Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our weekly newsletters. Signing up for any of our section newsletters will opt you in to the weekly Coronavirus briefing.
Sign up for our Banking newsletter
You must correct or enter the following before you can sign up:
Thank You!
Law360 (February 9, 2021, 8:31 PM EST) -- A former HSBC foreign currency executive can't skip his two-year prison sentence for defrauding a bank client in a $3.5 billion currency deal, but he can put off reporting to prison until he's vaccinated against COVID-19, a Brooklyn federal judge ruled Tuesday.
Mark Johnson's heart conditions and extensive community service in his home in the United Kingdom are not "extraordinary and compelling" enough circumstances to warrant shortening his time behind bars, U.S. District Judge Nicholas G. Garaufis said.
But forcing Johnson to surrender to Bureau of Prisons custody before being vaccinated would "subject him to severe and unjustifiable health risks," Judge Garaufis found, pushing Johnson's surrender date from March 23 to either Aug. 1 or three weeks after his final vaccine dose, whichever comes earlier.
In making his decision, the judge noted that both the government and Johnson could find "at least plausible support" for their arguments in district court rulings on whether a sentence reduction under the First Step Act should also apply to defendants who are not yet incarcerated, but that the Second Circuit has not spoken on the issue.
Judge Garaufis also held that Johnson "may" have exhausted all administrative remedies by receiving a refusal from the Bureau of Prisons to apply for home confinement or a sentence reduction — one of the requirements for seeking sentencing relief through the court.
But Johnson's lack of extenuating circumstances meant it was unnecessary to determine his eligibility for relief at the moment, and ultimately the court's obligation to honor the jury's guilty verdict and deter other would-be fraudsters outweighs Johnson's argument for a shorter sentence, the judge said.
Johnson, a British national and former global head of forex spot trading for HSBC, was convicted in 2017 of wire fraud and conspiracy and later sentenced to two years in prison. Johnson was incarcerated for about two months, before the Second Circuit granted him bail pending appeal. He has been residing in the U.K. during the appellate process.
The case stems from a deal Cairn Energy PLC made with HSBC to exchange $3.5 billion in proceeds from the sale of an Indian subsidiary from U.S. dollars to pounds sterling, in order for the London Stock Exchange-traded Cairn to make a distribution to investors.
Prosecutors say Johnson and others at HSBC engaged in front-running and other trading around the dollars-for-sterling deal that caused the price of sterling to spike, netting the bank millions of dollars in profits at the expense of its client, Cairn.
A spokesman for the U.S. attorney's office declined to comment Tuesday.
Counsel for Johnson did not immediately respond to requests for comment.
The government is represented by Lauren Elbert of the U.S. Attorney's Office for the Eastern District of New York.
Johnson is represented by Frank Wohl, Ramya Kasturi and Jeannie Rose Rubin of Lankler Siffert & Wohl LLP.
The case is U.S. v. Johnson et al., case number 1:16-cr-00457, in the U.S. District Court for the Eastern District of New York.
--Additional reporting by Stewart Bishop. Editing by Daniel King.
For a reprint of this article, please contact reprints@law360.com.
