Most of the white collar lawyers I know spend most of their professional time trying to keep their federal white collar clients from getting indicted. We know that the federal criminal justice system is heavily weighted against defendants in the post-indictment phase and that defending against federal white collar charges is a very expensive undertaking. In addition, for the defendant himself, the trauma of living your life under indictment while waiting (sometimes years) for the trial to begin can take an enormous financial and emotional toll. Jobs and friends disappear in an instant. Banks and brokerage houses start closing your accounts. Business prospects head for the hills. Even if the client prevails at trial, his or her life gets shattered in the process.
This is why I am continually amazed by the number of white collar attorneys who refuse to engage with the U.S. Department of Justice (DOJ) after learning that their clients are either the subjects or targets of federal white collar investigations. Why wouldn’t you as a lawyer representing the white collar subject or target do your best to prevent an indictment from happening in the first instance? The reason I hear most often, from unhappy clients, is that their white collar lawyer did not want to give away his/her best defenses ahead of time to the prosecutor who would then be able to counter-act them at trial.
I understand this strategy of imitating the furniture (doing and saying nothing), and there are times I have employed it. But far more often are the occasions in which I have proactively engaged with federal prosecutors and kept my clients from being charged.
Know Your Terms: Attorney Proffers, Targets, and Subjects
Before delving further into this topic, let’s define some key terms and concepts. When I discuss “proactively engaging” with the DOJ, I am not talking about bringing the client in for a proffer session. That is almost always the wrong tactic to employ when trying to prevent an indictment, because, as I have written elsewhere, the DOJ’s standard proffer agreements typically increase the client’s chances of getting indicted. When I proactively engage with a federal white collar prosecutor, it is done under “attorney proffer” rules. This is an understanding by the prosecutor and defense attorney that no words spoken by the defense attorney during their discussions will be ever admissible by the prosecutor against the defendant in court. The client is not present during an attorney proffer. The discussions are treated as if they are plea negotiations under Federal Rule of Evidence 410. In this way I can discuss hypothetically what I think my client might say when confronted by the government’s facts or theories.
It is also important to understand the meaning of certain words related to the client’s status. When the prosecutor tells me that my white collar client is a “target” of the investigation, she is saying it is more likely than not that she will indict the client unless new facts come to light. A “subject” is literally anyone possessing information of interest to the federal grand jury. Informally, a subject is someone who the prosecutor has not yet made up her mind about. Both subject and targets can benefit by the white collar defense attorney’s proactive engagement.
Case Study Number One: Proactive Engagement
A federal law enforcement agent learns he is the target of a white collar investigation into whether he falsely affirmed on a bill of lading that a shipment of his personal items to a new overseas work location did not include firearms. (It turns out that the firearms being shipped were disassembled.) I quickly poke around and discover that the prosecutor in charge of the case is tough, but has a reputation as a straight-shooter. My own investigation reveals that the client has a stellar performance record, but has made a number of work-related enemies by exposing incompetence within his agency. I also discover that the official who made the criminal referral against my client is my client’s longtime adversary within the law enforcement agency. Armed with these facts, I decide to engage with the prosecutor. I am convinced of my client’s complete innocence and state as much to the prosecutor. I tell him about the backstory to the case. I tell him that I truly want him to hit me with every allegation there is against my client and that I will endeavor to answer each and every accusation he fires at me. We quickly develop a rapport with each other over the course of several weeks. It is rare for a federal law enforcement officer to be charged with a false statement crime and I can tell that the prosecutor is somewhat skeptical of the case.
I find out that the law enforcement agency employing my client instructs its agents, as a matter of course, to Fed Ex their firearms in need of repair to Washington, DC, but not to check the box indicating that they are shipping firearms. Why? Because headquarters does not want the firearms to be stolen during shipment. I tell this story to the prosecutor. “How can you think about prosecuting my client for failing to check a box when the very agency he works for regularly tells all of their agents to do the same thing?” He is incredulous. “The story can’t be true,” he tells me. I ask him to check it out. He calls me back a week later and tells me the story checks out. “I can’t believe it,” he says. “I’m dropping the case.” My client is a free man today.
Case Study Number Two: Imitate the Furniture
My client, an independent contractor who regularly consults with a quasi-governmental agency on Third World development contracts, learns he is the target of a federal white collar investigation into illegal kickbacks under the Foreign Corrupt Practices Act. I contact the DOJ Main Justice prosecutors who meet with me, confirm the client’s status, and tell me about how great their evidence is against my guy. Their supervisor sits in on the meeting and, in a scene right out of a bad Hollywood movie, pounds on the table, screaming: “Every other defendant is outside of the tent, ready to piss in on your guy!” This supervisor has a reputation for tough talk, but minimal follow-through. He is in by 10 and out by 5 every day at Main Justice. I quickly determine that my client is the low man on the totem pole and that everyone else has pled guilty or will do so shortly. I can already tell, based on the evidence and attitudes shown toward me, that I will not persuade these jerks to decline prosecution and will only make things worse by revealing any part of my strategy. I politely leave the meeting after making it clear that my client will never plead guilty and is prepared to go to trial. I do not contact Main Justice again about the case, reasoning that DOJ will not want to expend the time and money trying a case against the low man on the totem pole when they can brag all day about the scalps they already have in hand. I never hear anything about the case again. My client is a free man today.
As you can see from these examples, there are various factors that go into the strategic decision of whether to engage with the prosecution in a white collar investigation. How strong is the case against the client? Are you certain that your client is telling you the truth? Can the prosecutor’s word be trusted? In the two case studies discussed above, note the critical importance of gathering intelligence about the trustworthiness and work ethic of the lead prosecutors. There is no set formula for determining whether to engage with the government or hold back and hope for the best. Many times there is nothing you can do to stave off prosecution. But if you know what you are doing and limit any additional exposure for your client by operating under standard attorney proffer rules, you can make the effort to engage without risking further harm to your client. And by proactively engaging with the government, in situations where it is safe to do so, you send the subliminal message that if the prosecutors move to indict your client they will have a long, hard fight on their hands against an able opponent.