Andersen Asks Judge Harmon For Acquittal or Retrial

On June 25, 2002, attorneys for Arthur Andersen filed a motion to invalidate the jury's verdict in the firm's recent trial for obstructing justice. The motion asks that the verdict be set aside "in the interests of justice." In its place, Andersen is asking for either a judgment of acquittal or a retrial.

According to a copy of the motion that was released to the press, the judge can and should set aside the jury's verdict at this time for a number of reasons, including the following:

  • It is extremely rare, if not unprecedented, for jurors to announce that their verdict rested on a legally invalid ground. No fewer than six jurors reported that the jury rejected the government's allegations of document destruction and instead convicted the firm because an in-house attorney "corruptly" persuaded an audit partner to "alter" a memo. This thinking lacks validity because: (1) The memo was edited, not altered. (If the firm had changed a hard-copy original of a document by whiting out the date and substituting a false one, that could be seen as illegally "altering" a document, but comments on a draft do not qualify.) (2) The attorney's comments cannot be considered "corrupt" persuasion. (Congress directed that bonafide legal advice would be an exception to the obstruction statutes.)

  • Reliance on the e-mail from Andersen's attorney in reaching the verdict is a fatal variance from the indictment. The law provides that a defendant must be informed of the charges against him, so he can prepare a defense. But the government never argued that the edited memo obstructed justice, so Andersen had no notice that the e-mail of proposed edits could be regarded as a criminal act. If the firm had known of these charges, its attorneys would have introduced or highlighted the evidence and arguments needed to dispute the allegations, and the jury would have received adequate instructions to avoid a misunderstanding. Because of the omissions and resulting errors, the widely-publicized verdict has received considerable public commentary and criticism. Allowing it to stand can only undermine, rather than protect, the credibility of the criminal justice system.

  • It is plain that the government has not proved its case. There is no evidence that anyone at Andersen used improper methods to persuade others to destroy evidence or that an official proceeding was ongoing or scheduled at the time of the alleged obstruction – both of which are required elements of the alleged offense. The court's instructions were not totally clear on these critical elements.

If Judge Melinda Harmon does not set aside the verdict, Andersen's attorneys plan to file an appeal with the U.S. Court of Appeals, 5th circuit.

-Rosemary Schlank

Andersen: The Story So Far

You may like these other stories...

Here's a CPA who truly walks the walk. On March 15, Frank Ryan, CPA, departed San Diego, California, with plans to be in Ocean City, Maryland, by July 2 to teach a course at the Maryland Association of CPAs’ (MACPA...
When Theodore J. Flynn first joined the Massachusetts Society of CPAs (MSCPA) in 1970, it was a different world and a different profession.  The "Big Eight" were still headquartered in Boston. Vietnam War...
Accountant Rickey Charles Goodrich had it a little too good. Many bean counters would kill to serve as financial guru to the likes of Pearl Jam. Goodrich was hired in 2005, and the following year, he became the CFO of Curtis...

Upcoming CPE Webinars

Apr 17
In this exciting presentation Excel expert David H. Ringstrom, CPA shares tricks that you can use with pivot tables every day. Remember, either you work Excel, or it works you!
Apr 22
Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.