Procedural issues.

Author:Marston, Christopher M.
Position:Annual white collar crime survey

    This Article discusses criminal procedure 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.


    A prosecutor has broad discretion to determine whether and how to charge a putative 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 differ.(3) However, a defendant can demonstrate that the more lenient statute clearly manifests an intent to repeal the more severe statute.(4) Additionally, the prosecutor can not choose which statute to apply in a manner that discriminates between defendants on the basis of suspect classifications.(5) A prosecutor has unfettered discretion to decide not to prosecute a defendant.(6) Part A of this Section describes grand jury processes with emphasis on the judicial standard for dismissing indictments tainted by grand jury error. 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 to believe that a crime has been committed.(11) Acting as both a "shield" and "sword," the grand jury protects the accused from unfounded criminal prosecutions and 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) Due to a court's extreme reluctance to dismiss an indictment,(14) a defendant seeking dismissal is confronted with several obstacles: grand jury secrecy rules,(15) limited discovery allowed to defendants,(16) absence 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 at a subsequent trial,(20) or a guilty plea,(21) generally may be used to establish that any error in the grand jury proceedings was harmless.

      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,(22) the Supreme Court reaffirmed that the "harmless error rule" generally governs error in grand jury proceedings.(23) The Court drew a narrow exception to this rule, finding that the harmless error rule does not apply where "fundamental errors" occur 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, allowing the presumption of prejudice."(24) Fundamental errors include race-based(25) and sex-based(26) selection of grand jurors. Errors such as the violation of grand jury secrecy requirements(27) and the government's improper introduction of evidence(28) are not deemed fundamental.(29) If a fundamental error is found, the court may dismiss the indictment without a "particular assessment" of the harm caused because prejudice is presumed.(30)

      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."(31) To remedy prosecutorial misconduct in limited circumstances, a court may dismiss an indictment, suppress grand jury testimony, quash subpoenas, discipline the prosecution, and impose other, similar sanctions.(32)

        Forms of prosecutorial misconduct include violations of grand jury procedural rules,(33) violations of a target's due process rights,(34) interference with the attorney-client relationship,(35) and other prejudicial conduct.(36)

        The Supreme Court, in United States v. Williams,(37) severely limited a court's ability to respond to prosecutorial misconduct by dismissing an indictment. Williams held that courts may not use their supervisory powers to "prescrib[e] ... standards of prosecutorial conduct in the first instance."(38) Supervisory power may be used to dismiss an indictment where misconduct "amounts to a violation of one of those `few clear rules which were carefully drafted and approved by this Court and by Congress.'"(39) Accordingly, courts generally will not question the reliability or sufficiency of the evidence supporting a facially valid indictment.(40) A prosecutor's suppression of exculpatory evidence, though it may constitute prosecutorial misconduct,(41) will not support dismissal of an otherwise valid indictment.(42)

        Rules of evidence do not apply in the grand jury.(43) Therefore, presentation of evidence to the grand jury that would be inadmissible under the rules of evidence in a regular criminal proceeding is permitted and will not support a dismissal of an indictment.(44)

        Courts will let an indictment stand, even when supported by false evidence or perjured testimony, as long as the indictment is facially valid and the alleged error is harmless.(45) 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, the court has adequate grounds to find that introduction of the evidence amounted to harmful error.(46)

    2. Discovery

      Federal Rule of Criminal Procedure 16,(47) the Jencks Act,(48) and the Brady(49) rule govern discovery in criminal proceedings. Other constitutional and related evidentiary issues raised by document production are discussed as follows: Fifth Amendment concerns; act of production doctrine; collective entity doctrine; required records exception; immunity; computer records as evidence; and grand jury subpoenas for sealed documents.

      1. Rule 16

        Most discovery in criminal cases is governed by Rule 16 of the Federal Rules of Criminal Procedure.(50) Upon request the defendant may discover five types of information: (1) written or recorded statements made by the defendant and in the possession, custody, or control of the government;(51) (2) any prior criminal record of defendant in the possession, custody, or control of the government;(52) (3) documents and tangible objects in government possession, custody, or control that are material to the defense, are intended for use during the government's case-in-chief, or belong to the defendant;(53) (4) examination and test reports in government possession, custody, or control that are material to the defense or are intended for use during the government's case-in--chief;(54) and (5) a written summary of expert testimony the government intends to use during its case-in-chief.(55)

        Under Rule 16 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).(56) The government may discover three types of information: (1) documents and tangible objects in the defendant's possession, custody, or control that the defendant intends to introduce as evidence during her case-in-chief;(57) (2) examination and test reports in the defendant's possession, custody, or control that the defendant intends to introduce as evidence during her case-in-chief, or similar reports prepared by a witness for the defendant and related to the testimony of that witness;(58) and (3) a summary of the testimony of expert witnesses that the defendant expects to introduce at trial.(59) 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.(60)

      2. Jencks Act

        Discovery is also governed by the Jencks Act(61) and Rule 26.2 of the Federal Rules of Criminal Procedure.(62) Under the Jencks Act statements or reports in the possession of the United States made by a potential government witness are not subject to discovery until after that witness has testified on direct examination.(63) After a witness has testified, at defendant's request, the government must turn over documents relevant to the witness' testimony.(64) If the government does not turn over requested documents, the testimony of the witness will be stricken and the trial will continue, unless the court determines that the interests of justice call for a mistrial.(65) Rule 26.2 incorporates the substance of the Jencks Act and applies the same principles to defense witnesses other than the defendant.(66)

      3. Brady v. Maryland

        Brady v. Maryland(67) held that a prosecutor's suppression of material evidence favorable to the defendant, following a defendant's request, violates due process.(68) This is true "irrespective of the good faith or bad faith of the prosecution."(69) The Supreme Court in United States v. Bagley(70) held that the suppression of material evidence is a constitutional violation regardless of whether there has been a specific or general request, or no request at all.(71) The Court in Bagley found the United States v. Strickland(72) formulation of materiality applicable to all three situations; "evidence is...

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