Arrest and the White-Collar Defendant

The rules governing federal criminal cases give prosecutors choices about how to initiate prosecutions. A case may be commenced through the filing of a written complaint by a law enforcement officer that sets out the facts constituting the alleged criminal offense or an indictment returned by a vote of a grand jury. Then the prosecutor has the option of obtaining an arrest warrant from a judge for the person named as the defendant.

Although judges generally must issue arrest warrants when the government asks for them, nothing in the rules requires prosecutors to make such a request. The decision is purely discretionary on the part of the prosecutor. Historically, lawyers for defendants in white-collar cases have been able to negotiate agreements for their clients that avoid both formal arrest and the need for the defendant to spend even a minimal amount of time in a pretrial holding cell. These agreements typically have two parts: 1) the defendant will appear on a certain date at a certain time at the offices of the U.S. Marshal to be fingerprinted and photographed; and 2) the defendant will then proceed to a courtroom for an initial appearance in front of a judge.

Occasionally, issues arise because the lead law enforcement agency on the case insists that it wants an 'arrest' for statistical purposes. The agency's point is that, if the defendant is allowed simply to appear in court without being in the custody of law enforcement, the agency will be denied an arrest statistic that it otherwise would have been entitled to, and arrest statistics often play a role in a local law enforcement office's effort to justify its staffing and funding to the agency's headquarters.

When these situations occur, the defense lawyer's first response should be to solicit the prosecutor's assistance in persuading the agency that its request is unreasonable. Over the years, however, prosecutors have become more sympathetic to their agents' desires to make their statistics, and sometimes a middle ground must be found. From the defendant's perspective, the best middle ground is an agreement that when the defendant enters the courtroom after already having been to the Marshal's office, he or she will be put in the 'custody' of the case agents while the parties wait for the judge to take the bench. Depending on the particular agents and agency involved, this might mean simply that the defendant will have to sit in the courtroom or an ante room with the agents (and with defense counsel nearby) until the judge arrives and, if the prosecutor or agents insist, that the defendant will have to be handcuffed during that period. There is no law governing these issues; it is all a matter of negotiation between the government and the defense.

If that arrangement is not acceptable to law enforcement or the prosecutor, the next best option from the defense's perspective is to have the agents meet the client and counsel in the Marshal's office and take him or her into custody there. Once in custody, the defendant will be taken to a holding cell in the courthouse until the judge is ready to hear the case. The least attractive option for the defendant, apart from a full-blown arrest, is one in which law enforcement agents require him or her to come to their office and be arrested there. This means that the defendant will travel in the agents' custody to the courthouse for the initial hearing before the judge, almost certainly in handcuffs.

Today's Get-Tough Attitude

The government has become less sympathetic to claims by white-collar defendants that they should be allowed any form of a voluntary surrender. In the current political climate, prosecutors and agents want to send a message to the public that they are tough on white-collar crime, and they are sensitive to any suggestion that there is a double standard for wealthy individuals. Moreover, television images of corporate executives in handcuffs are used to send a message to potential wrongdoers that 'this could be you.'

In this environment, what can be done to avoid a formal arrest in a white-collar case? The answer is that defense lawyers need to continue doing what they have always done, but need to recognize (and prepare their clients for) the fact that it may be more difficult to arrange a voluntary surrender that avoids time, however brief, in handcuffs and a jail cell. An experienced defense lawyer will know when it is time to start worrying about these issues. As a charging decision in a white-collar case nears, the government typically puts a stark choice to the defendant: either agree to plead guilty or be charged. If the defendant elects not to accept a deal, his or her lawyer should quickly talk to the prosecutor to see if he or she can get a commitment from the prosecutor that a voluntary surrender will be allowed. Because the decision is entirely discretionary, there is no legal recourse if the prosecutor refuses to give a commitment. As with many discretionary decisions in criminal practice, it likely will turn on the personalities of the prosecutor and lead agent, on their relationship with the defense lawyer, on the government's perception of whether the defendant is 'a bad guy,' and on whether the case has attracted public attention. If the prosecutor refuses to provide assurances that no formal arrest will occur, the lawyer has the option to appeal to a supervisor, but such a course of action has to be weighed carefully. There are only so many times a defense lawyer can appeal a line prosecutor's decisions in a case without losing credibility, and most of the time it is not worth playing that card on the issue of whether the client will be arrested since arrests almost never affect the outcome in a criminal case.

