White-Collar Crime: The Crash Course (Page 4)
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.
F. Talking To the Prosecutor
As a general rule, it is almost always advisable in a white-collar crime case to have your attorney talk to the prosecutor unless you have criminal exposure and the prosecutor knows nothing about you or your role in the matter under scrutiny. (Note again that I am not equating exposure with guilt.) Even in this situation, however, if discovery of your role is inevitable consider the advantages of having your attorney voluntarily disclose your activities or existence. It may well keep you from being indicted or at least reap benefits under the Guidelines. Keep in mind also that we are discussing your attorney, not you, talking to the government. (What the attorney says to the prosecutor and case agent will not be used against you at any later trial, although the prosecutor and case agent can use such information to pursue leads in the case and use any of the fruits of those leads. Your attorney should always confirm that the above rules apply to his discussions with the prosecutor and case agent. In the overwhelming majority of cases these rules will apply, but every once in a while an unscrupulous prosecutor or case agent will attempt to use the attorney’s actual words against the client at trial. This typically happens in criminal tax investigations.) You should never personally talk to government representatives unless your attorney is present and you should almost never talk to them, absent an immunity or plea bargain agreement, even if your attorney is present.
If you have some exposure and are already within the prosecutor’s worldview, your attorney’s approach will depend on whether you are one of many targets or the primary target of the investigation. If the prosecutor is trying to make a case against the primary target, and you want to cooperate in order to get immunity or a sweet plea bargain agreement, your attorney’s job is to make that prosecutor salivate. There are magic phrases that all prosecutors love to hear, such as “My guy can help you,” and “We want to cooperate.” Your attorney should use them liberally. (The mechanics of the approach will partially depend on the respective personalities of the defense attorney and the prosecutor and whether these actors are known to one another.) Your attorney should never promise information that you cannot truthfully deliver. Note as well that this brand of brown-nosing will usually not work if you are the Big Enchilada and have nobody bigger to rat on. In that case your attorney’s job is to convince the AUSA, and/or the AUSA’s superiors, not to indict you because: 1) you intended no wrongdoing; 2) the case is too complex to prove; 3) everybody was doing it this way [or, the alleged fraud was a “term of art” rather than a “lie”] in the construction, securities or fill-in-the-blank industry; 4) your experts will prove that your particular behavior was perfectly appropriate; 5) you are about to die (here is where a note from a prominent heart surgeon comes in handy); 6) you honorably served your country in World War II (this one is getting harder to use as the years go by); 7) the government’s star witness is a child-molester (this will not work if you aided and abetted the molestation); 8) there was no crime at all–just a complex series of transactions (resulting in a $5 billion loss) that the government doesn’t understand; or, 9) some combination of the above.
G. To Proffer Or Not To Proffer?
A proffer agreement (also known as a queen for a day agreement) is a written agreement between the prosecutor and an individual allowing the individual to provide information about a crime or possible crime to the government, with the assurance that his words will not be used against him in the government’s case-in-chief in the event of a subsequent trial. Think of it as a sneak preview you are giving to the prosecutor of what your likely testimony will be if you become a government witness. Unlike an immunity agreement or a plea bargain agreement, a proffer agreement will not protect you from the government’s later derivative, or indirect, use of your statements. In other words, the prosecution is free to use your statements to follow investigative leads and to advance the case. The proffer itself, which is given in a proffer session attended by you, your attorney, the prosecutor and the case agent, is almost always informally seen as a prelude to a written immunity or plea bargain agreement, provided that the government, in its sole discretion, finds your proffer truthful. (In fact, there is no reason for you ever to make a proffer absent this informal understanding.) But the informal understanding will not be contained in the written proffer agreement. The written proffer agreement will instead recite that the proffer is being given without any assurances whatsoever. Traditionally, written proffer agreements allowed the government to use your statements against you for impeachment purposes in a subsequent proceeding, but only if you took the stand and gave testimony materially inconsistent with your proffer. In recent years, government drafted proffer agreements also allow use of your entire proffer statement against you at trial, even in the government’s case-in-chief, if any portion of your trial defense (including your attorney’s opening statement or cross-examination questions) is in any way materially inconsistent with anything you said in your proffer session. This means that if your proffer session does not result in a plea bargain or immunity agreement, and you are indicted and go to trial, your ability to present a defense may be severely hampered. Thus, proposed government proffer agreements submitted to you and your white-collar crime attorney should be examined by both of you with the utmost of care.
