Procedural issues.

• Author: Abou-Rahme, Laila
• Position: Thirteenth Survey of White Collar Crime

1. INTRODUCTION

   This Article discusses criminal procedure, emphasizing issues that are particularly relevant to white collar crime litigation.(1) Section II discusses the initiation of white collar criminal prosecutions. Section III examines issues arising from parallel civil and criminal proceedings. Finally, Section IV addresses issues related to attorney representation raised during white collar crime litigation.

2. INITIATION OF PROSECUTION

   A prosecutor has discretion to determine whether and how to charge a defendant. In United States v. Batchelder,(2) the Supreme Court held that a prosecutor may charge a defendant under either of two overlapping statutes whose penalties are not equally severe(3) unless a defendant can show that the more lenient statute clearly manifests an intent to repeal the more severe statute.(4) In addition, a defendant challenging a prosecution on the basis of racial or other invidious discrimination(5) must establish that similarly situated individuals of a different race were not prosecuted.(6) Part A of this Section describes grand jury processes, with emphasis on the judicial standard of review for grand jury error, and Part B discusses document production issues.

   1. The Grand Jury

      The Fifth Amendment mandates that "No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury."(7) Therefore, a grand jury indictment is a necessary precursor to the prosecution of any federal felony.(8) A grand jury reviews all information related to an investigation until "it has identified an offense or has satisfied itself that none has occurred."(9) A grand jury does not adjudicate guilt or innocence;(10) instead, it determines whether probable cause exists.(11) Acting as both a "shield" and "sword," the grand jury not only protects the accused from "ill-conceived and malicious prosecutions," but also assists the government in investigating crimes.(12)

      Defenses or objections based on defects in the indictment must be presented prior to trial, unless the challenge is based on the indictment's failure to establish jurisdiction or to charge a crime.(13) In addition to a court's general reluctance to dismiss an indictment,(14) a defendant seeking dismissal is confronted with grand jury secrecy rules,(15) limited discovery allowed to defendants,(16) lack of the safeguards afforded at trial,(17) the government's power to reindict once an indictment is dismissed,(18) and the application of the harmless error rule to errors occurring during grand jury Proceedings.(19) Furthermore, a guilty verdict returned by a petit jury at trial generally establishes that any error in the grand jury proceedings was harmless.(20)

      The rest of this Part describes; (1) the standard of review used to determine whether error in grand jury proceedings warrants the dismissal of an indictment; and (2) prosecutorial misconduct.

      1. Standard of Review for Grand Jury Error

         In Bank of Nova Scotia v. United States,(21) the Supreme Court reaffirmed that the "harmless error rule"(22) generally governs error in grand jury proceeding,(23) holding that a court may invoke its supervisory powers(24) to dismiss an indictment only when procuring the indictment amounted to harmful error.(25)

         The harmless error rule does not apply to "fundamental errors" occurring in grand jury proceedings. An error is "fundamental" when "the structural protections of the grand jury have been so compromised as to render the proceedings fundamentally unfair."(26) However, errors such as the violation of grand jury secrecy requirements(27) and the government's improper introduction of evidence have not yet been deemed fundamental.(28) If a fundamental error is found, the court may dismiss the indictment without a "particular assessment" of the harm caused because prejudice is presumed.(29)

      2. Prosecutorial Misconduct

         Prosecutorial misconduct "denote[s] situations in which the prosecutor engages in improper behavior usually to gain an unfair advantage over the accused or otherwise to prejudice ... the grand jury."(30) To remedy prosecutorial misconduct a court may dismiss an indictment, reverse a conviction, suppress grand jury testimony, quash subpoenas, discipline the prosecution, and impose other, similar sanctions.(31)

         Forms of prosecutorial misconduct include violations of grand jury procedural rules,(32) violations of a defendant's due process rights,(33) interference with the attorney-client relationship,(34) and other prejudicial conduct.(35)

