Industry lawyers have long complained that it is unfair for the government to prosecute bankers for fraud after regulators have fined them for violating the law. But industry efforts to get dual prosecutions declared unconstitutional have largely failed.

That may be about to change. The Supreme Court is set to decide if the Constitution's protection against double jeopardy prevents the government from both fining and criminally prosecuting bankers.

"This is about a sense of fairness," said Ronald R. Glancz, a partner in the Washington office of the Venable law firm. "A lot of these people are scumbags. But anyone could get caught in this web. You want the government to play by fair rules."

The issue is coming to a head in Hudson v. United States. The Office of the Comptroller of the Currency charged in 1989 that John Hudson, Larry Baresel, and Jack Butler Rackley were involved in an insider-lending scheme involving seven banks in Oklahoma and Texas. The agency sought civil money penalties against the three and wanted to ban them permanently from the industry for causing $900,000 in losses.

The bankers settled the charges without admitting wrongdoing; Mr. Hudson paid $16,500, while Mr. Baresel and Mr. Rackley paid $15,000 each.

Prosecutors indicted the three in 1992 for the same violations of the insider-lending laws. The bankers moved to dismiss the charges, claiming they violated the Fifth Amendment's protection against double jeopardy.

The case spent the next four years bouncing back and forth between a trial judge and the U.S. Court of Appeals for the 10th Circuit. In its final ruling, the appeals court held that the defendants' constitutional rights were not violated, because the OCC fines were intended to recoup the costs of the investigation and prosecution.

Both sides are scheduled to detail their cases in briefs filed this summer, but they have outlined their arguments in documents already sent to the court. Lawyers for the bankers are arguing that regulators do not have the authority to use fines as a way of recovering the cost of their probes.

The government, however, has argued that the OCC spent $72,000 to investigate the case, which is far more than the amount recovered from the three defendants. Also, the government has argued that the bankers agreed in the civil settlement to waive their double-jeopardy rights and allow prosecutors to bring criminal charges.

The case is expected to be argued in late October with a decision out in January.

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