Special Counsel Subpoenas, FBI Agent Texts, GoGo Penguin Groove

An unusual point arose here (at the end) regarding an FBI agent’s political text-messages and cross-examination:

Jack Sharman – MSNBC – Meet the Press (Dec. 5, 2017) from LFW on Vimeo.

Text Messages and FBI Agents

The interview question focused on an agent in the Special Counsel’s office, Peter Strzok, and the fact that he was taken off the the investigation because of alleged anti-Trump, pro-Clinton text messages or other communications.  Congress has requested information from the Department of Justice about Agent Strzok, who was also apparently one of the agents who interviewed Hillary Clinton regarding the matter of her personal email server and who allegedly watered-down the FBI’s conclusions about her.

What the heck, indeed.

On a more practical note, what about FBI agents’ text messages (or emails or posts) and their use at trial?

A leading case is United States v. Suarez, A2010 WL 4226524 (D.N.J. Oct. 21, 2010).  In Suarez, the FBI agents received no instructions to preserve text messages, resulting in an adverse inference instruction at trial. Unfortunately for white-collar defendants, Suarez, while soundly reasoned, has not gained broad traction.

A problem is finding a broad source of authority for discovery of electronic material in criminal cases (as opposed to civil).  Although the Federal Rules of Criminal Procedure do not specifically address electronically-stored information, the Federal Rules of Civil Procedure do so extensively and have done so since their amendment in December of 2005.  As early as 2008, now-retired Judge John Facciola, a jurist often quoted and relied upon across the country on ESI issues, found that “[i]t is foolish to disregard [the Federal Rules of Civil Procedure] merely because this is a criminal case, particularly where, as here, it is far better to use these rules than to reinvent the wheel when the production of documents in criminal and civil cases raises the same problems.”  United States v. O’Keefe, 537 F.Supp. 2d 14, 19 (D.D.C. 2008).

The Department of Justice, not surprisingly, disagrees.

Were a person indicted by the Special Counsel to go to trial, he or she would be most interested in the content and timing of Agent Strzok’s text messages.  At a minimum, if the agent were to testify, the texts would be so-called “Jencks material” (that is, statements of a Government witness).

Perhaps more importantly, the texts might be “Giglio material” (that is, information going to the credibility of or otherwise supporting the impeachment of a Government witness).

With regard to the FBI otherwise, we have discussed issues arising from agents’ note-taking policies:

Handwriting On The Wall (And In The FBI’s Notes)

 

GoGo Penguin

We are in Advent, approaching Christmas.  This piece from the UK trio GoGo Penguin, while not a “Christmas” work, put me in mind of winter:

Here is Jim Fusilli’s WSJ  article on the band.

 

 

 

 

 

 

 

 


Subpoenas, Search Warrants and the Dead

Process server.

Process server.

The Grateful Dead were succinct about it:   “Got a tip they’re gonna kick the door in again/I’d like to get some sleep before I travel/But if you got a warrant, I guess you’re gonna come in” (from “Truckin”) (1970).

Here is a piece about subpoenas and search warrants for risk managers.  Short and free. Videos included.  Also free.  No Jerry Garcia, though:

On May 2, Jack Sharman spoke at the Spring Meeting of the Alabama Society for Healthcare Risk Management. As a member of the Firm’s White-Collar Criminal Defense and Corporate Investigations practice, Jack has represented physicians, physician-practices, nurses and other healthcare providers in criminal, civil and administrative investigations. Jack spoke on the background landscape of healthcare fraud today and, in particular, on how to prepare for and handle subpoenas and search warrants.

Here is a brief (140 seconds) Lightfoot 140 talk on search warrants and a longer CLE version.

 

And, if you have not heard it in a while, here’s the song.

 


Martoma and Harvard Law School (Again)

Forgery and bad-movie posters.

Forgery and bad-movie posters.

We recently addressed the ongoing Mathew Martoma trial “Harvard Law School fraud” story: The Martoma Trial and Character Evidence in White-Collar Trials

From Professor Susan Brenner, who blogs at Cyb3rCrim3, here’s a detailed analysis of the Court’s ruling not on the substantive issue — whether the government can discuss his HLS misdeeds at trial — but rather on Martoma’s motion to seal the discussion: The Law Student, Forgery and the Motion in Limine


The Martoma Trial and Character Evidence in White-Collar Trials

Former SAC manager Mathew Martoma

Former SAC manager Mathew Martoma

In the trial of former SAC hedge fund manager Mathew Martoma, the dispute over getting kicked out of Harvard Law School  is worth noting for what evidence we have juries consider at white-collar trials and what we don’t:

In 1999, Mr. Martoma was expelled from Harvard for creating a false transcript when he applied for a clerkship with a federal judge, court papers unsealed on Thursday showed. Mr. Martoma used a computer program to change several grades from B’s to A’s, including one in criminal law, and then sent the forged transcript to 23 judges as part of the application process.

