1. Criminal law for the civil lawyer Houston Bar Association Summer 2015

2. Major Topics Frequently charged/threatened crimes Preserving the attorney-client privilege in corporate investigations Parallel Proceedings Representing the subject of a search warrant The “phone call in the middle of the night”

3. Texas Disciplinary Rule of Professional Conduct 1.01. Competent and Diligent Representation (a) A lawyer shall not accept or continue employment in a legal matter which the lawyer knows or should know is beyond the lawyer’s competence, unless: (1) another lawyer who is competent to handle the matter is, with the prior informed consent of the client, associated in the matter; or (2) the advice or assistance of the lawyer is reasonably required in an emergency and the lawyer limits the advice and assistance to that which is reasonably necessary in the circumstances.

4. State Crimes Theft* Forgery* Misapplication of fiduciary property* Tampering with a government record* Securing execution of documents by deception Breach of computer security Witness Tampering Perjury Tampering with evidence Securities fraud

5. Federal Crimes False Statements Mail Fraud Bankruptcy fraud Wire fraud Obstruction of justice Theft of trade secrets Tax evasion Money Laundering

6. Hypo # 1

7. Hypo # 2

8. Hypo # 3

9. Summary Criminal statutes are spread across state and federal codes Criminal statutes tend to be broad Prosecutorial discretion is critical

10. Attorney-Client Privilege in Corporate Investigations

11. Upjohn v. United States Introducing all participants in the interview to the employee; Explaining to the employee what role each participant is playing in interview (e.g., lawyers, either in-house or outside counsel, representing company, investigators hired by the lawyers, etc.); Explaining to the employee that the in-house or outside counsel represent the company, and not the individual employee; Explaining to the employee that the interview is being conducted under the “umbrella” of attorney–client privilege; Confirming that the employee understands what “privilege” means: confidential communication made in the course and scope of an attorney’s work in providing legal advice to his or her client — that is, the company; Explaining to the employee that the privilege belongs to the company, not to the employee;

12. Upjohn v. U.S. Cont. Explaining to the employee that the company considers the interview to be privileged and confidential, and that the employee should not disclose to anyone else the contents of the interview; Explaining to the employee that because the privilege surrounding the interview belongs to the company, the company has the right to determine at some point in the future that it will waive or give up that privilege, and the company has the sole right to do that if it chooses; Explaining to the employee that from time to time companies do waive privilege on communications with employees and allow government agencies to have access to the contents of the communications; Explaining to the employee that such waivers of privilege are not done lightly, but that it is important for the employee to understand that the privilege belongs to the company and that the company can waive it; and Asking the employee if he or she has any questions about these issues.

13. DOJ’s Waiver Policy Thompson Memo McNulty Memo

14. 2008 Filip Guidelines Credit for cooperation will not depend on whether a corporation has waived attorney-client privilege or work-product protection, or produced materials protected by attorney-client or work- product protections. Rather, it will depend on the disclosure of facts. Prosecutors are prohibited from requesting that companies disclose non-factual attorney-client privileged communications or attorney work product, such as legal advice, except in the limited circumstances when either (a) a company is asserting an advice-of-counsel defense against criminal charges or (b) the communications between the company and its attorneys were made in furtherance of a crime or fraud. Prosecutors cannot consider whether a company has advanced attorneys’ fees to its employees, officers, or directors when evaluating cooperativeness. A company’s payment or advancement of attorneys’ fees to its employees will be relevant only in the rare situation where it, combined with other circumstances, would rise to the level of criminal obstruction of justice. Prosecutors may not consider whether a company has entered into a joint defense agreement in evaluating whether to give the company credit for cooperating. Prosecutors may not consider whether a company disciplined or terminated employees for the purpose of evaluating cooperation. Prosecutors may only consider whether a company has disciplined employees that the company identifies as culpable, and only for the purpose of evaluating the company’s remedial measures or compliance program.

