Thursday, April 14, 2011

Sixth Circuit Reverses TN Senator John Ford's Convictions for Wire Fraud and Concealing a Material Fact to The Feds.

This case is the second federal prosecution of State Senator John Ford and involves his failure to disclose his financial interests in certain organizations working with TennCare.  A jury convicted Ford of “honest services” wire fraud and of concealing a material fact, that is failing to disclose his relationships with Omnicare and another company that paid him and who also who did business with TennCare.

The Sixth Circuit found that Ford did not owe TennCare a contractual duty to report his financial interests with Omnicare. The only reporting duties owed by Ford here were owed to the senate and election registry.  Therefore, reasoned the court, failing to disclose those business relationships to TennCare was not a violation of federal law. We see from the result that Ford engaged in obviously poor ethics and perhaps violations of state election law but his actions did not amount to a federal crime.

Senator Ford argues too that in light of the Supreme Court's holding in the recent Skilling case (Enron prosecution) his wire fraud conviction should be set aside.  The Supreme Court in Skilling held that the honest services wire fraud statute “covers only bribery and kickback schemes.”  Senator Ford's convictions were for his failure to disclose his financial interests, not bribes or kickbacks.  It was on this ground that the Sixth Circuit vacated and reversed his wire fraud convictions.

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