Welcome to the LSIS Investigative Journal

Welcome to the LSIS Investigative Journal

Friday, August 18, 2017

Convicted Rapist Found Working Security for a Rape Counseling Center in California

Convicted Rapist Found Working Security for a Rape Counseling Center in California

People - Crime
By Christine Pelisek
Posted on August 16, 2017

A convicted rapist in California was recently found to be working security at a rape counseling center, PEOPLE confirms.

Police in Fresno, California, say they discovered that 40-year-old Damon Rodgers was working as a guard at Fresno’s Rape Counseling Services center after he posted on a security guard networking forum on Facebook asking about a sidearm holster for a .45-caliber handgun.

“At first, the reporting party was trying to help him out,” Fresno police detective Josh Alexander tells PEOPLE. “That’s how they originally started talking. Initially he was trying to help [Rodgers] out to get holstered, and then another guy said he is a convicted sex offender. He found [Rodgers] on the [California] Megan’s Law website.”

Rodgers was convicted in 1998 of two rapes in Madera County, California. He was released from prison in 2011.

Alexander, who monitors Fresno’s sex registrants, says the other security guard tipped him off on July 27.

Later that day, police pulled over Rodgers’ car after his shift at the center and found he was allegedly in possession of a gun and a switchblade, which as a felon he is prohibited to carry.

“He had the gun in a holster,” Alexander claims. “He said he had the gun for two weeks.”

Alexander alleges Rodgers weapon was not registered and loaded with nine .45-caliber slugs. The serial number had also been shaved off, he says.

“It was surprising to me,” he says. “Anytime we have a convicted sex offender who has a gun working at a rape crisis center, I would hope it would be cause for alarm for any law enforcement agency.”

Alexander says the security company that employed Rodgers, reportedly identified as Stone Protection Services, didn’t do a background check on him. “You take for granted they have gone through a clearance check,” he says.

Alexander says the rape center had no idea that a convicted sex offender worked there.

“They just went along with the security company they hired to work there,” he says. “If they had known who he was, they would have put a stop to it.”

Alexander says it is unclear how long Rodgers may have been working at the center or with the security company. Both the security company and the center didn’t return calls to PEOPLE for comment.

According to local TV station KFSN, California issued Rodgers a guard card last year but he used a slightly different name.

Rodgers has entered a plea of not guilty to a charge of possession of a firearm by a felon. He is held in the Fresno County Jail on $386,000 bail.

A hearing is scheduled for Aug. 30. His lawyer could not be reached for comment.

Wednesday, August 16, 2017

Spokeo Ruling Deals Blow To Cos. But May Have Silver Lining

Spokeo Ruling Deals Blow To Cos. But May Have Silver Lining

By Allison Grande

Law360, New York (August 15, 2017, 11:38 PM EDT) -- The Ninth Circuit's decision Tuesday that the harm stemming from an allegedly inaccurate consumer report published by Spokeo Inc. was concrete enough to establish standing gives class action plaintiffs a boost in their bids to block defendants from making quick exits, but the panel's fact-specific analysis may limit the ruling's broader application and leave companies with a stronger defense down the line, attorneys say.

The question of what statutory harms are sufficient to meet Article III's injury-in-fact requirement has been the topic of heated debate among the circuit courts since the U.S. Supreme Court last May issued its decision in the instant case. In that ruling, the justices found that plaintiffs must allege concrete harm and cannot rely on mere statutory violations to establish Article III standing. The high court remanded the dispute to the Ninth Circuit to decide if plaintiff Thomas Robins' Fair Credit Reporting Act claims met this concreteness standard.

In the latest data point in the standing conundrum, a unanimous Ninth Circuit panel ruled Tuesday that Robins' claims did meet this standing bar, since he had alleged FCRA violations that clearly implicated his “concrete interests in truthful credit reporting" that Congress had solidified in enacting the statute.

"The Ninth Circuit's decision makes it clear that when you have a statutory violation plus consequences, even if they're not monetary damages, you can have standing," said Kevin McGinty, a member at Mintz Levin Cohn Ferris Glovsky and Popeo PC. "In these modern economic times, defendants tend to want to reduce harm to dollars and cents, but injury doesn't have to be pecuniary losses."

Attorneys on both sides of the bar said that they weren't surprised by the Ninth Circuit's ruling, given that the high court had declined to overturn the appellate court's initial decision to find standing in 2014 and the traditional tilt of the Ninth Circuit, which since Spokeo has issued rulings in Syed v. M-1 LLC and Patten v. Vertical Fitness Group that found standing exists for claims issued under the FCRA and the Telephone Consumer Protection Act, respectively.

"Rather than laying out a meaningful defense for companies facing statutory-based class actions under the FCRA or TCPA, as many initially hoped, the Supreme Court’s decision in practice has only established boxes for plaintiffs to check in their complaints in order to anticipate a Spokeo motion-to-dismiss challenge," Robins Kaplan LLP principal Michael Reif said. "In other words, even after the Supreme Court’s reluctance to find an injury-in-fact based merely on a statutory violation, plaintiffs are having some success pleading around the court’s decision by asserting both the concreteness and particularized nature of the injury they allegedly suffered."

Still, attorneys flagged Tuesday’s ruling as significant, noting that it sets a fairly low standing bar for claims of failing to ensure maximum possible accuracy in credit reports and is likely to tip the balance toward plaintiffs at least when it comes to similar statutory claims.

"It's definitely going to be more difficult in terms of defendants trying to challenge standing for statutory injury cases in the Ninth Circuit," said Hanley Chew, of counsel at Fenwick & West LLP.

In reacting to the ruling, Edelson PC founder Jay Edelson, who represented Robins, told Law360 that his side believed the Ninth Circuit had issued “what will be seen as the definitive decision articulating Article III standing in the wake of the Supreme Court’s ruling.”

“Congress is allowed to define what constitutes an injury and pass a law, the violation of which can give rise to standing,” Edelson said. “The court firmly rejected the ‘something more’ doctrine that Spokeo has been pushing for years. As the court explained, litigants need not show ‘additional injury’ beyond what Congress has articulated.”

