WHITE COLLAR CORNER

To Cooperate Or Not To Cooperate – That Is The Question

David Rosenfield and Christopher Warren

You are under investigation for a white collar crime. Government agents or prosecutors approach you; they want you to cooperate. The agents want to speak with you and ask you to provide information about criminal activities you may have participated in or have knowledge of, perhaps involving the company you work at or one of your colleagues. They ask you to provide them with relevant documents, to wear a wire, or tape a phone call. You are understandably nervous and think, “what should I do?” David Rosenfield and Christopher Warren of Scarinci Hollenbeck, LLC discuss the general benefits and risks of cooperating with the government.

Recent Speech by Deputy AG Monaco on Corporate Crime Enforcement

As noted in a November 1, 2021 social media post from Scarinci Hollenbeck, LLC, in an October 28, 2021 speech at an American Bar Association conference, Deputy US Attorney General Lisa Monaco stated that white collar crime, and particularly corporate criminal enforcement, is a top priority for the Department of Justice (DOJ). Monaco also said prosecutors will now focus on individual accountability when conducting corporate criminal investigations. Further, and most importantly, she stated that the DOJ must “be bold in holding accountable those who commit criminal conduct.” Monaco indicated that companies must provide all non-privileged information regarding any individuals involved in the misconduct, regardless of their position, status, or seniority to be eligible for cooperation credit.

Failing to be Truthful to the Government Could Result in a One-Way Ticket to Jail

It is essential for corporate employees and other individuals to understand the pros and cons of cooperating with the government. If your white collar counsel has so advised, and you agree that you are going to cooperate, it is critical to be completely transparent and honest about all criminal activity that you are aware of or in which you may have engaged. Lying to the government is a federal crime that can lead to prosecution. Any “proffer agreement” or cooperation agreement you sign with the government will confirm this.

If you lie or hold back information from the government, the federal crimes you could be facing include lying to a government agent (18 U.S.C. §1001); obstruction of justice (18 U.S.C. §1505); impeding an investigation (18 U.S.C. §1512); and, if you’re under oath, perjury (18 U.S.C. §§1621 or 1623). If you’re talking to state prosecutors, the crimes are usually similar.

Being truthful as part of your cooperation may seem like an easy call. Why lie to the government, or hold back information from them? Often, this analysis is not so simple. You may be embarrassed or ashamed of your past actions or you may feel the need to protect a close friend, a relative, or perhaps even yourself. You may think that if you are not entirely forthcoming, the government will never find out. Do not be fooled; if you cooperate, you must go all-in, full tilt, be truthful, and not withhold any information. Prosecutors and agents are well-versed in white collar and regulatory investigations and can usually determine when a target or subject is holding back. If you cannot be truthful and forthcoming, have your attorney call off the interview ahead of time, or once underway, have the attorney stop the interview before its conclusion.

If You Cooperate, and Do It the Right Way, You Can Benefit Significantly

If you cooperate and do it properly, you may receive substantial benefits. First, the government will almost certainly agree to reduced charges. Instead of being charged with three or four counts, you may only be required to plead guilty to one lesser count. If you are inclined to self-report, and are the first person to cooperate, or provide beneficial information that results in guilty pleas or verdicts, the government may even agree not to charge you with a crime or recommend probation if they do.

Second, in a federal case, courts are required to consider the Federal Sentencing Guidelines when determining the length of your sentence. However, suppose federal prosecutors deem that your cooperation substantially assisted their case. If that is the case, they will file what is known as a “5K” motion. This motion asks the sentencing judge to give you to a term of imprisonment well below the Guidelines range. Depending on the circumstances of your case, you may be sentenced to probation, as opposed to serving a prison sentence.

Finally, yet another advantage to cooperating is that the government may reduce your financial penalties, which can include forfeiture, restitution, and fines.

Take Aways

The critical decision to cooperate, or not cooperate, is an important and difficult one. While cooperation can undoubtedly be very beneficial to an individual being investigated for white collar crimes, the strategy can only work if the target or subject deliberately decides to cooperate fully and truthfully.

Hire an Experienced White Collar Defense Attorney

If you are ever investigated for a white collar crime, and you need to make the difficult decision as to whether to cooperate, you should retain an experienced white collar criminal defense lawyer to navigate you through these treacherous waters. It is imperative that you seek seasoned legal counsel to advise and guide you through the process. And remember: your lawyer can only give you proper legal advice on how to proceed in the defense of a criminal and regulatory investigation if you are entirely truthful and honest with your counsel.

For more information on this issue and related white collar or regulatory matters, please contact:

David M. Rosenfield at drosenfield@warren.law; (917) 420-2548

Christopher D. Warren at chris@warren.law; (212) 580-9600

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Scarinci Hollenbeck, LLC defends individuals and companies in all types of litigation. Our team has decades of experience in all types of litigation, white collar defense, securities litigation, and financial services enforcement proceedings.