TurboTax Told Me I Could Get Away With It.

Timothy Geithner, President Obama's choice to run the U.S. Treasury and spearhead America's recovery from its financial crisis, is well on his way to being confirmed after the Senate Finance Committee voted 18-5 Thursday to forward his nomination to the full Senate.

But the endorsement came only after he underwent embarrassing scrutiny for his failure to pay all of his income taxes in 2001 and 2002 -- a mistake he blamed on, TurboTax, an easy-to-use computer income tax program used by 18 million taxpayers a year.

Geithner said he used TurboTax to complete his income tax forms in those two years, and he failed to include self-employment taxes in his federal returns.

He said that, to his recollection, the program did not prompt him to report income and pay self-employment taxes.

"I mistakenly believed that I was meeting my obligations fully, including self-employment taxes, but I did not prepare my returns in a way that caught that mistake initially," Geithner told the committee, adding, "these are my responsibility, not the tax software responsibility."

But TurboTax says the program is designed for average taxpayers and prompts everyone to report any additional income or wages earned through self-employment.

"The way TurboTax works, we ask you your personal information up front" and "walk you down an interview path that asks you the source of your income," said Scott Gulbransen, a spokesman for TurboTax. Even if you fill out a W2 tax form from a primary employer, "once you're done with that it will ask you if you had other sources of income," he told FOXNews.com.

"The whole idea of TurboTax is to make sure we have all your information," Gulbransen said.

Intuit, the company that makes the software, estimates that its customers receive tax returns in the hundreds of millions of dollars every year, he said.

"There's a lot of time that's put in to make sure that the product is easy to use for the average American," Gulbransen said. "The numbers speak for themselves."

The tax program -- now in its 25th year -- is retooled annually, he said.

"Because the tax laws change every single year, the code, we -- in essence after every tax season -- have to recreate the product from the ground up as far as tax code goes," Gulbransen said. "So from that perspective, we update it every year for not only the federal taxes, but also for each individual state that has income tax."

Dan Maurer, a senior vice president of TurboTax, issued a statement Wednesday saying user input is key.

"TurboTax, and all software and in-person tax preparation services, base their calculations on the information users provide when completing their returns. TurboTax also has built-in error-checking tools that routinely catch common taxpayer mistakes.

"Federal law and our own privacy policy prohibit us from discussing specifics of any customer's return," Maurer said.

Jury Nullification or Insanity? You Be The Judge.

In a landmark case for veterans suffering from post-traumatic stress disorder (PTSD), a San Jose, California, Santa Clara County jury Tuesday found a former Army Captain Sargent Binkley, diagnosed with PTSD not guilty by reason of insanity for robbing a Mountain View, Calif., pharmacy of drugs at gunpoint.



CAPT Binkley, 34, faced a maximum of 22 years and eight months and a minimum of 12 years in state prison after the same jury convicted him last week of the 2006 robbery. He initially spent about two years in county jail awaiting trial and has been in a residential drug treatment program ever since.
The jury's verdict in the sanity phase of the trial Tuesday means Binkley could be treated for the disorder in a state hospital or as an outpatient. He was taken into custody 13 January to be evaluated.

Was this a case of jury nullification?
"What this case means is that the jury stood behind a Soldier," said Charles J. Smith, one of his attorneys. "We strongly believe that Soldiers should get preferential treatment if they come back with problems after their service to our country."
Binkley and his father, Edward, burst into tears when the verdict was announced.
"There was no reason this case should have ever gone to trial," Edward Binkley said, adding that his son turned himself in after committing a second robbery in San Carlos, Calif.
The prosecutor who tried the case, Deborah Medved, and a spokeswoman for the DA's office could not immediately be reached for comment.
Binkley graduated from West Point and served in Bosnia and Honduras before he received a general discharge in 2003. His defense attorneys argued that he became traumatized by two events - guarding a mass grave in Bosnia and shooting a teenager in a Honduran drug raid.
His father said he became addicted to morphine-based painkillers after dislocating his hip while running away from an alcohol-fueled fight in Honduras over a woman.

SAN JOSE, CA
JANUARY 15, 2009

Sargent Binkley came into the courtroom in a dark green jump suit handcuffed with his hands in front. The bailiff unlocked the handcuffs as soon as Sargent sat down.

Defense proposed that Sargent Binkley be released into his (Chuck Smith's) custody. Smith had procured an ankle bracelet from the Sheriff's Department with GPS monitoring as an added layer of security. Smith attested to Binkley's exemplary performance at the Jericho House, his being negative in all drug tests from two counties, and his continued bail from San Mateo County with appropriate checks from Redwood City staff, as well as continued checks by staff from Santa Clara County.

