Procedural issues.

Author:Dolqueist, Lori Anne
Position:Tenth Survey of White Collar Crime

This article discusses criminal procedure, emphasizing issues which are particularly relevant to white collar crime litigation.(1) Section I discusses the initiation of white collar criminal prosecutions. Section II examines civil proceedings which parallel white collar criminal prosecutions and often arise under the same statute. Finally, Section III addresses possible pitfalls for lawyers litigating white collar crime cases.(2)

  1. Initiation of Prosecution

    The prosecutor has a great deal of discretion in determining whether to charge a defendant. In United States v. Batchelder,(3) the Supreme Court examined this discretion, holding that it is within the prosecutor's power to charge a defendant under the more severe of two overlapping statutes.(4) Indeed, prosecutorial discretion in choice of statute has withstood many constitutional challenges.(5) A defendant may, however, find success in a challenge based on racial or other invidious discrimination,(6) or, in the case of overlapping statutes, where the language or the legislative history manifests a clear intent to repeal the earlier, more severe statute.(7)

    1. The Grand Jury

    The standard of review applicable to prosecutorial misconduct before the grand jury,(8) grand jury secrecy rules,(9) limited criminal discovery,(10) the inapplicability of many trial safeguards to grand jury proceedings,(11) and the government's power to reindict once an indictment is dismissed,(12) render the defendant's task in seeking dismissal of the indictment extremely difficult.(13) To challenge an indictment successfully, therefore, a defendant must assert either (1) an error in the grand jury proceedings themselves, or (2) a violation of the defendant's constitutional rights.

  2. Error in the Grand Jury Proceedings

    There are two basic forms of error before the grand jury: prosecutorial misconduct and presentation to the grand jury of inadmissible evidence. Possible forms of prosecutorial misconduct include violations of grand jury procedural rules,(14) violations of the defendant's due process rights,(15) other prejudicial conduct,(16) and interference with the attorney-client relationship.(17) Prosecutorial misconduct will not warrant dismissal of an indictment without a showing of prejudice to the defendant amounting to harmful error.(18)

    The defendant must surmount the presumption that a facially valid indictment(19) is sustainable.(20) Courts will not question the sufficiency of the evidence supporting a facially valid indictment.(21) Even when the indictment is supported by false evidence or perjured testimony, a court will let it stand if the indictment is facially valid and the alleged error is harmless.(22) However, if the defendant is able to show that the prosecutor knowingly used false evidence or perjured testimony in front of the grand jury, and there is no other inculpatory evidence, the court might perform a pre-conviction examination of a facially valid indictment.(23)

  3. Review of Alleged Error Before the Grand Jury

    A defendant asserting defenses or objections based on defects in the indictment must do so prior to trial, unless the challenge is that the indictment fails to establish jurisdiction or to charge a crime.(24) When the court denies a defendant's motion to dismiss the indictment, the issue is not immediately appealable.(25) The defendant's attempt to challenge the indictment is further hampered by the fact that a guilty verdict returned by a petit jury irrebuttably establishes that the grand jury misconduct was harmless.(26)

  4. Violation of Constitutional Rights

    The cases do not state a clear harmless error standard applicable to a violation of the defendant's constitutional rights. The cases cited in Bank of Nova Scotia, in which the Court was faced with constitutional error and applied the "harmless beyond a reasonable doubt" standard for harmless error, were cases involving error before the petit jury.(27) Thus, it is unclear what would be the appropriate standard for constitutional error before the grand jury.(28)

    1. Document Production

    Rule 16(b) codifies the government's right to discover evidence in the possession of the defendant.(29) The government's right to discovery is limited and does not arise until the defendant has made a discovery request under Rule 16(a)(1)(C), (D) or (E) and the government has complied with that request.(30) Rule 16(c) creates a continuing duty for both the prosecution and the defense to disclose material evidence which becomes available after formal discovery.(31) The government can discover three types of information:(32) (1) documents and tangible objects in the defendant's possession or control that the defendant intends to introduce as evidence at trial; (2) examination and test reports in the defendant's possession or control that the defendant intends to introduce as evidence at trial, or similar reports prepared by a witness for the defendant and related to that witness's testimony; and (3) a written summary of the testimony of an expert whom the defendant intends to call at trial.(33)

