convicted Mosby of making a false mortgage application, ruling after a day of deliberations that Mosby lied about receiving a $5,000 gift from her husband as she closed on a condominium in Longboat Key, Fla., according to the U.S. Attorney's Office for the District of Maryland. The jury, however, acquitted her on similar charges related to the purchase of an eight-bedroom house in Kissimmee. The split verdict is a second conviction for Mosby, Baltimore's top prosecutor from 2015 to 2023. In November, a separate federal jury convicted her of two counts of perjury in connection with her withdrawal of thousands of dollars from her city retirement account under a federal law designed to help people suffering amid the COVID-19 pandemic. Mosby is facing up to 30 years for the mortgage fraud conviction, and the perjury counts from the November trial each carry a maximum of five years' incarceration. Still, actual federal sentences are usually less than the maximum. U.S. Attorney Erek L. Barron, whose Maryland office prosecuted the case, said in a statement following the verdict Tuesday: "We humbly respect the court's considered rulings, opposing counsels' zealous advocacy, and the wisdom of both jury verdicts in this case and we remain focused on our mission to uphold the rule of law." Local media reports say Mosby did not comment as she left court. During Mosby's latest trial, federal prosecutors vied to prove that Mosby spun a web of lies — about her federal tax debts, rental intentions and the $5,000 gift — as she purchased two homes in Florida with the retirement funds that she withdrew. Mosby's lawyers contended that Mosby was a first-time homebuyer and real estate rookie who leaned on professionals throughout the home purchase processes. Evidently, jurors were pushed toward conviction by the so-called gift letter that Mosby sent to her mortgage company in February 2021. In it, she said she had received a $5,000 gift from her then-husband and Baltimore City Council President Nick Mosby. Marilyn Mosby had the money and needed it to lock in a lower interest rate on the Longboat condo, but the funds were tied up in a custodial account that she shared with her daughter and the lender wouldn't accept. So, prosecutors said, Mosby wired the $5,000 to her husband, and he sent the money to an escrow agent. Marilyn Mosby testified that she wired the money because she was not confident that her husband could come up with the cash by closing. Assistant U.S. Attorney Sean Delaney, on the other hand, said during closing statements Monday that the gift letter is a smoking gun. "On the gift letter, it's open and shut," he told jurors. Although jurors hung their hats on the letter, opening and closing statements focused heavily on the $64,000 in back taxes that Nick and Marilyn Mosby racked up in tax years 2014 and 2015. Mosby still owed thousands of dollars to the Internal Revenue Service when she applied for mortgages on the vacation homes in 2020 and 2021, prosecutors said, but she indicated that she was not in default or delinquent on any federal debt. Mosby's legal team, meanwhile, insisted that Mosby was unaware of the lingering debt because her now ex-husband lied to her for years about paying it off. The couple divorced last year, and both Marilyn and Nick Mosby testified at trial. Prosecutors also accused Mosby of signing a contract that promised to maintain exclusive control over the Kissimmee property despite having already given control to a vacation rental company. In addition, prosecutors said Mosby sent a letter to her mortgage company falsely stating that she had lived in the Kissimmee property for the past 70 days. The government is represented by Sean R. Delaney and Aaron S.J. Zelinsky of the U.S. Attorney's Office for the District of Maryland. Marilyn Mosby is represented by James Wyda, Maggie Grace, Sedira Banan and Cullen Macbeth of the Office of the Federal Public Defender. The case is U.S. v. Marilyn Mosby, case number 1:22-cr-00007, in the U.S. District Court for the District of Maryland. Read more at: https://www.law360.com/legalethics/articles/1794544?nl_pk=7089bcf1-8829-40c2-883f-4d8f8fbbf1ea&utm_source=newsletter&utm_medium=email&utm_campaign=legalethics&utm_content=1794544&read_main=1&nlsidx=0&nlaidx=0?copied=1

Mosby Guilty On One Count Of Lying For Fla. Mortgage - Mr. Mark Smith, LL.M., CLDP

