WHITE COLLAR CRIME COMMITTEE NEWSLETTER

FALL 2014

ABA CRIMINAL JUSTICE SECTION WCC Committee

MESSAGE FROM THE EDITOR Welcome to the Fall 2014 Edition of the White Collar Crime Committee Newsletter.

The White Collar Crime Committee Newsletter showcases content and opinion of leading experts, scholars, and practitioners through articles written by our Criminal Justice Section members. The White Collar Crime Committee seeks your participation in its 20 regional committees and 20 substantive committees; and encourages your attendance at its national and international

conferences, CLE, and workshops.

For its third straight year, the Criminal Justice Section’s International White Collar Crime Institute will host a one and a half day conference in London in October 13-14 that will feature topflight legal practitioners from across the globe tackling such topics as corporate espionage and cybercrimes, international money laundering and sanctions, cross-border evidentiary concerns, whistleblowers, deferred prosecution agreements and international internal investigations. Special focus will be paid to fraud and bribery cases from the perspective of top prosecutors

from various countries.

Closer to home, the White Collar Crime Committee will hold a WCC Town Hall meeting at the Annual CJS Fall Institute in Washington D.C.. This year, on October 23, 2014 at 2PM EST the Committee will host a complimentary CLE panel discussing the ethical obligations of government, in-house and outside counsel in conducting internal investigations and parallel prosecutions, including multiple representation, confidentiality, maintaining and challenging privilege, the duty to disclose or withdraw, and the evolving law relating to lawyers as relators.

The White Collar Crime Committee encourages you to participate year round, and also looks forward to reading your submissions for our upcoming Spring 2015 issue. If you would like to submit an article for our next edition or have ideas on a subject for a topical Newsletter, please contact the WCCC Newsletter Subcommitte Chair, Salma S. Safiedine at S.Safiedine@SPartnersLaw.com.

FEATURED ARTICLES

The Importance of Protecting the Privilege in Internal Investigations

By Stephanie Fleischman Cherny, Lee Stein, and Andrew Breavington

In late June, the District of Columbia Court of Appeals overturned a ruling from earlier this year that had been viewed as eroding the attorney-client privilege in internal investigations. In re Kellogg Brown & Root, No. 14-5055 (D.C. Cir. June 27, 2014) reconfirmed the protection of confidential employee communications made during a company’s attorney-directed internal investigation that was mandated in a case familiar to all of us who conduct these investigations – Upjohn Co. v. United States, 449 U.S. 383 (1981). More specifically, the Court of Appeals found that the ruling in United States ex rel. Barko v. Halliburton Co., No. 05-cv-1276 (D.D.C. Mar. 6, 2014) constituted legal error that justified a writ of mandamus to prevent production of privileged materials in the underlying false claims act case. READ MORE

DOJ “Willfully” Corrects Its Stance on False Statement Prosecutions: Change Could Have Major Impact on Future White Collar Investigations

and Prosecutions

By Joel M. Athey, Vince Farhat, Nicholas B. Melzer, and Kelly J. Cass The U.S. Department of Justice (DOJ) recently adopted a more defense-friendly position on criminal prosecutions under a commonly used federal charging statute, False Statement to Government Agency, 18 U.S.C. §1001 (“Section 1001”). To be convicted under Section 1001, a person must act “willfully” in making false statements to federal investigators. Courts are divided over whether Section 1001’s “willfulness” element requires proof that the defendant knew his or her conduct was unlawful. However, in recent court filings, DOJ has quietly clarified that in order to prove a defendant acted willfully, federal prosecutors must show beyond a reasonable doubt that the defendant knew his or her statement was unlawful - not just that the statement was false. This is a material change in the government’s position that could have a significant impact on future white collar investigations and prosecutions. READ MORE

Oral Modifications Notwithstanding a No Oral Modification Clause:

Preserving the Right to Contract or Enabling Havoc?

