Roles and Powers of Federal Grand Juries—Proactive Investigations
Rule 6 = Federal grand jury sits for 18 months w/ possible 6 month extension. In NY, sit for one day a week for 4 months, subject to recall for 14 months.
18 USC § 3331 = Special grand jury. Can be renewed for up to 3 years. Can issue special reports:
Non-criminal misbehavior involving organized crime by appointed public official as basis for removal.
Organized crime conditions in district.
General Role of Prosecutor
Who to indict for what.
Which Ws to immunize and when.
When to close investigation.
General Characteristics and Operation of Grand Jury
16-23 persons serve.
Standard is probable cause.
Rules of evidence do not apply.
Simply majority required to indict.
Only P, W, court reporter, and interpreter (and sometimes law enforcement agent) can be present. Unauthorized entry will result in dismissal of indictment.
Strict secrecy requirements. Cannot disclose anything except as authorized by Rule 6(e)(2). Main exception is that Ws can talk about their testimony,
United States v. R Enterprises (U.S. 1991, p. 1) GJ subpoenas variety of books and records from 3 corporations of in pornography investigation, only one of which was actually sending obscene material into district.
Nixon standard for reviewing trial subpoenas (relevancy, admissibility, specificity) does not apply to GJ investigation.
Subpoena is relevant to GJ unless there is “no reasonable possibility that info sought will be relevant to general subject matter of investigation.”
Presumption of legitimacy.
BOP unreasonableness is on target.
Rationale = avoid delay + preserve secrecy of proceedings.
Result is that anything and everything goes. Subpoenas virtually unchallengeable. Only way s can fight back is by starting paper war.
Limitations on subpoena power:
Cannot use to prepare W for trial. Exception = After indictment, if subpoena power is used in good faith to add charges or s, then can use subpoenas even if they assist P in preparing for trial.
Cannot use to locate fugitive.
Cannot use in civil proceeding.
Can only investigate in district, but can investigate to determine venue.
Cannot use to harass or intimidate.
Cannot subpoena attorneys relating to representation of clients w/o approval of AG.
Cannot subpoena news/ media personnel w/o approval of AG.
Cannot resubpoena Ws held in contempt.
United States v. Williams (U.S. 1992, p. 7) indicted for false statements on loan application, misrepresenting accounts receivable. P had exculpatory tax returns demonstrating that had in fact reported accounts as income. Held =
Ps have no duty to present substantial exculpatory evidence to GJ.
Rationale = Would give GJ adjudicative role, and that ‘s not their job.
Dissent = Licenses prosecutorial misconduct and subjects potentially innocent s to indictment. Does not come out in wash at trial b/c (1) indictment w/o conviction has serious personal + professional consequences, and (2) 95% of s don’t go to trial.
In re Sealed Case (D.C. Cir. 1998, p. 22) Action to hold Starr in contempt for leaking GJ details to press. News articles were prima facie evidence of leak and violation of Rule 6(e)(2). BOP shifted to Starr to explain actions, DCT said that it should be done through show cause hearing + discovery. SCT says no.
In camera review of government’s ex parte proffer is most appropriate way to conduct proceeding.
Broad discovery would further undermine GJ secrecy.
Cross-x would disclose focus of investigation and identity of press members w/ whom Ws had contact.
Result = Never get to bottom of leaks. Info not confined to investigators b/c Ws can talk about testimony, and can’t subpoena reporters b/c of 1st amendment rights.
DR 7-104(a) = Lawyer shall not communicate on subject of representation w/ party he knows to be represented in that matter unless the attorney is authorized by law to do so.
United States v. Hammad (2d Cir. 1988, p. 34) Fire in store, leads to suspicion of Medicaid fraud. G supplied false receipts to H to assist in fraud. G turns informant. Government orders him to make contact w/ H on two occasions. G presented H w/ sham subpoena, H asks G to lie before GJ. Meetings are recorded and videotaped. DCT orders evidence suppressed b/c government had G—acting as alter ego of P—contact H when everyone knew H had an attorney.
SCT holds for first time that DR 7-104(a) applies to criminal investigations.
Target of investigation is “party” and GJ is “matter” w/in meaning of rule.