The DA argued that CA Penal Code requires that persons found guilty of certain crimes including armed robbery are to remain under Court supervised control (e.g. mental hospital, jail) for at least 180 days. DA Medved didn't bring a copy of the code to read so Judge Condron loaned Medved her copy. After the reading, Condron seemed surprised to know about that portion of the law and asked an interogative question "you mean I have no discretion in this matter"? Accepting the law as read by Medved, Condron conceded that she must comply. Further she said that since one of the court appointed doctors, Dr. Seaman, had stated that Binkley still suffered from PTSD and schizophrenia AND that "the jury had obviously used Dr. Seaman's testimony in coming to their verdict", she ruled was prepared to rule.

Defense attorney Smith then introduced another matter by saying that the DA had not turned over a report from her own Crime Lab investigator regarding findings on photos of alleged use of a gun in the robbery. Judge Condron asked Smith when he had requested the report. "Early this week, Monday," said Smith. Condron then asked Medved if she had received the request. "Yes" said Medved. Judge Condron then ordered the report to be turned over to the defense within 24 hours.

Binkley will continue to be held over in Santa Clara County until his next appearance which will be 9:00 a.m., Thursday, February 5th. At that time, Judge Condron is expected to have more specifics as to the defendant's disposition, and the Defense may have a motion to overturn the guilt verdict by reason of prosecutorial misconduct.

I Was Only Doing My Job, the Nuremburg Defense.

A federal appeals court on 6 Jan 2009 upheld former Enron Corp. CEO Jeff Skilling's convictions for his role in the energy giant's collapse but threw out his 24-year prison term and ordered that he be resentenced.

A three-judge panel of the 5th U.S. Circuit Court of Appeals in New Orleans denied Skilling's request to overturn his convictions. Skilling argued his convictions were invalid because of what his lawyers argued were incorrect legal theory, faulty jury instructions, a biased jury and prosecutorial misconduct, including accusations of witness intimidation and withholding evidence.

The panel wrote in its opinion that Skilling "failed to demonstrate that the government's case rested on an incorrect theory of law or that any reversible errors infected his trial."

While denying those arguments, the appellate panel also found that U.S. District Judge Sim Lake improperly applied a sentencing guideline that resulted in a longer prison term for Skilling, and ordered that he be resentenced. But legal experts still expect Skilling to get a lengthy prison term whenever he is resentenced.

Skilling was convicted in May 2006 on 19 counts of fraud, conspiracy, insider trading and lying to auditors for his role in the collapse of Houston-based Enron, once the nation's seventh-largest company.

Skilling is the highest-ranking executive to be punished for the accounting tricks and shady business deals that led to the loss of thousands of jobs, more than $60 billion in Enron stock value and more than $2 billion in employee pension plans after the company imploded in 2001.

Company founder Kenneth Lay also was convicted of conspiracy, fraud and other charges, but his convictions were vacated after he died less than two months later of heart disease.

Skilling's attorney, Daniel Petrocelli, who represented the Brown/Goldman family in a civil suit against O J Simpson, said he was "extremely disappointed." Petrocelli said he planned to ask for a rehearing before the three-judge panel, or before the entire 5th Circuit court, or he'll appeal to the U.S. Supreme Court.

Skilling is serving his time, the longest sentence in the Enron scandal, in a federal prison in Minnesota.

Federal prosecutors said they were pleased with the decision.

Prosecutors won their convictions of the top two men at Enron by arguing that Enron employees were bound to serve honestly and not put their interests ahead of the company's. If they failed to do so, they deprived the company of "honest services" and committed a crime.

Prosecutors argued Skilling's actions were dishonest and contrary to the needs of the company's shareholders and its financial stability.

When Petrocelli argued his appeal before the 5th Circuit in April, he characterized his client as a loyal employee who didn't commit a crime and might have only bent the rules for the company's benefit.

The 5th Circuit has overturned several Enron-related convictions that were based on the honest services theory, ruling that executives did only what Enron wanted them to do and did not profit at its expense.

Petrocelli said Tuesday that Skilling's honest services argument was the same as those other cases and that his client was unfairly being singled out.

Jack Sylvia, a Boston-based attorney with the firm of Mintz Levin, said Skilling was not able to show that he was acting under the orders of anyone at Enron. Some legal experts had thought that because of the prior reversals, the honest services argument was Skilling's best chance at overturning some or possibly all of his convictions.