A federal jury in Maryland on Tuesday found former Baltimore State's Attorney Marilyn Mosby guilty of lying on mortgage applications for one of her two Florida vacation homes, but not guilty on the application for the other home. After a more than two-week trial in Greenbelt, Maryland, the jurors convicted Mosby of making a false mortgage application, ruling after a day of deliberations that Mosby lied about receiving a $5,000 gift from her husband as she closed on a condominium in Longboat Key, Fla., according to the U.S. Attorney's Office for the District of Maryland. The jury, however, acquitted her on similar charges related to the purchase of an eight-bedroom house in Kissimmee. The split verdict is a second conviction for Mosby, Baltimore's top prosecutor from 2015 to 2023. In November, a separate federal jury convicted her of two counts of perjury in connection with her withdrawal of thousands of dollars from her city retirement account under a federal law designed to help people suffering amid the COVID-19 pandemic. Mosby is facing up to 30 years for the mortgage fraud conviction, and the perjury counts from the November trial each carry a maximum of five years' incarceration. Still, actual federal sentences are usually less than the maximum. U.S. Attorney Erek L. Barron, whose Maryland office prosecuted the case, said in a statement following the verdict Tuesday: "We humbly respect the court's considered rulings, opposing counsels' zealous advocacy, and the wisdom of both jury verdicts in this case and we remain focused on our mission to uphold the rule of law." Local media reports say Mosby did not comment as she left court. During Mosby's latest trial, federal prosecutors vied to prove that Mosby spun a web of lies — about her federal tax debts, rental intentions and the $5,000 gift — as she purchased two homes in Florida with the retirement funds that she withdrew. Mosby's lawyers contended that Mosby was a first-time homebuyer and real estate rookie who leaned on professionals throughout the home purchase processes. Evidently, jurors were pushed toward conviction by the so-called gift letter that Mosby sent to her mortgage company in February 2021. In it, she said she had received a $5,000 gift from her then-husband and Baltimore City Council President Nick Mosby. Marilyn Mosby had the money and needed it to lock in a lower interest rate on the Longboat condo, but the funds were tied up in a custodial account that she shared with her daughter and the lender wouldn't accept. So, prosecutors said, Mosby wired the $5,000 to her husband, and he sent the money to an escrow agent. Marilyn Mosby testified that she wired the money because she was not confident that her husband could come up with the cash by closing. Assistant U.S. Attorney Sean Delaney, on the other hand, said during closing statements Monday that the gift letter is a smoking gun. "On the gift letter, it's open and shut," he told jurors. Although jurors hung their hats on the letter, opening and closing statements focused heavily on the $64,000 in back taxes that Nick and Marilyn Mosby racked up in tax years 2014 and 2015. Mosby still owed thousands of dollars to the Internal Revenue Service when she applied for mortgages on the vacation homes in 2020 and 2021, prosecutors said, but she indicated that she was not in default or delinquent on any federal debt. Mosby's legal team, meanwhile, insisted that Mosby was unaware of the lingering debt because her now ex-husband lied to her for years about paying it off. The couple divorced last year, and both Marilyn and Nick Mosby testified at trial. Prosecutors also accused Mosby of signing a contract that promised to maintain exclusive control over the Kissimmee property despite having already given control to a vacation rental company. In addition, prosecutors said Mosby sent a letter to her mortgage company falsely stating that she had lived in the Kissimmee property for the past 70 days. The government is represented by Sean R. Delaney and Aaron S.J. Zelinsky of the U.S. Attorney's Office for the District of Maryland. Marilyn Mosby is represented by James Wyda, Maggie Grace, Sedira Banan and Cullen Macbeth of the Office of the Federal Public Defender. The case is U.S. v. Marilyn Mosby, case number 1:22-cr-00007, in the U.S. District Court for the District of Maryland. Mr. Mark Smith, LL.M. Certified Legal Documents Preparer (800) 590-6698 (Telephone) cldp@mail.com (E-Mail) https://cldpmarcsmith.com (Website) American Bar Association No.: 6036858 Please feel free to reach out via social media as well: https://www.instagram.com/marksmithcldp/ https://www.facebook.com/groups/marksmithcldp https://medium.com/@cldpmarksmith https://twitter.com/cldpmarksmith https://mrmarksmithllmcp.quora.com/ https://www.youtube.com/@cldpmarksmith https://www.pinterest.com/cldpmarksmith/ https://www.facebook.com/certifiedlegaldocumentspreparermarksmith

