The Right Experience: A Guide for Retaining White Collar Defense Counsel in the United States
Written by Dennis E. Boyle¹
Individuals who have never been to the United States can be and are indicted in the United States. Frequently, the targets of federal investigations do not know that they are under investigation. Indictments of individuals are often “sealed” so that the charges are maintained in secret. It is usually not until they travel to a country that has an extradition treaty with the United States that they discover the jeopardy they are in. During a business trip or a family vacation, they may find themselves arrested, handcuffed, and taken to a local jail to await an extradition hearing that will almost always result in the U.S Marshal’s service taking them to the United States.
In many cases, the criminality of the conduct will be obvious: narcotics trafficking racketeering and human trafficking, for example. In other cases, however, the criminality of the conduct will be far less apparent, and in some cases, conduct that is legal in the country where it was committed may become the subject of criminal charges in the United States. A business dispute arising from a business deal could become the basis of a wire fraud prosecution. A gift to a foreign official, even if expected by local custom, could become the basis of a Foreign Corrupt Practices Act violation. A misstatement in the financial statements of a company traded on an American stock exchange could result in a securities fraud prosecution. A company doing business in certain regions of the world may find itself charged with money laundering or violations of the International Emergency Economic Powers Act (sanctions) even though it thought it was not subject to U.S law. The circumstances that could result in criminal charges in the United States are numerous and increasing all the time.
So what should the target of a U.S investigation or prosecution do? The absolute first thing it must do is retain an experienced, competent white collar criminal defense. But how can they know who to retain? The defendant in need of foreign legal assistance should, in the first instance, rely upon trusted legal counsel in the home country. Trusted legal counsel in the client’s home country will need to understand some of the basics of the American legal system so that he or she can assists the client in retaining qualified American counsel.
¹Mr. Boyle is a partner in the White Collar Criminal Practice Firm of BoyleFrost. A complete biography can be found at: www.boylefrost.com/dennis-e-boyle. He can be reached at email@example.com.
An Overview of the American Criminal Justice System²
The court system of the United States is comprised of three separate institutions: the courts, the prosecution and the defense. Each of these three institutions operates independently in an “adversarial” manner”. In theory, at least, the prosecution brings forth the charges and is required to prove its case with evidence beyond a reasonable doubt in order to obtain a conviction. It is the role of the defense to contest this evidence and to present exculpatory evidence on behalf of the defendant. Finally, it is the court’s responsibility to be fair and neutral in deciding the facts or in presiding over a jury trial. If the defendant is convicted, it is the court’s duty to impose an appropriate sentence, although many statutes have mandatory sentencing aspects to them when the law was created by Congress.
Only the prosecution is involved in the investigation of the offense. This investigation is usually conducted, at least initially, in secret as investigators and prosecutors gather facts and identify witnesses. Sometimes they will obtain authorization from a court to intercept voice and wire communications. As the investigation proceeds, they may attempt to interview the subject of the investigation or they may execute a search warrant of business offices or residences to obtain documentary evidence. Although courts may be called upon to authorize warrants³, they are not involved in the investigative process.
Criminal charges at the federal level are brought by way of an indictment by a grand jury. A grand jury is comprised of some number of citizens who hear evidence only from the prosecutor and decide if there is “probable cause” for the institution of criminal charges. They vote by simple majority. Probable cause is a low burden of proof for the government to meet. They need only prove that there is reason to believe that a crime occurred and that the defendant committed the crime.
When an indictment has been returned, a warrant for the defendant’s arrest will be issued. In many cases, the indictment and warrant will be “sealed” by the court-in other words, kept secret-so that the defendant will not be able to flee to a jurisdiction where he or she would not be returned to the United States. If the defendant is located overseas, the government will seek his or her extradition⁴.
² This memorandum addresses only the federal criminal justice system. Each state has its own separate rules of criminal procedure. Some state systems closely follow the federal system and some deviate substantially from the federal system. However, most white collar cases are prosecuted by DOJ in federal courts.
³ In the United States, warrants can only be issued by an independent magistrate or judge based upon finding of “probable cause.” U.S Constitution, Art, IV. The issue of probable cause is frequently complex and is probably the most litigated issue in American criminal courts.
