Second Circuit Affirms Bourke’s Conviction
Earlier today the Second Circuit Court of Appeals issued a decision (here) affirming Frederic Bourke’s 2009 conviction of conspiring to violate the FCPA and the Travel Act and of making false statements.
The Bourke appeal was principally based on knowledge issues which present narrow, factually unique issues. Nevertheless the Second Circuit’s holding on conscious avoidance is noteworthy in terms of FCPA jurisprudence. Essentially the court held that Bourke enabled himself to participate in a bribery scheme without acquiring actual knowledge of the specific conduct at issue and that such conscious avoidance, even if supported primarily by circumstantial evidence, is sufficient to warrant an FCPA-related charges. The message to international investors should be clear, if a potential investment results in sleepless nights and fear of asking specific direct questions because of the answers you might receive, there is probably better uses for your money.
Brian Whisler (an FCPA practitioner at Baker & McKenzie – see here) who has been following the case offered the following. “Despite the considerable speculation surrounding this case, today’s Second Circuit opinion affirming Mr. Bourke’s conviction came with little surprise, as the standard on review is so heavily weighted in favor of the government when defendants challenge the sufficiency of the evidence underlying their convictions. The Court found that a rational juror could infer from the totality of the evidence that Mr. Bourke deliberately avoided confirming his suspicious aroused by multiple red flags signaling corruption and that the same evidence could establish his knowledge about the crime. Given DOJ’s aggressive pursuit of individual executives, this precedent is instructive, particularly for purposes of defining willful blindness.”
Before turning to the Second Circuit’s decision, a bit of background. The Bourke case is arguably the most complex and convoluted case in the history of the FCPA and focuses on the conduct of Bourke and others – including most notably Viktor Kozeny (who is enjoying life in the Bahamas) – in a bribery scheme connected to the privatization of the Azerbaijan state-owned oil company, SOCAR. The case largely focused on the FCPA’s knowledge element and whether Bourke, as an investor, had sufficient knowledge of the bribery scheme.
As noted in this previous post when Bourke was sentenced to 366 days in November 2009, the case involved a nearly decade long investigation that spanned the globe, dismissal of FCPA substantive charges on statute of limitations grounds, reinstatement of the FCPA substantive charges, a superseding indictment which then dropped the FCPA substantive charges and a six week jury trial. For additional background on the case, see this superb piece by Andrew Longstreth that appeared in the American Lawyer.
Bespeaking the complex nature of the case, in November 2009 when Judge Shira Scheindin (S.D.N.Y.) sentenced Bourke she stated as follows. “After years of supervising this case, it’s still not entirely clear to me whether Mr. Bourke is a victim or a crook or a little bit of both.”
A previous post (here) outlined Bourke’s appeal.
The Second Circuit’s opinion begins as follows. “On appeal, Bourke vigorously attacks his conviction on several fronts, including the (1) correctness of the jury instructions given, (2) the propriety of certain evidentiary rulings made by the district court, and (3) the sufficiency of the evidence supporting the false statements conviction. For the reasons given below, we affirm.”
After a detailed discussion of the facts, the Court focused on the jury instructions and stated as follows. “Bourke challenges the jury instructions on four primary grounds. First, he argues the district court erred in refusing to instruct the jury that it needed to agree unanimously on a single overt act committed in furtherance of the conspiracy. Second, he argues the district court improperly charged the jury on conscious avoidance because (1) there was no factual basis for such a charge; and (2) the government waived its reliance on the conscious avoidance theory. Third, he argues the district court erred by failing to instruct the jury that the government needed to prove Bourke acted “corruptly” and “willfully” to sustain a conviction on FCPA conspiracy. Finally, he argues the district court erred in failing to give the jury Bourke’s proposed good-faith instruction.”
As to overt acts, the Court held that “the jury need not agree on a single overt act to sustain a conspiracy conviction.” The court stated as follows. “We conclude, therefore, that although proof of at least one overt act is necessary to prove an element of the crime, which overt act among multiple such acts supports proof of a conspiracy conviction is a brute fact and not itself element of the crime. The jury need not reach unanimous agreement on which particular overt act was committed in furtherance of the conspiracy.”