Then, during a Harvard disciplinary hearing to determine whether he should be expelled, Mr. Martoma tried to cover his tracks by creating a fake paper trail that included fabricated emails and a counterfeit report from a computer forensics firm that Mr. Martoma had created to help conceal his activities.

After Harvard expelled him, Mr. Martoma, who at the time was known as Ajay Mathew Thomas, legally changed his name to Mathew Martoma.

The Government wishes to introduce this evidence, it says, not because it’s trying to paint Martoma as a bad guy but rather to prove that he has the computer-forensic capability to destroy real evidence, create bogus evidence and thus mislead the authorities:

The prosecution argues in court papers that Mr. Martoma’s deception is relevant to show that he has the technical knowledge to alter computer files. That could be relevant, prosecutors say, if Mr. Martoma’s lawyers seek to argue he never received a copy of a confidential report that discussed problems with a clinical trial for an experimental Alzheimer’s drug being developed by Elan and Wyeth.

Prosecutors charge that Mr. Martoma recommended that SAC sell its shares in Elan and Wyeth after receiving the report from a key cooperating witness in the case, Dr. Sidney Gilman, and then flying to Ann Arbor, Mich., to discuss the results of the trial with him.

Mr. Martoma’s lawyers at Goodwin Procter, in the run-up to the trial, have raised questions about the government’s failure to find any email evidence that Dr. Gilman sent Mr. Martoma a copy of the report. Dr. Gilman, 81, who received a nonprosecution agreement from the government, is expected to testify that he sent the report to Mr. Martoma and discussed the findings both on the phone and when the two men met a few days before SAC began selling the companies’ shares.

Prosecutors have conceded they have not found any email evidence to support Dr. Gilman’s contention that he sent a copy of the report to Mr. Martoma. But they said Mr. Martoma’s pattern of deception at Harvard is “evidence of the defendant’s capacity to destroy or fabricate electronic forensic evidence.”

In other words, the Government lacks evidence (other than the testimony of the cooperating email-sender) that the report was actually sent to or received by the defendant.

You hit "Send," you never know what happens.

You hit “Send,” you never know what happens.

Essentially, the Government wants jurors to conclude that the defendant could have received the report; could have destroyed it; and could have hidden the fact of destruction from investigators because of his (unsuccessful) attempts to do something similar in law school.

This is over-reaching.

First, such questions are usually handled at trial by each side offering computer-forensic experts.  The expert offers an opinion on which he or she can be cross-examined, then jurors decide whom to believe.  (Of course, if there is nothing an expert can opine on — if old servers are simply gone, for example — then experts are of little help.)

Second, this is “character evidence.”  Rule 404 provides:

(a) Character Evidence.

(1)Prohibited Uses. Evidence of a person’s character or character trait is not admissible to prove that on a particular occasion the person acted in accordance with the character or trait.

(2)Exceptions for a Defendant or Victim in a Criminal Case. The following exceptions apply in a criminal case:

(A) a defendant may offer evidence of the defendant’s pertinent trait, and if the evidence is admitted, the prosecutor may offer evidence to rebut it;

(B) subject to the limitations in Rule 412, a defendant may offer evidence of an alleged victim’s pertinent trait, and if the evidence is admitted, the prosecutor may:

(i) offer evidence to rebut it; and

(ii) offer evidence of the defendant’s same trait; and

(C) in a homicide case, the prosecutor may offer evidence of the alleged victim’s trait of peacefulness to rebut evidence that the victim was the first aggressor.

(3)Exceptions for a Witness. Evidence of a witness’s character may be admitted under Rules 607, 608, and 609.

(b) Crimes, Wrongs, or Other Acts.

(1) Prohibited Uses. Evidence of a crime, wrong, or other act is not admissible to prove a person’s character in order to show that on a particular occasion the person acted in accordance with the character.

(2) Permitted Uses; Notice in a Criminal Case. This evidence may be admissible for another purpose, such as proving motive, opportunity, intent, preparation, plan, knowledge, identity, absence of mistake, or lack of accident. On request by a defendant in a criminal case, the prosecutor must:

(A) provide reasonable notice of the general nature of any such evidence that the prosecutor intends to offer at trial; and

(B) do so before trial — or during trial if the court, for good cause, excuses lack of pretrial notice.

