Parallel Proceedings: The End of an Error?

Next, in United States v. Stringer, 408 F. Supp.2d 1083, 1087-88 (D. Or. 2006), another district court dismissed the entire indictment against three defendants in a corporate-fraud case because it found that factually and temporally overlapping investigations conducted by the SEC and the U.S. Attorney's Office in Oregon 'were not parallel proceedings.' The court reasoned that the prosecutors were 'actively involved in the SEC investigation' by meeting regularly with SEC personnel, receiving documents, requesting that depositions be taken in the district to establish venue for possible false statements charges, and advising the SEC investigators on the elements of criminal false statements charges. In the alternative, the Stringer court found that the indictment should be dismissed because the government had 'engaged in deceit and trickery to keep the criminal investigation concealed' when an SEC attorney instructed a court reporter not to mention the DOJ's involvement to defense attorneys and also side-stepped a direct response when one defense attorney asked whether there was a pending criminal investigation.

The combined impact of the district court decisions in Scrushy and Stringer prompted a flurry of written commentaries (including two in this publication) and made parallel proceedings a hot topic at both government training courses and meetings of the white-collar criminal defense bar. For the past two years, it appeared that these twin decisions might herald a future in which government civil and criminal investigators had to deal with each other far more gingerly, if at all, while defense attorneys would eagerly seek to explore all contacts between the government's civil and criminal agencies in any case involving concurrent investigations.