Sometimes, arrest is unavoidable because the government wants to make a point with the public. In a highly publicized recent example, John Rigas, the 78-year-old founder of Adelphia Communications, was arrested by federal authorities who charged him with securities fraud and led him on what is known in law enforcement circles as a 'perp walk' before the gathered media. This occurred despite the contention of Rigas' attorney that his client had offered to surrender. Why would the government ignore such an offer from a 78- year-old man? According to a quote in The New York Times from Mary Jo White, the former U.S. Attorney in Manhattan, because a perp walk 'certainly catches people's attention in the right places, from the prosecutor's point of view.'

Steven F. Reich is a partner in the New York office of Manatt, Phelps & Phillips, LLP, where he is a member of that firm's Special Investigations/White Collar Defense Practice Group. He previously served as Senior Associate Counsel to President Bill Clinton.

For a person under criminal investigation, the image is a frightening one. There is pounding at your front door during the early morning hours. A voice yells, 'FBI! Open the door!' You throw on clothes, head to the front door and as you open it, agents rush by you into your living room. The FBI agent with whom your attorney has been dealing for months tells you, 'We have a warrant for your arrest. You'll have to come with us.' Your spouse and children, who have been awakened by the agents, are now seated in your living room. Your hands are cuffed behind your back and you are led from your home. Remarkably, all you can think about at this moment is that your lawyer told you the government does not arrest people in these kinds of cases. Your lawyer was wrong.

By the time a federal prosecutor decides to charge a defendant in a high-profile white-collar case, the defendant almost always knows that he or she is a target of the investigation. That is because complex fraud investigations typically stretch over a period of months or even years, and may be covered in the media. Often, prior to filing formal charges, the government either makes an effort to secure the defendant's cooperation, or to persuade him or her to plead guilty to a lesser charge. The point is that charges in these kinds of cases almost never come as a complete surprise to the defendant. Increasingly, however, what comes as a surprise is the decision of federal prosecutors in white-collar cases to obtain arrest warrants or insist on some other process that requires the defendant to spend time in a jail cell prior to an initial court appearance.

Arrests in White-Collar Cases

The rules governing federal criminal cases give prosecutors choices about how to initiate prosecutions. A case may be commenced through the filing of a written complaint by a law enforcement officer that sets out the facts constituting the alleged criminal offense or an indictment returned by a vote of a grand jury. Then the prosecutor has the option of obtaining an arrest warrant from a judge for the person named as the defendant.

Although judges generally must issue arrest warrants when the government asks for them, nothing in the rules requires prosecutors to make such a request. The decision is purely discretionary on the part of the prosecutor. Historically, lawyers for defendants in white-collar cases have been able to negotiate agreements for their clients that avoid both formal arrest and the need for the defendant to spend even a minimal amount of time in a pretrial holding cell. These agreements typically have two parts: 1) the defendant will appear on a certain date at a certain time at the offices of the U.S. Marshal to be fingerprinted and photographed; and 2) the defendant will then proceed to a courtroom for an initial appearance in front of a judge.

Occasionally, issues arise because the lead law enforcement agency on the case insists that it wants an 'arrest' for statistical purposes. The agency's point is that, if the defendant is allowed simply to appear in court without being in the custody of law enforcement, the agency will be denied an arrest statistic that it otherwise would have been entitled to, and arrest statistics often play a role in a local law enforcement office's effort to justify its staffing and funding to the agency's headquarters.

