“Fantastic Lies” and Corporate Criminal Prosecution

When the past is dug up in documentaries (or docudramas), events are often sensationalized.  This practice is of long pedigree: Shakespeare was not above amping up an old story when it suited his needs.  Unfortunately, few filmmakers are at Shakespeare’s level, and the sensationalism ends up being no more than that.  The viewer has no better sense of the past than he did when he began.  The only sense the viewer has is the sense that she has been had.

30-For-30On the other hand, from time to time a documentary digs up the past but cools down the facts, making them approachable in a way that would have been impossible at the time.  The participants have aged or died; passions have cooled; and political or emotional scar tissue has formed.

Such is the latter case with the recently released ESPN “30 for 30” film about the Duke lacrosse case, Fantastic Lies.

 

Produced by Marina Zenovich with only a modest amount of cooperation from the players and their families and essentially no cooperation from anyone else, the film is superb. It is commendable for reasons of both art and entertainment, but there are lessons to be drawn from Fantastic Lies to the benefit of American corporations and business people who think they understand some of their most treasured institutions, including two at the heart of the film: the criminal justice system and the elite university.
No joy.

No joy. (AP Photo/Gretchen Ertl)

In case you have been lost in Donald Trump’s hair for the last dozen years, the Duke lacrosse case involved a group of varsity lacrosse players at Duke who held a party. Two strippers were paid to provide entertainment at the party.  One of them, an African-American woman named Crystal Mangum, claimed that she had been sexually assaulted, verbally abused and threatened with racist epithets.

The case ignited a PC firestorm and witch-hunt, a hunt that would have been academic tragicomedy were it not for the local district attorney in Durham, Mike Nifong, who indicted three players. The lacrosse coach was forced to resign, the season was canceled and the national media had a feeding frenzy.

Very attentive now.

Mr. Nifong, very attentive now.

Nifong was ultimately shown to have withheld exculpatory evidence that demonstrated conclusively that Mangum had not been assaulted by any person at the party.  He was disbarred, the players exonerated and lacrosse reinstated at Duke.

Zenovich tells the story almost exclusively through the combination of the words of the (relatively few) participants and witnesses who would speak with her, plus contemporaneous footage of court appearances, lacrosse games, social media posts and state bar disciplinary proceedings.  It is a narrative presented with skill, calmness and wonder at how such hysteria happens.

I have written about the Duke lacrosse case and white-collar crime problems before: Dear Colleagues All: University Discipline, Sexual Assault and The Department of Education and Title IX, University Discipline, Sexual Assault and Parallel Proceedings and The Old College Try, and The New College Tribunal.

Those observations were largely in the context of the much larger problem wrought by the federal Department of Education’s Office of Civil Rights (or “OCR”).  The OCR interprets (or misinterprets) Title IX to force colleges and universities to hold Star Chamber-like proceedings in matters of campus sexual assault.  (Consider this March 10, 2016 letter — Lankford Letter DOE Title IX — from Senator James Lankford (R-OK), Chairman of the Subcommittee on Regulatory Affairs and Federal Management, Senate Committee on Homeland Security and Governmental Affairs).

Setting aside the significant implications for students and universities, what can we take away as business people from Fantastic Lies?  Here are five thoughts to post in the break room:

Real charges can result from actual innocence.  Do not assume, because you have not done anything wrong, that you will not be charged with and convicted of a crime. Innocent people are charged with and convicted of crimes every month (and probably every week) across the country.  Prosecutors are not clairvoyant, and they are not divine even when they act in good faith. When they act in bad faith (which is rare), or when they are negligent, incompetent or just don’t understand the business events they are looking at (which is much more common), innocent people will get charged with crimes, and juries will sometimes convict them.

Do not assume that “the truth will out.”  The Government has overwhelming discretionary power.  The proceedings of a grand jury are secret, manifested by the fact that a witness’s lawyer may not even accompany her client into the room. Agents are intimidating, and citizens think they have to speak with him.  The disclosure of “Brady” information – that is, exculpatory information — is wholly within the Government’s control. This is precisely the kind of information that Nifong, the prosecutor in the Duke lacrosse case, withheld.  (If you have doubts about whether these sorts of things happen with troubling frequency, read Criminal Law 2.0 by federal court of appeals judge Alex Kozinski.  It first appeared in the Georgetown Law Journal Annual Review of Criminal Procedure, but do not worry.  It is written in clear, plain English).

