Jones Day Snags Houston Federal Prosecutor Jason Varnado

© 2015 The Texas Lawbook.

By Mark Curriden

(Oct. 7) – The Houston federal prosecutor who won criminal convictions against the top accountants in Allen Stanford’s $7 billion Ponzi scheme is leaving the U.S. Attorney’s Office to join an international law firm’s white-collar criminal defense practice.

Assistant U.S. Attorney Jason Varnado, a 10-year veteran prosecutor who scored guilty verdicts and guilty pleas against dozens of South Texas business leaders for fraudulent activity and business crimes, is joining Jones Day, a law firm with 2,400 lawyers in 43 countries, including 170 lawyers in Texas and 50 in Houston.

“The time is right for a new challenge,” Varnado told The Texas Lawbook in an exclusive interview. “We are seeing a real shift in how the federal government approaches corporate criminal activity. It is an exciting time.”

Varnado led the 2013 prosecutions of Gilbert T. Lopez Jr., the former chief accountant for Stanford Financial Group, and Mark J. Kuhrt, the company’s former global controller. Each was sentenced to 20 years in federal prison.

Several Texas law firms tried to hire Varnado during the past two months, but he says he chose to go with Jones Day because the firm is aggressively expanding its white-collar and corporate investigations practice in Texas.

Three months ago, Jones Day hired David Woodcock, the regional director of the U.S. Securities and Exchange Commission and the nationwide chair of the SEC’s Financial Reporting and Auditing Task Force. Woodcock has offices in Dallas and Houston.

A year earlier, the law firm hired Matthew Orwig, the former U.S. Attorney for the Eastern District of Texas and a specialist in white-collar criminal prosecutions. Jones Day now has 17 lawyers in Texas who focus on corporate investigations by state and federal authorities.

Varnado’s move comes three weeks after the U.S. Department of Justice and the SEC announced they planned to significantly increase enforcement actions against companies and business leaders involved in fraudulent activities.

“Houston is ground zero for federal investigations into violations of the Foreign Corrupt Practices Act because of the energy industry’s global reach,” Varnado says. “Most Texas oil and gas companies have operations or joint ventures in countries where bribery is a tradition.”

There are more than 260 investment advisory firms in Houston with about $300 billion in assets under management. In addition, there are about 2,500 broker-dealer branch offices in Harris County, according to the SEC.

“These firms are going to come under increased scrutiny from the SEC and the DOJ in the coming months,” Varnado says. “I think we are going to see a lot more cases being brought by federal prosecutors in Dallas and Houston against companies and corporate individuals.”

Woodcock says Varnado, who was his classmate at the University of Texas School of Law, will be a tremendous asset for business clients on trial for securities and financial crimes.

“Jason has an extraordinary ability to take a highly complex financial fraud scheme involving several multinational corporations and boil it down for the jury to understand,” he says. “For example, Jason had to show to the jury that the accountants knew or should have know about Stanford’s criminal activities. That is not an easy task.
 
“Equally important, Jason is highly respected within the Justice Department and credibility really matters with the government when you represent a corporate client,” Woodcock says.
 

Nancy MacKimm, the partner-in-charge of the Houston office for Jones Day, says the firm plans to continue to grow its Texas presence, especially in Houston.
 
“We see tremendous potential in Houston and our office continues to be in growth mode in this market,” MacKimm says.

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