Plaintiffs attorney Jim Francis of Francis & Mailman PC, who specializes in FCRA class actions but was not involved in the Spokeo case, agreed that the Ninth Circuit's ruling follows both what the Supreme Court has instructed and what FCRA practitioners "have known for years": namely, that in passing the FCRA, Congress identified the substantive rights to be free from the reporting of inaccurate information and the protection of one's privacy.

"Any thoughtful or linear analysis of the claims asserted in Spokeo yields the same result as the Ninth Circuit," Francis said. "This decision is simply the application of existing long-standing precedent. Perhaps that is why there is no dissent."

However, not all attorneys agreed that the Ninth Circuit's ruling would have sweeping consequences that favored the plaintiffs.

"The significant question is whether the ruling will have implications beyond FCRA cases that allege a material misrepresentation of personal facts concerning the named plaintiffs," Carlton Fields shareholder Kristin Ann Shepard said. "When the Ninth Circuit went to address the concreteness of the injury, it looked at two things: the FCRA itself and its legislative history, and the common law of libel. That rationale lends [itself] to a rather narrow reading of the case."

When it comes to broader questions of standing for claims that aren't couched in libel or don't stem from statutory violations, such as those under the TCPA or Fair and Accurate Credit Transactions Act or those that arise in the wake of data breaches, the Ninth Circuit's ruling that inaccuracies in credit reports are sufficiently concrete for standing may not be applicable, according to attorneys.

"The decision affirms the concept that plaintiffs cannot simply get by [in these cases] by pointing to statutory violations and indicates that courts will likely be a little bit more analytical in terms of the facts alleged in each particular case and place greater emphasis on each plaintiff's specific allegations of harm or wrongdoing," Seyfarth Shaw LLP attorney Robert Szyba said.

The decision may not even be broad enough to automatically confer standing to all plaintiffs who go to the Ninth Circuit with FCRA claims, attorneys said, noting the Ninth Circuit's insistence that some harm must be alleged and that not every "minor inaccuracy reported in violation of the FCRA" would give rise to standing.

"To be sure, there are still some instances where a violation of the FCRA alone will not meet the standing requirement," Shook Hardy & Bacon LLP data security and privacy group chair Al Saikali said, pointing specifically to instances where the inaccuracy is "trivial."

Troutman Sanders LLP partners David Anthony and Cindy Hanson in a joint email noted the importance of the Ninth Circuit emphasizing that “in many instances, a plaintiff will not be able to show a concrete injury simply by alleging that a consumer-reporting agency failed to comply with one of the FCRA’s procedures," and that the consumer must rather show that the violation materially affected the consumer’s protected interests in accurate credit reporting.

"Courts will therefore have to analyze the 'nature of the specific alleged reporting inaccuracies' to ensure that the plaintiff has suffered a real risk of harm," they said.

Given the Ninth Circuit's fact-specific focus, courts will likely be tasked with deciding where the line is between FCRA injuries that constitute trivial inaccuracies that don't confer standing and more serious errors that do give rise to concrete harm, attorneys noted.

"The [Ninth Circuit] decision casts the test as whether the alleged procedural violation actually harms the concrete interest the procedural right is trying to protect," said Michael Rhodes, chair of Cooley’s privacy and data protection practice group. "But in practice that still leaves some discretion to the district courts facing the Article III standing inquiry since the Ninth Circuit doesn't offer much specific guidance on this point."

Benesch Friedlander Coplan & Aronoff LLP partner David Almeida added that while the Ninth Circuit concluded that not all reporting accuracies cause material harm, it "dropped the ball" by failing to explain how Robins' allegation that Spokeo published inaccurate information about him harmed his job prospects.

"This hypothetical harm would seem to fall well short of the Supreme Court’s Clapper analysis,” Almeida said, referring to the Supreme Court's 2014 ruling in Clapper v. Amnesty International that an injury must be “concrete, particularized, and actual or imminent," and a future injury must be "certainly impending."

"Indeed,” Almeida said, “the Ninth Circuit disregarded Clapper entirely, which we think is clearly a mistake."

Ropes & Gray LLP counsel David T. Cohen agreed that the Ninth Circuit’s essential “end-run around Clapper” in holding that Congress can convert a material risk like a threat to Robins’ employment prospects into an actual injury to create standing without meeting the Clapper standard was “particularly remarkable and troubling.”

“This will make the decision very vulnerable at the Supreme Court,” Cohen said.

The Ninth Circuit's decision to find standing was likely "strongly colored" by the fact that Spokeo allegedly got a "number of important things" about Robins wrong, such as his age, marital status, wealth, education level and profession, as well as his photograph. But the panel's focus in its "very fact-dependent" decision on details such as the report being published, and its insistence that there must be “examination of the nature of the specific alleged reporting inaccuracies to ensure that they raise a real risk of harm," may give a boost to defendants, according to Morgan Lewis & Bockius LLP partner Ezra D. Church.

"The emphasis on the need to examine the nature of the specific inaccuracies may be a silver lining for defendants, emphasizing that questions of standing may raise individualized issues that will be hard to adjudicate in a class action context," Church said.

Spokeo pointed to this potential side effect in its response to the ruling Tuesday, saying that the Ninth Circuit's endorsement of a fact-specific analysis of harm could "make it very difficult for the plaintiffs to meet the requirements for certifying a class action" since individualized inquiries would likely be necessary to make sure that every claimant met this standard.

In the meantime, attorneys expect the issue of standing to make its way back to the Supreme Court in the near future, especially given that the Ninth Circuit decision helps to deepen the divide with other circuits, most notably the Seventh Circuit's ruling in Groshek v. Time Warner Cable Inc., that have found standing for similar FCRA claims.

"We can expect this case to advance the debate [over standing], but not end it in any way," Wiley Rein LLP privacy practice chair Kirk Nahra said.

U.S. Circuit Judges Diarmuid F. O’Scannlain, Susan P. Graber and Carlos T. Bea decided the appeal.

Robins is represented by Jay Edelson, Rafey S. Balabanian, Ryan Andrews, Roger Perlstadt and J. Aaron Lawson of Edelson PC, and William Consovoy and Patrick Strawbridge of Consovoy McCarthy Park PLLC.

Spokeo is represented by Andrew J. Pincus, Donald M. Falk, John Nadolenco, Archis A. Parasharami, Stephen C.N. Lilley and Daniel E. Jones of Mayer Brown LLP.