Fight back, early.  The players and parents in Fantastic Lies did not fully understand what was happening until it was too late.  Just as a parent or student cannot rely upon bland reassurances from education bureaucrats in crisis, a corporation or executive cannot put too much weight on comforting words and hinted support from agents, regulators or prosecutors.  Assume that something bad is happening and do something about it.

Shut up. When one is investigated, the impulse to share one’s innocence is almost overwhelming. Especially in a high-profile investigation, that impulse will rarely be rewarded because your words will be twisted, compressed and taken out of context.

Before electronic court filings.

Before electronic court filings.

I hope you have money. The defendant students in the Duke lacrosse case did not win simply because they were innocent. They won because their parents were able to afford a team of some of the best criminal defense lawyers in North Carolina.   For the purposes of this discussion, the difference between the Duke lacrosse players and the Scottsboro Boys is not race. The difference is cash on hand.

The Innocence Project

The Innocence Project

If you are moved by the film, as I was, you may want to look into the work of The Innocence Project, which “was founded in 1992 by Barry C. Scheck and Peter J. Neufeld at the Benjamin N. Cardozo School of Law at Yeshiva University to assist prisoners who could be proven innocent through DNA testing. To date, more than 300 people in the United States have been exonerated by DNA testing, including 20 who served time on death row.”

Here is more reaction to Fantastic Lies, from the lacrosse community and elsewhere:



Lawyer Presentations Without PowerPoint: Charles Laughton and The Fiery Furnace

Charles Laughton

Charles Laughton

At trial in a white-collar or civil business case, lawyers sometimes complain that the material or documents they must work with are so old, so familiar or so different from everyday language and commerce that there is no way to keep the attention of judge and jury.

Not so.  Just watch as Charles Laughton reads The Fiery Furnace on the Ed Sullivan Show (1960).

And, delivered decades before a PowerPoint deck, laser pointer, “elmo” or any other such dreadful presentation tool was available.  (Indeed, delivered without notes, for that matter).

 

In case you need a transcript go-by, here it is (from Daniel 3:1-30).  Personally, for the most obscure musical instrument, I prefer the translation “sackbutt” to “trigon”, but I was not asked:

King Nebuchadnezzar made an image of gold, whose height was sixty cubitsand its breadth six cubits. He set it up on the plain of Dura, in the province of Babylon. Then King Nebuchadnezzar sent to gather the satraps, the prefects, and the governors, the counselors, the treasurers, the justices, the magistrates, and all the officials of the provinces to come to the dedication of the image that King Nebuchadnezzar had set up.  Then the satraps, the prefects, and the governors, the counselors, the treasurers, the justices, the magistrates, and all the officials of the provinces gathered for the dedication of the image that King Nebuchadnezzar had set up. And they stood before the image that Nebuchadnezzar had set up. And the herald proclaimed aloud, “You are commanded, O peoples, nations, and languages, that when you hear the sound of the horn, pipe, lyre, trigon, harp, bagpipe, and every kind of music, you are to fall down and worship the golden image that King Nebuchadnezzar has set up. And whoever does not fall down and worship shall immediately be cast into a burning fiery furnace.” Therefore, as soon as all the peoples heard the sound of the horn, pipe, lyre, trigon, harp, bagpipe, and every kind of music, all the peoples, nations, and languages fell down and worshiped the golden image that King Nebuchadnezzar had set up.

Therefore at that time certain Chaldeans came forward and maliciously accused the Jews. They declared to King Nebuchadnezzar, “O king, live forever!  You, O king, have made a decree, that every man who hears the sound of the horn, pipe, lyre, trigon, harp, bagpipe, and every kind of music, shall fall down and worship the golden image.  And whoever does not fall down and worship shall be cast into a burning fiery furnace. There are certain Jews whom you have appointed over the affairs of the province of Babylon: Shadrach, Meshach, and Abednego. These men, O king, pay no attention to you; they do not serve your gods or worship the golden image that you have set up.”

