“I am not going to answer your trick questions, Mr. Wisenberg.”

PRESIDENT BILL CLINTON

White-Collar Crime: Client and Attorney Expectations

Part 2. What Do The Client And The Attorney Have A Right To Expect From Each Other?

A. What Your Federal White-Collar Attorney Must Know

To competently handle a federal white-collar crime case, your attorney must, at a minimum, be thoroughly grounded in the law of federal criminal procedure as well as the substantive criminal law or laws that you are suspected of having violated. Over and above this, your white-collar crime lawyer needs to know the operational basics, that is, how the rules of criminal law and procedure really operate during the various stages of a federal white-collar crime investigation. The competent white-collar crime practitioner should also be acutely aware of the ever-increasing use by the government, against corporate and individual defendants, of civil enforcement tools, including regulatory investigations (by entities such as the Securities and Exchange Commission), asset forfeitures and actions under the False Claims Act.

B. Will Your Real Attorney Please Stand Up?

If your company’s attorney interviews you as part of an internal corporate investigation, does the attorney represent you as well? The answer is almost always no. The company attorney conducting the interview will probably tell you that: 1) he represents the company; 2) the interview is privileged; 3) the privilege belongs to the company; and, 4) the company has the option of waiving the privilege at some time in the future. (In fact, most authorities agree that the company attorney is ethically obligated to tell you this.) If this is all that the company attorney tells you, however, you might go into your interview with a false sense of security. Why? Because, what the attorney has not told you, in the above example, is that, in the current white-collar climate, the company will almost certainly waive its privilege and turn over the results of the internal investigation, including a summary of your interview, to federal prosecutors. You should obviously be aware of this before deciding whether to participate in an interview which is part of an internal corporate investigation. Knowing the stakes involved, you can then decide, in consultation with your own white-collar lawyer, whether to participate in the interview. Your failure to participate might result in the company firing you, but that may be preferable to increasing your criminal exposure through an interview with company counsel who has become, in effect, an agent for the government.

C. Attorney Honesty

A white-collar crime client, no matter how outwardly sophisticated, is usually scared when he first contacts a criminal defense attorney. In many cases he is already in serious trouble. He wants to be told that things aren’t that bad, or that he might not be charged with a federal white-collar crime at all. Seasoned counsel can often provide sincere reassurance as to some of these matters. But your attorney should never downplay your potential criminal exposure or minimize the legal and factual situation at hand. Credibility is one of the criminal defense attorney’s most potent weapons. If he cannot establish credibility with his own clients, how can he be expected to do so with government attorneys during plea negotiations or with juries during trial? If you cannot trust your own attorney-if he seems to have a different answer every time you ask a question, if his attitude toward you changes after he receives your up-front retainer funds, if he fails to return your phone calls without adequate explanation-it is time to consider a new lawyer.

D. Client Honesty

White-Collar crime lawyers should never say that they “don’t want to know what happened.” Whatever the merits of that approach in cases involving drugs or violence, it is definitely inappropriate in white-collar crime matters. Your attorney needs to know everything, because in white-collar cases, intent is almost always the issue. Only a small number of white-collar crime cases involve outright thievery–the rest constitute a gray area. Moreover, almost all white-collar crimes require the prosecutor, in effect, to prove willfulness, that is, intentional violation of a known legal duty, or at least to establish a specific intent to defraud. This can be a very difficult burden to meet. You must tell your attorney every little fact, and every bad thing that you think you did, so that he can determine as early as possible if there is a legitimate defense based on lack of intent. Also, you should never put your attorney in the position of negotiating with the government based on false assumptions about your culpability, because this destroys his credibility with the government. But that is just what will happen if you fail to reveal everything to counsel. Getting this information from you will often be difficult for your lawyer, because the denial factor (“I didn’t do anything wrong”) among white-collar crime clients is high. Why is the denial factor so high among white-collar crime clients? Many of them are prominent in their professional fields and have never before been involved with the criminal justice system. It is often very hard for such people to reveal uncomfortable facts to their lawyers, even in the context of privileged attorney-client conversations. You must get over this hang-up. Your freedom is in the balance.

E. Learn The Crime And The Guideline Range

In federal criminal practice, since the establishment of the United States Sentencing Guidelines (“Guidelines”) on November 1, 1987, almost all strategic decisions of the competent white-collar crime defense attorney have initially flowed from Guidelines analysis. The United States Supreme Court, however, ruled on January 12, 2005, in U.S. v. Booker, that the Guidelines are no longer binding on United States District Courts. The Guidelines are now advisory. Federal judges must continue to calculate Guideline sentencing ranges and must “consult” and “consider” the Guidelines, but they do not have to follow the recommended Guidelines range. It is too early to tell what the full effect of Booker will be. Moreover, Congress may enact a legislative fix that renders the Guidelines mandatory again. For now, however, the Guidelines remain very important, and should be consulted at the outset of representation by the diligent white-collar crime attorney. You can obtain a copy of the Guidelines, which are usually updated yearly, from West Publishing Company or the United States Sentencing Guidelines Commission. In a Guidelines analysis, counsel must determine the most likely federal crime with which the client may be charged and the Guidelines section matching that crime. Once the proper Guidelines section is determined, the white-collar crime lawyer must learn the maximum possible harm and the maximum possible benefit, under the Guidelines, for every activity in which the client engaged. For example, did the client defraud a vulnerable victim? If so, he potentially faces more jail time. By the time a client leaves the office after the first visit, the attorney and the client should have a very solid idea of what the likely Guidelines range will be if the client is found guilty. This is a vital first step that will affect everything from the client’s decision whether to cooperate during the early stages of an investigation to the question of whether and how to plea bargain with the prosecutor.

Keep in mind that, while the Guidelines are now advisory, they still must be consulted and considered by the trial judge, and that a Guidelines sentencing range will be calculated by that judge. Also keep in mind that federal judges have been sentencing under the Guidelines for the past 17 years. Old habits die hard. In the vast majority of white-collar crime cases, these judges can be expected roughly to follow the Guidelines. And the trend in recent years has been towards draconian increases in recommended Guideline ranges for white-collar crime offenders. While fairly steep Section 5K1.1 downward departures are theoretically possible in white-collar crime cases, in actual practice the Guidelines have severely constrained judicial discretion in sentencing in the past several years. Moreover, in fraud cases, the more monetary loss you are found to have caused the higher your Guidelines range will be. It is relatively easy for a sophisticated prosecutor to allege and prove a large “amount of loss” under Section 2B1.1 of the Guidelines or to jack up your Guidelines range by throwing a money laundering count into your indictment. Your attorney must be able to spot such dangers and to give you best and worse case scenarios of what to expect from the Guidelines.

NEXT PART – Avoiding Indictment

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SOLOMON L. WISENBERG

Solomon L. Wisenberg has extensive lead counsel experience in complex white collar criminal investigations and jury trials. His nationwide practice is primarily devoted to representing individuals and businesses exposed to federal criminal and regulatory inquiries or charged with federal crimes. READ FULL BIOGRAPHY

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