Idiot defense
Encyclopedia
The idiot defense is a satirical term for a legal strategy
where a defendant claims innocence
by virtue of having been ignorant of facts of which the defendant would normally be expected to be aware. Other terms used for this tactic include "dumb CEO defense," "dummy defense," "ostrich defense," and "Sergeant Schultz
defense."
The term was popularized as a result of a number of high-profile corporate accounting scandal
defendants claiming that all wrongdoing was performed by others, without the defendant's knowledge or consent. Attorneys for these defendants claimed that their skill was in valuation
and deal-making, and that they lacked the training to recognize fraud
ulent accounting practices they claimed that they would have needed. However, in many cases the defendants's subordinates have testified that the defendants ordered them to falsify the accounts.
No major instances of the idiot defense being successful in criminal proceedings have been reported in American jurism to date. Instead, all such uses are widely believed to have resulted in the defendants employing idiot defenses being found guilty on at least some if not all counts.
, lawyers, and external accountants
to provide him warning of any possible abuse. In his closing statements, Rigas's lawyer asked "Does [John Rigas] have a right to believe that things would be done properly, that adequate and appropriate disclosures were made, that the lawyers and the accountants and the personal accountants would make sure of that?"
Rigas was convicted on July 8, 2004.
, former CEO of CUC International, was charged with 16 counts in relation to inflated earnings statements from CUC before it merged with HFC Inc. to form Cendant
. During his trial, Forbes testified to working on "the strategy vision part, talking to key clients ...." He also claimed he was "much more valuable to shareholders doing that than being in day-to-day operations." Forbes's attorney, Brendan Sullivan Jr.
, summarized: "The defense of Walter Forbes is that he didn't know about it."
The jury in the case against Forbes returned on January 4, 2005. While they did convict another defendant, they failed to reach a verdict on the charges against Forbes.
Forbes was found guilty of conspiracy to commit securities fraud and two counts of making false statements at a third trial on October 31, 2006.
The prosecutor referred to this as the "aw shucks defense." Bernard J. Ebbers was convicted of all charges on March 15, 2005.
, founder and former CEO of HealthSouth
, became the first CEO to be charged with violating the Sarbanes-Oxley Act
. Scrushy's defense lawyer, Jim Parkman, asked during the trial, "That's what y'all did and how you planned it, so (Scrushy) wouldn't know what the whole picture was?"
Scrushy was found not guilty of all charges on June 28, 2005. But the idiot defense was not believed to have been the reason he was acquitted; instead, the prosecution apparently lacked enough courtroom-admissible evidence to make its case against him.
collapse. In a 60 Minutes
interview before his trial, Lay said, "I don't think I'm a fool. But I think I sure was fooled." He also added, "But I can't take responsibility for the criminal conduct of someone inside the company."
Lay and Jeffrey Skilling
were convicted on many of the charges (see The trial of Kenneth Lay and Jeffrey Skilling).
and Tony Blair
have also used the reference to an "idiot defense" to describe the two leaders's basing claims of Iraqi weapons of mass destruction
on reports from their respective country's intelligence agencies.http://www.hellblazer.com/archives/2004/01/the_idiot_defense.html
http://dneiwert.blogspot.com/2003_12_28_dneiwert_archive.html#107300875064439381
Barry Bonds
's admission of possible steroid
use, and claim that he was unaware of any steroids at the time, have also been described as an idiot defense.http://www.freep.com/sports/rosenberg/rosey18e_20050218.htm
Strategy
Strategy, a word of military origin, refers to a plan of action designed to achieve a particular goal. In military usage strategy is distinct from tactics, which are concerned with the conduct of an engagement, while strategy is concerned with how different engagements are linked...
where a defendant claims innocence
Innocence
Innocence is a term used to indicate a lack of guilt, with respect to any kind of crime, sin, or wrongdoing. In a legal context, innocence refers to the lack of legal guilt of an individual, with respect to a crime.-Symbolism:...
by virtue of having been ignorant of facts of which the defendant would normally be expected to be aware. Other terms used for this tactic include "dumb CEO defense," "dummy defense," "ostrich defense," and "Sergeant Schultz
Hogan's Heroes
Hogan's Heroes is an American television sitcom that ran for 168 episodes from September 17, 1965, to March 28, 1971, on the CBS network. The show was set in a German prisoner of war camp during the Second World War. Bob Crane had the starring role as Colonel Robert E...
defense."