The case is Thomas Robins v. Spokeo Inc., case number 11-56843, in the U.S. Court of Appeals for the Ninth Circuit.

--Editing by Pamela Wilkinson and Breda Lund.


Lawsuit over false online data revived after U.S. top court review

Lawsuit over false online data revived after U.S. top court review

Jonathan Stempel
August 15, 2017 / 9:35 AM

NEW YORK (Reuters) - A federal appeals court on Tuesday revived a California man's lawsuit accusing Spokeo Inc of publishing an online profile about him that was filled with mistakes.

The 9th U.S. Circuit Court of Appeals ruled 3-0 in favor of Thomas Robins, 15 months after the U.S. Supreme Court asked it to more closely assess whether he suffered the "concrete and particularized" injury needed to justify a lawsuit.

Spokeo sells data aggregated from various databases to users including employers and people seeking romantic partners.

Robins sued after learning that his profile, which carried someone's else's photo, said he was married with children, affluent, in his 50s and employed, and had a graduate degree.

He said all of this was wrong, and accused Pasadena, California-based Spokeo of willfully violating the federal Fair Credit Reporting Act, with potential damages of $1,000.

The case was significant because Robins tried to pursue a class action, which if successful could expose Facebook Inc, Alphabet Inc's Google and other online data providers to mass claims in similar lawsuits.

In a 6-2 decision in May 2016, the Supreme Court set aside an earlier 9th Circuit ruling favoring Robins, and asked the appeals court to review the severity of Robins' injury.

Justice Samuel Alito concluded that not all inaccuracies, such as a wrong postal code, could threaten real harm.

In Tuesday's decision, Circuit Judge Diarmuid O'Scannlain said "it does not take much imagination" to surmise how Robins could have suffered real harm, given the importance of consumer reports to getting jobs, obtaining loans and buying homes.

The alleged errors "do not strike us as the sort of mere technical violations which are too insignificant to present a sincere risk of harm to the real-world interests that Congress chose to protect with FCRA," O'Scannlain wrote.

Spokeo said it will vigorously defend itself in court, and it believes the need to show individualized inaccuracies will make it "very difficult" to win class certification.

The Supreme Court decision has prompted some uncertainty, with lower courts dismissing some proposed class actions based only on technical violations, while letting other cases continue even when alleged harms were intangible.

"We're obviously very pleased," Jay Edelson, a lawyer for Robins, said in a phone interview. "This lays out exactly what the Supreme Court was getting at."

Robins' case drew support from the U.S. Consumer Financial Protection Bureau, which in a court brief said Spokeo fell short of seeking "maximum possible accuracy" in its reports.

The CFPB did not immediately respond to a request for comment.

The case is Robins v Spokeo Inc, 9th U.S. Circuit Court of Appeals, No. 11-56843.

Reporting by Jonathan Stempel in New York, additional reporting by Alison Frankel; editing by G Crosse


Tuesday, August 1, 2017

They trashed their wedding photographer over a $125 fee, so a jury told them to pay her $1 million

They trashed their wedding photographer over a $125 fee, so a jury told them to pay her $1 million

The Wasington Post
By Avi Selk
August 1 at 1:16 PM

An autumn affair at the Petroleum Club in downtown Dallas, the union of a full-time beauty blogger and the love of her life, appeared to be a gorgeous thing — marred by one misfortune.

Three months after the ceremony, in front of a local television crew, Andrew and Neely Moldovan showed off a box of empty picture frames.

Their photographer was withholding the images, they told NBC affiliate KXAS in January 2015, and was demanding an extra $150 when they’d already paid thousands.

“It’s heartbreaking, because, you know, these are our memories,” Neely Moldovan said.

And many agreed.

“Wedding photographer holds couple’s pictures hostage,” blared the Daily Mail a few days later.

The Moldovans’ sympathizers descended on photographer Andrea Polito’s review pages, calling her a scam artist, or worse.

Her reputation was ruined, her business dried up and she closed her studio.

And then the story changed.

Polito sued the Moldovans, claiming all they ever had to do to get their glossies was fill out a form, choose options for their wedding album and pay a small charge they had long known about.

The photographer showed the court emails in which she and her employees tried to appease the couple — even as the Moldovans were calling reporters, whipping up a furor on social media and plugging their newfound fame to fans of Neely Moldovan’s beauty blog, Polito said.

On Friday, a jury in Dallas decided that the tale of the ransomed wedding photos was not heartbreaking, and not even true.

In fact, the jurors concluded, the accusations amounted to malicious defamation, for which the Moldovans should pay the photographer more than $1 million in damages.

The Moldovans haven’t commented on the verdict, which they can still challenge. Neely Moldovan did not mention it to her thousands of followers in her latest blog post, which concerned post-pregnancy pore troubles.

But Polito, who hopes the jury’s decision will help her rebuild a ruined career, was happy to share her version of the saga with The Washington Post.

After more than a decade in the wedding photography business, she said, her studio was booked every weekend, months in advance, with couples from the poshest parts of Dallas and its suburbs.

When the future Mrs. Moldovan opened an order in early 2014, she struck Polito as a friendly, fairly typical client — “A 30 Something Dallas Lifestyle and Beauty Blogger,” as Moldovan describes herself on her website.

She and Polito worked out a schedule for engagement, rehearsal and wedding shoots in the months ahead.

Afterward, Polito said, she warned her studio manager: “She’s a blogger. Make sure everything looks perfect.”

Photographers from the studio shot the wedding ceremony that October, and the studio sent the couple proofs the next month, according to court records.

“She posted those all over social media,” Polito said.

And then Neely Moldovan began asking when she could have high-resolution versions of the photos.

Polito said her studio, like many, withholds high-res images until the entire wedding package is completed, culminating in the delivery of a custom wedding album, usually months after the wedding.

Otherwise, Polito said, “photographers will hand over the images and the bride disappears.”

Her studio explained as much to Neely Moldovan, she said, and asked her to fill out a form with her album options.

But November and December went by. Then New Year’s.

One week into 2015, the newlywed told her Twitter followers about the travails of choosing her photos.