ACLU Atty On How To Protect Civil Liberties In The AI Era - Mr. Mark Smith, LL.M., CLDP

 Because artificial intelligence and algorithmic systems often operate in the shadows, there's a new need for legislation, regulation and enforcement to ensure the technology doesn't undercut civil liberties by engaging in discrimination in housing, education or employment, according to Cody Venzke, senior policy counsel for the American Civil Liberties Union.

Cody Venzke

Working on issues of surveillance, privacy and technology, Venzke applies his training as a privacy lawyer toward ensuring everyone from students to job seekers aren't having their civil rights and civil liberties infringed upon by algorithmic systems and artificial intelligence tools in either the public or private sectors.

But Venzke said this isn't just hypothetical, stressing that already marginalized groups have been seeing discrimination by algorithmic systems that can determine whether they will have access to certain housing or job opportunities.

Regulating how people's data can be used is also a high priority right now, Venzke said.

"When there are state-level attacks on vulnerable groups of people, it means that algorithmic systems and the use of our data can make them even more vulnerable," he said. "We've seen this, for example, in attacks on reproductive rights, where the lack of comprehensive privacy legislation and certain loopholes in existing privacy protections have allowed law enforcement to pursue a digital trail of data." 

Venzke spoke with Law360 about what safeguards he thinks are most needed to protect people — including marginalized groups who are already seeing harm — from discriminatory algorithmic systems and AI tools. This interview has been edited for length and clarity.

Are there AI-oriented government policies that the ACLU is concerned about?

President [Joe] Biden's executive order [Safe, Secure, and Trustworthy Artificial Intelligence] enshrined a lot of the principles that we have been advocating for [regarding] uses of artificial intelligence, including auditing and identifying potentially discriminatory uses of AI and then mitigating those discriminatory harms. Seeing civil rights centered in the administration's AI policy is a major win for us.

One of the things that we are looking forward to over the course of the next year or so is ensuring that those policy principles are enshrined in agencies' actual practices. We think that is a good building block to begin working from. There's additional work to be done, including addressing AI uses in the private sector.

What are you looking out for in the private sector's usage of AI?

I think that what we would be looking for is to see many of the principles that were in the artificial intelligence executive order and in the administration's blueprint for an AI Bill of Rights be extended to the private sector. That means ensuring that algorithmic systems aren't resulting in discriminatory harm. That means mitigating those discriminatory harms and providing people with really meaningful recourse if they've been harmed by artificial intelligence. For example, this means that you would be aware of the fact that your job application is being processed and assessed by artificial intelligence, getting notice of that assessment and the decision that's made, and getting an opportunity to either challenge that decision or correct any incorrect data that it relied on.

Are there regulations that you or the ACLU are pushing for in the year ahead?

We've been championing more detailed guidance from the Equal Employment Opportunity Commission to help ensure that both employers and the companies that develop and sell hiring tools, understand that civil rights law applies to them even when the hiring decisions are made by artificial intelligence.

We released a report earlier this year on high-tech surveillance in the education space, including monitoring kids' online activity, the use of facial recognition in schools and similar surveillance technology. We are looking forward to action from the U.S. Department of Education, including guidance for schools on how civil rights law intersects with artificial intelligence and how the [Family Educational Rights and Privacy Act] applies to artificial intelligence.

One of the places where the executive order, we think, fell short is in national security and adjacent fields such as domestic law enforcement and immigration. National security and immigration uses of artificial intelligence are some of the most impactful places where AI can affect individuals' rights and individuals' liberties. Those spaces were largely left untouched by the executive order — not entirely — but they're largely subject to a future, yet-to-be-drafted memorandum on AI in the national security space.

What kind of challenges are people coming to the ACLU with regarding AI policies?

