Statements protected by attorney-client privilege, rules 7th Circuit.

• Author: Ziemer, David

Byline: David Ziemer

It violated the attorney-client privilege to admit statements of an attorney that his client had admitted guilt to the charge. Nevertheless, the Seventh Circuit held on Jan. 18 that the error was harmless, where the evidence of guilt was overwhelming. In the 1990s, Edward T. Jung managed a hedge fund called Strategic Income Fund, LLC (SIF), for Hollis Lamon, a securities broker and promoter. Fred Isaf acted as SIF's special counsel. In 2003, Jung was charged in Illinois federal court with eight counts of wire fraud and two counts of securities fraud. During the trial, the government introduced several statements made by Jung's former attorney, James Fox. First, Isaf testified that Fox had told him that "[Jung] had, if I remember the words exactly, engaged in improper and illegal trading." Second, the government introduced a letter from Isaf to SIF's investors stating that "[Jung's] lawyer informed me that [Jung] had engaged in 'improper and illegal trading activity' which he had concealed from Lamon and Stern, all SIF Members, and SIF's accountant." Third, Lamon testified that Fox had told him that "Mr. Jung, unbeknownst to us, had another account. And he had taken, I believe was the word, our money and used it for his own personal benefit and lost it all trading." Finally, Lamon also testified that "Mr. Fox gave us papers that he said were written by Mr. Jung at the time that was, for lack of a better word, Mr. Jung's confession." The jury found Jung guilty on all ten counts, and he was sentenced to 109 months imprisonment, three years of supervised release, a special assessment of $1,000, and $21 million in restitution. Jung appealed, but the Seventh Circuit affirmed in a decision by Judge William J. Bauer. Privilege The court concluded that the statements were distinguishable from those in two other cases in which it had held that statements of a defendant's attorney were admissible pursuant to FRE 801(d)(2)(D), as statements of the defendant's agent. U.S. v. Harris, 914 F.2d 927 (7th Cir. 1990); U.S. v. Sanders, 979 F.2d 87 (7th Cir. 1992). In Harris, the defendant's attorney visited with an eyewitness prior to trial and showed him pictures of Harris' brother in an attempt to develop the theory was that Harris' brother had committed the crime and that he was a victim of mistaken identity. However, after reviewing the pictures, the witness was confident that it was Harris that he saw, rather than his brother. At...