How Corporate Email Can Put You in a Federal Prison

As you know, I am a former federal prosecutor for over twenty years, (and currently, a Georgia criminal defense lawyer). This blog is generally about fraud and white collar crime. I also throw in a few "war stories" from the courtroom from time to time! This blog is not about how to avoid criminal liability! (And, of course, if you are currently the target of a federal grand jury investigation, you should consult with your own attorney about your own situation!) However, the current investigation by examiners of millions of emails at Lehman Brothers--who are attempting to determine who knew what and when, and who drove the large securities firm into bankruptcy--should provide some important lessons on how to avoid letting your email send you to federal prison!

For example, if you work for a corporation, it is critical that you never get careless or take email for granted. In other words, always remember that email lasts forever! It can be forwarded, printed out, and even retrieved after you press "delete." And it can come back to haunt you, months later, during a federal criminal investigation. In other words, always be circumspect: never say stupid things in email, such as joking about liability, or admitting fault, (especially when you really aren't at fault), unless you are willing to accept the consequences. Also, if you have warned your bosses about your concern about the legality of the company's course of action, you might want to document it in an email, and then print it out and save a copy.

In short, as the current Lehman Brothers investigation illustrates, email can be your best friend, or your worst enemy!

Former Florida GOP Chairman Charged With Fraud

Have you heard the bad news from Florida? No, I'm not referring to the approach of oil toward Florida beaches from the BP oil spill. Instead, I am talking about the reported arrest earlier today of former Florida GOP chairman Jim Greer on fraud, theft, and money laundering charges. According to numerous reports, Greer, a close associate of Florida Governor Charlie Crist, is accused of utilizing a shell company to steal money from the state party.
Now, I have no clue about whether or not Greer actually committed any crimes. Also, I believe he should be entitled to a presumption of innocence. But as a former federal prosecutor, (and currently, as a criminal defense lawyer), I have often seen schemes to defraud committed in which the perpetrator utlized shell companies in this manner. The key to success is often whether or not the perpetrator has unchecked authority to pay bills of such an entity. In other words, if the victim entity has no real checks and balances in place, it can be relatively easy for someone who controls the checkbook of that entity to created a bogus, non-existent company and then pay its fictitious invoices.
Now, that's enough bad news about white collar crime today! Let's all get back to worrying about the BP oil spill mess! (Of course, if other news reports are true, there may also be some white collar crime percolating to the surface in the BP oil spill fiasco, too).

Special Challenges in Major White Collar Crime Prosecutions

I want to start a new periodic series in this blog about what it is like to be a federal prosecutor and how, as a former AUSA, I "put together" some of my major prosecutions. Trust me, a lot of planning and hard work goes into many federal criminal investigations. I also want to discuss some of the special challenges I faced, as an AUSA, in prosecuting high profile criminal cases.

As a former federal prosecutor in Augusta, Georgia, I was very lucky to be in the right place at the right times to try some of the largest federal fraud and public corruption cases in Georgia (and United States) history! For example, I tried the largest home healthcare Medicare fraud case and the largest vote-buying case in American history. But big cases often bring big challenges. For example, consider the following:

1. No Precedents to Guide You:
Being a federal prosecutor sometimes feels like being a Star Fleet Commander in Star Trek. Simply put, you confront new problems and new worlds never seen before! Put another way, for some of my major fraud investigations, there were no precedents to guide me. Now, don't get me wrong. The U.S. Department of Justice provides excellent resources and unparalleled training opportunities for federal prosecutors. But my point is that, in some of my major criminal cases, there were no prior criminal cases, or precedents, just like mine, and I was pretty much on my own to face them.

For example, I once prosecuted a major home health care fraud case in which the home healthcare agency owner was accused, among many other allegations, of falsely billing the Medicare and Medicaid programs for tens of thousands of dollars for a luxury Georgia Dome stadium suite, liquor, and parties. I had to determine whether or not this constituted Medicare fraud, i.e. a criminal matter, or whether it was simply a civil matter. In that case, I decided to include some of the allegations, (e.g. billing Medicare and Medicaid for tens of thousands in liquor billings), in my indictment, even though I could find no clear precedent. Fortunately, I prevailed later at trial! I could give you countless other examples.

The point is that, because there were no precedents, as a result, I often had no prosecution models, or sample indictments, to guide me. Instead, I had to do my own research, lead my own task force of agents and auditors where I wanted to go, and draft my own indictments. In other words, as a federal prosecutor, you sometimes must first research and determine whether or not the target's activities are criminal before you can really begin to prove it occurred.

But frankly, I enjoyed this special challenge of federal prosecution. I had a unique opportunity, as an AUSA, to "boldly go where no one has gone before!"

Corporate Fraud and Conspiracies: Who Do you Prosecute?

I am sorry about posting again the photograph of convicted ponzi scheme defendant, Bernie Madoff. Based upon his crimes, he doesn't merit the attention! But his fraud case presents a number of interesting issues.

For example, in Madoff's case, it has been reported that investigators are still out there "looking at" some of Madoff's relatives and associates to determine whether to try to lock up anyone else. This raises an interesting question: How do agents and prosecutors determine exactly who all to target in a criminal investigation?

As a former federal prosecutor, I had a fairly simple, straightforward approach. I generally "followed the money" and, unless you were a top executive, or ringleader, who clearly directed and knew about, and directly profited from, the fraudulent scheme, I probably wouldn't try to "make your day" by prosecuting you, even if you had some inkling as to what was going on.

In other words, as a former corporate fraud prosecutor, I generally focused on prosecuting only the primary movers and shakers who put the ill-gotten gain in their pockets and I left alone the salaried, lower level employees, such as secretaries or book-keepers, who merely did what they were told to do. I also generally stayed away from prosecuting family members, unless they were clearly key participants in the fraudulent scheme.

But you need to be aware that other federal prosecutors sometimes utilize a different approach! In other words, I have known some government prosecutors who aggressively target everyone who participated in the scheme. Then, they gamble that they can "roll over" the lower level employees against the top targets. Please don't get me wrong: Prosecutors should be aggressive. However, in my opinion, some prosecutors simply go too far! They allow their own competitive spirit and healthy egos to determine who should be targeted. They also sometimes ignore the human costs.

And can I be honest here? In my opinion, some overly aggressive government prosecutors also lack appropriate human compassion for the people whose lives they are ruining! I will never forget the inconsiderate words of one prosecutor about a target: "It must s_ _ k to be him!"

As a result, if anyone "out there" who is reading this post is a family member or associate of Mr. Madoff, you should get down on your knees and pray that you are being investigated by a government prosecutor who possesses both some common sense and a little human compassion! Otherwise, you may have to face the consequences of being persecuted by a federal prosecutor who is simply interested in putting more notches in his or her holster!

What do you think?