Everett Criminal Law Symposium

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Practical and ethical considerations specific to white collar crime were the subject of an afternoon symposium at Duke Law School on October 22. The symposium, which brought together practitioners and jurists from across the Carolinas, was organized by Walter T. Cox III, in honor of longtime Duke Law faculty member Robinson O. Everett; the two currently co-teach a seminar in “Advanced Issues in Criminal Justice” at the Law School. The symposium was sponsored by Judge Cox’s law firm, Nelson Mullins Riley & Scarborough.

The incidence and prosecution of federal white collar crime have gone up exponentially in recent years, noted Carl Horn III, U.S. Magistrate Judge for the Western District of North Carolina and the afternoon’s first presenter. He attributed this to such factors as an increased “federalization” of criminal law, with new laws being adopted in such areas as health care law, identity theft and cybercrime, increased commitment of resources to investigation and prosecution, and the adoption of federal sentencing guidelines. A reduced standard of intent has also had an effect, he noted; criminal culpability can attach if a defendant “knew or should have known” of or was “willfully blind” to wrongdoing.

“The object of this constructive knowledge or willful blindness, which perhaps was subject of civil regulatory attention 20 years ago, is now felony misconduct being afforded priority federal attention and backed by severe penalties–heavy fines, and where individuals are charged, by mandatory, and often lengthy, terms of imprisonment,” said Judge Horn.

Peter Anderson, a Charlotte attorney and former federal prosecutor, observed that clients who find themselves under investigation often are taken by surprise by changes in the law.

“[The client’s] first reaction is ‘just make this go away,’ or ‘this must be some kind of mistake,’ ‘but I’m not a bad person–why am I being investigated criminally.’ Those reactions are very significant when you look at the traditional evolution of where we’ve come from–a traditional notion of crime and criminal prosecution.”

Anderson emphasized the importance for lawyers to proactively help clients stay out of trouble; proactive regulatory compliance plans demonstrate good corporate citizenship and can influence a prosecutor to avoid charges or convince a jury to acquit.

Michael Bryan, a corporate attorney in Charleston, SC, also endorsed demonstrations of proactive compliance when a client comes under investigation, in such areas as document management.

“Destruction of documents will kill a client’s credibility with investigators and prosecutors. Every client should have a records management and document maintenance policy in place [proactively],” he said. “It goes a long way towards showing that there was no intent to destroy documents or avoid disclosure.” He also explored ethical considerations for in-house and outside counsel who may become aware of wrongdoing within a corporation.

Josh Howard, a federal prosecutor for the Western District of North Carolina, advised practitioners to establish at the outset whether the client is being investigated as a witness, subject, or target of the investigation. While witness status does not imply criminal exposure, a subject is a “person of interest” within the investigation. If a client is identified as a target there is very likely an indictment pending.

In order to influence prosecutorial discretion regarding charges and pre-sentence reports, candor is key, and Howard advised defense attorneys to properly prepare their clients to talk about their own wrongdoing, not just those of others. He also advised offering prosecutors help understanding the transactions involved through organized production of documents, and discussed plea bargains and “downward departure motions” that can reduce sentences. His co-panelist, Judge Malcolm J. Howard, of the United States District Court for the Eastern District of North Carolina, added that filing a concise and clear trial brief with the judge overseeing a white collar case is also helpful.

The symposium closed with a presentation by two former defendants. Richard Tomlinson emphasized the importance of understanding a client’s status early on in the investigation, and getting assurances of immunity before allowing the client to make disclosures that could later lead to prosecution. “Civil inquiries can escalate to criminal investigations,” he observed, commenting that he had relied on the advice of his corporate lawyer in early meetings with prosecutors, not appreciating the difference between civil and criminal practice.

Jim Toms ’68, who was disbarred and served time in federal prison for acts performed as a lawyer, said there may be times when lawyers need outside help in dealing with their clients.

“If you are representing white collar clients, recognize that the psychological effect of the client’s loss of perceived status could be disastrous. You might need to bring in other people to help them do what needs to be done–friends, social workers, psychologists, or members of the clergy.” He also deemed it helpful for counsel to understand the situation clients might face in prison; they can, for instance, obtain reduced sentences if they are enrolled in substance abuse programs, substance abuse being a common factor in white collar crime.

A webcast of the Robinson O. Everett Symposium on White Collar Crime: Ethical and Practical Considerations for the Civil or Criminal Practitioner is available in the archives on our webcast page.