Rule 608 is also pertinent:

(a) Reputation or Opinion Evidence. A witness’s credibility may be attacked or supported by testimony about the witness’s reputation for having a character for truthfulness or untruthfulness, or by testimony in the form of an opinion about that character. But evidence of truthful character is admissible only after the witness’s character for truthfulness has been attacked.

(b) Specific Instances of Conduct. Except for a criminal conviction under Rule 609, extrinsic evidence is not admissible to prove specific instances of a witness’s conduct in order to attack or support the witness’s character for truthfulness. But the court may, on cross-examination, allow them to be inquired into if they are probative of the character for truthfulness or untruthfulness of:

(1) the witness; or

(2) another witness whose character the witness being cross-examined has testified about.

By testifying on another matter, a witness does not waive any privilege against self-incrimination for testimony that relates only to the witness’s character for truthfulness.

The fact that the defendant points out the prosecution’s lack of evidence — that is,there’s apparently no evidence that Martoma received the email to which the report was attached — does not magically turn that same lack of evidence into admissible 404(b) evidence of “motive, opportunity, intent, preparation, plan, knowledge, identity, absence of mistake, or lack of accident.”  

"From the Old Fields Must Spring the New Corn."

“From the Old Fields Must Spring the New Corn.”

Plus, the prejudicial effect of the evidence — here’s a guy who went to Harvard Law School, a fancy institution, where he cheated and tried to cover it up, then ended up at SAC, another fancy organization, and is nowaccused of cheating — would grossly outweigh any probative value.


Breaking Bad, All the Time: White Collar Crime for Business Lawyers

 

Trial Dot Com

The Network of Trial Law Firms is an excellent CLE vehicle.  Here’s a Sharman White Collar Panel Video of a Network panel about white-collar issues for civil lawyers — me, Jackie Arango of Akerman Senterfit (Miami), Joel Neckers of Wheeler Trigg (Denver) and Gerry Leone of Noxon Peabody (Boston).  Here’s the blurb from the Network program:

No one thinks of themselves, their employees or their company as “criminals.” On the other hand, Walter White was once just a chemistry teacher. The lines between what are business-crime problems and what are traditional corporate civil issues — compliance, due diligence, regulatory recordkeeping and permitting, whistleblowers, confidentiality, privilege and indemnification — have become blurred. Listen to an experienced panel highlight the most important events and insights from 2013 and what to expect in 2014.

Video camera

I know, I know.  The video is a bit long to just sit and watch unless you’ve previously gone to the “Cocktails” archive of this blog, but I find the most curious point to arrive at minute 25:22, where I play for the crowd a 140-second video of myself talking about search warrants.  A video within video.  They loved it.


Madoff’s Screw Sculpture, Bill Murray and Rule 403

The fact that Madoff’s Screw Sculpture Is Excluded From Evidence at Trial (tipped off by @WaltPavlo) is amusing to a non-party, reminiscient as it is of Bill Murray’s character (Frank Cross, the Ebenezer Scrooge character) in the movie Scrooged (1988), a remake of “A Christmas Carol.”

 

Frank Cross: We’re gonna need champagne for 250 people, and send the stuff that you send to me. Don’t send the stuff that I send to other people.

There are, however, some serious implications.

The sculpture was recovered from Madoff’s office after his 2008 arrest for masterminding a Ponzi scheme that cost investors about $17 billion in lost principal. Five former Madoff employees are facing trial in federal court in Manhattan for aiding the fraud. U.S. District Judge Laura Taylor Swain yesterday granted a defense request and prohibited the government from showing jurors the sculpture or photographs of it, after defense lawyers complained of the artwork’s “colloquial inference.”

It’s not just the “colloquial inference.”  Under Federal Rule of Evidence 403, the court

may exclude relevant evidence if its probative value is substantially outweighed by a danger of one or more of the following: unfair prejudice, confusing the issues, misleading the jury, undue delay, wasting time, or needlessly presenting cumulative evidence.

The Advisory Committee notes go on to point out that

“Unfair prejudice” within its context means an undue tendency to suggest decision on an improper basis, commonly, though not necessarily, an emotional one.

An “emotional basis” was almost surely what the sculpture would have provided.


Deferred Prosecutions and Decisions Not To Indict

Two recent articles in @Dealbook are worth noting because of their discussion of what goes into two very important parts of the American enforcement system: deferred prosecution agreements and a prosecutor’s decision to not indict.