H. Who Likes Proffers?
The prosecutor likes proffers. Since she is contemplating a plea bargain or immunity agreement, she does not want to buy a pig in a poke. (In case you were wondering, you are the pig.) She has to know what you will say at later trials of those who will be charged and she has to look you in the eye in order to determine whether you are credible. (She will protect herself by ensuring that any future plea bargain or immunity agreement will contain language nullifying the plea bargain or immunity deal in the event that you recant any part of your proffer.) Even if the proffer does not result in a plea bargain or immunity agreement, the prosecution has gained. As mentioned earlier, the prosecutor and agent will usually have some new leads. Further, having seen and interviewed you, the prosecutor is in a better position to cross-examine you some day. If you admitted some wrongdoing, the prosecutor will also feel more self-confident about indicting you, even if she cannot use your words against you, because she will “know” that you are guilty.
Why would you ever want to proffer? Because, and only because: 1) you have exposure; 2) indictment is a foregone conclusion if you don’t work out a plea deal or immunity agreement; 3) you want a plea deal or immunity agreement; and, 4) the prosecutor will not give you either without first hearing your proffer. Even in this scenario, as noted above, proffering is a high-risk venture.
I. Is It Worth The Risk To Proffer?
It is usually not worth the risk to proffer, even in the above scenario, unless: 1) the prosecutor is absolutely trustworthy; 2) a plea agreement (or immunity deal) is contemplated by both sides if you tell the truth at the proffer session; 3) your attorney, the prosecutor and the case agent are all on the same page regarding the general contours of the contemplated plea agreement and the general outline of what you are likely to reveal at the proffer session; and, 4) you are prepared to tell the full truth at your proffer session. There are two potential dangers associated with declining to proffer and/or plea bargain at the pre-indictment stage. If the Big Enchilada or another major player comes in and makes a deal while you are holding out, it will significantly reduce your chances of receiving a large Section 5K1.1 Guidelines reduction. Additionally, the prosecutor may very well react to your refusal to proffer by ginning up a specious money laundering count or artificially increasing the “amount of loss” caused by your alleged offense, greatly enhancing your potential Guidelines exposure. (On the other hand, since the Guidelines have now been rendered advisory by the Supreme Court, it is easier for federal judges to hand down sentences below the recommended Guidelines range even without a 5K1.1 Guidelines motion for reduction of sentence by the government.)
J. Grand Jury Issues
In general, you should do anything possible to avoid a grand jury appearance unless you have absolutely no exposure. The risks are high and the benefits few of a grand jury appearance. (The attorney is not allowed into the grand jury during the appearance, but the client is allowed to come out and consult with him after every question.) Though there are only two official categories of people appearing before the grand jury to give testimony, targets (those more likely than not to be indicted) and subjects (anyone with evidence within the grand jury’s purview), a three category system of target-subject-witness has informally evolved. Under this system, targets are more likely than not to be indicted, subjects are under some suspicion but have not yet reached target status, and witnesses are people not under current suspicion who simply have relevant evidence to give. These distinctions are still relatively meaningless, because a non-target’s status can change to target at any time. No prosecutor worth his salt will ever promise you that your status as a witness is permanent. Since the grand jury has a right to every man’s evidence, how do you keep out of its clutches? The privilege against self-incrimination is quite broad. Any question the truthful answer to which may tend to incriminate you can be met by invocation of the privilege. Of course the privilege must be invoked in good faith, but as a practical matter it is very difficult for the government to successfully resist its invocation. If a white-collar client has any non-frivolous claim of exposure due to his criminal activities, he should be legitimately able to invoke the privilege against self-incrimination.