You’re one anxious big fish. You were the manager of two colossal New York hedge funds, both of which recently and dramatically collapsed, wiping out the assets of thousands of faithful investors. You’re a social pariah, and your stricken wife and kids have moved in with your in-laws. Anybody who recognizes you from the unflattering images plastered on the front pages of the “New York Times” and “Daily News,” including your uppity 5th Avenue doorman, greet you with a sneer.
Far worse is the fact that hordes of young, hungry investigators from the office of Manhattan’s U.S. Attorney are convinced you deliberately misled investors about your funds’ health. They’re loudly alleging you conjured up fraudulent values for the funds’ risky sub-prime securities, and, smelling blood, they’re sifting through myriad records of everything you ever did, said, e-mailed, or twittered. Your bullish public comments, they shrilly declare, cloaked your bearish villainy.
The government is always looking to catch world-class crooks.
Alone, friendless, and desperate, your mind reels as you think of all the former Wall Street lions rotting on a cot in some cell in federal prison serving 7 to 150. It’s like a “Who’s Who” of corporate titans. Ponzi-scheme genius, Bernie Madoff. Publishing tycoon, Conrad Black. Aldelphia Communications founder, John Rigas. WorldCom CEO, Bernie Ebbers. Tyco’s Dennis Kozlowski. Enron CEO, Jeffrey Skilling. You may become another poster boy for American corporate greed and corruption.
Where’s the out?
The out is a first-class criminal defense attorney.
What Is It?
A white-collar lawyer advises clients about available strategies and options when they’re facing intense scrutiny by a government agency. The most popular white-collar crimes include corporate fraud, tax evasion, money laundering, and individual corruption.
Any short list of high-end white-collar defense attorneys should be composed of former government prosecutors. That is, lawyers who’ve “flipped,” as they say in the under-worldly language of criminal law. It’s these highly skilled attorneys who understand the prosecutorial mindset, and can anticipate the cunning strategies they’ll employ against you.
As much as you might resent these well-dressed law enforcement officials, with their farrago of lies and defamations, you nevertheless want a defense attorney who has a friendly relationship with them. Government prosecutors and agents automatically give more credibility to defense attorneys who’ve forged their legal skills as prosecutorial attack dogs.
Who Needs One?
Big fish.
The government is always looking to catch world-class crooks. Agents and prosecutors always enjoy making a media splash, both to have a profound impact on deterrence, and their careers. This means white-collar crime involving government corruption and big-money corporate fraud are currently at the top of the list.
Benefits
As with all legal issues, the earlier an attorney is brought into the investigation, the better. It’s extremely difficult to fix errors made by the clients through disclosures and interviews with the government agents. The first questions a top-tier white-collar defense attorney will ask is, “What did you say to government investigators?” and “Who else knows about your problem?” It’s critical for your counsel to understand the scope of your problems, and what the universe of your knowledge is. If twenty people know what you’ve been up to, your options are different than if your Golden Retriever is the only one with any knowledge.
An effective white-collar defense attorney will want to know all the facts. It’s impossible to form a defense strategy without fully knowing the obstacles, hurdles, and pitfalls that may be encountered in an investigation or criminal trial. So you’ve made a few errors in judgment. We all do. Any white-collar defense attorney worth his staggering fees will tell you all cases have negative facts. If there were no negative facts, there would be no case. Address them up front or they may come to haunt you. Understanding all the unadulterated facts enables your lawyer to tell a coherent and compelling story in court.
Conversely, often the government does not know all of the facts. Agents and prosecutors put together a story that makes sense to them, but might strike you as creative writing. Bruce Cutler, successfully defending John Gotti Sr. for the second straight time, once dramatically waved the government’s indictment in front of a spellbound jury as if it were a turd, mocking, “This is nothing but a screenplay!”
There will always be facts that undermine the prosecutors’ theory.
Notable white-collar defense attorneys will also stress no conviction is inevitable. Powerful, maniacally driven CEO’s might crash and burn, but how that plays out in court is often unpredictable. Take HealthSouth CEO Richard Scrushy. He walked in 2005 after being found not guilty of all 36 charges against him in a $2.7-billion accounting fraud case – despite the sworn testimony against him by his five chief financial officers.
A case like Scrushy’s highlights an adept, if simple, defense strategy: blame it all on your employees. A defendant can claim if his own corporate in-house accountants and lawyers raised no flags of improper transactions, then how could he, as CEO, possibly know? As Conrad Black quipped in his Chicago trial, the failure of his employees’ to raise questions was “not a flattering reflection on their thoroughness.” Unfortunately for Black, the prosecutor arguing the fraud, money-laundering, and racketeering case was Patrick Fitzgerald. Fitzgerald’s U.S. Attorney’s office boasts the highest conviction rate in the nation.
Risks
Since prosecutors often spend years gathering evidence, interviewing witnesses, reviewing documents, and questioning people before a grand jury before requesting an indictment, you can count on the fact that they think they’ll win the case. If they didn’t, they wouldn’t risk squandering their talent and resources.
Consequently, the biggest risk is editing your story for your defense attorney, and short-changing him in providing every conceivable form of documentation, including financial documents, internal memoranda, voicemails, e-mails, and telephone or cell phone records.
You want to be the first to inform your defense attorney of all the cold, hard facts. If the government prosecutor is the first to reliably inform your legal counsel, the potential negative consequences could be devastating.
The information in the article is not intended to substitute for the legal expertise and advice of your attorney. We encourage you to discuss any decisions about litigation with an appropriate legal expert.
For more information, or to find a legal expert in your area, click on the links below.
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