But legitimate investigative techniques will be “authorized by law” w/in meaning of rule. So cooperating Ws can still go out and trap targets.
Use of sham subpoena was not legitimate technique.
Suppression of evidence obtained in violation of rule may be ordered in DCTs discretion.
Suppression was abuse of discretion in this case b/c law had been unsettled.
Result = Gives law enforcement incentive to keep Ps out of investigation. And Ps don’t want to risk losing their licenses. Only thing really prohibited is sham subpoenas.
United States v. Ryans (10th Cir. 1990, p. 41) charged w/ conspiracy to violate Sherman Act in moving business. One of suspected co-conspirators agreed to cooperate in exchange for immunity and recorded phone conversations w/ targets, including Ryans. DCT suppressed 2 conversations conducted after Ryans had obtained counsel. 10th Cir. reverses, disagreeing w/ Hammad.
DR 7-104(a) is coextensive w/ 6th amendment. Does not apply b/c commencement of adversary proceedings against target (i.e., indictment)
Text of rule contemplates adversarial relationship—“party” connotes litigant, “matter” connotes litigation.
Grievance Comm. For SDNY v. Simels (2d Cir. 1995, p. 50) Simels represented Davis on drug charges. Government W who was supposed to testify against Davis was shot and badly hurt. Harper was charged w/ attempted murder. Government said that it would be charging Davis w/ attempted murder as well. Simels contacted Harper to see if he had info relevant to Davis’s defense. Q was whether he violated DR 7-104(a). Court finds no ethical violation.
Harper was not “party” w/in meaning of rule. He was a potential witness against Davis, so okay for Simels to interview him.
DR 7-104(a) should not bar defense attorney’s efforts to interview Ws and develop trial strategies.
DR 7-104(a) not about rights, or it would apply to unrepresented parties as well. Just about professional courtesy.
Narrow definition of “party” eviscerates Hammad. Hard to see how target can be party if potential is not.
NY Bar Ass’n changed rule after this decision—instead of “party” it reads “person.”
United States v. McDonnell Douglas Corp. (8th Cir. 1998, p. 71) Problem was conflict b/w state and federal no-contact rules applying to corporate employees. Federal rule was narrow—employee is not “party” unless he is a “controlling employee.” State rule was broad—party is employee w/ managerial responsibility or whose act/omission could be imputed to corporation for liability purposes. Government opposed application of state rule. Court said that state rule applied.
Federal ethical regulations were effort to solve problem of having 50 different ethical codes for federal prosecutors.
Court held that AG was w/o authority to promulgate federal rules.
Ps cannot exempt themselves from the ethical rules that operate in their jurisdiction.
Nonconsensual Electronic Surveillance
Title III of Omnibus Crime Control Act—18 USC § 2510 et. seq.
Main act giving rise to complex federal investigations.
Applies only where both parties are non-consenting. Linda Tripps are excluded.
Talking mainly about wire tapping.
Not talking about clone beepers, pen registers, or video cameras
Getting approval (§ 2516, § 2518)
P must get approval from deputy AG or higher in order to apply for wiretap.
They are turned down. Statute has teeth and reflects degree of intrusiveness.
Application must be to Article III judge, not magistrate.
Must contain full and complete statement of facts that establishes probable cause of one or more offenses enumerated in § 2516.
Must describe type of communication sought to be intercepted.
Must describe facilities (i.e., for wiretaps, the phones tapped, for bugs, the location). Exception = roving wiretap where P knows conversation will occur but doesn’t know exactly where.
Must fulfill last resort requirement. Certify that alternative techniques have been tried and have failed, or that they are likely to fail if tried.
Must set forth time period for interception. Limit is 30 days, no exceptions.
Must not fall w/in “enough is enough” provision. Must tell all other times that agents sought to intercept conversations of persons named and failed.
DCT usually approves application b/c of stringent review w/in executive branch.
If P wants to extend 30 day period, must go through whole application process all over again. Not unusual for time period to lapse b/f bug is placed.
Can get emergency wiretap w/ AG sign-off but w/ retroactive judicial approval where there is immediate danger of death or terrorism or where organized crime is involved.