As to conscious avoidance, the Court disagreed with Bourke’s argument that a conscious avoidance charge lacked a factual predicate and stated as follows. “While the government’s primary theory at trial was that he had actual knowledge of the bribery scheme, there is ample evidence to support a conviction based on the alternate theory of conscious avoidance. The testimony at trial demonstrated that Bourke was aware of how pervasive corruption was in Azerbaijan generally. Bourke knew of Kozeny’s reputation as the “Pirate of Prague.” Bourke created the American advisory companies to shield himself and other American investors from potential liability from payments made in violation of FCPA, and joined the boards of the American companies instead of joining the Oily Rock board. In so doing, Bourke enabled himself to participate in the investment without acquiring actual knowledge of Oily Rock’s undertakings. The strongest evidence demonstrating that Bourke willfully avoided learning whether corrupt payments were made came from tape recordings of a May 18, 1999 phone conference with Bourke, fellow investor Friedman and their attorneys, during which Bourke voiced concerns about whether Kozeny and company were paying bribes. […] Finally, Bourke’s attorney testified that he advised Bourke that if Bourke thought there might be bribes paid, Bourke could not just look the other way. Taken together, a rational juror could conclude that Bourke deliberately avoided confirming his suspicions that Kozeny and his cohorts may be paying bribes.”
The Court further stated as follows. “It is not uncommon for a finding of conscious avoidance to be supported primarily by circumstantial evidence. Indeed, the very nature of conscious avoidance makes it unlikely that the record will contain directly incriminating statements. Just as it is rare to find direct record evidence of an employer stating, “I am not going to give you a raise because you are a woman,” it is highly unlikely a defendant will provide direct record evidence of conscious avoidance by saying, “Stop! I think you are about to discuss a crime and I want to be able to deny I know anything about it!” Here, the evidence adduced by the government at trial suffices to support the giving of a conscience avoidance charge.”
The Court specifically rejected Bourke’s argument that the conscious avoidance charge improperly allowed the jury to convict him based on negligence, rather than based on evidence that he avoided learning the truth. The Court stated as follows. “[T]he record contains ample evidence that Bourke had serious concerns about the legality of Kozeny’s business practices and worked to avoid learning exactly what Kozeny was doing.” Moreover, the Court stated that the “district court specifically charged the jury not to convict based on negligence [and] there is no reason to suspect that the jury ignored that instruction.”
As to mens rea, the Court found no error in the district court’s jury instruction that to convict the jury had to find that Bourke knew of the conspiracy’s object and that Bourke intended for that object to be accomplished. The Court found that “the district court properly instructed the jury that it must find Bourke knowingly entered into a conspiracy that had the object of corruptly and willfilly bribing foreign officials and that Bourke intended to aid in achieving this object.” In so holding, the Court stated that Bourke’s requested jury instruction that would have required the jury to “find Bourke willfully and corruptly joined a conspiracy to willfully and corruptly bribe foreign governments” was an “absurd result unsupported by the law.”
As to Bourke’s proposed good faith instruction, the Court stated as follows. “Even assuming arguendo that Bourke’s proposed instruction was legally correct with an adequate basis in the record, his argument fails because the theory was effectively presented elsewhere” in the jury instructions and the “failure to give a specific good faith charge does not require reversal.”
Does the Second Circuit’s decision mark the end of the road for Bourke? Perhaps not, his request for a new trial – based on the theory that a key witness offered false testimony – is still pending. The Second Circuit’s decision does not address Bourke’s pending request, but in light of its decision, it is unlikely that Judge Scheindin will grant Bourke’s motion.
When It Wants To, Congress Knows How To Speak
The FCPA defines “foreign official” as “any officer or employee of a foreign government or any department, agency, or instrumentality thereof …”. One of the arguments in the “foreign official” challenges is that “where Congress wants to define ‘instrumentality’ to include state-owned enterprises, it knows how to do so.” (See pg. 30 of the Carson brief summarized in this previous post).
My “foreign official” declaration (see here) notes as follows. “There is no express statement or information in the FCPA’s legislative history describing the ‘any department, agency, or instrumentality’ portion of the “foreign official” definition. Further, there is no express statement or information in the FCPA’s legislative history to support the DOJ’s expansive legal interpretation that alleged SOEs are ‘instrumentalities’ (or ‘departments’ or ‘agencies’) of a foreign government and that employees of SOEs are therefore ‘foreign officials’ under the FCPA’s anti-bribery provisions. However, there are several statements, events, and information in the FCPA’s legislative history that demonstrate that Congress did not intend the ‘foreign official’ definition to include employees of SOEs. […] During its multi-year investigation of foreign corporate payments that preceded enactment of the FCPA, Congress was aware of the existence of SOEs and that some of the questionable payments uncovered or disclosed may have involved such entities. Indeed, in certain of the competing bills introduced in Congress to address foreign corporate payments, the definition of ‘foreign government”’ expressly included SOEs. These bills were introduced in both the Senate and the House during both the 94th (1975-76) and 95th (1977-78) Congresses. […] However, despite being aware of SOEs, despite exhibiting a capability for drafting a definition that expressly included SOEs in other bills, and despite being provided a more precise way to describe SOEs, Congress chose not to include such definitions or concepts in S. 305, the bill that ultimately became the FCPA in December 1977.”