⁴ Extradition is a quasi-judicial process based upon treaty. Pursuant to treaty, the united States may request a country arrest and return an individual located within its borders to the United States. Extradition practice is beyond the scope of this article but practitioners should be aware that there are defenses to extradition located within each treaty. Also, not all countries have extradition treaties with the United States.
When the defendant has been arrested, he or she must be brought before a magistrate at the soonest possible time for an arraignment. Although an arraignment marks the beginning of the formal prosecution, it usually lasts no more than 10 or 15 minutes. The defendant is brought before the court, an attorney enters an appearance on behalf of the defendant, a plea is entered (always “Not Guilty”) and bail is set. Bail has become increasingly rare in the United States, and a defendant should be prepared to remain imprisoned until the end of the case.
Either at the arraignment or shortly thereafter, the U.S District Court Judge assigned to the case will enter a practice order setting forth a schedule for the submission of motions, other required documents, hearings and trials. The practice order will also specify the procedure that will apply in that particular judge’s courtroom. Thereafter the parties will exchange discovery, which is very limited. The defense may file motions to dismiss the indictment, to suppress evidence or statements or for some other type of relief from the court. Ultimately, if the parties do not come to an agreement on how the case should be resolved-a “plea bargain”-the case will proceed to trial.
Unless the defendant decides otherwise, the trial will take place before a jury. The jury is comprised of twelve citizens randomly selected from the community. The parties participate in a process called “voir dire” during which potential jurors are questioned to discover bias. If bias is found, the potential juror is removed from the panel. Once the twelve jurors have been selected, the case proceeds, with the government presenting an opening statement. The defense then has the right, but not the obligation, to present an opening statement. The government then presents its case, followed again by the defense. Once all of the evidence has been presented, the government will argue to the jury followed by the defense. The judge will then “instruct” the jury on the law. The jury will then deliberate in secrecy until it has reached a decision. Once the jury has come to a unanimous verdict, it will return to the courtroom and render its verdict.
If the trial results in a conviction, the judge, at some later date will schedule a sentencing hearing and impose a sentence upon the defendant.
The Selection of Defense Counsel
As a very basic matter, the client retains the attorney by signing a written retainer letter and paying some type of fee. The client is the individual or entity specified in the written agreement, and the attorney’s duty of loyalty is owed only to that client. If the client is a corporation, the attorney represents the corporation and only the corporation; the attorney does not represent any officer or director and owes no duty to any individual officer or director. If the attorney represents an individual, he or she represents only that individual, not the individual’s wife, husband, father or daughter. All communications with the client are privileged and may not be disclosed to anyone without the client’s consent.
There are certain qualifications the client should look for when retaining a white collar criminal defense counsel for an international white collar case. These include:
- Experience in the defense of white collar criminal cases. While experience as a prosecutor may be useful, the client should look for a lawyer with substantial experience defending individuals and companies charged with violations of U.S law.
- Experience in international law. Unlike domestic white collar attorneys, the international white collar defense lawyer needs to be familiar with extradition, challenges to the extra-territorial application of the U.S law, conflicts of laws, the proper process for obtaining evidence internationally, etc.
- Jury trial experience. Criminal trials in the U.S are typically resolved in a jury trial, and advocacy before the twelve non-lawyers who make up the jury is typically more important than specific subject matter expertise. It probably takes twenty to twenty-five jury trials before an attorney becomes minimally competent to try a case. The best attorney will have tried a hundred or more jury trials.
- Adequate resources. The complexity of white collar cases means that the white collar criminal defense lawyer must have a reliable team of lawyers and nonlawyers to assist in the investigation and defense of a case. In addition to in-house support, the lawyer must have access to investigators, certified fraud examiners, forensic accountants and other professionals.
Unfortunately, not every white collar criminal defense counsel in the United States is worthy of trust. Some lawyers are too closely aligned with the government. Others are simply lazy, and it is much easier to plead a client guilty than it is to go to trial. Some lawyers lack the competence or experience to know what motions to file or how to defend a client before a jury trial. The client should interview several lawyers, ask questions about the attorney’s experience and the strategy the attorney intends to employ. The strategy should begin with a thorough investigation of the allegations that are the subject of the investigations or arrest.
