EFTA00077287.pdf

etu Dirk ga % WVAILNYLLtOil 4ournal An Athol Publication THURSDAY, MAY 6, 2020 The Prince and the Proffer In recent months, the U.S. Attorney for the Southern District of New York has issued forceful public statements regarding the ap- parent failure of Britain's Prince Andrew to cooperate in an ongoing investigation of alleged sex-trafficking by the late Jeffrey Ep- stein and his associates. In this Corporate Crime article, Evan Barr examines whether these unusual actions were justified under the circumstances, and some of the challenges that lawyers for the Prince will surely confront as the investigation continues. BY EVAN T. BARR 0 n two separate occasions in recent months, Geoffrey Berman, U.S. Attorney for the Southern District of New York, has issued forceful public statements regard- ing the apparent failure of Britain's Prince Andrew to cooperate in an ongoing investigation of alleged sex- trafficking by the late Jeffrey Epstein and his associates. Berman called upon Prince Andrew to live up to a purported undertaking to assist in the government's inquiry by meeting with federal authorities to discuss his friendship and contacts with the deceased financier. In making these public remarks, Berman departed from the traditional practice of avoid- ing official comment related to ongo- ing investigations. This article will examine whether the U.S. Attorney's unusual actions were justified under the circumstances, and some of the challenges that lawyers for the Prince will surely confront as the investiga- EVAN T. BARR is a partner at Fried Frank Harris Shrive, & Jacobsen and a former federal prosecu- tor in New York. He worked on a matter for Epstein years ago while employed at another law firm. By Evan T. I Barr tion continues. The Events in New York and London In an indictment unsealed in July 2019, the U.S. Attorney's Office for the Southern District of New York charged Epstein with conspiracy to commit sex trafficking of mi- nors, in violation of Title 18, Unit- ed States Code, §1591 and related offenses. On Aug. 10, 2019, authori- ties found Epstein dead in his jail cell. U.S. Attorney Berman issued a statement that day asserting that "our investigation of the conduct charged in the Indictment—which included a conspiracy count—re- mains ongoing." On August 12, At- torney General William Barr also vowed in a speech to "continue on against anyone who was complicit with Epstein." In October 2019, , a victim in the Epstein matter, recorded a televised inter- view with BBC Panorama in which she reiterated claims previously incorporated in various civil litigations alleging that Epstein and Epstein's former girlfriend Ghislaine Maxwell had sex-trafficka to Prince Andrew on multiple occasions in 2001 when she was underage. On Nov. 16, 2019, facing intense pressure to explain his asso- ciation with Epstein, Prince Andrew gave a lengthy interview on BBC Newsnight. During the program, the Prince acknowledged a longstand- ing friendship with Maxwell, denied any involvement will= and claimed he could not "shed light" on Epstein's illicit activities. He also questioned the authenticity of a snapshot showing him with- and insisted he was at a restaurant with family on the night in March 2001 when =claimed they had sex. The Prince concluded by not- ing he would need to consult with his lawyers in advance of testifying under oath about his relationship with Epstein. The press widely criticized the Prince following the BBC inter- view for his lack of sympathy and EFTA00077287 litiolorktaflawild THURSDAY, MAY 6, 2020 unpersuasive denials. As a result, on Nov. 20, 2019, the Prince issued a statement announcing that he would be stepping back from his public duties for the foreseeable future. Expressing regret for his as- sociation with Epstein, the Prince noted "[o]f course, I am willing to help any appropriate law enforce- ment agency with their investiga- tions, if required." The interview clearly touched a nerve at the U.S. Attorney's Office. On Jan. 27, 2020, during a press con- ference held outside Epstein's Up- per East Side mansion, Berman was asked about the Prince's November 20 offer to help and stated, "[t]o date, Prince Andrew has provided zero cooperation." According to the New York Times, Berman went on to say his office did not typically comment on cooperation in an ongoing inves- tigation, but he felt that it was "fair" for the public to know that Prince Andrew had failed to live up to his promise. Berman noted that the "in- vestigation is moving forward" and added that "Jeffrey Epstein couldn't have done what he did without the assistance of others." On March 8, 2020, the Daily Tele- graph reported that Prince Andrew had hired "an eminent team of lawyers" including an expert in extradition matters in the United Kingdom to fend off the Ameri- can investigation. The Times had previously reported that following the BBC interview in November, federal prosecutors and FBI agents had reached out to Prince Andrew's lawyers and asked to interview him but got no response. Then, on March 9, 2020, at a press conference in another mat- ter, Berman stated in prepared remarks that "[c]ontary to Prince Andrew's very public offer to co- operate with our investigation into Epstein's co-conspirators, an offer that was conveyed via press release, Prince Andrew has now completely shut the door on voluntary cooperation." Berman added that his office was "consid- ering its options." On March 13, 2020, the Telegraph reported that a spokesman for the U.S. Attorney's Office had confirmed "[t]here have been communications through [the Prince's] attorneys, but we have been informed that he is not willing to submit to an interview." The article went on to say that sources close to Prince Andrew had described him as "angry and bewildered" by the suggestion that he had refused to cooperate. Applicable Legal Standards and Principles Berman's remarks at these press conferences stand out for many courthouse observers because they were so unusual. In late 2016, then- FBI Director James Comey wrote two letters to members of Congress (which were immediately revealed to the public) providing updates on the status of the Bureau's re- view of Hilary Clinton's emails. (In 2018, the DOJ Inspector General, Mi- chael Horowitz, issued a report that criticized Comey for violating DOJ guidelines in writing the letters.) Aside from that infamous episode, however, as a general matter DOJ personnel studiously refrain from making any substantive comments regarding the status of an ongoing investigation. In so doing, they are following well-established rules and regulations. As a threshold matter, Federal Rule of Criminal Procedure 6(e)(2) bars the disclosure of any "matter occurring before the grand jury" by, among others, attorneys for the government and law enforce- ment agents privy to such grand jury material. The grand jury se- crecy rule is intended both to "en- courage free and untrammeled disclosures by persons who have information with respect to the commission of crimes" and "to protect the innocent accused who is exonerated from the disclosure of the fact that he has been un- der investigation." United States v. Procter & Gamble, 356 U.S. 677 (1958). Although Rule 6(e) does not define when a matter is one "occurring before the grand jury," courts have construed that phrase to include, among other things, the following types of information: rev- elations of the identify of expected witnesses; information about ex- pected testimony of witnesses or likely questions; and information that reveals the strategy or direc- tion of a grand jury investigation. See United States v. Skelos, 2 No. 15 Cr. 317 (KMW) (S.D.N.Y. Oct. 20, 2015). Notably, however, Rule 6(e) does not apply to disclosures of in- formation obtained independently of the grand jury process, even if the information might later be pre- sented to the grand jury. EFTA00077288 liebliettgajmuind THURSDAY, MAY 6, 2020 The Department of Justice has is- sued regulations dealing with the release of information to the me- dia in criminal and civil cases. 28 C.F.R. §50.2. The regulations princi- pally prohibit DOJ personnel from furnishing any statement which might reasonably be expected to influence the outcome of a pend- ing or future criminal trial. But the regulations also apply "from the time a person is a subject of a criminal investigation until any proceeding resulting from such an investigation has been terminated by trial or otherwise." 28 C.F.R §50.2(b) (emphasis added). The regulations specifically com- mand DOJ personnel to refrain from making available certain types of information that generally tend to create a danger of preju- dice without serving a significant law enforcement function, includ- ing, inter alia: (1) observations about a defendant's character; (2) statements, admissions confes- sions, or alibis attributable to a de- fendant, or the refusal or failure of the accused to make a statement; and (3) statements concerning the identity, testimony, or credibility of prospective witnesses. 28 C.F.R. §50.2.(b)(6). The U.S. Attorney's Manual like- wise includes a policy statement establishing guidelines for prosecu- tors to comply with the above regu- lations. Of relevance here, U.S.A.M. 1-7.530 (A) (Disclosure of Informa- tion Concerning Ongoing Investiga- tions) provides that "components and personnel of the Department of Justice shall not respond to questions about the existence of an ongoing investigation or comment on its nature or progress, including such things as the issuance or serv- ing of a subpoena, prior to the pub- lic filing of the document." U.S.A.M. 1-7.530(B) allows that comments about or confirmation of an ongo- ing investigation may need to be made "in matters that have already received substantial publicity or about which the community needs to be reassured that the appropri- ate law enforcement agency is in- vestigating the incident, or where release of information is necessary to protect the public interest, safe- ty, or welfare" but in such "unusual circumstances" they are subject to pre-approval by the U.S. Attorney or Department Division handling the matter. The Prince's Precarious Position The Prince will face significant pressure going forward to cooper- ate with the U.S. authorities. The U.S. Attorney's extraordinary com- ments obviously add to that pres- sure. Berman warned on March 9 that the government was "con- sidering its options" and he has a number of them at his disposal. In the absence of a voluntary ap- pearance, the Department of Jus- tice could invoke the mutual legal assistance treaty (MLAT) with the United Kingdom to request Prince Andrew's testimony under oath in England. Lawyers for and the other victims also have vowed to use the process set forth in the Hague Convention to serve the Prince with a subpoena. While British authorities are unlikely to facilitate or prioritize such demands, and while the Prince would retain the right to decline to testify under the Fifth Amend- ment to the United States Consti- tution, the impact on his already diminished reputation would be considerable and an adverse infer- ence could be drawn against him in the related