“I’m finally getting around to filling this out,” she wrote to the studio the same day. “Do we pay extra for a cover?”

Yes, she did. Having already paid the studio thousands, Moldovan was not happy about this.

“She basically didn’t read her paperwork or contract,” Polito said. “She just couldn’t understand why she couldn’t have her high-res images. It’s in bold in our contract.”

A string of explanatory emails between the couple and the studio unfolded over the following days.

In the midst of this, Polito’s lawyers argued in court, Andrew and Neely Moldovan began emailing reporters across Dallas and beyond — promoting a looming news story to their friends and fans.

“I’m going apes‑‑‑ on our photographer,” Andrew Moldovan texted a friend on Jan. 12, 2015, according to transcripts Polito’s lawyer shared with The Post. “We want our f‑‑‑ing wedding album, which we already paid for.”

“We are hoping that our story makes the news and completely ruins her business,” Neely Moldovan wrote to someone the same day, according to court records.

Polito knew nothing about this, she said, until her studio manager texted her a screenshot of Neely Moldovan’s latest Instagram post: “No big deal NBC in our apt.”

Although she declined to appear on camera, Polito sent the local NBC reporter a page-long email: about albums and album covers, contracts, schedules and “a-la-carte items” the Moldovans had yet to pay for.

Almost none of that email appeared in the station’s first January broadcast, which focused on the Moldovans, their empty picture frames and memories held “hostage,” as the reporter put it, over a $150 album cover fee, which he said “the contract doesn’t mention anything about.”

Then, the station released a follow-up report a few days later, with many more details and a story not nearly so simple.

The NBC affiliate described months of conversation between the Moldovans and the studio. The minimum cost of an album cover was actually $125, and a wedding expert who had blasted Polito in the station’s first segment was now defending her after learning more about the case.

But it didn’t make much difference. “The damage had already been done,” Polito told The Post.

The Moldovans’ story was picked up across the United States and overseas.

Meanwhile, court records show, Neely and Andrew Moldovan were busy on social media, advancing the “hostage” narrative.

“Blatantly steals money from you all while holding your pictures ransom,” a user named Andrew wrote in a review of the Moldovans’ wedding shoot. The couple told the NBC station that people were impersonating them online, although Polito’s lawyers would argue otherwise in court.

“She’s done this to over 22 brides that have come forward,” Neely Moldovan wrote, according to a screenshot shared by Polito’s lawyer.

And in another message: “Pretty sure her business is done.”

So it was, Polito said.

The photographer had built her business — including a studio in downtown Dallas, with employees and contractors — largely on word of mouth, she told The Post.

“They can’t refer a bride when this is going on,” she said.

She told the court that only two clients were willing to sign with her after news stories ran, and she had to shut her studio down and start living off savings.

Her lawyers hired an analyst who estimated that she had lost hundreds of thousands of dollars in profit by the time her 2015 lawsuit went to trial last week in Dallas County district court.

The trial had been long delayed. Accused of conspiracy, defamation and disparagement, the Moldovans tried to have the suit tossed and argued that Polito could not cite a single case of lost business, let alone prove that the couple had lied.

A lawyer for the Moldovans declined to comment on the case.

But a judge let the case go forward. And on Friday, the jury sided with Polito, whose complaint described the couple as “dead set in their pursuit of publicity and public shaming.”

After an afternoon of deliberation, a majority of jurors agreed that the Moldovans had defamed and disparaged Polito and her studio, and conspired to do so. The total price to make good was just over $1 million.

It’s not certain that Polito will ever see the money. Her lawyer, Dave Wishnew, said he expects the couple to challenge the verdict before a judge orders them to pay.

But for Polito, who said she hasn’t shot an event in years and has drained her savings and retirement accounts since the Moldovans took their complaints international, the verdict is vindication enough.

“For two and a half years I walked around my daughter’s school feeling ashamed and embarrassed,” she said. “They know I’ve won now.”


Sentence upheld for ex-celebrity private investigator Pellicano in wiretapping and racketeering case

Sentence upheld for ex-celebrity private investigator Pellicano in wiretapping and racketeering case
LA Times
By: Meg Bernhard
July 31, 2017

A U.S. district judge Monday upheld the 15-year prison sentence of former celebrity private investigator Anthony Pellicano, who was charged with illegal wiretapping and running a criminal enterprise.

Pellicano faced resentencing because of a technical error during his original 2008 trial, when the judge gave erroneous jury instructions for charges of aiding and abetting computer fraud and unauthorized computer access.

The U.S. 9th Circuit Court of Appeals vacated those two charges in 2015 and ordered a resentencing. But the appellate court upheld more serious charges against Pellicano for running a criminal enterprise that illegally obtained police records and wiretapped celebrities so his clients could outmaneuver them in litigation.

At Monday’s hearing, U.S. District Judge Dale Fischer called the 15-year punishment “reasonable and sufficient,” ruling that the vacated counts had a marginal impact on the original sentence.

Pellicano appeared at the hearing via a video conference from the Terminal Island correctional facility in San Pedro, where he is incarcerated, because he feared losing his jail cell. He is expected to be released in March 2019. Pellicano must also undergo three years of supervision following his release.

Sitting at a table with a guard seated behind him, Pellicano, who did not request his own attorney, was quiet during the hearing, speaking only to address the judge with affirmative “yes, Ma'ams” when asked procedural questions.

After receiving his sentence, Pellicano said he would take no further action in court.

“I have no intention of appealing anything,” Pellicano said.

Assistant U.S. Attorney Kevin Lally said the sentence was what prosecutors had sought. During his remarks, Lally accused Pellicano of subverting public institutions by obtaining confidential information through his racketeering enterprise.

Pellicano was originally convicted in 2008, after a widely watched trial gave a glimpse into the inner workings of Hollywood feuds.

Prosecutors said Pellicano bribed police officers to search law enforcement databases and phone companies to wiretap his clients’ opponents and listen to their most intimate conversations. According to prosecutors, Pellicano’s rates for the confidential information were expensive.

His clients included big-name celebrities and businessmen.

At the hearing, two of Pellicano’s victims, Jude Green and former Los Angeles Times reporter Anita Busch, implored the judge to uphold his 15-year sentence.