Then Nebuchadnezzar in furious rage commanded that Shadrach, Meshach, and Abednego be brought. So they brought these men before the king. Nebuchadnezzar answered and said to them, “Is it true, O Shadrach, Meshach, and Abednego, that you do not serve my gods or worship the golden image that I have set up? Now if you are ready when you hear the sound of the horn, pipe, lyre, trigon, harp, bagpipe, and every kind of music, to fall down and worship the image that I have made, well and good. But if you do not worship, you shall immediately be cast into a burning fiery furnace. And who is the god who will deliver you out of my hands?”

Shadrach, Meshach, and Abednego answered and said to the king, “O Nebuchadnezzar, we have no need to answer you in this matter. If this be so, our God whom we serve is able to deliver us from the burning fiery furnace, and he will deliver us out of your hand, O king.But if not, be it known to you, O king, that we will not serve your gods or worship the golden image that you have set up.”

Then Nebuchadnezzar was filled with fury, and the expression of his face was changed against Shadrach, Meshach, and Abednego. He ordered the furnace heated seven times more than it was usually heated. And he ordered some of the mighty men of his army to bind Shadrach, Meshach, and Abednego, and to cast them into the burning fiery furnace. Then these men were bound in their cloaks, their tunics,their hats, and their other garments, and they were thrown into the burning fiery furnace. Because the king’s order was urgent and the furnace overheated, the flame of the fire killed those men who took up Shadrach, Meshach, and Abednego. And these three men, Shadrach, Meshach, and Abednego, fell bound into the burning fiery furnace.

Then King Nebuchadnezzar was astonished and rose up in haste. He declared to his counselors, “Did we not cast three men bound into the fire?” They answered and said to the king, “True, O king.” He answered and said, “But I see four men unbound, walking in the midst of the fire, and they are not hurt; and the appearance of the fourth is like a son of the gods.”

Then Nebuchadnezzar came near to the door of the burning fiery furnace; he declared, “Shadrach, Meshach, and Abednego, servants of the Most High God, come out, and come here!” Then Shadrach, Meshach, and Abednego came out from the fire.  And the satraps, the prefects, the governors, and the king’s counselors gathered together and saw that the fire had not had any power over the bodies of those men. The hair of their heads was not singed, their cloaks were not harmed, and no smell of fire had come upon them.  Nebuchadnezzar answered and said, “Blessed be the God of Shadrach, Meshach, and Abednego, who has sent his angel and delivered his servants, who trusted in him, and set aside the king’s command, and yielded up their bodies rather than serve and worship any god except their own God.  Therefore I make a decree: Any people, nation, or language that speaks anything against the God of Shadrach, Meshach, and Abednego shall be torn limb from limb, and their houses laid in ruins, for there is no other god who is able to rescue in this way.” Then the king promoted Shadrach, Meshach, and Abednego in the province of Babylon.

 


“Isn’t pretty much everyone you represent a criminal? Why use tax money for that?” | An Interview With Federal Public Defender Kevin Butler

Kevin Butler

Kevin Butler

We took a few minutes and sat down with Kevin Butler, the Federal Public Defender in the Northern District of Alabama.   Before he was appointed in 2012, the district was one of only four federal judicial districts, out of 94 nationwide, that lacked some form of public defender office to represent indigent criminal defendants.

If you are in the corporate world, I can hear you right now.  You’re reminding yourself that you are an honest businessperson.  If you are a lawyer — internal or external — you are reminding yourself that you do not represent defendants in the guns, drugs or child-porn sectors of the economy.  Better to go read the Wall Street Journal.  Or, at least, ESPN the Magazine.

Bear with us.  There is more of you here than makes you entirely comfortable.

A graduate of Cornell University, Butler received his law degree from Arizona State University.  Before coming to Birmingham, he was in the Federal Public Defender’s office in the Middle District, based in Montgomery.  During his last eight years in Montgomery, her served as the Chief Assistant Federal Public Defender.

Butler also served as an Assistant Federal Public Defender in the Eastern District of California and in the District of Nevada.

Here is an excerpt from the interview:

 1) What do FPDs do?

I believe the role of the Office of the Federal Public Defender has three key components.  First, to provide outstanding and zealous representation to indigent persons charged with federal criminal offenses.  Second, to maintain the highest level of skill and competence for all lawyers who represent the indigent through regular and consistent training.  Third, to provide public service in the form of education and outreach regarding the impact federal criminal proceedings have on the community.