15. Summary Investigate your cases Give the Upjohn warnings Enter into joint defense agreements

16. What is a parallel proceeding?

17. Obtain a stay

18. Factors courts consider What is the status of the criminal proceedings, and has the defendant or a key witness been indicted? To what degree do the facts and issues in the criminal and civil cases overlap? Is the civil litigation being taken in bad faith, such as to be used to advance a criminal case? Will the stay in fact preserve a defendant’s right against self-incrimination and resolve the conflict between actively defending the civil case and invoking the constitutional right? Will the civil discovery expose the party’s theory with respect to the matters at issue to the prosecution in advance of trial, or otherwise prejudice the defense of the criminal case?

19. Factors Cont. do the two proceedings present a conflict in which an effective defense of both the civil case and criminal proceeding is impossible? Will the invocation of the Fifth Amendment result in dismissal of a cause of action by a party who makes the invocation? If a stay is granted, for how long will it need to last, and how will the length of a stay affect the court’s docket and the litigants? When will the statute of limitations run on a potential criminal prosecution that the witness fears? If it is the plaintiff seeking a stay, is the plaintiff trying to use the invocation of self- incrimination privilege to seek a litigation advantage? Should the civil case be stayed in its entirety, or can some discovery be conducted even though the court might defer a trial pending the outcome of criminal proceedings?

20. The Fifth Amendment

21. Adverse Inferences First, the negative inference applies only to situations in which parties refuse to testify “in response to probative evidence offered against them.” Second, any “negative inference” from that witness’s refusal to testify must be “reasonable.” Third, whether the invocation of the Fifth Amendment by a non-party (for example, a non-party witness) can result in a “negative inference” against a party (for example, the non- party witness’s employer) is subject to review on a case-by- case basis. Fourth, the witness’s invocation of the Fifth Amendment can be subject to withdrawal before the case’s conclusion at trial or summary judgment.

22. Collateral Estoppel When an “issue … was litigated and critical to the prior criminal conviction, [the convicted party] ‘is estopped from attacking the judgment or any issue necessarily decided by the guilty verdict.’”

23. Summary Obtain a stay When in doubt, take 5 An adverse finding in a criminal case will preclude re-litigation

24. Responding to Search Warrants

25. Preliminary Steps Obtain and review the search warrant and request a copy of the search-warrant affidavit. Advise the corporate representative on the scene not to engage in any substantive conversations with the agents and to tell them simply that counsel is on his way. Identify the agents on site and contact the agent in charge or the prosecutor to inform both of them that counsel represents the corporation. If counsel becomes aware of the search before the start of the work day, have a client representative contact non- essential personnel and inform them not to come to work.

26. Preliminary Steps Cont. If law enforcement arrives during the work day, communicate basic information to employees, including: (1) the agents are on the premises to conduct a search; (2) the corporation does not know whether any of the employees are targets of the search or an ongoing investigation; (3) employees should not engage in any obstructive conduct or alter, delete, or remove any records, equipment, or electronically stored information (ESI) on site; (4) agents may try to interview employees, but the employees are not required to speak to the agents; and (5) employees should not create or sign any documents on behalf of the corporation without first conferring with their appropriate supervisor. After this information has been communicated, send non-essential employees home. Designate note-takers and begin conducting an internal accounting of the items seized

27. Avoid Common Missteps Employees of the corporation should not engage in obstructive conduct. Employees should not supply the government with any additional legal authority to search the facility by either signing a consent to search form or verbally consenting to a search of the facility. Employees on site should take reasonable measures to identify and safeguard privileged documents, including potentially privileged documents, and documents containing confidential or proprietary information.

28. Employee Interview Where did the agents commence the search? How did the search progress? What locations of the facility were searched? Did the agents appeared particularly interested in a specific item of property?

29. Final Steps Obtain a copy of the receipt of the seized property Request a copy of the inventory

30. Summary Take care of the employees by sending them home and informing them that they have no obligation to speak with law enforcement and that the company will pay for legal counsel Keep track of what is taken Inform corporate rep not to consent to search

31. When your phone rings in the middle of the night

32. How an arrest occurs

33. Posting Bond

34. Summary Advise client to invoke his right to remain silent and his right to counsel in response to questioning Advise the client not to discuss the facts with anyone, including family, while he is in custody Tell family to call Blackwood Bail Bonds ((713) 222-2245), or another reputable bonding company.

35. F. Andino Reynal 917 Franklin, Sixth Floor Houston, TX 77002 (832) 427-2711 andino@reynal-law.com www.reynal-law.com