Luigi Mangione's Outburst & Uber's Court Loss

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0:51David Voreacos:Luigi Mangione railed about double jeopardy during an unusual courtroom outburst. after a judge set his state trial for June 8th, leapfrogging an October trial date set by a judge for his federal trial. Mangione's defense team objected to the June date, saying they won't be ready in time and that their client faces the threat of double jeopardy. As court officers led him from the courtroom, Mangione shouted, It's the same trial twice. One plus one equals two. This is double jeopardy by any common sense definition. Mangione is charged with killing UnitedHealthcare CEO Brian Thompson on a Manhattan sidewalk in December of 2024.

1:38David Voreacos:Both the state and the federal government are trying him for Thompson's killing. His lawyers have pushed for the federal trial to go first, which could bar the state trial from happening because of New York's double jeopardy protections. At Friday's hearing, Mangione's defense attorney, Karen Friedman Agnifolo, repeatedly said, The June trial day places an unfair burden on Mangione's team to prepare for the federal and state trials at the same time. Quote, Mr. Mangione is being put in an untenable situation because of this tug of war between two different prosecution offices. Judge Gregory Caro's response was, be ready on June 8th.

2:22David Voreacos:That's it. Joining me is Bloomberg legal reporter David Voriakis. So, David, basically, Manhattan prosecutors are fighting with federal prosecutors over who gets to try Mangione first.

2:35Dana Whitfield:That's correct. The judge in the federal case ruled that Mangione could not be tried on a murder count that could lead to the death penalty, which is what the Trump administration was looking for. Now, this would be the death penalty if the jury found him guilty and then the jury then decided that he should be put to death. She took that option off the table for legal reasons, saying that essentially the underlying charge or the related charge of stalking with the intent to kill was not the appropriate one to use with this murder count. So she dismissed the murder count and a firearms offense but left the stalking charges and their two stalking charges for Mangione who still could face life in prison if he's convicted of those.

3:31Dana Whitfield:The judge set a September 8th date to begin jury selection in that case unless the prosecutors appeal her ruling and it's not clear that they will. Meanwhile, just last week, the judge in the state case, who had previously thrown out a first-degree murder charge and left in place a second-degree murder charge, set a June 8th trial date for Mangione, and he said that he would move that to September 8th if the federal prosecutors appeal.

4:10David Voreacos:I thought long ago the feds had said that they would let the state go first. And Judge Caron noted, quote, it appears the federal government has reneged on its agreement to let the state, which has done most of the work in this case, go first.

4:27Dana Whitfield:There has been discussion of an agreement. It's just a little unclear how that agreement was supposed to be enforced. And the judge in the federal case went ahead and set a September 8th trial date because the judge in the state case had not acted. and there was a very intense hearing on Friday after which Mangione was shackled and being let out of court and he turned and shouted to the gallery, it's the same trial twice, one plus one is two, double jeopardy by any common sense definition. Now this is not a normal turn of events where the defendant would make such a pronouncement to the gallery.

5:15Dana Whitfield:What he's referring to is that his lawyers have argued consistently that by charging him for the same act, the allegation is that he murdered United Health Group executive Brian Thompson. By charging him twice for the same act, that that amounts to double jeopardy, which is barred in the U.S. Constitution and under New York state law. So there's been a lot of jockeying between federal and state prosecutors to see who was going to go first.

5:49David Voreacos:Isn't it accepted that it's two different sovereigns and you can try a person in state court and federal court?

5:55Dana Whitfield:I think it's unclear how the facts of this case will play out and how the law will play out in this case. There's clearly competition. And you could imagine that, say, the judges or the prosecutors would get together and resolve this. But this seems to be proceeding not in an amicable fashion.

6:18David Voreacos:If you look at it without all the publicity, it seems to be a classic state case. It's a killing on the streets of Manhattan.

6:25Dana Whitfield:It is more traditionally a state prosecution. And the judge said that. The state court judge said that on Friday, that this is more traditionally something that would go on. And that's something that the prosecutors for Manhattan District Attorney Alvin Bragg have been arguing all along, that they investigated this case with the New York Police Department, and they collected all the evidence and put out the bulletins that led to Mangione's arrest in Altoona, Pennsylvania, and that the Justice Department and the federal government only got involved essentially after the New York Police Department and the Manhattan DA had done the bulk of their investigation.

7:09Dana Whitfield:And if you recall, the Attorney General Pam Bondi said that the Justice Department was going to seek the death penalty before the Southern District of New York prosecutors had secured a federal indictment.

7:25David Voreacos:And Bondi was criticized for making that decision before she even knew the facts of the case. Why does each side want to go first? Is there a concern perhaps that the argument of double jeopardy will come up after the verdict in a first trial? And also perhaps that a second trial is less of a surprise for the defense, so they may have an advantage?

7:51Dana Whitfield:It's not entirely clear why it's so important to each side to go first. I mean, I assume for publicity value and, you know, the evidence is fresher, the witnesses are fresher. As you suggest, the defense might have a better shot the second time around. But say if Mangione is convicted and faces a life sentence, it's not entirely clear that he would want to go through that a second time. I mean, you could imagine that that might give leverage for a plea deal averting a second trial.

8:26David Voreacos:Key evidence in the case was found in Mangione's backpack that was searched at that McDonald's in Pennsylvania where he was arrested. And the defense has been fighting to keep that evidence out of the trial, arguing it was an illegal search. But the state judge, Judge Caro, is not going to issue a ruling on whether that critical evidence is in or out until May 18th, when he set the trial date for June 8th.