Implantation and monitoring
First step is to break in and plant bug. Can take months.
Set up monitoring room w/ 2 machines, one of which must make original recordings.
Agents have to keep logs of everything intercepted.
Must minimize recording of non-pertinent or privileged conversations.
Content does not have to be criminal to be pertinent. Can use non-criminal conversation to ID voices.
Privilege is not absolute bar to interception. Can listen to see if topic of conversation changes.
Standard of compliance w/ minimization requirement is objective reasonableness.
Ps have practical price to pay (in credibility to supervisors and judges) for disregard of minimization requirement.
Sealing and inventory notices
After tapes are made, they must be protected from editing and alteration.
W/in 48 hours of 30 day period, tapes must be taken to judge for sealing.
Named interceptees get notice that order was entered, dates of conversations recorded, and whether communications were intercepted.
“Others” (as judge decides) may also get notice of interception. Ps love to take advantage of this. Send notices to everybody, scare the shit out of them, and bring informant forward.
Use in grand jury investigation
Person’s ignorance about what’s been taped has big influence on testimony. Ps lead you to believe that they have something on tape, have to answer Qs or commit perjury.
Ps find people on periphery who won’t be indicted, but who may be potential Ws, and give them use immunity to talk.
Where immunized person won’t rat out of fear of mob, P at least ruins them as defense . s answer “don’t recall, please play tape if you do.” Ps never play tape, and defense can’t call them as W b/c of lack of recollection.
Leon good faith exception to invalid warrant does not apply. No probable cause kills evidence.
Statute has standing requirement. Only “aggrieved person” can bring motion to suppress—named interceptee, someone overheard, someone w/ privacy interest on premises.
People talked about don’t count. Sucks for them.
Membership in conspiracy can be proven by statements themselves.
Things that can give rise to suppression are failures in sealing, probable cause, last resort, signature by proper official.
Confidential informant is different from cooperating W. Informants remain confidential from everyone.
Relationship w/ government begins either as financial transaction or from working off of a case (i.e., convert would-be into source).
Important to government—agents make their reputations through sources.
Important to informant—they get a guardian angel in the government and make big money.
Sorrels v. United States (U.S. 1932, p. 76) was indicted on for selling liquor during Prohibition. Government agent went to his home, accompanied by ’s friends, where he posed as tourist. Asked if he could get him some whiskey. said no. Asked second time, said no. Asked third time, finally went out and came back w/ whiskey. Agent admitted that he was the only one of anyone present who mentioned liquor. plead entrapment.
SCT recognizes defense. Informants can be used to catch criminals, but not to create them.
Concurrence argues for due process defense for “outrageous government conduct.” 2d and 9th Cir. accept this defense, but other circuits don’t.
Even where outrageous government conduct defense is recognized, nothing shocks the conscience of the court. SeeUnited States v. Nolan-Cooper (indictment not set aside where undercover agent became lover of target).
Roviaro v. United States (U.S. 1957, p. 85) Roviaro was indicted for selling heroin to informant. Before trial, he requested name of informant. Government objected on ground that informant’s identity was privileged. Lower court recognized privilege, SCT reversed. Articulated balancing test.
Must balance informant’s interest in protecting identity against ’s right to a fair trial.
Government cannot deprive of entrapment defense. If informant is present when criminal transaction occurs, the government will not be able to withhold his identity.
Result = Agents are really careful to separate informants from the arrest.
United States v. Cuellar (U.S. 1996, p. 93) Cuellar was convicted for possession and distribution of cocaine. Argued that his due process rights were violated based upon government’s paying an informant a percentage of the money seized in undercover operations, and making additional payments contingent on the outcome of trial. In particular, got $580, 000 after trial. SCT says that contingent arrangement is OK.
argument was that the contingency arrangement + magnitude of sum awarded gave informant too great an incentive to fabricate evidence and distort truth.
SCT says that government is not precluded from using informants b/f or during trial just b/c they might have incentive to lie.
Contingent nature of fee arrangement did not constitute outrageous government conduct.
Other Grand Jury Tools—Immunity, Contempt, and Perjury
18 USC § 6002 = If W invokes or is likely to invoke 5th amendment and refuse to testify, court may grant W use immunity and order W to testify. Immunity can only be granted at upon request of US attorney and approval of AG.