  5. Fifth Amendment Aspects of Document Production

    In order to invoke the protection of the Fifth Amendment privilege against self-incrimination,(34) a potential witness must show three elements with respect to the requested documents.(35) First, the individual must demonstrate that the government is compelling compliance with its demands.(36) Thus, the privilege may not be asserted by persons who voluntarily comply with a government request. Further, the privilege must be affirmatively asserted. Failure to assert the privilege is considered proof that the response was not compelled.(37) Second, the individual must prove that the information sought is testimonial in nature.(38) In order to be testimonial, an individual's "communication must itself, explicitly or implicitly, relate a factual assertion or disclose information."(39) Third, the individual must show a likelihood that the requested evidence is incriminating.(40) Compelled documents are privileged only if the specific answers would be incriminating.(41) Witnesses are not required to prove that the information will actually be used against them in criminal prosecution, but must prove a reasonable basis exists for fearing self-incrimination.(42)

    Since the privilege against self-incrimination is personal, only those who risk self-incrimination may assert the privilege.(43) Therefore, a third party in actual or constructive possession of the requested documents, who would not personally be incriminated by the act of production, may not invoke the Fifth Amendment privilege to quash a subpoena. Attorney-client transactions, however, create, a special situation.(44)

  6. Act of Production Doctrine

    The act of production doctrine limits the government's access to documents. The doctrine requires two inquiries into the government's document requests. The first question is whether the contents of the documents are privileged under the Fifth Amendment.(45) Courts have commonly found that the contents of personal or business documents are not protected since they are voluntarily prepared.(46)

    The second inquiry is whether the act of document production is itself subject to Fifth Amendment protection.(47) In the context of document production itself, the privilege applies only if the act is both testimonial and incriminating.(48) Specifically, if the act of document production communicates: (1) the existence of the documents, (2) possession or control of the documents by the witness, or (3) the authenticity of the documents, then the act is privileged under the Fifth Amendment.(49)

  7. Collective Entity Doctrine

    Since the Fifth Amendment privilege was designed to protect individuals from the coercive power of the state,(50) it may be invoked only by natural persons,(51) not by corporations(52) or other types of collective bodies.(53) This artificial entity exception to the Fifth Amendment is called the collective entity doctrine.(54)

    A collective entity has been defined as an organization that is well-organized, structured and "an independent entity apart from its individual members" that maintains a distinct set of organizational records.(55) The crucial factor is whether the organization has an established institutional identity independent of its individual constituents.(56) The collective entity doctrine only applies, however, when the act of production constitutes an act on the entity's behalf, rather than a personal act.(57) The individual producing the documents is then said to be a "records custodian."(58)

    Recognizing the testimonial problems of the act of production, courts have conferred limited personal immunity on the individual producing the documents.(59) Nevertheless, if the custodian occupied a prominent position in the organization, it is likely that the corporation's act of production, which is no longer identified with the custodian at trial, will be personally incriminating.(60)

    Despite the breadth of the collective entity doctrine, custodians of records are not entirely precluded from invoking the Fifth Amendment privilege. One court has held that, where the subpoena is vague as to whether it requests records held in personal or in representative capacity, and the act of production would involve testimonial incrimination, courts should treat the subpoena as a personal subpoena and allow a custodian to assert the Fifth Amendment privilege.(61) As a safeguard, most courts will review requested documents in camera to determine whether there is a business aspect to them.(62) Where a document is owned by the custodian personally, rather than by the corporation, courts have allowed the custodian to assert the Fifth Amendment privilege.(63)

  8. Required Records Exception

    Another limitation on the Fifth Amendment privilege against self-incrimination is the "required records" exception.(64) Individuals may be compelled to turn over documents retained by a...

To continue reading