One of the biggest ones we're seeing on the litigation side is the use of AI and law enforcement, particularly the use of facial recognition technology, which has resulted in disparate, incorrect arrests of Black people when the facial recognition technology wrongly identified them as leads in investigations and that was simply used to then make an arrest.

The executive order requires law enforcement agencies to really assess the way that algorithmic systems are used throughout the criminal legal system. So that includes not just the use of facial recognition technology for identifying leads in investigations, but other algorithmic systems that make decisions about people. For example, some algorithmic systems are used to determine the terms of parole — which individuals might pose a risk to the community. These systems are ones where we would love to see increased auditing of potential discriminatory impacts from those systems and mitigation of any discriminatory impacts, because of the significant impact those systems can have on individuals.

How might something like that be mitigated?

Well, one of the ways is ceasing to use the system if you can't address discriminatory impacts that it's having on people. Beyond that, ways that algorithmic technology can have the harms mitigated include by examining the data that's used to train the system. Often, what we see is the data that's used to train an algorithmic system, or that's fed into it to make decisions about individuals, reflects existing societal biases against people of color, people with disabilities and other vulnerable groups. In addition, providing certain procedural safeguards — like providing notice to the individual, providing an opportunity to challenge the algorithmic system and providing the opportunity to correct information — are ways that you can help mitigate those discriminatory uses.

One final way, I think, that's really essential is that as entities consider whether to deploy an algorithmic system, or are assessing algorithmic systems they've already deployed, they consult with a wide array of stakeholders, especially those that are most likely to be impacted by the system. They might be able to provide insight observations about the system's use and its potential impacts that might otherwise be missed.

What do you think needs to be cleared up when it comes to crafting AI policies?

One of the key things that I think policymakers need to ensure that they are grappling with as they think about AI is addressing algorithmic systems and AI systems that are already in place and already affecting people's lives. I think that generative AI, like ChatGPT, is sort of grabbing lots of headlines, and that means a lot of the proposals that we are seeing are focused on things like generative AI and deepfakes. And although those are probably worthy of legislative attention, that leaves lots of algorithmic systems that are making decisions in education, in governmental benefits and hiring unaddressed. For example, 99% of Fortune 500 companies are using algorithmic systems to make hiring decisions about people, where an artificial intelligence system will score resumes and advance the highest scoring resumes on to the next round. Studies have shown that these algorithmic hiring circumstances can lead to discriminatory effects where they will favor employees that have already been favored by existing biases in society.

Is there any AI regulation coming in 2024 that you're expecting?

The U.S. Department of Health and Human Services is required to develop a strategic plan on the use of algorithmic systems in governmental benefits. I think it's going to be a critical step. The ACLU has litigated against the use of algorithmic systems in various Medicaid programs, which are administered by state agents, and in some of those circumstances what we've seen is that state agency employees develop the algorithm to determine people's benefits with almost no vetting, no grounding in statistical measuring and no notice or recourse for affected individuals.

One of the major things that underlies the use of algorithmic systems is our data, and we're seeing lots of agencies respond favorably to regulating, as much as they can, the uses of our data. The Consumer Financial Protection Bureau is preparing a proposed rule on regulating data brokers under the Fair Credit Reporting Act, the Federal Trade Commission has had long-simmering rulemaking on commercial surveillance, and the Department of Education has long indicated that they are working on an update to rules under the Family Educational Rights and Privacy Act. So I think all of those would be really meaningful protections for people to control their data amid the increased prevalence of AI in those sectors.

Why is it important to you and to the ACLU to get AI policy right?

Frankly, there are many critical areas of our lives where we have long and rightfully been protected by civil rights laws and by procedural protections to ensure that entities aren't making sort of arbitrary decisions about our access to housing, to education, to employment and other critical opportunities. The advent of AI should not change that at all. Unfortunately, AI is often functioning in the shadows. We might be unaware of its use. We might be unaware of how it came to those decisions about us. Legislation, regulation and enforcement are critical for ensuring that AI doesn't undercut those long-standing protections.

Mr. Mark Smith, LL.M.
Certified Legal Documents Preparer
(800) 590-6698 (Telephone)
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American Bar Association No.: 6036858

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