"That's why a lot of people were anxious for this opinion to be handed out," said Christopher Bebel, a former federal prosecutor now in private practice in Houston. This opinion "represents an overwhelming victory for the government."

Merit Pay or Bonuses. Goals or Quotas.

Legal experts have speculated that the flagging economy will push law firms to finally abandon the costly lockstep compensation systems they have clung to for years.

The first signs of that sea change are appearing.

Morgan Lewis & Bockius informed associates on Monday that 2009 bonuses will be merit based, as opposed to an established amount given to those who billed at least 2,000 hours. A memo sent to attorneys, which was posted on the legal blog Above the Law, laid out several criteria upon which the bonuses will be paid.

"In deciding on bonuses, we will look at the entire picture of an associate's contribution, including level of engagement, efficiency and value in serving clients, excellence, results achieved, contribution to our culture, participation in our programs, and other factors," the memo reads. Associates will still be expected to bill 2,000 hours, although that won't be a "hard-and-fast requirement," according to the memo. Achieving 2,000 hours won't guarantee that associates receive a bonus, nor will falling short of that number mean associates won't get a bonus, the memo said. However, the firm will give "substantial weight to the level of engagement in awarding bonuses."

Officials at Morgan Lewis declined to comment further on the issue.

It's not yet clear what 2008 bonuses will look like for associates at the firm. In October, firm leaders announced that bonus decisions would not be made until some time in January. Those announcements have yet to be made.

Critics of lockstep compensation — be it salary increases or bonuses — have said that the reluctance of law firms to diverge from the legal industry's established pattern has allowed compensation to get out of hand in recent years. Firms have been able to absorb the escalating attorney compensation in flusher times, but the weak economy has highlighted the problem, they say.

Law firms are already in cost-cutting mode. In addition to reduced bonuses in many instances, a number of law firms are freezing associate pay in 2009. Those firms include Orrick, Herrington & Sutcliffe; Latham & Watkins; Sheppard, Mullin, Richter & Hampton; and DLA Piper.

Law And Order Flees Mexico. Illegals Run to USA, Mainly California.

FELIPE ANGELES, Mexico — Four hooded men smashed in the door to the adobe home of an 80-year-old farmer, handcuffing his frail wrists and driving him to a makeshift jail. They released him after relatives and friends paid a $9,000 ransom, which included his life savings.

Many people from Felipe Angeles left to escape the kidnalling and the violence.
The kidnapping was a dismal story of cruelty and heartbreak, familiar all across Mexico, but with a new twist: the daughter of this victim lived in the United States and was able to wire money to help assemble his ransom, the farmer, who insisted that he not be identified by name, said in an interview.

A string of similar kidnappings, singling out people with children or spouses in the United States, so panicked this village in the state of Zacatecas that many people boarded up their homes and headed north, some legally and some not, seeking havens with relatives in California and other American states.

“The relatives of Mexicans in the United States have become a new profit center for Mexico’s crime industry,” said Rodolfo García Zamora, a professor at the Autonomous University of Zacatecas who studies migration trends. “Hundreds of families are emigrating out of fear of kidnap or extortion, and Mexicans in the U.S. are doing everything they can to avoid returning. Instead, they’re getting their relatives out.”

The reported rush into the United States by people from the state of Zacatecas is another sign that Mexico’s growing lawlessness is a volatile new factor affecting the flow of migrant workers across America’s border. The violence is adding a new layer of uncertainty to the always fraught issue of Mexican emigration, already in flux because of the economic downturn in the United States.

Academics and policy makers on both sides of the border, who are watching closely for shifts in migration patterns, say it is too early to know the long-term impact of either the drug-related violence or the loss of jobs by thousands of migrant workers in the United States. But so far, earlier predictions of an exodus of out-of-work Mexicans back to their hometowns seem to have been premature.

Instead, it appears that the pattern in the state of Zacatecas — where many people have family in the United States — may be a good indicator of what is happening throughout Mexico. The country’s spiraling criminality appears not only to be keeping some Mexicans in the United States, but it may also be leading more Mexicans to flee their country. “It’s a toxic combination right now,” said Denise Dresser, a political scientist based in Mexico City. “Mexicans north of the border are facing joblessness and persecution, but in their own country the government can’t provide basic security for many of its citizens.”