As noted in the Carson brief, in the Foreign Sovereign Immunities Act (passed a year before the FCPA), the term “agency or instrumentality of a foreign state means any entity which is an organ of a foreign state or political subdivision thereof, or a majority of whose shares or other ownership interest is owned by a foreign state or political subdivision.” In short, Congress knew how to embed SOE concepts in the FSIA when it wanted to.
Similarly, as noted in the Carson brief, Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (which became law in 201o) and imposes requirements on certain resource extraction issues to, among other things, disclose information regarding payments made to “foreign governments” for the purpose of the commercial development of oil, natural gas or minerals, defines “foreign government” to “include [] a department, agency, or instrumentality of a foreign government or a company owned by a foreign government.” In short, Congress knew how to embed SOE concepts in Dodd-Frank when it wanted to.
A bill introduced by Rep. Chris Smith last week further demonstrates that when Congress wants to, it knows how to embed SOE concepts into legislation. The bill, “The Global Online Freedom Act” seeks to “prevent U.S. businesses from cooperating with repressive governments in transforming the Internet into a tool of censorship and surveillance …”. The bill defines “foreign official” to mean (i) any officer or employee of a foreign government or of any department; and (ii) any person acting in an official capacity for or on behalf of, or acting under color of law with the knowledge of, any such government or such department, agency, state-owned enterprise, or instrumentality.” Further, the bill defines “state-owned enterprise” as follows – “a commercial entity in which a foreign government owns or controls, directly or indirectly, more than 50 percent of the outstanding capital stock or other beneficial interest in such commercial entity.”
For the Carson and Lindsey “foreign official” decisions see here and here. Recently the Lindsey convictions were vacated based on prosecutorial misconduct (see here), the Carson case remains pending.
Milestone Erased: Judge Matz Dismisses Lindsey Convictions, Says That “Dr. Lindsey And Mr. Lee Were Put Through A Severe Ordeal” And That Lindsey Manufacturing, A “Small, Once Highly Respected Enterprise … Placed In Jeopardy”
As detailed in this prior post, last May, Lindsey Manufacturing Company (a privately held manufacturer of electrical transmission and related products that employs approximately 100 individuals) and Keith Lindsey (President) and Steven Lee (Chief Financial Officer) were convicted after a five week trial by a federal jury in the Central District of California of one count of conspiracy to violate the FCPA and five counts of FCPA violations.
Reacting to the guilty verdicts last May, Assistant Attorney General Lanny Breuer stated in this release as follows. “Today’s guilty verdicts are an important milestone in our Foreign Corrupt Practices Act (FCPA) enforcement efforts. Lindsey Manufacturing is the first company to be tried and convicted on FCPA violations, but it will not be the last.”
The DOJ’s “important milestone” has been erased as Judge Howard Matz, after months of legal wrangling, vacated the convictions and dismissed the indictment. See here for Judge Matz’s ruling.
Jan Handzlik (Venable – here) represented Lindsey Manufacturing and Lindsey and Janet Levine (Crowell & Moring – here) represented Lee.
Judge Matz’s ruling begins as follows. “In this Court’s experience, almost all of the prosecutors in the Office of the United States Attorney for this district consistently display admirable professionalism, integrity and fairness. [A footnote states – Two of the three members of the prosecution team in this case were from the Washington, D.C., main office of the Department of Justice, including the lawyer who initiated the investigation. Only one “local” AUSA was involved]. So it is with deep regret that this Court is compelled to find that the Government team allowed a key FBI agent to testify untruthfully before the grand jury, inserted material falsehoods into affidavits submitted to magistrate judges in support of applications for search warrants and seizure warrants, improperly reviewed e-mail communications between one Defendant and her lawyer, recklessly failed to comply with its discovery obligations, posed questions to certain witnesses in violation of the Court’s rulings, engaged in questionable behavior during closing argument and even made misrepresentations to the Court. Consequently, the Court throws out the convictions of Defendants Lindsey Manufacturing Company, Keith E. Lindsey and Steve K. Lee and dismisses the First Superseding Indictment.”