Fees in white collar criminal matters are extremely unpredictable because the scope of the work is unpredictable at the beginning of the case. There are a couple of aspects of fees that are worth noting:
- Fees may be either hourly or fixed
- Contingent fees or “success fees” are illegal in a criminal case
- An attorney should never be retained on the basis of cost
- If the fee is lower than the fee quoted by other competent counsel, it probably means the attorney does not understand the scope of the work required or does not intend to devote the time necessary for successful representation in the case
In order for the client to obtain the best possible result, he or she must have an excellent relationship with his or her attorney based upon open communication and trust. Where the client is an institutional client, this same level of trust must exist with the general counsel and other corporate decision makers. The attorney must understand the client’s goals. For an institutional client, the goal may be to settle the matter as quickly as possible and with as little expense as possible to avoid ongoing negative publicity. The client must understand and consider the attorney’s advice, whether the client likes it or not.
Too many attorneys believe too early that they understand the case and the client and that they know what is best. White collar cases involve business operations with significant factual and legal nuances. Each business in each industry has its own culture and its own way of doing things. Just because something at first blush may seem illegal does not mean that it, in fact, is illegal. The attorney needs to take the time to understand the business and the transaction. When the transaction involves complex issues of tax, securities or sanctions, it may require the use of experts to understand precisely what happened and why.
It is also important that the lawyer see the case from the client’s point of view. Too many attorneys, particularly those who have spent a career as prosecutors, tend to look at the case from the point of view of the government. While it is beneficial to see both sides of the case, the best white collar criminal defense attorneys will be able to understand and articulate the case from the client’s point of view.
In the international context, communications can be even more challenging. The client may come from a culture or legal system where police investigators are more neutral and where prosecutors are less adversarial. The presentation of a gift may be viewed as just that – a gift. These clients will have difficulty understanding why a common practice elsewhere is viewed as crime by American authority. Others may see the American justice system as an arbitrary exercise of power and not understand the significant due process rights afforded defendants in U.S courts. It is frequently useful for U.S attorneys to work with attorneys from the client’s home country to understand cultural expectations. If the attorney does not understand these cultural differences, the representation will be more difficult and is less likely to be successful.
The Investigation of the Potential White Collar Offense
Much has been written about the “internal; investigation” the expensive and far ranging investigations undertaken by law firms into alleged misconduct by corporate officers or employees. This type of investigation has its roots in the corporate reporting requirements of the Sarbanes-Oxley Act of 2002 (“SOX”)⁵.
⁵Sarbanes-Oxley Act of 2002, section 301, 15 U.S.C. Section 78-1. Basically, this statute requires companies to have independent audit communities empowered to investigate allegations of misconduct. A variety of DOJ, SEC and other agency programs enacted before and after SOX provide for leniency in some circumstances when the company has conducted an internal investigation and cooperates fully with the DOJ or SEC.
While these investigations are frequently required for major, publicly traded corporations, they are not the type of defense-oriented investigations that should be undertaken by institutional and individual clients to defend themselves. In fact, internal investigations frequently spawn confusion in the mind of the individual client and can impede a valid defense.
Some attorneys may be satisfied to rely upon the investigation conducted by the Department of Justice (“DOJ”) or those parts of it they wish to share with the defense. Unfortunately, there is now substantial evidence that DOJ withholds relevant exculpatory evidence to secure a conviction. Although the U.S Supreme Court long ago held that the Constitution requires all exculpatory evidence to be provided to the defense⁶, the unfortunate reality is that the suppression of exculpatory evidence is all too common⁷. It would therefore be unwise to rely upon the assurances of the government.
The successful resolution of an allegation of a white collar offense, whether it is received before the institution of a government investigation, after the government investigation has commenced or is contained in an indictment, begins with a thorough investigation of the allegation by competent white collar criminal defense counsel. The sooner the investigation is undertaken, the greater the opportunity for a positive outcome. It is not sufficient to rely on someone else’s “internal investigation” into the same matter: it is definitely not sufficient to rely upon the government’s investigation. The attorney must undertake his or her own investigation with the interests of the client in mind.
The investigation the attorney undertakes must be thorough. He or she must obtain all available documents and make sure that all witnesses are available. In most cases, this investigation will be undertaken by investigators acting at the direction of the attorney. When the investigation must be undertaken outside the U.S which will frequently be the case, the white collar criminal defense attorney will need to use the counsel in the country or countries where the alleged conduct arose. Unlike the traditional “internal investigation” the defense-oriented investigation need not resolve conflicts in the evidence or come to conclusions as to guilt or innocence. Since it is undertaken to protect or defend the client, it need only document the strengths and weaknesses in the government’s position as well as the strength and weaknesses in any defense.