2) What drew you to it?

My parents instilled in me a fundamental appreciation of an individual’s right to liberty and their right to equal protection under the law.  I have dedicated my career to helping ensure my clients afforded due process and equal protection of the law.

3)  Isn’t pretty much everyone you represent a criminal?  Why use tax money for that?

A key tenet of our legal system is fact that everyone accused of a crime by the government is presumed innocent.  Furthermore, this presumption cannot be overcome unless the government (the prosecution) proves beyond a reasonable doubt that an individual has committed an offense.  Societal and subjective beliefs regarding an individual’s guilt should never curtail or “short circuit” these tenets and they do not impact my desire to zealously represent an individual accused of a criminal offense.

4) What is your relationship like with the prosecutors?

Our criminal justice system is adversarial.   Though adversarial in Court, in this District the prosecution and the defense bar enjoy a civil and collegial relationship.  I believe all parties recognize that we have an ethical duty to zealously represent our side in criminal proceedings.
Therefore, as a rule neither party confuses zealous advocacy of their party’s interests with personal animosity.

5) Corporations can become defendants in criminal cases.  Why should American businesses pay attention to and appreciate what the FPD does?

Whether a corporation or individual has been charged with a criminal offense, more often than not, the law, the procedure, and the policy governing the criminal proceedings are the same. Therefore, an effective strategy employed by my office on behalf of an individual often translates into effective strategies for the representation of a corporation.

 * * *

What binds the Federal Public Defender client and the corporate client?

The 1970s were good to me.

The 1970s were good to me.

As the Steve Miller band pointed out in 1976, they both take the money and run.

Like a drug-dealer or the child-pornographer, the erstwhile-honest businessperson can be brought to earth like the birds in “The Decoys” by W.H. Auden (1907-1973):

Under the spell completely
They circle can serenely,
And in the tricky light
The masked hill has a purer greenness.
Their light looks fleeter.

Alas, the signal given,
Fingers on trigger tighten.
The real unlucky dove
Must smarting fall away from brightness
Its love from living.

 

Take note of two of Mr. Butler’s points: the white-collar mindset regarding “innocence” and the applicability of FPD strategies to the defense of corporations and businesspeople.

First, as we have noted elsewhere, the power of the grand jury is underestimated, and the presumption of innocence is more theory than reality.  Most people, most of the time, believe that most defendants charged with a crime probably committed the crime, yet business defendants think that, somehow, they will be believed if they can just tell their story.  This mind-set of white-collar intent causes all sorts of misdirection and wrong steps,  as in the  Zachary Warren indictment, is one of the distressing aspects of the Supreme Court’s Salinas decision.

It ought to be a crime.

It ought to be a crime.

Second, in an age when Congress often addresses social ills, real or perceived, by criminalizing heretofore lawful conduct; when some federal judges publicly complain to prosecutors about an insufficient number of heads-on-pikes over financial failures; and when agents and investigators of business-crimes use techniques and technologies formerly reserved for street offenses and organized crime, it would be surprising if FPD defensive strategy and tactics did not transfer readily to the corporate arena.

Federal Public Defenders provide a necessary service to the country.  Plus, as practitioners, we can learn a great deal from them.

 


Take The Deal or Go To Trial? Exactly.

"I know.  I should've taken the deal."

“I know. I should’ve taken the deal.”

The awful pressure to plead guilty, brought on by the significantly enhanced sentences that the Government often seeks where a defendant asserts his right to a trial, is highlighted in the media in drug cases, as here: Prosecutors Draw Fire for Sentences Called Harsh. For white-collar defendants — businesspeople who may be otherwise wholly unacquainted with the criminal justice system — the combination of mandatory minimums, ardent prosecutors and a public consciousness that prefers to blame for their woes abstractions (“Wall Street” or “the accountants” or “bankers”) rather than individual choices means that going to trial is almost impossible.  Plus, the costs can be prohibitive.

Not Rodin's "Thinker"

Not Rodin’s “Thinker”

Indeed, when a federal judge says in public that the wrong people decide who goes to prison, things have come to a head.  There is a move afoot in Congress to address sentencing, but it’s focused primarily on drugs.  Maybe, though, reform will trickle up to the businessperson’s case.