In reaching his conclusion, Judge Matz acknowledges that even he was overwhelmed by the pace of the case and thus unable to see sooner the gravity of the DOJ’s misconduct. The following paragraph from his order is telling. “… [When a trial judge managing a large docket is required to devote a great deal of time and effort to a fast-moving case that requires numerous rulings, often the judge will miss the proverbial forest for the trees. That is what occurred here. This Court was confronted with so many motions challenging the Government’s conduct that it was difficult to step back and look into whether what was going on reflected not isolated acts but a pattern of invidious conduct. Although the Court did issue orders granting various of Defendants’ motions to suppress, motions to exclude evidence, motions to compel further discovery, motions for curative instructions, etc., it did not fully comprehend how the various pieces fit together. And fit together they do. The Government has acknowledged making many “mistakes,” as it characterizes them. “Many” indeed. So many in fact, and so varied, and occurring over so lengthy a period (between 2008 and 2011) that they add up to an unusual and extreme picture of a prosecution gone badly awry. To paraphrase what former Senator Everett Dirksen supposedly said, “a few mistakes here and a few mistakes there and pretty soon you’re talking misconduct.””
Upon first hearing of Judge Matz’s tentative ruling earlier this week, my initial reaction was that his decision would have little impact on FCPA enforcement (other than perhaps the O’Shea case pending in the S.D. of Texas given that it focuses in part on the same evidence and involves the same prosecutor). After all, prosecutorial misconduct motions focus on specific actions by specific actors.
Upon reading Judge Matz’s order however, it seems clear that his decision was based in part on the quality of the DOJ’s case in the first instance. Post-trial motions as to sufficiency of the evidence and based on various FCPA elements were pending, but are now moot. In any event, it is reasonable to conclude that Judge Matz might have vacated the jury verdict based on substantive grounds.
For instance, in addition to criticizing the DOJ’s willful blindness instruction, Judge Matz stated that it was improper and misleading for the DOJ to take inconsistent positions as to certain alleged school payments to the son of the Mexican “foreign official.” Because of the DOJ’s misconduct, Judge Matz stated as follows concerning Defendants’ opening statement. “In their opening statements defense counsel were not in a position to cite grand jury transcripts as support for what eventually became part of their defense. Lacking the factual support they needed, they could not and did not assert, in effect, “The evidence will show that the Government team failed to conduct a complete and fair investigation. In fact, the Government obtained the very charges in the indictment through false and misleading grand jury testimony of an FBI agent. The prosecution has been scrambling to find out what happened ever since. Had they done their homework properly, they would have learned long before now that there was no crime.””
More on point, Judge Matz stated as follows. “A clearly established additional basis for finding prejudice is the weakness of the Government’s case. The case against the Lindsey Defendants was far from compelling. That the jury returned its verdicts after some seven hours of deliberation is not a reliable indication of just how close the evidence was, contrary to the Government’s contention. For example, the key issue as to the Lindsey Defendants was whether they knew that the monies that LMC would and did pay to Grupo would be used by Enrique Aguilar to bribe CFE officials, and whether they intended that to happen. There was no direct evidence of such intent. There were no oral admissions (secretly recorded or otherwise); no writings acknowledging the payments were corrupt; no evidence of furtive conduct, except perhaps for the disputed bookkeeping reclassification of one contract, described above. The circumstantial evidence, at best, was murky.”
In conclusion, Judge Matz stated as follows. “The unavoidably dry recital of the background and prosecution of this case set forth above does not fully account for the real impact of the Government’s conduct. Dr. Lindsey and Mr. Lee were put through a severe ordeal. Charges were filed against them as a result of a sloppy, incomplete and notably over-zealous investigation, an investigation that was so flawed that the Government’s lawyers tried to prevent inquiry into it. In some instances motives, statements and conduct were attributed to them that were wholly unfounded or were obtained unlawfully, such as the statements attributed to Dr. Lindsey that were suppressed because of Miranda violations and Agent’s Guernsey’s grand jury testimony that Lee “didn’t want to know” what Aguilar would do with the commission payments. The financial costs of the investigation and trial were immense, but the emotional drubbing these individuals absorbed undoubtedly was even worse. As for LMC, the very survival of that small, once highly-respected enterprise has been placed in jeopardy. That is not to say that the Lindsey Defendants are entitled to a finding of factual innocence; they are not. Moreover, the hardships described in the preceding paragraph are the plight of many defendants who go to trial. But as the Kohring dissent phrased it, “In this case, dismissal of the Superseding Indictment is justified not only as a deterrent but to release [defendant] from further anguish and uncertainty.””