If completed early enough-before the government has completed its investigation-the skillful white collar criminal defense attorney can use the investigation to dissuade the government from pursuing criminal charges. It also serves as the basis for the defense of the case should trial become necessary. If it is in the client’s best interest to enter into a plea agreement, the investigation can be used to mitigate the sentence that could otherwise be imposed.
⁶Brady V. Maryland, 373 U.S. 83 (1963).
⁷S. Powell, License to Exposing Corruption in the Department of Justice Lie, Brown Books Pub. Co. (2014). In her book, Ms. Powell explains in detail how DOJ has withheld critical evidence in multiple high-profile cases, including that of Senator Ted Stevens.
There are two other points best made in the investigative section. First, if the case arises in a civil context, either as a civil case brought by the government in the first instance, or in a case between private litigants, the Federal Rules of Civil Procedure, particularly the deposition rules and civil subpoena powers, can be used to obtain information that may not otherwise be available. The white collar criminal defense attorney needs to understand and know how to apply these rules.
The Proper Defense of a White Collar Case
Ideally, it would be best to resolve a case with the DOJ by convincing the DOJ not to proceed with the prosecution, but in most cases that will not be possible. The white collar criminal defense counsel and the client need to be prepared to fully litigate the case. The successful resolution of a criminal case, however, does not just happen. It is a result of a thorough investigation of the matter, a completed understanding of the facts and a mastery of the law.
- Jurisdictional Defenses
In the United States, the DOJ and many defense attorneys assume that U.S criminal law applies internationally; however extra-territorial of U.S criminal laws is not something that should be assumed. An unfortunate aspect of modern American jurisprudence is that well over 90% of defendants, including nearly all institutional defendants, plead guilty. The law governing the extraterritorial application is therefore not as developed as other areas of the law.
Nevertheless, there is reason to believe that the courts may not accept DOJ’s expansive view of international criminal jurisdiction. In Kiobel v. Royal Dutch Shell⁸, the U.S. Supreme Court found that there was an insufficient nexus between Kiobel’s injuries and the United States to sustain jurisdiction under the Alien Tort Claims Act⁹. Other lower courts have found a nexus requirement to exist in criminal law¹⁰. At least one other court found that international law may limit the extra-territoriality of American criminal law¹¹.
Potential limitations on extraterritorial jurisdiction may be found in the text of statutes, the U.S Constitution and international law. It is difficult to predict how this area of law will develop, but there are viable jurisdictional defenses that can and should be argued whenever a case has been filed.
⁸133 S. Ct. 1659 (2013). In Kiobel, the plaintiff alleged that Shell had used the Nigerian government and the Nigerian Army to violate his rights under the Alien Tort Claims Act. Since all of the conduct giving rise to the plaintiff’s cause of action occurred in Nigeria and no significant activity occurred in the United States, the court found that there was not a sufficient nexus to the U.S
⁹28 U.S.C Section 1350.
¹ºUnited States v. Mesjuck, 156 F.3d 918 (9th Cir. 1998); United States V. Moreno-Morillo, 334 F.3d 819 (11th Cir. 2011).
¹¹United States v. Ibarguen-Masquera, 634 F.3d 1370 (11th Cir. 2011).
- Procedural Defenses
The Constitution of the United States contains a wide range of procedural protections for the criminal defendant. A defendant’s person or residence may not be searched without a warrant issued by a neutral magistrate based upon “probable cause”¹². The search must be “reasonable.” The arrest of the defendant must be based upon “probable cause.” The defendant is entitled to “due process” of law, a vague phrase that has been interpreted to grant the defendant numerous rights¹³. The defendant has the right to counsel at all critical stages of the proceeding¹⁴. The Violation of these rights may result in the suppression of evidence or statements or the dismissal of an indictment. The key to success is careful preparation and a thorough understanding of the law.