The investigation into Pellicano began in 2002, when Busch’s car was vandalized in an alleged attempt to intimidate her into not pursuing stories about former Hollywood super agent Michael Ovitz. Her windshield was broken and a dead fish and a rose were discovered inside the car, along with a sign that read “STOP.”

“He needs to stay in prison,” said Green, whom Pellicano’s agency spied on and threatened during a bitter divorce with her multi-millionaire husband, Leonard Green, in 2001, according to prosecutors.

When she spoke, Pellicano lifted his sunglasses and leaned forward, then raised his arms and turned to the guard behind him to ask her identity.

After the hearing, Green said she still feared Pellicano could retaliate and had taken a risk in coming to the federal courthouse in Los Angeles despite her sons urging that she stay away.

But Busch, whom Green had not met before Monday, said she convinced her to attend, and the two drove to court together sharing stories of their experience with Pellicano and how the private investigator had reshaped their lives.

In an interview, Busch said she lives in constant fear that Pellicano still could retaliate against her.

“It’s hard to live like this,” she said.


Tuesday, July 25, 2017

Los Angeles Private Investigator Sentenced to Prison for Role in Violent Gambling Organization

Los Angeles Private Investigator Sentenced to Prison for Role in Violent Gambling Organization

Assistant U. S. Attorneys Benjamin Katz (619) 546-9604, Andrew Young (619) 546-7981 or Mark W. Pletcher (619) 546-9714


Department of Justice
U.S. Attorney’s Office
Southern District of California

Monday, July 24, 2017

SAN DIEGO – Daniel Portley-Hanks, a Los Angeles based private investigator, was sentenced today to 16 months in prison for his role in the gambling organization run by former USC football player Owen Hanson.

Portley-Hanks entered a guilty plea to Hobbs Act extortion on December 27, 2016. According to his plea agreement, he was paid $7,000 by Hanson to drive from Los Angeles to a Pennsylvania cemetery where the family burial plot of an individual who owed Hanson’s organization money was located. Once there, Portley-Hanks took photos of the family tombstone, splattered it with red paint, and later altered the photographs to add the targeted individual’s name and the words “Very Soon” as the date of death. Another photo was altered to include an image of a masked Hanson standing over the family grave with a shovel. The photos and other documents created by Portley-Hanks were then mailed to the individual along with a video depicting two beheadings.

The government’s sentencing documents attached numerous emails between Hanson and Portley-Hanks that showed that for a period of more than three years, Portley-Hanks assisted Hanson’s organization by running background and location checks on gamblers and law enforcement officers, conducting surveillance, and connecting Hanson with Jack Rissell, another co-defendant who served as an “enforcer” for Hanson’s enterprise.

Rissell – who also pleaded guilty to extortion – is scheduled to be sentenced on July 31, 2017. In total, 21 of 22 defendants charged in relation to Hanson’s enterprise have entered guilty pleas. The remaining defendant, Khalid Petras, is set for trial on August 29, 2017. He is accused of money laundering and running an illegal gambling business. The charges against this defendant are merely accusations, and he is considered innocent until proven guilty.

The case arose out of a joint investigation by FBI and the New South Wales (Australia) Police Force in conjunction with the New South Wales Crime Commission. Hanson was initially indicted and arrested on September 9, 2015, after arranging the delivery of five kilograms of cocaine and five kilograms of methamphetamine.

DEFENDANT Case Number: 15CR2310-WQH
Daniel Portley-Hanks Age: 71

Hobbs Act Extortion, 18 U.S.C. § 1951
Maximum penalty: 20 years’ imprisonment, $250,000 fine, 3 years’ supervised release.

Saturday, July 22, 2017

Justice Department reinstates forfeiture program that returned seized assets to local police

Justice Department reinstates forfeiture program that returned seized assets to local police
ABA Journal
Posted Jul 19, 2017 03:30 pm CDT
By Debra Cassens Weiss

The U.S. Justice Department has announced it will reinstate a forfeiture program in which local police departments seize property connected to criminal activity that violates federal law, and then get to keep up to 80 percent of the proceeds.

Deputy Attorney General Rod Rosenstein told reporters Wednesday that new safeguards will prevent abuses, report the Washington Post, Reuters, BuzzFeed News and the Washington Examiner. Attorney General Jeff Sessions made the same point in prepared remarks; the policy directive is here.

Former Attorney General Eric Holder had mostly eliminated the program, which allows seizure of property without a criminal conviction.

New guidelines require local police departments to demonstrate that a property seizure is justified by probable cause and to provide more training to officers on asset forfeiture laws. Federal officials will have to quickly send notice to property owners about the seizures.

When seized cash totals less than $10,000 additional safeguards may be required. Unless the U.S. Attorney’s office approves the forfeiture, the property must be seized under one of these conditions: under a state warrant, incident to arrest, at the same time contraband is seized, or when the owner or person from whom the property is seized admits the property comes from criminal activity.

Among those objecting to the Justice Department’s new policy are the American Civil Liberties Union and the Institute for Justice.

“Civil forfeiture is inherently abusive,” Institute for Justice senior attorney Darpana Sheth said in a statement. “No one should lose his or her property without being first convicted of a crime, let alone charged with one. The only safeguard to protect Americans from civil forfeiture is to eliminate its use altogether. The Department of Justice’s supposed safeguards amount to little more than window dressing of an otherwise outrageous abuse of power.”

Navigating drone laws has become a growing and lucrative legal niche

Navigating drone laws has become a growing and lucrative legal niche

ABA Journal
Posted Jul 01, 2017 12:20 am CDT
By Darlene Ricker

Imagine a Jetsons-like world with drones buzzing above your building as they deliver packages, dry cleaning and even groceries to a rooftop concierge. Four years ago, CEO Jeff Bezos predicted that Amazon.com would be using drones for deliveries by 2019, and aviation lawyers saw what was on the horizon: a budding practice area in which the sky is literally the limit.

Although legal developments might delay Bezos’ timeline, nothing has slowed the proliferation of drones in a wide range of commercial and personal uses. To hobbyists, a drone is a fancy toy. To Hollywood studios, it’s a magical tool. To search and rescue crews, it’s a lifesaving device. Regardless of the application, the central issue remains: How will the law be interpreted and applied in this uncharted territory?