Whatever impact Judge Matz’s decision will have on FCPA enforcement, this much is clear: the DOJ is now 0-2 in corporate criminal prosecutions. As detailed in this prior post, in 1991, in an FCPA case involving Harris Corporation, John Iacobucci, and Ronald Schultz, U.S. District Judge Charles Legge (N.D. of California) granted a verdict of acquittal after the DOJ’s case. Citing insufficient evidence, Legge said the government had failed to show any intent by the defendants to enter into a criminal conspiracy.
“Foreign Official” Evidence
Last week, U.S. District Court Judge Jose Martinez (S.D. of Florida) denied (here) Carlos Rodriguez’s and Joel Esquenazi’s motions for judgment of acquittal or a new trial in the Haiti Teleco case. See here for a prior post regarding the jury verdict.
With sparse caselaw on the FCPA’s “foreign official” element, anything a court says as to “foreign official” or “instrumentality” is worthy of a read. This post summarizes relevant excerpts from Judge Martinez’s order including the evidence the court found sufficient to demonstrate that Teleco was an “instrumentality” of the Haitian government and that certain employees of Teleco were thus “foreign officials” under the FCPA. As detailed below, that evidence mostly (but not exclusively) consisted of “extensive research” a former Haitian Minister of Justice did in connection with a book.
Under the heading “Evidence at Trial Regarding Teleco As A Public Entity,” the order notes that the Government called Gary Lissade to testify regarding Haitian law and public institutions and states (at pages 5-7) as follows.
“In support of the allegations regarding the FCPA and Haitian bribery law, the Government called Gary Lissade, Haiti’s former Minister of Justice and the author of a book on Haiti’s public administration, as an expert in Haitian law and Haitian public institution. [A footnote explains that Lissade conducted extensive researching, including legal research and interviews, in reaching his conclusions] Mr. Lissade explained that Teleco was widely considered to be a Haitian public entity during the relevant time period and that he had classified Teleco as part of the public administration in his 2000 book.”
“Mr. Lissade explained that Teleco was established as a private institution in 1968 but become a public entity when, around 1971-1972, the state-owned National Bank of the Republic of Haiti (“BNRH”) acquired 97% of its shares. Mr. Lissade conceded that the exact time and circumstances of this acquisition were unclear but explained that the Government’s actions and official documents from the time period reflected that the acquisition and assumption of control had occurred. Mr. Lissade also conceded that, although Teleco began to use the term “S.A.M.,” rather than “S.A.” [a footnote says that Mr. Lissade noted that S.A. designates a private corporation in Haiti and that the addition of the initial “M” indicates that the corporation is a mixed public/private enterprise] to reflect its partial state-ownership after the acquisition, Teleco never underwent any legal process to change its name.”
“Mr. Lissade testified that Teleco was 97% owned and 100% controlled by BNRH’s successor, the state-owned Bank of the Republic of Haiti (“BRH”), for many years, including during the time period charged in the indictment. Teleco was run by a board of directors and a general director, all of whom were appointed by executive order signed by Haiti’s President, Prime Minister, and relevant Ministries. The people who worked under these political appointees were considered to be ‘public agents’ working for the ‘public administration,’ which Mr. Lissade defined as ‘the entities the state uses to perform and to give services to the people living in Haiti’ and ‘as an instrument … for the state to reach it missions and objectives and goals.’ Teleco was entitled to special treatment under Haitian tax laws, and its revenues were controlled by the BRH.”
“Mr. Lissade further testified that Haiti’s bribery laws applied to Teleco officials during the relevant time period. In 2008, Haiti passed an asset disclosure law, intended to combat public corruption, that required certain employees of Teleco and other public institutions to declare their assets, further confirming Mr. Lissade’s opinion that Teleco had been considered a public entity during the relevant time period.”
“Mr. Lissade also explained that, in 1996, Haiti passed a modernization law intended to privatize certain state-owned companies, including Teleco, but Teleco did not actually become partially privatized until 2009-2010.”