Kastigar v. United States (U.S. 1972, p. 119) Petitioners subpoenaed to testify b/c GJ, plead 5th amendment and refused to testify. They were granted use immunity, but wanted transactional immunity. SCT said use immunity sufficient.
Immunity statute is coextensive w/ scope of 5th amendment privilege.
Immunity from use of compelled testimony, as well as from evidence derived directly and indirectly therefrom, affords necessary protection under 5th amendment.
Immunity from prosecution (transactional immunity) would afford broader protection than 5th amendment and is not required.
In subsequent criminal prosecution, P has BOP that evidence proposed to be used is derived from a legitimate source wholly independent of compelled testimony.
28 USC § 1826 = If W refuses to comply w/ order to testify, court may order W confined for period not to exceed life of court proceeding or term of GJ. Max period of confinement is 18 months.
Simkin v. United States (2d Cir. 1983, p. 136) was incarcerated for contempt for refusal to answer Qs about cocaine charges. claimed fear of drug lords who would harm him or his family if he inculpated them. He was held in contempt. Lawyer applied for termination of civil contempt b/c was committed to refusal to testify. Argued that further imprisonment would have no coercive effect and therefore was punitive.
Civil contempt is coercive device imposed to secure compliance w/ order.
When it becomes obvious that sanctions will not compel compliance, they lose remedial nature and become punitive.
Where civil contempt remedy unavailing, criminal contempt sanction is available.
DCT has broad discretion in determining coercive effect of sanction. As long as judge is satisfied that there is reasonable possibility that confinement will have coercive effect, confinement may continue.
DCT need not accept s avowed intention never to testify.
No defense that was ignorant of law and made good faith effort to abide by his understanding of court order.
Perjury = 18 USC § 1621
United States v. Gonzales (N.D. Ill. 1985) was charged w/ committing perjury before GJ. contends that government knew the answers that he was going to give, having heard them several times before, and that the only purpose of eliciting the testimony was to obtain a perjury charge. SCT upheld conviction.
When GJ inquires into maters not w/in its competence, court may find that inquiry was into immaterial matters and thus the responses could not form basis for perjury prosecutions.
No perjury trap where government inquires into material matters, even though government knows answers W is likely to give.
Government may reasonably believe that W will testify truthfully once under oath.
United States v. Catalano (SDNY 1993, p. 134) Catalano was charged w/ perjury b/c GJ investigating organized crime. Several conversations at restaurant had been intercepted, and he had received notice of interception b/c GJ. He argued that government created perjury trap by asking questions to which it already knew the answers.
Perjury trap can constitute outrageous government conduct.
But no such conduct here. knew that P was investigating organized crime and P thought he had specific knowledge about matters that would assist GJ.
Literally true but unresponsive answers
Bronston v. United States (U.S. 1972, p. 129) P referred to wrong year in questioning about foreign bank accounts. W answered question truthfully, saying that he had no foreign bank accounts during year in question. W was aware of P’s mistake in saying wrong year. P prosecuted for W for perjury.
Literally true but unresponsive answer does not amount to perjury.
W commits perjury when he willfully states material matters which he does not believe are true.
Statute does not make it criminal for W to willfully state any material matter that implies something that he does not believe to be true.
W’s intent to mislead examiner is irrelevant.
It is responsibility of P to probe and press W to give right answer.
If W evades questioning, it is P’s responsibility to bring W back to the mark and flush out the truth.
D. Federal Penal Statutes
18 USC § 1962 = It shall be unlawful for anyone who has received any income derived, directly or indirectly, from a pattern of racketeering activity:
To use or invest, directly or indirectly, the proceeds of such income in the acquisition, establishment, or operation of any enterprise engaged in or affecting interstate or foreign commerce.
Keeps organized crime out of legitimate business.
To acquire or maintain, directly or indirectly, any interest in or any control of any enterprise engaged in or affecting interstate or foreign commerce.
Keeps bad guys from working their way into the enterprise.
If employed by or associated with any enterprise engaged in or affecting interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of the enterprise’s affairs through a pattern of racketeering activity.