- Defenses on the Merits
Trial by jury is a right enshrined in the U.S Constitution and reason why many American attorneys become trial lawyers. For trial attorneys, there is nothing more exciting, more frightening or more exhausting than a jury trial. Unfortunately, with the number of guilty pleas, few lawyers have the skills necessary to successfully defend a client before a jury trial. There are many white collar criminal defense lawyers who have never defended a client before a jury trial. Perhaps more than anything else, the client needs to make sure that his or her attorney is capable of defending him before a jury. In fact, jury trial skills are probably more important than substantive law knowledge.
The successful white collar criminal defense attorney understands both strategy, the overarching theory of the case and the actions (“tactics”) that must be taken in the trial itself. The attorney cannot win if he or she lacks a good strategy. In addition to understanding strategy, the attorney must know how to employ the correct tactics.
A coherent strategy before a jury is absolutely necessary. Most white collar criminal offenses require two things: an actus reus and a mens rea, a criminal act and a guilty mind. The actus reus is rarely in doubt-the defendant almost always made the statement, created the document or took the action. What is usually less clear is the mens rea, the state of mind. White collar criminal statutes usually require an “intent to defraud” or a “corrupt intent”. The question then is not what did the defendant do but rather, what was in his or her mind? Every aspect of the cross examination, every witness presented by the defense, the testimony of the defendant and the arguments of counsel all need to address this defense.
“Tactics” refers to the manner in which strategy is implemented. For example, it will usually be necessary to shake the credibility of government’s witnesses. Frequently, they will have given statements in the past that are inconsistent with their testimony in court. Often times, they will have received favorable treatment from the government for their testimony, whether it be a promise of immunity, favorable treatment in another case or sometimes money or other consideration. In these cases, it will be necessary to impeach the witness on cross-examination. Cross-examination is the art of asking question that expose the witness’ prior inconsistent statements and bias in order to damage or destroy his or her credibility with the jury. If the government’s witnesses are shown to not be credible, the government’s case will collapse. It is the successful merging of strategy and tactics that leads to success before a jury.
¹²U.S Constitution, Amend. IV.
¹³U.S Constitution, Amend. V.
¹⁴U.S Constitution, Amend. VI.
The Federal Sentencing Guidelines
The sentence that a defendant will receive after being convicted in federal court is usually fairly predictable within a certain range. In 1984, Congress created the United States Sentencing Commission. The Sentencing Commission, in turn created guidelines to be employed by the District Courts¹⁵. Although these guidelines are no longer mandatory¹⁶, many courts follow the guidelines.
The guidelines are essentially a matrix with two axis. The horizontal axis contains an “prior history category” based upon the prior criminal record of the defendant. In most white collar cases, the criminal history will be a Category 1.
The vertical axis is the “offense gravity score”. The sentencing guidelines contain a myriad of factors to be considered depending upon the charge, the amount of the loss, whether the defendant pled guilty, the means employed, the role in the offense, etc. Suppose that we have a defendant who defrauded a victim of $4,200,000. Under Section 2B1.1 of the guideline, the defendant would have a base level offense of 6 points, which would be increased by 18 points because of the dollar value of the fraud, for a total of 24 points. If the defendant pled guilty, he or she would receive three points credit for accepting responsibility and have a total offense gravity of 21. If the defendant went to trial and testified under oath that he was innocent, he or she would receive a two point increase for attempting to obstruct justice and have a total offense gravity score of 26.
Turning then to the matrix, the defendant who pled guilty would face a sentencing range of 37-46 months, and the defendant who went to trial and was convicted would face a sentencing guideline range of 63-78 months. While this example is simplistic, it shows that the guideline range can be calculated anytime the offense conduct and prior record are well understood. There are other guidelines that apply to fines and can be calculated for institutional clients.
¹⁵A complete copy of the Sentencing Guideline Manual promulgated by the Sentencing Commission is available at:
¹⁶United States V. Book er, 543 U.S 220 (2005). Blakely V. washington, 542 U.S. 296 (2004)
The investigation and litigation of a white collar criminal defense is complex and difficult. In selecting an attorney, experience is important, but it has to be the right kind of experience. Experience in the defense of individuals and companies is important, as is experience in international law. The attorney should be one who has tried a significant number of jury trials. Finally, the attorney must have the resources to actually mount a credible defense. There are never any guarantees as to the ultimate outcome of any case, but retaining the right attorney is the most important step that a client can take to maximize the opportunity for a successful outcome.