Vol. 73, No. 2, February
2000
When the FBI Comes to the Door
If your civil client is contacted by a
federal agent, will you know what to advise? This primer on criminal
investigations is for civil lawyers who find their clients and practices
suddenly immersed in a federal criminal case.
by David Cannon & Steven Biskupic
ot many civil clients are prepared for a knock on the door
from federal agents.
When it happens, even in the most innocent of circumstances, the
business owner or other professional may immediately telephone a lawyer
- and often, that lawyer is not someone who practices in criminal law.
In all likelihood, the attorney will be a civil practitioner who may
have helped the client on a will, a real estate purchase, or a
bankruptcy.
In such cases, the civil practitioners may find
themselves searching their memory of criminal law courses to comprehend
some of the terms that federal agents and prosecutors routinely use. Is
a simple subpoena for records a cause for concern? What is the
difference between a subject and a target? Do conflicts exist between
representing the corporation and individual employees? And almost
always: Is there a need to consult with a criminal attorney? The answers
will vary with the context.
The following article is a primer on criminal investigations for
civil lawyers who find their practices suddenly immersed in a federal
criminal case.
The Routine Process of a Grand Jury
While the common public perception speaks of the impaneling of grand
juries as an escalation of an investigation, the reality is quite
different. Under the U.S. Constitution and federal rules, all federal
felonies must be presented to a grand jury. 1 The only exception arises if the accused
waives the process; then a criminal Information is issued directly by
the United States Attorney.2
The grand jury, which meets and considers evidence in secret, is the
federal equivalent of a preliminary hearing.3 The grand jury, composed of between 16
and 23 persons, votes on whether probable cause exists to issue a public
charge. Only 12 votes are needed, and the process is almost unilaterally
controlled by the prosecutor. No defense counsel or judge is present. In
1992 the U.S. Supreme Court held that the prosecutor is not required to
introduce evidence that suggests the defendant may be innocent.4 The one-sided nature of the proceedings
leads cynics to claim that a grand jury would indict a ham sandwich if
asked by the prosecution.
In white collar cases, however, the grand jury serves an added
dimension as an investigative tool. Certain evidence-gathering
procedures require the use of the grand jury. For example, under the
Right to Financial Privacy Act, bank financial records can be obtained
in an investigation only through the use of a grand jury
subpoena.5 In addition, prosecutors
confronted with certain practice areas of the law - such as
environmental regulation - may use the lay background of the individual
grand jurors to test public comprehension of the alleged wrongdoing.
Thus, even in the most preliminary stage of an investigation, grand
jury subpoenas often are used. The appearance of the subpoenas does not
mean that an investigation has become heightened or that the grand jury
is ready to charge the recipient. All felony investigations start this
way.
Witness - Subject - Target
In most white collar cases, the government attorneys will inform
counsel of the client's status. The United States Attorneys Manual, used
by all federal prosecutors, formalizes the classifications into three
categories.6 A target is a person
linked to an offense by substantial evidence and one the prosecutor is
contemplating charging.7 A subject
is a step removed; the person's conduct falls within the scope of the
investigation, but the person is not considered a target.8 The last category is witness.9
The distinction between the categories, especially in a white collar
case, may be fluid. For example, the bookkeeper who unknowingly records
personal expenses for the owner as business deductions may end up as a
witness in a tax fraud investigation. If the bookkeeper knows the books
are being doctored, he has moved into the subject category. Finally, if
the bookkeeper ran his own expenses through the business as well, the
bookkeeper also may become a target.
Immunity
Invariably, the first thought of a noncriminal lawyer faced with FBI
agents on the doorstep is: Does my client need immunity? Just as
invariably, the immediate response of a prosecutor supervising the
agents is: No. From both perspectives, the problem is the unknown. The
lawyer does not want to unwittingly expose the client to questioning
that may be used against the client; the prosecutor does not want to
give immunity only to learn that the client was the most culpable of the
targets, or worse, that prosecution of the most culpable has now been
made impossible because of the immunity.
While keeping silent is the client's constitutional right, it may not
be the best strategy in every situation. For example, the blanket
refusal to answer all questions may draw increased scrutiny from agents
wondering what is being hidden. Also, if other witnesses are
cooperating, the client may find her credibility hurt simply by being
the last one to tell her version of the events.
The most common compromise is informal immunity; that is, an
agreement between the parties as to how the statements can be used.
Formal immunity exists under federal law and is memorialized by judicial
order.10 Informal immunity is
nothing more than an agreement or contract between the parties.11
As such, informal immunity (and its multiple variations) has come to
be called by a variety of terms: letter immunity (since it often is
memorialized solely in a letter signed by the parties); proffer
agreements (because the information is considered a description through
counsel of information the client would proffer under the immunity
agreement); or king or queen for the day (since the words given by the
client during that particular interview on that particular day will not
be used against the client).
In practical terms, the informal immunity often boils down to this
middle ground: The actual words of the witness will not be used against
the witness; however, future prosecution remains a possibility. Most
importantly, law enforcement may pursue leads that arise from the
statement, including those that later may be used to prosecute the
witness.
Multiple Representations
No clash between civil and criminal law seems as great as the issue
of multiple representations. In civil practice, the idea that a lawyer
can represent multiple similar interests is routine. Simultaneous
representation of a corporation, chief shareholder, and employees would
not necessarily set off alarms.
To the prosecutor, however, these interests appear to almost always
conflict. Given varying degrees of involvement in suspect conduct, or
even the same levels of culpability, there will always be an incentive
for someone out of the group to strike a deal with prosecutors. A
strategy of divide and conquer is not unusual.
Also in a criminal investigation, corporate and individual interests
usually will differ since only the individual can be sentenced to jail,
thus providing an incentive to the individual to have only the
corporation face charges. On the other hand, it may serve the corporate
interest to simply have an employee admit individual culpability since a
corporate conviction may bar the business from certain future dealings,
such as government contracts.12 In
addition, the government contract may require the business to cooperate
in any investigation, even though it may serve the individual interest
to assert his right to remain silent.13
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