8:58Dana Whitfield:The state court judge is going to rule in May, which is almost six months after he had a seven-day hearing on the matter, whereas the federal judge had a single hearing with one witness on it and ruled promptly that the evidence collected in Luigi Mangione's backpack in a McDonald's in Altoona, Pennsylvania was admissible in the federal trial. So she ruled against the defense request to throw out that evidence, which, if it's admitted, is, according to the New York authorities, very damning. It includes what they say was the gun that was used to murder Thompson. It includes a silencer, a gun magazine, and a diary that authorities say included a number of writings suggesting that Mangione was planning to murder Brian Thompson.

9:56David Voreacos:This sort of illustrates the differences between practicing in state court and federal court. This message is brought to you by Apple Card.

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10:29David Voreacos:Terms and more at AppleCard.com. As markets move and headlines break, what matters most is context. A Bloomberg subscription gives you unmatched reporting, sharp analysis, and powerful tools that help you connect the dots. Visit Bloomberg.com slash podcast offer to learn more. First Brand's founder Patrick James and his brother Edward pleaded not guilty to fraud charges stemming from the multi-billion dollar collapse of their auto parts supply business. Prosecutors say that as a result of the defrauding of the company's lenders and financing partners, hundreds of millions of dollars flowed into the personal accounts of Patrick James.

11:13David Voreacos:Federal prosecutors allege the two former First Brands executives used fake and inflated invoices to persuade lenders to provide billions of dollars in financing to the company. Jay Clayton, the U.S. attorney for the Southern District of New York, said the James brothers obtained billions for First Brands and millions for themselves by presenting their lenders with the impression of a successful, growing international business. He said it was a business run through fraud, fake documents and false financials. The indictment follows separate civil lawsuits brought against the brothers by First Brand's bankruptcy advisors.

11:54David Voreacos:The company filed for Chapter 11 bankruptcy in September of last year, with just$12 million in its corporate accounts and more than$9 billion in liabilities. I've been talking to Bloomberg Legal Reporter David Voriakis. Tell us about the charges, David.

12:10Dana Whitfield:Patrick James was the founder of First Brands, which is a big auto parts supply business that filed for bankruptcy last year. And the allegations are that he and his brother, who was a top executive, engaged in a massive fraud scheme regarding the financing of billions of dollars to the company. And they were indicted on charges, including wire fraud, bank fraud, conspiracy to commit wire fraud, and conspiracy to commit money laundering.

12:44David Voreacos:And explain how prosecutors say they committed these frauds.

12:49Dana Whitfield:They are accused of essentially creating false invoices, using fake and inflated invoices to persuade lenders to give them financing that they needed to keep their business going. And, you know, there's allegations of roundtrip financing. And a lot of this has already been aired and litigated in bankruptcy court. The prosecutors in the Southern District of New York say that it amounted to a criminal scheme. Of course, the brothers have pleaded not guilty and to their lawyers deny wrongdoing. The prosecutors have also secured the guilty plea and cooperation of a big executive, Peter Brumbergs, who pleaded guilty under seal.

13:43Dana Whitfield:and will be testifying at a trial that's scheduled to begin on July 13th.

13:50David Voreacos:And prosecutors say that they have recordings?

13:53Dana Whitfield:They have consensual recordings. They said that in a hearing, but the nature of those recordings and who's on them is unclear at the moment.

14:02David Voreacos:So most of this was litigated or brought up in bankruptcy court. What did they find in bankruptcy court?

14:09Dana Whitfield:There was a great deal of money that essentially went missing. According to creditors, there's one lawsuit that accuses Patrick James of misappropriating more than$700 million between 2018 and last September. And they say that that helped James and his family live their lavish lifestyle. James, of course, denies that. And essentially, their defense is that they were the victims of self-interested, sophisticated institutions that placed what they said were patently absurd interest rates and fees on their borrowings.

14:53David Voreacos:So they are accusing the lenders of engaging in predatory practices. Are they also claiming that the tariffs played a part in this?

15:02Dana Whitfield:They do blame the tariffs a bit, too. That was a factor that changed the business environment that helped lead to their bankruptcy.

15:12David Voreacos:How much money do they have now?

15:14Dana Whitfield:It's unclear. They have many millions of dollars now. Patrick James is free on a$50 million bond, and Edward James is free on a$25 million bond. And they had to put up a portion of that in cash and also post properties to secure their bond. So this is a big part of the bankruptcy litigation is just how much money do they have and how much were they paid through the companies. It's a private company that Patrick James owns. And so the accounting is not quite as transparent as if it had been a public company.

15:54David Voreacos:And the penalties are pretty stiff here if they're convicted.

15:59Dana Whitfield:Yes. I believe it's life in prison for Patrick James. And as with all of these financial frauds that involve wire fraud and bank fraud, it's potentially dozens of years in prison. Typically, white-collar executives receive far less than that. But, I mean, they're looking at very serious time if they're convicted in this case.

16:22David Voreacos:So trial is set for July 13th. I imagine that's going to be a very complicated trial with lots of documents. Do you know how long the trial is expected to take?

16:35Dana Whitfield:Well, it's a complex financial fraud, and I don't think the prosecutors have yet said how long they need to present their case. But I would imagine if it's anything like similar cases, it would be several weeks. And so far, it appears that the most powerful evidence they have would be testimony from Peter Brumberg's, the cooperating first brand's executive who pleaded guilty.

17:04David Voreacos:Thanks so much, David. That's Bloomberg Legal Reporter David Voriakis. In other legal news today, a landmark trial. For the first time, Uber has been found liable for not preventing an alleged sexual assault of a passenger. The rideshare giant was hit with an eight and a half million dollar verdict in a jury trial in Arizona where a 19 year old woman said she was raped by her driver. The company said it plans to appeal. The jury found that Uber was liable because the driver was acting as an apparent agent of the company. But the jury said Uber didn't act negligently or design a defective product.