         In most cases, a court will not question the admissibility or sufficiency of the evidence supporting a facially valid indictment.(36) A prosecutor's suppression of exculpatory evidence or use of "shoddy" evidence may constitute prosecutorial misconduct.(37) Presentation of inadmissible evidence to the grand jury, while frequently raised as error, is rarely sufficient to dismiss an indictment. Even when supported by false evidence or perjured testimony, courts will let the indictment stand as long as it is facially valid and the alleged error is harmless.(38)

         One rationale for the harmless error rule is that the grand jury proceeding is preliminary, and the defendant will be afforded full constitutional protections at trial.(39) However, if a defendant is able to show that the prosecutor knowingly presented false evidence or perjured testimony to the grand jury and there is no other inculpatory evidence, then the court may perform a pre-conviction examination of a facially valid indictment.(40)

   2. Document Production

      Rule 16 of the Federal Rules of Criminal Procedure codifies the right of the government and the defendant to discover evidence in each other's possession.(41) The government's right to discovery does not arise until the government has complied with the defendant's discovery request under Rule 16(a)(1)(C), (D), or (E).(42) The government can discover three types of information: (1) documents and tangible objects in the defendant's possession or control that the defendant intends to introduce as evidence at trial;(43) (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 the testimony of that witness;(44) and (3) a summary of the testimony of expert witnesses that the defendant expects to introduce at trial.(45) The defendant has identical discovery rights, as well as the right to inspect "buildings or places" under the government's control.(46) Rule 16(c) also creates a continuing duty for both the prosecution and the defense to disclose material evidence that becomes available after formal discovery.(47) Constitutional and related evidentiary issues raised by document production are discussed as follows: (1) Fifth Amendment concerns; (2) act of production doctrine; (3) collective entity doctrine; (4) required records exception; (5) immunity; and (6) computer records as evidence.

      1. Fifth Amendment Aspects of Document Production

         To invoke the protection of the Fifth Amendment privilege against compelled self-incrimination with respect to requested documents,(48) a potential witness must show that three conditions are met.(49) First, the individual must demonstrate that the government is compelling compliance.(50) Thus, voluntarily prepared personal and business documents are not protected by the privilege.(51) Also, failure by the witness to assert the privilege affirmatively is considered proof that the response was not compelled.(52)

         Second, the witness must prove that the information sought is testimonial in nature.(53) Third, because only those who fear self-incrimination may assert the privilege,(54) the witness must prove that a reasonable basis exists for fearing self-incrimination. However, he need not prove that the information will actually be used against him.(55) Therefore, a third party in actual or constructive possession of requested documents who would not incriminate himself by the act of production may not invoke the Fifth Amendment privilege to quash a subpoena.(56) In addition, if the third party holds the documents as a representative of an entity to which the Fifth Amendment does not apply (i.e., a corporation), the third party must still produce the documents even if they are self-incriminating.(57)

         Attorney-client transactions, on the other hand, give rise to a special situation. When a document is transferred to and retained by an attorney, the attorney-client privilege, rather than the client's Fifth Amendment privilege, attaches and thus permits the attorney to refuse production.(58) However, protection is limited to those documents acquired for legal advice.(59)

      2. Act of Production Doctrine

         The production of documents can communicate the existence of documents, a witness' possession or control of documents, and a witness' belief in documents' authenticity.(60) If these "tacit averments" are compelled, testimonial, and self-incriminating, then the Fifth Amendment applies to protect the witness.(61)

      3. Collective Entity Doctrine

         The Fifth Amendment privilege was designed to protect natural persons from the coercive power of the state.(62) Thus, only such individuals,(63) as opposed to corporations(64) or other collective entities,(65) may invoke the Amendment's protections. This rule is known as the collective entity doctrine.(66) The Supreme Court has further reasoned that a corporation may not assert federal Fifth Amendment privileges because it is an artificial entity created under state law.(67)

         A collective entity is an organization that is generally well-structured, maintains a distinct set of records, and has an institutional identity independent of its individual constituents.(68) Law firms and partnerships qualifying as collective entities do not receive Fifth Amendment protection.(69)

         The collective entity doctrine only applies when...