The term was popularized as a result of a number of high-profile corporate accounting scandal
Accounting scandals
Accounting scandals, or corporate accounting scandals, are political and business scandals which arise with the disclosure of misdeeds by trusted executives of large public corporations...
defendants claiming that all wrongdoing was performed by others, without the defendant's knowledge or consent. Attorneys for these defendants claimed that their skill was in valuation
Valuation (finance)
In finance, valuation is the process of estimating what something is worth. Items that are usually valued are a financial asset or liability. Valuations can be done on assets or on liabilities...
and deal-making, and that they lacked the training to recognize fraud
Fraud
In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation...
ulent accounting practices they claimed that they would have needed. However, in many cases the defendants's subordinates have testified that the defendants ordered them to falsify the accounts.
No major instances of the idiot defense being successful in criminal proceedings have been reported in American jurism to date. Instead, all such uses are widely believed to have resulted in the defendants employing idiot defenses being found guilty on at least some if not all counts.
John J. Rigas
John J. Rigas, the founder of Adelphia, was charged with conspiracy, bank fraud, and securities fraud. Rigas's defense asserted that he expected the Adelphia boardBoard of directors
A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization. Other names include board of governors, board of managers, board of regents, board of trustees, and board of visitors...
, lawyers, and external accountants
Accountancy
Accountancy is the process of communicating financial information about a business entity to users such as shareholders and managers. The communication is generally in the form of financial statements that show in money terms the economic resources under the control of management; the art lies in...
to provide him warning of any possible abuse. In his closing statements, Rigas's lawyer asked "Does [John Rigas] have a right to believe that things would be done properly, that adequate and appropriate disclosures were made, that the lawyers and the accountants and the personal accountants would make sure of that?"
Rigas was convicted on July 8, 2004.
Walter A. Forbes
Walter ForbesWalter Forbes
Walter Forbes is an American business manager and Federal prisoner.He was prosecuted by the U.S. Attorney's Office for the District of New Jersey and convicted of one count of conspiracy to commit securities fraud, and two counts of making false statements, for inflating reported incomes for the...
, former CEO of CUC International, was charged with 16 counts in relation to inflated earnings statements from CUC before it merged with HFC Inc. to form Cendant
Cendant
Cendant Corporation was a New York-based provider of business and consumer services, primarily within the real estate and travel industries. In 2005 and 2006, Cendant broke up and spun off or sold its constituent businesses...
. During his trial, Forbes testified to working on "the strategy vision part, talking to key clients ...." He also claimed he was "much more valuable to shareholders doing that than being in day-to-day operations." Forbes's attorney, Brendan Sullivan Jr.
Brendan Sullivan
Brendan V. Sullivan, Jr. is a senior partner of the law firm Williams & Connolly. Sullivan is probably best known for the role he served, in the late 1980s, as defense counsel for United States Marines Lieutenant-Colonel Oliver North in the wake of the Iran-Contra scandal...
, summarized: "The defense of Walter Forbes is that he didn't know about it."
The jury in the case against Forbes returned on January 4, 2005. While they did convict another defendant, they failed to reach a verdict on the charges against Forbes.
Forbes was found guilty of conspiracy to commit securities fraud and two counts of making false statements at a third trial on October 31, 2006.
Bernard J. Ebbers
In this case, Bernard J. "Bernie" Ebbers, former WorldCom CEO, claimed that $11 billion in fraud was committed by the company's CFO, Scott Sulivan, and other subordinates without Ebbers's knowledge. During his criminal trial, Ebbers testified, "I was shocked. I couldn't believe it, I never thought anything like that would have gone on. I put those people in place. I trusted them. I had no idea they would do anything like this."The prosecutor referred to this as the "aw shucks defense." Bernard J. Ebbers was convicted of all charges on March 15, 2005.
Richard M. Scrushy
Richard M. ScrushyRichard M. Scrushy
Richard Marin Scrushy is an American business man and founder of HealthSouth Corporation, a global healthcare company based in Birmingham, Alabama....
, founder and former CEO of HealthSouth
HealthSouth
HealthSouth Corporation , based in Birmingham, Alabama, is the nation’s largest owner and operator of inpatient rehabilitative hospitals. Operating in 26 states across the country and in Puerto Rico, HealthSouth serves patients through its network of inpatient rehabilitation hospitals , outpatient...