That question has catapulted the careers of a cadre of attorneys across the country. Given the ambiguities in the law, which had no warning of this technological development, the brave new world of drones has spawned a growing—and lucrative—legal niche. With little case law for guidance and a complex web of government regulations to wade through, “drone attorneys” have recently found themselves in high demand.

The problems drones can cause might not initially have been obvious to the public. But the Federal Aviation Administration was keenly aware from the beginning. The agency’s mandate is clear-cut: to keep safe the airspace. Anything that flies carries the risk of crashing into another object or falling and endangering people and property below. Drones fall under the legal rubric of “aircraft” and therefore must be regulated for the same reasons airplanes are. Beyond safety concerns, the same legal issues that apply to the use of any vehicle (even an automobile) have their place in drone law: permissible operation, civil and criminal liability, misuse and the like. That has opened multiple doors for the practice of drone law.

In its infancy, drone law was largely the domain of sole practitioners, many of them licensed aircraft pilots or drone hobbyists. But when Congress in 2012 mandated the FAA to draft regulations for drone operation by 2015, the prospect of drone law practice began to catch the attention of large firms, particularly those with aviation law departments.


Among the first was Dentons, one of the largest law firms in the country as well as a global firm with a long-established aviation law department. In late 2013, Dentons announced the formation of a UAS (unmanned aircraft system aka drone) practice group, which launched in 2014. The firm has more than 20 aviation lawyers and professionals, five of whom focus almost exclusively on drone matters.

If drone law seems too narrow of a niche for a large firm, it has turned out to be anything but. “Law firms recognized that drone law is the hottest, most ripe opportunity there is,” says Michael Drobac, an attorney in Akin Gump Strauss Hauer & Feld’s drone law practice group in Washington, D.C.

For Dentons, it made perfect sense to expand its practice into drone law. “A drone is a small aircraft. Who better than aviation attorneys to be lawyers to the drone industry?” says partner Mark Dombroff, who co-chairs the firm’s aviation law department and is based in McLean, Virginia.

He sees drone law as an enormous area. “Drone technology is going to advance dramatically, and it’s going to revolutionize the size and magnitude of the aviation industry.”

A former FAA and Department of Justice aviation attorney, Dombroff saw the potential when Congress issued its drone regulations mandate. “We looked at the drone world and said to ourselves, ‘This isn’t a toy. A drone is aviation.’ We knew the drone industry was going to develop and eventually be regulated just like airplanes,” he says.

It has taken 114 years—since the Wright brothers flew the first airplane—for aviation law to reach its current state of development.

“I can assure you it’s not going to take that long for drone law to catch up,” Dombroff says. He predicts that the niche will eventually become as large as aviation law because the widespread use of drones significantly exceeds the sphere of drone manufacturers or operators.


The U.S. military, which began to experiment with unmanned aircraft in the 1920s, developed much of the early drone technology for wartime use, such as conducting surveillance in dangerous places and delivering deadly weapon payloads.

When it comes to deploying drones as a deadly force in conflict, international humanitarian laws govern their use. This requires distinguishing between combatants and civilians and taking precautions against strikes on civilian areas and infrastructure.

But drones found their way outside the military, creating the need for a different set of rules for civilians. The sheer numbers that operate in the “drone zone” are staggering. As of Feb. 1, there were 49,857 commercial drones and 664,688 hobbyist drone owners registered with the FAA. Because hobbyists get one ID number for all the drones they own, the FAA estimates owner registrations represent 1.6 million drones.

The statistics encompass all manner of machines, from basic models for toy or recreational use—now easily available online and in electronics and department stores—to super-high-tech devices favored by those who use drones for business.

Adam Lisberg is a spokesman for DJI, a leading drone manufacturer based in China that sells sophisticated professional-use drones. He says the technology has already affected a panoply of industries.

“People say drones are the future. That’s true. But they’re also very much the here and now,” he says.

“Every day we’re seeing new uses of drones that are saving money, saving time and making filming safer. Just about every business you can think of needs images,” Lisberg says. “It can be done more efficiently, safer, cheaper with a drone. It’s so much safer to do inspections with a drone than having someone climb to the top of a cellphone tower.”

Dombroff ticks off myriad ways businesses are already using drones: insurance, news gathering, commercial surveillance, remote sensing, power line inspection, commercial filming, concerts, advertising, real estate, construction, law enforcement, firefighting, disaster relief, agriculture, education, air quality, search and rescue, and mineral, gas and oil exploration.

Dentons has clients in many of those areas, which makes it logical for Dombroff’s firm to have a drone practice, he says. “Those clients are entering the aviation industry,” he says, even if it’s by default.


Akin Gump, which formed a drone law practice in 2014, defended an aerial filming company in a recent high-profile FAA enforcement matter, Huerta v. SkyPan International. The largest drone fine ever sought—$1.9 million—targeted SkyPan, a provider of aerial photography for real estate developers and architectural companies. SkyPan has used drones for more than two decades without incident.

The Federal Aviation Administration claimed that SkyPan flew near high-rises in restricted airspace in Chicago and New York City. The case settled in January for $200,000. Before SkyPan, the largest commercial fine was $18,700.

Some might wonder why the FAA singled out SkyPan. The enforcement action might have been somewhat more objective than it appears.

In assessing the severity of violations for drones and commercial air carriers, the FAA refers to a sanction guidance table that suggests fine ranges based on several elements. Among them are whether the aircraft was manned or unmanned, whether the violation was willful and intentional or inadvertent, whether the operator was a business or an individual, and how many violations happened.

According to an FAA spokesman, enforcement actions come from a variety of sources, including complaints from the public, referrals from local law enforcement and independent FAA investigations. Building owners are among those who have complained about drone activity in their vicinity.

Because FAA fines range from $1,000 to $10,000 per incident, they can rack up easily, even in situations that might not appear to warrant harsh punishment. For example, if a drone falls from the sky and dents a car but is found to have been flown in violation 100 times, math dictates that the fine could be $100,000 or $1 million.

If a proposed levy exceeds $400,000, the FAA sends a civil penalty letter to the alleged violator. If a settlement is not reached, the FAA may refer the matter to the DOJ, which determines whether to file a complaint.

