White-Collar Crime: The Crash Course (Page 3)

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.


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.


I Random1
Securities Book

He Wrote The Book

Provides a concise review of relevant statutes and real-world guidance for navigating a white collar case.

He Wrote The Book

Provides a concise review of relevant statutes and real-world guidance for navigating a white collar case.

Securities Book

Solomon L. Wisenberg defends clients throughout the U.S. in a wide range of white collar criminal cases. Recent Successes

Because of his experience and extensive knowledge of white collar criminal law, Mr. Wisenberg is routinely sought out by prominent national print and broadcast media to provide expert analysis of complex white collar legal issues. Read More

Mr. Wisenberg’s book, White Collar Crime: Securities Fraud (3rd Ed. 2016), is published by Thomson Reuters–one of the world’s leading legal publishing houses. His articles and essays have appeared in the Washington Post, the National Law Journal, Corporate Counsel, the White Collar Crime Prof Blog, and other leading publications. See Article Links