, became the first CEO to be charged with violating the Sarbanes-Oxley Act
Sarbanes-Oxley Act
The Sarbanes–Oxley Act of 2002 , also known as the 'Public Company Accounting Reform and Investor Protection Act' and 'Corporate and Auditing Accountability and Responsibility Act' and commonly called Sarbanes–Oxley, Sarbox or SOX, is a United States federal law enacted on July 30, 2002, which...
. Scrushy's defense lawyer, Jim Parkman, asked during the trial, "That's what y'all did and how you planned it, so (Scrushy) wouldn't know what the whole picture was?"
Scrushy was found not guilty of all charges on June 28, 2005. But the idiot defense was not believed to have been the reason he was acquitted; instead, the prosecution apparently lacked enough courtroom-admissible evidence to make its case against him.
Kenneth L. Lay
Kenneth L. Lay was indicted on charges of securities fraud, wire fraud, and making false and misleading statements in relation to the EnronEnron
Enron Corporation was an American energy, commodities, and services company based in Houston, Texas. Before its bankruptcy on December 2, 2001, Enron employed approximately 22,000 staff and was one of the world's leading electricity, natural gas, communications, and pulp and paper companies, with...
collapse. In a 60 Minutes
60 Minutes
60 Minutes is an American television news magazine, which has run on CBS since 1968. The program was created by producer Don Hewitt who set it apart by using a unique style of reporter-centered investigation....
interview before his trial, Lay said, "I don't think I'm a fool. But I think I sure was fooled." He also added, "But I can't take responsibility for the criminal conduct of someone inside the company."
Lay and Jeffrey Skilling
Jeffrey Skilling
Jeffrey Keith "Jeff" Skilling is the former president of Enron Corporation, headquartered in Houston, Texas. In 2006 he was convicted of multiple federal felony charges relating to Enron's financial collapse, and is currently serving a 24-year, four-month prison sentence at the Federal...
were convicted on many of the charges (see The trial of Kenneth Lay and Jeffrey Skilling).
Other uses
Critics of George W. BushGeorge W. Bush
George Walker Bush is an American politician who served as the 43rd President of the United States, from 2001 to 2009. Before that, he was the 46th Governor of Texas, having served from 1995 to 2000....
and Tony Blair
Tony Blair
Anthony Charles Lynton Blair is a former British Labour Party politician who served as the Prime Minister of the United Kingdom from 2 May 1997 to 27 June 2007. He was the Member of Parliament for Sedgefield from 1983 to 2007 and Leader of the Labour Party from 1994 to 2007...
have also used the reference to an "idiot defense" to describe the two leaders's basing claims of Iraqi weapons of mass destruction
Iraq and weapons of mass destruction
During the regime of Saddam Hussein, the nation of Iraq used, possessed, and made efforts to acquire weapons of mass destruction . Hussein was internationally known for his use of chemical weapons in the 1980s against Iranian and Kurdish civilians during and after the Iran–Iraq War...
on reports from their respective country's intelligence agencies.http://www.hellblazer.com/archives/2004/01/the_idiot_defense.html
http://dneiwert.blogspot.com/2003_12_28_dneiwert_archive.html#107300875064439381
Barry Bonds
Barry Bonds
Barry Lamar Bonds is an American former Major League Baseball outfielder. Bonds played from 1986 to 2007, for the Pittsburgh Pirates and San Francisco Giants. He is the son of former major league All-Star Bobby Bonds...
's admission of possible steroid
Anabolic steroid
Anabolic steroids, technically known as anabolic-androgen steroids or colloquially simply as "steroids", are drugs that mimic the effects of testosterone and dihydrotestosterone in the body. They increase protein synthesis within cells, which results in the buildup of cellular tissue ,...
use, and claim that he was unaware of any steroids at the time, have also been described as an idiot defense.http://www.freep.com/sports/rosenberg/rosey18e_20050218.htm
Court documents
- United States of America vs. Bernard J Ebbers, United States District Court Southern District of New York, Indictment S3 02 Cr. 1144 (BSJ)
- United States of America vs. Kenneth L. Lay, et al., United States District Court Southern District of Texas Houston Division, Cr. No. H-04-25 (S-2). (7 July 2004)
- United States of America vs. Richard M. Scrushy, United States District Court Northern District of Alabama Southern Division, Case No. CR-03-BE-0530-S. (29 October 2003)