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Exonerating Your Client Before Indictment

By James F. Hibey and Arthur T. “Ted” Farrell

When the government investigates potential violations of the Foreign Corrupt Practices Act (FCPA), multiple entities and parties need protection. The corporation itself may face significant damage to its reputation and huge fines should it be convicted. In addition, individuals who may have been involved in the alleged wrongdoing may face not only fines but also the prospect of years in federal prison.

At the investigatory stage, the lawyer’s work is done quietly, that is, outside the courtroom and with little fanfare or publicity. Although that work is done “under the radar,” there are tactics and lessons learned from a lifetime of practice that can be shared. A successful result for the client—no indictment—will require skill, tenacity, an ability to understand the ebb and flow of the investigation, and perhaps even a little bit of luck. And it will require a quick response and hard work. Your job is to get out in front of the events and do everything possible to convince the prosecutor not to bring a charge, saving the company and its employees from years of uncertainty, excruciating pressure, and the prospect of prison time.

To earn your client’s gratitude and for your own professional satisfaction, keep the following dos and don’ts in mind.

Learn everything you can about the prosecutor. Prosecutors have a tremendous amount of discretion to bring indictments, and so, in any criminal investigation, it is critical that you reach out immediately to your friends and colleagues to find out as much as possible about his personal prosecutorial style. Is this a person always looking to make a deal, or does he go to trial no matter what? Is this person amenable to non-prosecution agreements or willing to pursue lesser charges in return for cooperation? Is he always intent on charging the corporate entity, or is he more likely to punish the individual? No two prosecutors are exactly alike, and the more you know about the prosecutor’s individual work history, tendencies and demeanor, the better equipped you will be to persuade him not to indict your client.

Establish credibility. If the prosecutor sees you as honest and trustworthy, he will be more likely to keep you in the loop during the investigation and more open to listening to your arguments. On the other hand, if the prosecutor feels even the slightest bit uneasy relying on the information you give him, he will be less likely to keep you informed of the progress of his investigation. Rather, you will first learn what he knows when you are reading the indictment you want to avoid.

Learn from the prosecutor. Communication with the prosecutor is a two-way street. As you are building trust, you will have the chance to pick up information and to learn where the process is headed. During the initial stages of your representation, the prosecutor probably knows more about the facts and has a better developed theory of the case than you do, but what may seem to be an obvious disadvantage can be harnessed to work in your favor as you learn about your case through the prosecutor’s eyes. The more you understand about the approach and assumptions made by the prosecutor, the better equipped you will be to look for and uncover information that may alter his thinking. Is your client the only one under investigation, or is this a multi-firm or industry-wide investigation? Is your client the big fish or just a minor player? Is this something that is just getting under way, or are you getting involved after the prosecutor’s mind is just about made up? These are things you need to find out sooner rather than later so that you can communicate effectively with the prosecutor and protect your client.

Educate the prosecutor. Ultimately, your goal is to convince the prosecutor that what at first seemed criminal was, when viewed in the proper context, legal. As the prosecutor is giving you bits of information, be sure to offer him a nugget or two along the way. This is not the time to make any admissions, but feeding the prosecutor a helpful fact or two will keep him interested in further discussions. Alleged corporate wrongdoing sometimes does not square with the historical behavior of a corporation and its management. If you represent an exemplary institution, for example, let the prosecutor know that early on.

Display an openness to cooperation. The prosecutor should know that you are willing to consider cooperating in exchange for avoiding prosecution.

Learn as much as you can about your client’s conduct. Once you have an idea of your client’s place in the alleged activity, the prosecutor’s theory of the case, and his motivation, it is time to find out everything that there is to know about the conduct in question. Go back to the general counsel, report on what you learned, and find out whether the prosecutor is correct and, if so, whether there are any innocent alternative explanations. Work with in-house counsel to identify the key players and run targeted searches to get a handle on just what happened and what the government may or may not be able to prove. While you review the data, spend as much time as possible with people in the organization who can explain how things work. Your goal should be to understand your client’s business as well as she does and far better than the prosecutor does.

