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


White-Collar Crime: Avoiding Indictment


A. Getting Indicted Is Bad

For most white-collar crime clients, avoiding indictment is the name of the game. Getting indicted is financially and psychologically devastating and typically means a ruined reputation, debarment from doing business with the government, revocation of a professional license and/or the end of the corporate career. The costs of trial preparation and trial will dwarf the costs of trying to convince the prosecutor not to indict. Once you have been indicted, it is almost impossible to convince the government to change its mind and drop the charges. This will leave you with two alternatives-pleading guilty to at least one felony white-collar count or fighting it out in a trial.

B. Learning How to Shut Your Mouth

The gravest errors of white-collar crime suspects are often made in the period just after they learn of an official investigation. The most common mistake that white-collar crime clients make is to try and cover up their activities by altering or destroying documents, ordering their employees to do so, or asking their friends and colleagues, directly and indirectly, to hide the truth. This often convinces a prosecutor to charge the client and is also devastating in court. An innocent person, it will be argued and believed, has no need to engage in a cover-up.

A closely related and equally dangerous pitfall occurs when the client starts falsely denying culpability about the specifics of his alleged offense to everyone in sight, particularly law enforcement authorities. In some jurisdictions this can open the door, during the criminal trial, to a burden-shifting jury instruction known as the False Exculpatory Statements Instruction. This instruction essentially tells the jury that innocent people have no reason to lie, and that the jury can consider the accused’s false explanations in determining guilt or innocence. It is an invitation to convict and, in the hands of a skilled prosecutor, a stake in the heart of the white-collar crime defendant. (Even if the jury instruction is not given, a competent prosecutor can argue the point to the jury.)

You must not to discuss anything about your case with anybody except your attorney and the members of his staff. All inquiries of you by outsiders, whether friends, acquaintances or government agents, should be met with the same reply: “I have an attorney and I am not going to discuss this matter.” Federal agents can also be told that your attorney will get in touch with them. You should ask these agents for their business cards.

If you do not have an attorney yet, you can say that: “I am not going to discuss this matter. I am in the process of seeking [or “I am about to seek”] the advice of an attorney.” The key is to avoid any discussion of substantive matters and to never tell a lie, even when discussing non-substantive matters. Never make up a phony reason for declining to discuss a criminal investigation with a federal agent or an acquaintance. It will come back to haunt you.

If your friends, associates or employees are about to be questioned by law enforcement agents, or summoned to the grand jury, and they inform you of this, you should remind them that you are represented and will not talk about the case, but you can also urge them to tell the truth. (This must be done in general terms, without any specific discussion of what that truth is.) You can also ask them if they mind talking to your lawyer. Although your white-collar crime lawyer cannot offer them legal advice, he can explain some general principles and recommend counsel for them if they are not represented. You must not personally tell friends or associates anything that can be interpreted as a request on your part for them not to talk to federal agents.

Silence is not the same thing as an affirmative statement that you are represented by counsel (or soon will be) and will not discuss the case. Why is it important to affirmatively state that you are (or are about to be) represented by counsel and that you will not discuss the case? In many situations, your silence can be construed as an admission. If you are in the custody of a state cop or federal agent, you have a right to remain silent and your silence cannot be used against you. But if you are talking to a state cop or federal agent and you are not in custody, or if you are talking with a private citizen, your complete silence can be interpreted as an admission and can be used against you in court. For example, suppose that a co-worker informs you of a pending criminal investigation and accuses you of committing a particular criminal act. If you just sit there and don’t say anything, that co-worker can later testify that you stood silent when he accused you. The jury is free to construe your silence as an admission or confession to the crime. The same thing can happen when a federal agent accuses you of something, as long as his accusation does not take place in a custodial setting. And if you testify at trial that you are innocent, your pre-custodial silence in the face of an accusation will be used to show that you are lying on the stand. The prosecutor will argue to the jury that the explanation you gave on the stand was false, because you did not give that explanation when you were initially confronted and accused.