If the bad guys are already associated w/ enterprise, keeps their dirty work out.
To conspire to do any of the above.
Defining “racketeering activity” = There are 5 categories of crime:
State law felonies = The 8 state law offenses that can constitute racketeering activity are listed below. Attempts and solicitations are included. And double jeopardy doesn’t apply—act that serves basis for state law conviction can still serve as basis for RICO violation.
Murder Arson Extortion
Kidnapping Robbery Narcotics
(2) Acts indictable under Title 18 = 30 Title 18 offenses can constitute racketeering activity. Chief among them are mail fraud, wire fraud, obstruction of justice, violations of Hobbs Act, money laundering, and gambling.
Act must not just involve Title 18 activity, must be indictable under Title 18. Whether an attempt qualifies as racketeering activity depends upon the particular offense.
Double jeopardy may or may not apply. When offense is constituent of racketeering charge (complex offense), and not same offense, government can re-prosecute under RICO.
may be able to prove collateral estoppel—if jury decided fact in ’s favor at prior trial, government cannot try to prove it against him. Availability of this defense will often turn on whether specific verdict was issued.
(3) Acts indictable under 29 USC § 186 (Taft-Hartley Act) = These offense deal w/ restrictions on payments and loans to labor organizations and embezzlement of union funds.
(4) Acts involving securities fraud or drug offenses = Use of “involving” implies that attempts are fair game.
(5) Violations of money laundering provisions
Defining “enterprise” = Includes “any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity.”
United States v. Turkette (U.S. 1981, p. 140) was indicted under RICO for involvement in enterprise which was described as a “group of individuals associated for the purpose of illegally trafficking in narcotics, committing arsons, defrauding insurance companies, bribing police officers, and corruptly influencing state court proceedings.” 1st Cir. held that exclusively criminal organizations did not qualify as “enterprises” under RICO, that RICO was intended only to protect legitimate enterprise from infiltration by racketeers. SCT reversed.
Term “enterprise” encompasses both legitimate and illegitimate enterprises.
Court takes apart language and decides that “any union or group associated in fact though not a legal entity” was meant to cover illegitimate enterprises.
Potential problem w/ this definition of enterprise is that it merges 2 elements of defense—can government just show pattern of racketeering activity and stop at that? SCT says no.
Enterprise = “An entity or group of persons associated together for a common purpose of engaging in a course of conduct.” Provable by evidence of an ongoing organization, formal or informal, and my evidence that the various associates function as a continuing unit.
Pattern of racketeering activity = “A series of criminal acts as defined by the statute.” Provable by evidence of the requisite number of acts or racketeering committed by the participants in the enterprise.
Enables to say, “This is just a conspiracy (a pattern of racketeering), not a RICO enterprise.”
Government required to prove conspiracy + ongoing organization, formal or informal, that functions as a unit.
Effect of decision was to unleash Ps on organized crime.
Decision changed way statute was applied. Ps no longer brought actions under (a) and (b) of statute, but went after criminals themselves under (c).
Defining “pattern of racketeering activity”
Need at least 2 acts of racketeering activity.
At least one act has to occur after effective date of statute (1970).
The last act has to occur w/in 10 years of prior act of racketeering activity.
No limit to how far back you can go as long as you have the above stuff.
Prove acts by: old testimony, detective files, and admission of prior convictions under FRE 803.
H.J. Inc. v. Northwestern Bell Telephone Co. (U.S. 1989, p. 148) Customers of NW brought action against NB and members of MN public utility company. Argued that NW was bribing MN to set higher rates. DCT held that bribery was committed in furtherance of single scheme to fix rates. There was no multiple illegal scheme to satisfy the pattern requirement. SCT says you need only 2 acts that are related + continuous to show pattern, you do not need to show multiple criminal schemes.
Relatedness = Acts must have the same or similar purposes, results, victims, or methods of commission, or otherwise be interrelated by distinguishing characteristics and not be isolated events. Acts always meet this requirement
Continuity = Harder to prove the temporal element.
Closed-ended = Can show continuity over closed period by proving series of related predicates extending over substantial period of time.