Take immediate steps to deal with wrongdoers. Your internal investigation may uncover illegal behavior by agents or employees of the company. If it does, deal with any problems swiftly and decisively. The company must have zero tolerance for activities that are against the law and put the company at risk. Employees who break the law should be questioned about their activities and then terminated. Agents should be barred from working for the company in the future, and the company should take all possible steps to recoup any moneys paid or owed to rogue agents.  This will send a signal that the company is not in the business of ignoring or rewarding corrupt behavior.

Take steps to protect the company going forward. During the investigation, look at the existing policies and procedures of the organization and take steps to improve them. Such efforts will help to protect the company going forward and serve as a positive example to show the prosecutor that the company is doing all it can to abide by the law. If the company conducts FCPA compliance training, ensure it is up to date and addresses situations that the company’s employees and agents are likely to encounter. Even already-trained employees take a refresher course. All employees should be made well aware that they will be fired for failing to abide by the law.

Let the prosecutor know that you are prepared to offer a full-throated defense at trial. Once you have dealt with the company’s problems and have squared the prosecutor’s theories with the facts you uncovered during your internal investigation, it is time to go back to the prosecutor and make your case. Although a trial is something you want to avoid, the prosecutor must know that if he chooses to indict, you will not simply roll over. The more difficult a potential conviction seems, the more likely the prosecutor will forgo indictment. You may share information with the prosecutor pursuant to a formal agreement, or you may have no agreement whatsoever in place. Regardless, your goal is to tell the most persuasive story possible without creating the potential of an adverse effect on your client should the prosecutor indict. As always, your approach needs to be grounded in the facts. Instead of criticizing the prosecutor’s case, point to specific areas where the evidence is weak and explain why it is unlikely that a charge could lead to conviction. Let him know the reasons why the agent hired by the company to help it bid on contracts was a rogue. Let him know that the company you represent would never ratify such conduct. Show him evidence of the due diligence performed by the company before hiring the agent as well as the content of your company’s compliance training course. Any evidence that makes it less likely that your client engaged in wrongdoing should find its way to the prosecutor’s supervisor. This is also the time to start talking about the law, why the conduct the prosecutor is investigating is not a crime, and how certain information that might interest the prosecutor will not be admissible should the matter go to trial. The key here is twofold: (1) present the merits of why the prosecutor should not indict, and (2) let the prosecutor know that if he does indict, you are ready, willing, and able to fight tooth and nail.

Go over the prosecutor’s head if necessary. There will be times when a prosecutor makes his intent to charge clear, no matter what exculpatory facts you present. In those situations, you may need to appeal to his superiors.

Don’t lie or otherwise mislead the prosecutor. If the prosecutor gets even a hint of dishonesty from you, he will have no incentive to continue communicating, regardless of the merits of your arguments.

Don’t be brash. The prosecutor has all but unfettered discretion to indict. Because he has the power, you need to be humble.

Don’t make things personal. While you may have to go over the prosecutor’s head, you must never make your appeals to his supervisor a forum to complain about the prosecutor’s professionalism, competence, or motives. Appeals to the supervisor should be based on the facts and the law.

Don’t try the case in the press. Attempting to pressure the prosecutor by trying the case in the media is almost always a bad idea.  Leaking only the most favorable facts for your client is likely to anger the prosecutor and will destroy any good will and trust built up over the course of the investigation.  What is more, when the rest of the story surfaces, your client will be faced with another less favorable news story.  Your goal is to convince the prosecutor – a person with wide discretion – not to charge your client.  Trying the case in the press will likely lead to the opposite result. 

Sometimes, your client will be indicted no matter what you do. There may be political pressure; there may be a vendetta; there may be a third party who has convinced the prosecutor that your client is guilty. In these cases, while you prepare to fight at trial, you also need to make contingency plans. You may want to talk with the prosecutor about a deferred prosecution agreement, or offer to cooperate in exchange for a lesser sentence.

Keywords: litigation, trial tips, exoneration, indictment, FCPA

This article was adapted from a longer one that was published in the Spring 2011 issue of Litigation.


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