SkyPan was a business matter that involved more than 60 drone flights from 2012 to 2014 that allegedly violated FAA regulations. In the settlement, the agency agreed to make no findings of violation.

Drobac, executive director of the Small UAV Coalition, a trade organization in Washington, D.C., says there was “white-hot interest in the [drone] industry in SkyPan.”

In Dombroff’s view, “SkyPan sent a firm message to the drone industry: ‘You’re not playing with toys anymore. You’re in the regulated world of aviation.’” He predicts significantly stepped-up FAA enforcement by the end of the year.

The FAA has targeted drone operators as diverse as teenagers and large corporations, issuing fines from $400 into the millions. Shawn Usman, a hobbyist who crashed a drone on the White House lawn in 2015, paid $5,500. More often, fines and settlements range from $1,100 to $2,200.

“The drone community is not well-organized, and it’s easy for the FAA to pick on them,” says Jonathan Rupprecht of Palm Beach Gardens, Florida, a sole practitioner who is a licensed pilot and flight instructor.


The FAA has a new enforcement tool. Last August, long-awaited drone regulations under Part 107 of the Federal Aviation Regulations (the small UAS rule) took effect. They approved drone use for agriculture; research and development; educational and academic use; power line, pipeline and antenna inspections; rescue operations; bridge inspections; aerial photography; and evaluations of wildlife nesting areas.

The regulations took several years to reach their final form, and the agency received input from “a variety of industry stakeholders and elected officials,” the FAA spokesman says. “In fact, the FAA has had an aviation rule-making committee on UAS, consisting of industry representatives, to make recommendations to the FAA since 2008.”

Loretta Alkalay, an aviation and drone lawyer in New York City, says the new regulations are a mixed bag. On the down side, she says, “the FAA has created a nation of scofflaws.” Alkalay, who was the regional counsel of the FAA’s eastern division for more than 20 years, teaches a popular drone law course at the Vaughn College of Aeronautics and Technology in Queens.

She says drone enthusiasts, particularly student hobbyists, find the regulations to be confusing. “The FAA needs to make it easy to comply. A lot of people get started as hobbyists. If you make it difficult for students, you make it difficult to feed the pipeline for aviation professions.”

Brendan Schulman—DJI’s vice president of policy and legal affairs, who is based in its New York City office—takes exception.

“It’s easier now to comply with the law. Part 107 lowered the barrier of entry,” he says. “Anyone who wants to experiment with the use of a drone in his business just has to pay $150 and pass a multiple-choice test. Before, you had to go to flight school and pay thousands of dollars to get a pilot’s license.”

At the 2017 Consumer Electronics Show in January, Michael Huerta, administrator of the FAA, said that since Part 107 went into effect, more than 30,000 people have started the remote-pilot application process. About 16,000 have taken the remote-pilot knowledge exam, and about 90 percent have passed.

In the five months since the new regulations took effect, the FAA had not initiated any cases that alleged Part 107 violations, according to the FAA spokesman. However, he says, there might be incidents under investigation that the FAA will not discuss.

Meanwhile, John Taylor, a Silver Spring, Maryland, attorney and a drone hobbyist, says, “A 13-year-old who fails to follow the arcane nuances of FAA regulations regarding recreational use shouldn’t be a felon for failing to comply with rules appropriate to commercial operations. Small flying toys aren’t aircraft and shouldn’t be treated as such, especially when operated below the tree line in the property owner’s backyard.”

Toy drones that weigh 0.55 pounds or less do not require registration, and that covers most toys costing less than $100. Children must be at least age 16 to apply for a drone license and are subject to enforcement actions for drones. According to the FAA spokesman, the agency has received complaints about underage children operating drones. But as of March 7, it had not taken any enforcement actions.

“I believe that whether a property owner wants his children to be able to fly their toy aircraft there, or whether he wants to prohibit commercial drone flying there, is the property owner’s choice,” Taylor says. “That opinion may not sit well with a lot of folks, especially commercial operators, but I believe that’s where a century of aviation case law takes us.”

Taylor spent a winter night in 2015 crafting a legal challenge on his own behalf to the rule that prohibits flying model aircraft within 30 miles of Washington national airspace. “I was sitting in my office and realized that, with Christmas coming, thousands of people would be getting drones as gifts. And like everyone else, they probably had no idea how to operate them legally,” he says.

Rupprecht was beside him at the desk. The two stayed up all night, drafting a petition for injunctive relief. Taylor filed his complaint that December.

At this point the fate of the registration requirement for hobbyist drones appears uncertain. The U.S. Court of Appeals for the District of Columbia Circuit struck down the requirement May 19, ruling in Taylor v. Huerta that the FAA didn’t have the authority to regulate model aircraft. At press time the FAA had not announced whether it would challenge the ruling.

Several drone attorneys expressed skepticism that a motion for rehearing or an appeal would be effective. “The opinion said what the FAA is doing is illegal and told them to stop. It doesn’t get much clearer than that,” says Taylor, the plaintiff.

The agency confirmed it was considering its options, saying in a statement, “The FAA put registration and operational regulations in place to ensure that drones are operated in a way that is safe and does not pose security and privacy threats.”

Taylor dismisses that rationale, calling the registration requirement “a feel-good measure taken in reaction to unfounded hysteria” about drones and air safety. “Registration seemed a tyrannical thing in the first place, and people are mad,” he says.

Should the decision stand, Taylor asks: “What happens now with the information about people in the database and the fees that have already been collected?”

Rupprecht says his aviation law practice morphed into a drone law boutique as drone sales climbed and the government stepped up enforcement actions. He has 80 clients who have drone matters.

“We [drone attorneys] all fly, and we support each other. We’re like a freedom fighter group,” he says.


While the 624-page tome released by the FAA last June brought some clarity, drone attorneys say a lot of gray areas remain. “Everyone’s playing hot potato with the drone industry,” Rupprecht says. “The FAA punted [with Part 107] instead of answering important questions. We still don’t know where the navigable airspace is, and that’s a big problem.”

That issue has been hovering above drone operations since 1989, when the Supreme Court in Florida v. Riley ruled that police may conduct warrantless aerial searches from public airspace. Although the height flown was 400 feet above an alleged marijuana farm, the court did not define the limits of “public” or “navigable” airspace, Alkalay says.