You should not even talk about the case with your spouse. If you and your spouse want to do so, however, this is difficult for your lawyer to prevent. Such communications should be permitted reluctantly, if at all, and only after your spouse is instructed not to speak to anyone else. Even if you and your spouse later divorce, the marital communications privilege will prevent disclosure of these discussions, unless you were talking in front of a third-party (in which case the privilege is waived) or instructing your spouse to engage in criminal acts (in which case the crime-fraud exception applies). Remember that not all marriages survive a lengthy white-collar crime investigation. Male defendants often have a particularly hard time explaining to their wives how a portion of their ill-gotten loot went to refurbish a mistress’ apartment. Remember also that a disgruntled spouse can waive the marital testimonial privilege and testify against her spouse with respect to matters falling outside of the marital communications privilege. Finally, if you and your white-collar crime attorney have signed on to a joint defense agreement, communication is allowed, though not required, with other signatories to the agreement, although it is best for counsel to be present when this occurs. Without a joint defense agreement in place it is especially dangerous for the white-collar client to discuss the case with an alleged partner in crime. Today’s associate may be tomorrow’s star government witness.

You must also not throw away any arguably pertinent papers. There could very well be a “trash cover” on your house, resulting in the discovery of these papers and the issuance of a search warrant. In fact, some lawyers want all relevant records delivered to them so that nothing “disappears” prior to turning the documents over to the authorities.

C. Know Your Prosecutor

The character and experience of the prosecutor and the white-collar counsel’s attitude toward him are critical. Your attorney can usually find out which prosecutor is heading up an investigation by looking at the bottom of any grand jury subpoena you, your company, and/or another witness receives. Failing that, your lawyer can always call the United States Attorney’s Office to get this information. If your attorney does not already know the character and reputation of the Assistant United States Attorney (“AUSA”) investigating your case, a few calls to local defense attorneys will suffice. Remember that in a white-collar crime case the AUSA is heading up the entire investigative effort, not just passively sitting back and receiving an offense report from a law enforcement agent.

D. Be Nice To Your Prosecutor

As a general rule, you catch more flies with honey. Jerks have a tendency to get their clients indicted. While being nice will not prevent the indictment of a plainly culpable client, it can actually make a difference in a close case. Prosecutors enjoy tremendous discretion in deciding who and what to charge. Needlessly hacking them off might make your attorney look or feel like a hot shot, or may make you feel good because your attorney is a “fighter” who won’t back down from the government, but it is seldom beneficial to you. (There is a world of difference between being tough and being rude. Many federal white-collar crime defendants and their attorneys fail to grasp this critical reality.) Behaving courteously and professionally with the AUSA can also positively affect many important non-charging decisions, such as whether you will be allowed to turn yourself in for an arrest, as opposed to being handcuffed in your boxer shorts in front of your spouse, your children and all of the neighbors at six in the morning. There is an exception to the catch more flies with honey rule. Occasionally you may run across a prosecutor with an attitude problem of his or her own, who is also stupid or incompetent. Such individuals do exist and they often make big mistakes during an investigation. By aggressively pouncing on the mistake early enough, your attorney can potentially delay, hamper or derail a planned prosecution. For example, if you are able to discover, through friendly witnesses, that the prosecutor is abusing the grand jury process, complaining to the Department of Justice (“DOJ”) and filing a motion with the court can alert higher authorities to the abusive conduct, forcing a review of the entire investigation. Such reviews are rare, but they do happen. Even with an abusive prosecutor however, your attorney can take an extremely aggressive litigation posture without being personally insulting to the other side.

E. Get All The Information You Can As Early As You Can

After interviewing you, your attorney should obtain as much information as possible as early as possible from the prosecutor, friendly witnesses and the shadow grand jury. The prosecutor does not have to discuss his investigation with your attorney, but she often will do so. This is particularly true if you are not the primary target of the investigation. The prosecutor may want to use you in order to nail the main target. She can facilitate this process, at little cost to herself, by outlining the main themes of her case to your attorney and letting your attorney know where you fit into her game plan. If FBI agents are interviewing witnesses who are friendly to you, these witnesses will probably allow your attorney to debrief them about the interviews. By focusing on what the agents are asking these friendly witnesses, your lawyer can often get a good sense of where the investigation is heading. Your white-collar crime counsel can escalate this process by conducting what is known as a shadow grand jury. This entails debriefing friendly witnesses about their experiences in front of the grand jury. This is perfectly proper. Not only does it help you monitor the course and scope of the investigation, but it is also a means of discovering any grand jury abuse that may be going on. The downside of conducting a shadow grand jury is that it is costly, tends to anger ignorant prosecutors (who equate shadow grand juries with improper interference) and serves as a wake-up call to intelligent prosecutors, alerting them that potential subjects and targets are armed with competent counsel.

NEXT PART – Avoiding Indictment (continued)

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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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