civil litigations, lead- ing to a possible default judgment. If defense counsel decides to make the Prince available voluntarily, he or she will likely seek immunity or a non-prosecution agreement, as even a Prince probably should not appear with only a "queen for a day" proffer letter to protect him. (A "queen for a day" or proffer let- ter is a written agreement between a federal prosecutor and a defen- dant or prospective witness that allows the defendant or witness to provide information about an alleged crime under investigation while limiting, to some degree, the prosecutor's ability to use that information directly against him or her in subsequent criminal proceedings. The letter explicitly permits the prosecutor to use the information to pursue other leads and to impeach the defendant/wit- ness with his prior proffer state- ments on cross examination.) On the other hand, defense counsel might well conclude that the safest approach is to hunker down in the U.K. First, Prince An- drew's close relationships with both Epstein and Maxwell will pre- sumably place him squarely in the category of subject rather than EFTA00077289 ifeloliorktaleXenned THURSDAY, MAY 6, 2020 witness. Second, although the al- legations at issue date back to 2001, there is no statute of limita- tions for federal sex trafficking of- fenses involving minors. Third, as a result of his BBC interview, the Prince has "locked himself in" to a version of events (including some highly specific alibis) that leave him little room to adapt should new evidence come to light. Thus, even if he does agree to testify be- fore a grand jury or (more likely) participating in an informal proffer session, he risks possible perjury or false statement charges (not to mention likely leaks to the media). Fourth, notwithstanding the fact that the Prince is a member of a royal family that enjoys close ties with the United States, he lacks any formal diplomatic or sover- eign immunity and is facing a pros- ecutor who has already shown a willingness to pursue high profile foreign leaders such as the former President of Venezuela. Assessing the US. Attorneys Conduct In light of all of the surrounding circumstances, and the applicable rules and regulations that govern extrajudicial statements by federal prosecutors, did the U.S. Attorney cross the line when he discussed his frustrations with Prince An- drew's failure to cooperate dur- ing the January and March press conferences? First, even assuming arguendo that a federal grand jury is inves- tigating Epstein's co-conspira- tors, the U.S. Attorney would not have violated Rule 6(e) merely by discussing the fact that the Prince had not been cooperative. Those statements do not disclose any ac- tions "occurring" before the grand jury (indeed, the gravamen of Ber- man's complaint is that the Prince has not made himself available to be a part of the investigation). Second, the Department of Justice press regulations found at Title 28 of the Code of Federal Regulations are clearly focused on trials and protecting the rights of charged defendants, which are not relevant to this situation. However, there is some residual ambiguity here be- cause the regulations do state that they apply "from the time a person is a subject of a criminal investi- gation" until the end of any case, and Prince Andrew might well be a subject of the inquiry. If Prince Andrew is presently a subject, and a case against him is ultimately filed, calling him out for having re- fused to cooperate would appear to run afoul of the regulations in- sofar as they prohibit disclosure of information about "the refusal or failure of the accused to make a statement." Third, the U.S. Attorney's Manu- al clearly discourages any and all comments like these concerning the "nature or progress" of an on- going investigation. That clause plainly applies to the comments about the Prince made at the Janu- ary and March press conferences, especially since the implication of those remarks was that such cooperation would be important in advancing the inquiry. On the other hand, the Manual does allow comment in "matters that have al- ready received substantial public- ity or about which the community needs to be reassured that the ap- propriate law enforcement agency is investigating the incident." The U.S. Attorney could try to justify his press statements under ei- ther or both of these exceptions, especially where the Prince argu- ably had injected himself into the dialogue by appearing on a high- profile television program to field questions. Conclusion Even if the U.S. Attorney techni- cally avoided violating any of the applicable legal standards, such remarks are discouraged for good reason. The U.S. Attorney may have concluded that he needed to apply public pressure to obtain the Prince's information, and this aggressive tactic might even bear fruit. But a lawyer properly repre- senting the Prince, or any white- collar client for that matter, must carefully consider a number of factors before choosing to make his or her client available for ques- tioning by the authorities. That process generally will entail sen- sitive and protracted discussions between counsel over the time, place and ground rules for any such meeting. To instill an atmo- sphere of trust and fair play, such negotiations should take place in private and not on the front page of tomorrow's paper. ftermohich ragas.. ketch Jig 4 2L n1O nd the NEW YORK LAW PL ANAL O 3O) ADA Man LIC All alb ment4 kaki .14.6Oitav wand ratuomn a psista For ininmuckA. coma 877.257.3 02 or rtranat‘bnixtm •N11,14I0f070-44770 EFTA00077290