The extraordinary increase in violence in Mexico in recent years has resulted in part from President Felipe Calderón’s war against drug lords. His campaign to arrest the leaders of the cartels and the military officers and law enforcement officials they have compromised has unleashed factional fighting among rival drug groups, as well as violence against the government.

Traditionally, most of Mexico’s criminal violence has been concentrated in northern border cities like Tijuana where cocaine enters the United States. But law and order have been deteriorating in many regions; and heartland states like Michoacán, Jalisco and Zacatecas, which are the homes of millions of migrants to the United States and are longtime drug smuggling routes, are now also reporting spikes in killings and kidnappings.

Jerez, a town of 60,000 a few miles northwest of Felipe Angeles in Zacatecas, was until recently a calm place, largely untouched by organized crime, said Abel Márquez Haro, a grocery wholesaler.

But recently, scores of men driving Chevrolet Suburbans and carrying automatic rifles established a menacing presence, threatening residents on the street and extorting businesspeople. The identities of the men remain a mystery, but many people in the town say they assume they are traffickers who have abandoned another Mexican state, perhaps to avoid an army crackdown.

On Nov. 10, a dozen of the gunmen arrived at Mr. Márquez’s warehouse, dragging him out, bashing him and several employees with rifle butts and then hauling him away. He was held blindfolded for 30 hours as the kidnappers demanded $500,000 for his freedom, Mr. Márquez said in an interview. Eventually his family agreed to a smaller ransom, Mr. Márquez said. When his son delivered the money, the kidnappers released Mr. Márquez but seized his son, demanding a second ransom, which the family also paid, Mr. Márquez said.

He is trying to sell his business, he said, and hopes to relocate to some safer city in Mexico. But he said that a friend who witnessed his kidnapping was so rattled that he had since gone to live with a brother in California.

Residents described several other recent kidnappings and extortions across the state of Zacatecas: a cattleman held until a daughter in Las Vegas sent money to help pay a $35,000 ransom; a rancher who was tied to a tree during a five-day period of captivity; a car-parts dealer who avoided capture by immediately paying gunmen the ransom they demanded.

Those who live in the region say such crimes — and the attention they receive on Spanish-language television in the United States — appear to have frightened not only those who live here year-round. Most years at Christmastime, hundreds of men in cowboy hats who work north of the border return to Jerez, jamming the streets with pickup trucks and cars with California and Illinois license plates and reuniting with old friends and family in the town square.

This holiday season, Jerez and surrounding towns have had few migrants return. And demographers based in Jalisco and Michoacán said in interviews that few migrants had returned to those states either.

Those reports surprised many who study immigration, including Douglas S. Massey, a sociology professor at Princeton University.

“What I thought would be happening this Christmas is that more migrants would go home to Mexico than usual and just stay there,” Dr. Massey said. Surveys of Mexican migrants that he conducted last summer in North Carolina after a large poultry processing plant closed there showed that “people were heading back to Mexico because they couldn’t find another job” and because federal raids had spread so much fear among migrants, he said.

“People were saying, ‘If it’s a matter of surviving day to day, I’d rather do that in Mexico,’ ” Dr. Massey said.

Other experts also expected to see larger than usual flows of Mexicans home this Christmas. A caucus of Mexican legislators who specialize in migration issues predicted in October that some three million Mexicans might return from the United States as a result of the recession. But the same group reported in a study released in late December that in fact fewer migrants seemed to have returned this holiday season than in previous years, in part because of what they delicately termed “the insecurity in Mexico.”

And in Felipe Angeles, the flow of people ran north rather than south at year-end.

Residents here were so frightened by the kidnappings of the octogenarian and of about a dozen other people who lived in or near this village in recent months that hundreds of them set up a roadblock with their tractors and trucks on the main highway here last month. They demanded that the army send troops to protect them. Soldiers were deployed to patrol the town for a few days, but that did not leave the residents feeling secure.

“The kidnappers were targeting people with relatives in the United States, because they knew these families have money,” said Santana Lujan, a local farmer who participated in the blockade. “It’s left a psychosis of fear and worry.”


A teacher who spoke on the condition of anonymity estimated that of the town’s 400 houses, about 200 were now vacant, with 50 of them emptied in recent weeks. About half of the departing families left for the United States, he said, while the rest sought safety elsewhere in Mexico.

In an interview, the 80-year-old man who was kidnapped trembled when describing his six-day captivity. He said he was repeatedly kicked by his captors.

His daughter has since urged him to go live with her in the United States, but he said he felt too old to emigrate.

“But many people have left,” he said, “and more are going to leave