By Salma S. Safiedine, Mary Clarke, and Amanda Galbo A contract can be defined as a promise or set of promises for the specific performance of an agreement, for which the law gives a remedy if not abided by. A contract is comprised of three components: offer, acceptance, and consideration. A contract is also comprised of clauses, whether written or implied, to aid the contracting parties’ comprehension and interpretation of the acts to be performed by either side. This article will discuss the impact of an oral modification clause on a contractual party’s attempt to change obligation; and the impact of the clause, or lack thereof, on facilitating criminal behavior. READ MORE

Nuisance or Nightmare? — Responding to Highly Public Allegations

By Kristin Rivera

It’s Tuesday, 9 a.m. — seven days before the filing deadline for an SEC registrant’s annual financial statements. The company’s CFO has just been notified that a prominent hedge fund manager with a significant short position in the company has posted a document online detailing a variety of allegations against the company, including accounting fraud, improper disclosures, and questions about the CEO’s integrity. The CFO immediately convenes other members of senior management, including the general counsel. There is a heated debate about what to do next. Some argue that they should issue a press release categorically stating that the allegations are false. Others suggest that they consult with the audit committee or outside counsel first. The CFO wonders if she should notify their auditors. What should the company’s response be? What are their governance obligations with respect to these allegations? READ MORE

CJS UPCOMING EVENTS

MARK YOUR CALENDARS FOR THE NEXT YEAR’S WCC NATIONAL INSTITUTE:

The 29

th National Institute on White Collar Crime: March 4-6, 2015, New Orleans, LA

CJS Southeastern White Collar Crime Institute: Sept. 11-12, Atlanta, GA

Bitcoin and Other Virtual Currencies: Emerging Issues in Regulation and Enforcement: Sept. 24, webinar

International Regulation and Compliance, Oct. 1-3, Washington, DC (formerly known as the Foreign Corrupt Practices Act National Institute)

International White Collar Crime Institute: Oct. 13-14, London, UK

CJS Fall Institute, Council and Committee Meetings: October 23-25, Washington, DC

ABA/ABA Money Laundering Conference, Nov. 9-11, National Harbor, MD

Securities Fraud, Nov. 13-14, New Orleans, LA

Criminal Tax Fraud and Tax Controversy, Dec. 10-12, Las Vegas, NV

Visit The Criminal Justice Section’s Complete Calendar.

RECENT CJS PUBLICATIONS Immigration Relief: Legal Assistance for Noncitizen Crime Victims, by Elizabeth Anne Campbell, Rachel DeLia Settlage, and Veronica Thronson, is an essential resource that synthesizes, explains, and guides the reader through all of the crucial components of this area of the law. Its careful organization, thorough explanations, and clear presentation demystify the daunting array of immigration statutes, cases, regulations, practice manuals, and policy memoranda that govern the adjudication of applications for immigration relief for immigrant victims of crime.

Criminal Procedure in Practice, Fourth Edition, by Jack B Zimmermann, Melanie Wilson and Paul Marcus, provides practical guidance for attorneys during each stage of a criminal case from the police investigation immediately following the crime to post-conviction reviews.

ABA Standards for Prosecutorial Investigations is one of a multi-volume set of publications containing American Bar Association Standards on Criminal Justice on a wide range of topics. The "black letter" Standards contained and discussed in this publication relate to prosecutorial investigations involving organized crime, political corruption, corporate and financial fraud, money laundering, environmental and other regulatory crimes, and terrorism.

As one of the cornerstones of the Criminal Justice Section's work, The State of Criminal Justice 2014 serves as an invaluable resource for policy-makers, academics, and students of the criminal justice system alike. Authors weigh in on a range of hot topics in criminal justice including white collar crime, juvenile justice, sentencing, cybercrime and international law. This annual publication examines and reports on the major issues, trends and significant changes in the criminal justice system. The 2014 volume contains 21 chapters focusing on specific aspects of the criminal justice field, with summaries of all of the adopted official ABA policies passed in 2013-2014 that address criminal justice issues.

See more CJS books.

VISIT THE WHITE COLLAR CRIME COMMITTEE WEBSITE FOR UPDATES AND RECENT NEWS

WCCC CO-CHAIRS: PHILIP H. HILDER, DAVID M. ZINN

White Collar Crime Committee Newsletter

Editor: Salma S. Safiedine Managing Editor: Kyo Suh

The WCCC Newsletter is published two times a year. Articles reflect the views of the individuals that prepared them and do not necessarily represent the position of the American Bar Association, the Criminal Justice Section, or the editors of the newsletter.

Copyright 2014, American Bar Association.

The American Bar Association Criminal Justice Section

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Email: crimjustice@americanbar.org Web: www.americanbar.org/crimjust