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.

 


Fourth Circuit Rips United States Attorney’s Office For Brady Non-Disclosure

As noted by the White Collar Law Prof blog, here — Fourth Circuit Rebukes United States Attorney’s Office — this criticism of a United States Attorney’s Office for repeated Brady-disclosure problems is unusual.  If nothing else, the Fourth Circuit is generally a law-and-order bench, which lends the criticism greater force.  Here are some highlights:

A cursory review of this Court’s opinions reveals recent consideration of at least three cases involving discovery abuse by government counsel in this district.

 

Mistakes happen. Flawless trials are desirable but rarely attainable. Nevertheless, the frequency of the “flubs” committed by this office raises questions regarding whether the errors are fairly characterized as unintentional.

 

Remedies elude defendants because discovery violations ultimately prove immaterial to the verdict. But that is not the true problem. The problem is that the government appears to be betting on the probability that reams of condemning evidence will shield defendants’ convictions on appeal such that at the trial stage, it can permissibly withhold discoverable materials and ignore false testimony. Make no mistake, however. We may find such practices “harmless” as to a specific defendant’s verdict, but as to litigants in the Eastern District of North Carolina and our justice system at large, they are anything but harmless. “No [one] in this country is so high that [she or] he is above the law. No officer of the law may set that law at defiance with impunity. All the officers of the government, from the highest to the lowest, are creatures of the law and are bound to obey it.” United States v. Lee, 106 U.S. 196, 220 (1882). The law of this country promises defendants due process, U.S. Const. amend. V, and the professional code to which attorneys are subject mandates candor to the court, see Model Rules of Prof’l Conduct R. 3.3., and fairness to opposing parties, see id. R. 3.4. Yet the United States Attorney’s office in this district seems unfazed by the fact that discovery abuses violate constitutional guarantees and misrepresentations erode faith that justice is achievable. Something must be done.

 

To underscore our seriousness about this matter, and to ensure that the problems are addressed, we direct the Clerk of Court to serve a copy of this opinion upon the Attorney General of the United States and the Office of Professional Responsibility for the Department of Justice. The transmittal letter should call attention to this section of the opinion.

 

 

Brady requires the Government  to disclose to the defendant materially exculpatory evidence in the Government’s possession. For a refresher on the Brady rule, look here:  The Brady Rule


New DOJ Cases From the Financial Crisis? Look For This Criminal/Civil Hybrid

A good summary by Peter Henning, here —   DOJ Financial Crisis Cases?  — about possible future cases arising from the financial crisis and the Government’s use of a FIRREA provision.  In part:

But pursuing criminal cases from the financial crisis gets increasingly difficult, especially against individuals, because unlike a good bottle of wine, evidence does not age well. Memories dim and the chance of finding the “smoking gun” e-mail or recording that can help implicate a defendant in a fraudulent scheme becomes less likely with the passage of time.

Mr. Holder will more likely pursue charges under a civil statute that has become the Justice Department’s favorite tool of late against banks: 12 U.S.C. 1833a. The statute provides for civil penalties for violations “affecting a financial institution” of up to $5.5 million or the amount the defendant gained from the misconduct.

Congress enacted this provision in 1989 during the savings and loan crisis as part of the Financial Institutions Reform, Recovery and Enforcement Act to give prosecutors another tool to pursue cases involving fraud and other misconduct at banks.

The law is a hybrid: it requires prosecutors to establish that criminal conduct occurred while using the lower civil burden of proof to establish the violation. That makes it easier for the Justice Department to make its case and can even allow a court to make a favorable ruling based solely on written evidence without a trial.

Section 1833a contains other favorable measures for the government. The law extended the statute of limitations for a host of banking crimes to 10 years from the usual 5-year period, so the Justice Department faces little time pressure in pursuing cases involving the mortgage market during the lead up to the financial crisis.

The statute only requires that the violation affect a financial institution, a term that has been broadly construed in recent district court decisions. Last week, Judge Jed S. Rakoff of Federal District Court in Manhattan rejected a challenge by Bank of America to a lawsuit involving the sale of faulty mortgages by its Countrywide Financial subsidiary. He found that the financial institution affected by the fraud could be Bank of America itself, so that even a self-inflicted wound could be the basis for pursuing a civil penalty action.