Open-ended = Can show continuity over open period by proving showing that predicates establish threat of long-term racketeering activity. Prove by reference to the enterprise.
Predicates themselves involve distinct threat of long-term activity.
Predicates are part of regular way of doing business for ongoing entity.
Predicates are regular means of conducting or participating in ongoing RICO enterprise.
Salinas v. United States (U.S. 1997, p. 155) Salinas was deputy who supervised jail. Supervisor took bribes from inmate in exchange for contact visits w/ his girlfriend. When supervisor wasn’t personally around, Salinas arranged the visits. He received watch + pickup truck for doing it. He was convicted of conspiracy to violate RICO. Salinas argued that there could be no conspiracy offense unless he himself committed or agreed to commit the 2 predicate acts required for the substantive RICO offense.
Conspiracy to violate RICO does not require that agree to commit 2 predicate acts.
Conspiracy may exist even if conspirator does not agree to commit or facilitate every part of substantive offense.
Sufficient that conspirator adopt goal of furthering the criminal endeavor which, when completed will satisfy all the elements of the substantive RICO offense.
18 USC § 1341
Forms basis for most civil RICO prosecutions.
Old version of statute had more stringent requirements and punishments varied according to degree of harm to postal service. No more.
No need for scheme to be dependent on mailing. Use of mail does not need to be part of original scheme.
Punishment no longer proportionate to damage to postal service.
Each mailing constitutes separate court even if only single fraudulent scheme.
“Scheme to defraud” language is broader than common law fraud—false promises (future fraud) are included.
18 USC § 1346 = Embellished the statute a bit.
McNally decision required that obtain money or property in order for mail fraud statute to apply.
Congress reacted w/ § 1346 to remove requirement.
Schemes to deprive others of their “intangible right to honest services” are included.
Use of mail “for purposes of executing fraud”
Kann, Parr, Maze = Early cases explained required nexus b/w the mailing and fraud in one of 2 ways:
Focus on when victim loses money—does it come b/f or after the mailing?
Focus on when perpetrator gets proceeds of fraud—does he have $$ at time of mailing?
Schmuck v. United States (U.S., 1989, p. 160) does some odometer tampering, which is misdemeanor. fixes miles on used cars to inflate value, sells them to dealers, dealers sell car to person on street, and dealer mails title application to state. already has money in pocket from dealer when applications are mailed. But Ps throw in mail fraud. Really sucks b/c each count can carry 5 year sentence and they’ll run consecutively. says that mailings were not in furtherance of fraudulent scheme. SCT disagrees.
Mails need not be essential element of scheme, suffices that the are incident to essential part of scheme.
Ultimate sale of fixed cars to customers would not be complete w/o mailing of title.
Failure of passing title would have jeopardized Schmuck’s relationship of good will w/ dealers whose unknowing cooperation was essential to scheme.
Irrelevant that mailing was innocent.
Irrelevant that mailing was routine
Relevant Q is whether mailing is part of execution of scheme as conceived by perpetrator at time, regardless of whether mailing later, through hindsight, may return to haunt him.
18 USC § 1951 = Prohibits person from delaying, obstructing, or otherwise affecting commerce through actual or threatened robbery, extortion, or physical violence.
Extortion “under color of official right” = § 1951 (b)(2) = There are 3 general categories of behavior by local officials, two of which are criminal, and it’s often hard to draw the line.
Outright bribery—police officer takes bribe to lock somebody up.
Public officials take lots of money w/ implicit promise to do something in return.
Politicians take campaign contributions from people w/ same agenda, and implicitly promise to further that agenda while in office.
People who do #1 or #2 get sentenced under bribery statute.
Evans v. United States (1992, p. 171) Undercover agent sought ’s assistance to rezone property for residential use. Agent gave $7,000 cash and $1,000 check payable to ’s campaign. reported check but not cash on state campaign-financing disclosure form. Also did not report cash on tax returns. 2d and 9th Cir. had ruled that people in middle category could not be prosecuted criminally unless there was affirmative inducement by of payment. SCT said no.
Affirmative act of inducement by public official is not required element of extortion “under color of official right” under Hobbs Act
Affirmative inducement only required in case of private individual