“Mr. Lissade’s testimony that Teleco was owned and controlled by the Haitian government was corroborated by numerous witnesses and voluminous documentary evidence. For example: Robert Antoine testified that Teleco was a state-owned company and that, when he worked there, he was a government employee whose supervisor, Patrick Joseph, had been appointed by the President of Haiti; Jean Fourcand testified that the President of Haiti appointed his cousin, Patrick Joseph, as General Director of Teleco, the ‘state owned’ ‘national phone company’ of Haiti; Juan Diaz testified that he learned while living in Haiti that Teleco was a ‘nationalized’ company owned by the Haitian government; Antonio Perez testified that Esquenazi, Dickey, and Terra’s business partners at HAWAI told him that Haiti Teleco was owned and operated by the Haitian government and that he saw an Aon insurance application submitted by Terra to that effect; and John Marsha, who worked at Aon, testified that Esquenazi, Rodriguez, and Dickey told him that the contract they wanted to insure was with a foreign government and that the type of insurance they requested only applied to government contracts.”
Judge Martinez stated, as to the “foreign official” / “instrumentality” issue, and otherwise, that based on the above “the evidence at trial was sufficient to support the jury’s verdict of guilty beyond a reasonable doubt and also weighed heavily in favor of the jury’s verdict. This is not a case in which the interests of justice require that the jury’s verdict be set aside.”
Judge Martinez next addressed the defendants’ argument that the “court’s instruction regarding a state-owned enterprise pursuant to the FCPA was incorrect.” See this prior post for the full instruction. Judge Martinez merely stated as follows. “This court properly instructed the jury through a non-exclusive multi-factor definition that permitted the jury to determine whether Teleco was an instrumentality of a foreign government.”
Judge Martinez concluded his order by discussing the declaration of Jean Max Bellerive, the current Prime Minister of Haiti. As detailed in this prior post, Bellerive stated that “Teleco has never been and until now is not a state enterprise.” Yet, as detailed in this prior post, the DOJ assisted Bellerive in revising certain statements in his declaration even though the facts in his original declaration were “truthful.”
Judge Martinez stated that the “declaration provides no newly discovered evidence and would not have affected the jury verdict. He stated that “Mr. Bellerive’s second declaration simply clarified the contents of the first declaration” and that the “contents of the first declaration were established throughout trial and were known to Defendants during trial preparation.”
Sentencing of Rodriguez and Esquenazi is scheduled for October 25th.
Lindsey Misconduct Briefing Complete
Circle October 17th on your FCPA calendar. On this day, U.S. District Court Howard Matz (C.D. Cal.) will hear arguments whether the DOJ’s first and only jury trial conviction of a corporate FCPA defendant (as well as two individual defendants) should stand or be dismissed because of the DOJ’s alleged prosecutorial misconduct.
This prior post asked, based on comments Judge Matz made during a June hearing, whether the DOJ’s conviction of Lindsey Manufacturing and its executives Keith Lindsey and Steve Lee is hanging by a thread. This post summarized (and linked to) the defendants’ supplemental motion to dismiss. This post summarized (and linked to) the DOJ’s response brief.
Recently, Janet Levine (Crowell & Moring – here) and Jan Handzlik (Venable – here), counsel for the defendants, filed a reply brief (here). The issues in dispute are highly factual and the brief opens as follows. “From at least October 2008, the prosecution engaged in a course of misconduct that was both flagrant and prejudicial. Among other things, the prosecutors inserted false factual statements into their agent’s search warrant affidavit; failed to bring those statements to the agent’s attention; repeatedly used affidavits containing these falsehoods for searches and seizures; changed the contents of proposed search warrant authorizations from language that comported with the Fourth Amendment to language that allowed the case agents to conduct general searches of electronically stored information; allowed false testimony to be presented to the grand jury; shielded that false testimony and other falsehoods and failures in the investigation from disclosure to the grand jury, the Court and the Lindsey-Lee Defendants; failed to comply with disclosure orders and with Brady v. Maryland; failed to comply with this Court’s limiting instructions; and improperly and prejudicially argued willful blindness to the jury.”
In closing, defendants argued as follows. “Regardless of what terms are used to describe the prosecution’s actions — “mistake,” “misconduct,” “error” — and regardless of whether the prosecution acted willfully or not, one thing is clear: the prosecution, at the very least, recklessly and continuously disregarded its obligations to the Court, the defendants and the Constitution. The cumulative effect of this misconduct substantially prejudiced the defendants’ ability to secure a fair trial.” According to defendants, “[t]his pattern of misconduct requires dismissal with prejudice.”