File:BigBenAtDusk.jpg

In For a Better Way to Prosecute Corporations, Look Overseas,  Brandon L. Garrett (a professor at University of Virginia School of Law) and David Zaring (an assistant professor of legal studies at the Wharton School of the University of Pennsylvania) discuss the spread abroad of an American idea — the deferred prosecution agreement:

The favored new tool of the corporate prosecutor, the deferred prosecution agreement, is being actively exported to other countries. In these agreements, prosecutors allow large corporations to avoid a criminal prosecution entirely by agreeing to pay a fine and adopt reforms. Five years after the financial crisis, many doubt whether prosecutors have taken business crime seriously enough, and some of the blame is laid on lenient deferred prosecution agreements.

We can learn some lessons about how to better hold corporations accountable for crimes, though, from the way these types of prosecution agreements are now being used across the globe. After passing detailed legislation approving their use, the British government has circulated plans for a potentially more rigorous deferred prosecution agreement program.

One should note, however, that DPAs are not cakewalks for companies, and that they represent a great savings in prosecutorial resources (as well as allowing the Government to declare victory and go home, when it might be otherwise faced with a difficult case of proving criminal intent.

 

Open handcuffs

“Intent” is addressed in On JPMorgan and What Makes a Criminal Case,  by Peter J. Henning, a professor at Wayne State University Law School, focuses on the unreviewability of decisions not to prosecute:

The case of the so-called London Whale presents an interesting contrast in how the government pursues corporate wrongdoing. While two lower-level employees of JPMorgan Chase were formally indicted last week for their role in the credit derivatives trading that caused over $6 billion in losses, the bank itself faced only civil charges that it settled by paying $920 million. No higher level individuals were accused of violations.

The easy explanation, of course, is that the wealthy and powerful avoid their comeuppance while those less fortunate face the wrath of prosecutors. This is a common refrain when the law is enforced against some, but not others who appear to be in the same situation, whether it be mom-and-pop stores accused of food stamp fraud or drug laws used primarily against the urban poor.

The fact is that prosecutors and the police have enormous discretion over whether to bring charges against someone, with a decision not to charge a crime virtually unreviewable by the courts. The American criminal justice system puts enormous faith in those who decide how the criminal law is enforced because prosecutors do not have to disclose what went into their decision not to pursue charges.

. . .

So what standard makes a case criminal rather than civil, and when should individuals be accused of misconduct or allowed to avoid charges? The answer is left up to the prosecutor, who decides whether there is enough evidence and what is the best use of available resources.

There is no realistic prospect of judicial review of a decision not to file charges. In Inmates of Attica Correctional Facility v. Rockefeller, a case arising from the Attica prison riot in 1971 in which federal prosecutors did not file civil rights charges for the death of inmates, the United States Court of Appeals for the Second Circuit found that “the manifold imponderables which enter into the prosecutor’s decision to prosecute or not to prosecute make the choice not readily amenable to judicial supervision.” That means there is no recourse if the prosecutor decides not to pursue a case, unless another office steps in and decides to file charges on its own.

The lack of transparency over a decision not to file charges benefits those who were investigated. If prosecutors had to explain why charges were not filed, such a statement could cause significant harm to a person’s reputation with no readily available means to rebut any claimed misconduct.

Yet it remains disquieting when the same actions result in criminal charges for some but only a civil case for others, and no individuals are held responsible for misconduct at a company. In the end, we are left to trust that prosecutors have made good decisions.

Although it would be interesting to learn, on a record before a judge, why some people and companies are charged and others not, the reputational, personal and economic harm would be enormous.



Civil Lessons From Criminal Trials (on YouTube)

Criminal Trials.  Civil Lessons.

This recent talk on Civil Lessons From Criminal Trials  is primarily directed to internal counsel; what they should think about when hiring outside counsel; and how they should review that lawyer’s plan to defend and resolve the case.  It may be of some interest, though, to outside counsel looking for a different perspective on handling his or her civil case.

Here is the (very short) written Handout.

 


Fifth Circuit: “[A] district court cannot authorize interception of cell phone calls when neither the phone nor the listening post is present within the court’s territorial jurisdiction.”

You use your cell phone for work?  In a potentially important Title III opinion, the Fifth Circuit limits the territorial reach of cellphone interception in United States v. Richard North.  In part: “[A] district court cannot authorize interception of cell phone calls when neither the phone nor the listening post is present within the court’s territorial jurisdiction.”