When these situations occur, the defense lawyer's first response should be to solicit the prosecutor's assistance in persuading the agency that its request is unreasonable. Over the years, however, prosecutors have become more sympathetic to their agents' desires to make their statistics, and sometimes a middle ground must be found. From the defendant's perspective, the best middle ground is an agreement that when the defendant enters the courtroom after already having been to the Marshal's office, he or she will be put in the 'custody' of the case agents while the parties wait for the judge to take the bench. Depending on the particular agents and agency involved, this might mean simply that the defendant will have to sit in the courtroom or an ante room with the agents (and with defense counsel nearby) until the judge arrives and, if the prosecutor or agents insist, that the defendant will have to be handcuffed during that period. There is no law governing these issues; it is all a matter of negotiation between the government and the defense.

If that arrangement is not acceptable to law enforcement or the prosecutor, the next best option from the defense's perspective is to have the agents meet the client and counsel in the Marshal's office and take him or her into custody there. Once in custody, the defendant will be taken to a holding cell in the courthouse until the judge is ready to hear the case. The least attractive option for the defendant, apart from a full-blown arrest, is one in which law enforcement agents require him or her to come to their office and be arrested there. This means that the defendant will travel in the agents' custody to the courthouse for the initial hearing before the judge, almost certainly in handcuffs.

Today's Get-Tough Attitude

The government has become less sympathetic to claims by white-collar defendants that they should be allowed any form of a voluntary surrender. In the current political climate, prosecutors and agents want to send a message to the public that they are tough on white-collar crime, and they are sensitive to any suggestion that there is a double standard for wealthy individuals. Moreover, television images of corporate executives in handcuffs are used to send a message to potential wrongdoers that 'this could be you.'

In this environment, what can be done to avoid a formal arrest in a white-collar case? The answer is that defense lawyers need to continue doing what they have always done, but need to recognize (and prepare their clients for) the fact that it may be more difficult to arrange a voluntary surrender that avoids time, however brief, in handcuffs and a jail cell. An experienced defense lawyer will know when it is time to start worrying about these issues. As a charging decision in a white-collar case nears, the government typically puts a stark choice to the defendant: either agree to plead guilty or be charged. If the defendant elects not to accept a deal, his or her lawyer should quickly talk to the prosecutor to see if he or she can get a commitment from the prosecutor that a voluntary surrender will be allowed. Because the decision is entirely discretionary, there is no legal recourse if the prosecutor refuses to give a commitment. As with many discretionary decisions in criminal practice, it likely will turn on the personalities of the prosecutor and lead agent, on their relationship with the defense lawyer, on the government's perception of whether the defendant is 'a bad guy,' and on whether the case has attracted public attention. If the prosecutor refuses to provide assurances that no formal arrest will occur, the lawyer has the option to appeal to a supervisor, but such a course of action has to be weighed carefully. There are only so many times a defense lawyer can appeal a line prosecutor's decisions in a case without losing credibility, and most of the time it is not worth playing that card on the issue of whether the client will be arrested since arrests almost never affect the outcome in a criminal case.

Sometimes, arrest is unavoidable because the government wants to make a point with the public. In a highly publicized recent example, John Rigas, the 78-year-old founder of Adelphia Communications, was arrested by federal authorities who charged him with securities fraud and led him on what is known in law enforcement circles as a 'perp walk' before the gathered media. This occurred despite the contention of Rigas' attorney that his client had offered to surrender. Why would the government ignore such an offer from a 78- year-old man? According to a quote in The New York Times from Mary Jo White, the former U.S. Attorney in Manhattan, because a perp walk 'certainly catches people's attention in the right places, from the prosecutor's point of view.'

Steven F. Reich is a partner in the New York office of Manatt, Phelps & Phillips, LLP, where he is a member of that firm's Special Investigations/White Collar Defense Practice Group. He previously served as Senior Associate Counsel to President Bill Clinton.