“I am confident the courts will find that you own some space over your property,” she says. “But is it 10 feet? Fifteen feet?”

Drone attorneys want the FAA to have jurisdiction “all the way down to a blade of grass,” Rupprecht says. “Otherwise, it will be a regulatory nightmare if we have to deal with a mishmash of state and local regulations.”

The issue is whether federal law pre-empts state law. Schulman of drone manufacturer DJI deems pre-emption to be “a pressing issue.” Formerly in private practice, he was a member of the FAA rule-making committee.

Schulman fought several high-profile drone cases against the FAA. Among them was his successful defense of Raphael “Trappy” Pirker in the first federal case that involved the operation of a commercial drone in the United States.

In 2013, the FAA fined Pirker $10,000 for using a drone in 2011 to film the University of Virginia in Charlottesville for an advertisement that promoted the university’s medical school. The FAA alleged that it came within 100 feet of an active heliport at the university and within 50 feet of people on a busy street.

A pedestrian told the FAA that he feared he would be struck and had to move out of the drone’s path. Pirker was cited for operating a drone “in a careless or reckless manner so as to endanger the life or property of another.” The case, Huerta v. Pirker, turned into a protracted legal battle. It settled in 2015 for $1,100.

Schulman expresses concern that local and state legislatures proposed more than 280 state bills in 2016 to regulate drones. Their passage, he says, “would lead to a less safe operating environment because it will be less clear what the rules are.”

Dombroff of law firm Dentons sees pre-emption as a nonissue. “Pre-emption is well-established by U.S. Supreme Court decisions,” he says, pointing to the 1946 case U.S. v. Causby.

Causby held that the federal government has pre-empted the regulation of airspace from the ground up, creating a zone known as “Causby airspace.” But it didn’t pre-empt privacy issues, which are regulated by the states, Dombroff points out.


Sally French, the author of the popular Drone Girl blog, says Part 107 does not regulate anything related to privacy.

“Some people say we need drone privacy laws. The same privacy laws we have now apply to the camera in your iPhone. Your cellphone can do a lot more damage than a drone. You can take a photo in a locker room, and the person may have no idea. A drone is big and loud and obvious,” French says.

Dombroff says there has been a degree of hysteria about privacy at the state level. “Everyone should slow down, take a deep breath and see if we need new privacy laws for drones. I guarantee there will be, at some point, a lawsuit by the federal government against a state drone law,” he says.

The focus on regulating drones has escalated along with technology. As commercial pilots started to fly higher, so have drone operators. That sparked safety concerns within the FAA. Of recent concern has been a sport or a hobby known as aeromodelling (or drone races), and its popularity is burgeoning.

ESPN partnered with the Drone Racing League in September for a 10-episode season of drone races, billed as the most recent extreme sport. Operated by controllers on the ground, the drones navigated obstacle courses at up to 80 mph.

When an unmanned aircraft reaches speeds that high, the airspace, as well as those on the ground below it, might be at risk. However, Mark LaFay, an author of drone law books, says, “The practical question is: How can a drone impact my life? If your drone battery dies or you have a mechanical failure, a 10-pound piece of equipment can damage property. If you drop 10 pounds on someone’s head, it could kill them.”

Sole practitioner and licensed pilot Rupprecht agrees that drone safety is important. But he points out: “At the end of the day, there are a lot of other things that can kill you. You’re worrying about a little drone crashing but not the airplane you’re flying on?”

Last September, Alina Pituch sued a University of Southern California fraternity chapter and an event-planning company, claiming she suffered a head injury when a drone photographing a frat party fell on her. The lawsuit in the Los Angeles Superior Court alleges negligence and premises liability.

Some people have taken concerns about personal safety from drones into their own hands and promptly found themselves on the wrong side of the law. LaFay says that even if a landowner thinks a drone might crash and damage their property, they do not have the right to shoot it out of the sky.

A Kentucky man did exactly that, claiming he had feared a drone was going to crash onto him. But his “self-defense against drones” position didn’t fly with authorities.

“If someone parks his car on your front lawn, you don’t have the right to light it on fire,” LaFay says. “You have the right to call a tow truck and sue the insurance company. It’s the same if a car hits your mailbox—the driver is responsible for the damage. You have to go through the proper process.”

Industries and professions that depend on drones have encountered some unique legal hurdles. Three years ago, the FAA began to allow drones to be used in commercial filmmaking, but a waiver is required to fly a drone at nighttime or above people (such as at outdoor concerts or the Olympics). FAA records indicate that 65 percent of waiver applications have been used for night operations.

Aerial Mob, based in Carlsbad, California, was one of the first film production companies in the United States to receive FAA approval to use drones in film production in late 2014. The company works with major motion picture studios.

“Part 107 has some good parts and some not-so-good elements,” says Tony Carmean, a founding partner, producer and head of business development at Aerial Mob.

Before Part 107 was enacted, his company faced numerous restrictions on filming at certain locations. “We lost business because we couldn’t turn around the paperwork fast enough,” he says. “Before 107, we lost a job with Fox because it took four months to get it approved. Now, we just have to give the FAA a few hours’ notice. The FAA has it pretty streamlined to apply for a waiver to fly in the dark and over people.”

In November, the FAA approved Disney’s request to allow drone flights above Walt Disney World and Disneyland Resort. The Magic Kingdom has been a no-fly zone since 2003, when the restricted airspace was created for security reasons after the 9/11 terrorist attacks in New York, Washington, D.C., and Pennsylvania.

Now, instead of using live fireworks displays, drones will perform in a musical show that features simulated fireworks, Disney characters in the sky, and perhaps simulated space flights such as from the Star Wars movies. Drones will have LED lights and fly in formations that create light-based entertainment, which some say could revolutionize the entertainment industry.

Whether or not that comes to pass, one thing is certain: The drone industry and the issues that surround it are not going to fly away anytime soon.

Darlene Ricker, a former entertainment law and intellectual property attorney, is a freelance writer based in West Palm Beach, Florida.

This article appeared in the July 2017 issue of the ABA Journal with the headline "Taking Flight: Navigating drone laws has become a growing and lucrative legal niche."