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The Crime-Fraud Exception to Attorney-Client Privilege: A Primer in Real Time

For Immediate Release: October 30, 2017

Contact: Craig M. Sandberg, 312.263.7249, craig@muslin-sandberg.com

Washington, D.C. – Today the nation learned (1) Paul Manafort, President Donald Trump’s former campaign chairman, has been indicted as part of special counsel Robert Mueller's investigation into Russian meddling in the 2016 election and (2) a former Trump campaign foreign policy adviser, George Papadopoulos, pleaded guilty to making a false statement to the FBI after he lied about his interactions with foreign officials close to the Russian government. To say that these recent developments in the special counsel's investigation dominated the new cycle would be an understatement.

However, as a criminal-defense attorney, one of the most interesting reports related to the federal district court's ruling on a foundation of attorney-client relations. Politico reported that Chief Judge Beryl A. Howell of the U.S. District Court for the District of Columbia had agreed to allow Robert Mueller to use something called the crime-fraud exception to attorney-client privilege to compel testimony from an attorney who formerly represented Paul Manafort and Manafort’s onetime employee Rick Gates. In the court's 37-page opinion, dated Oct. 2 and unsealed this week, Judge Howell determined that Manafort and Gates’ former attorney could be compelled by Mueller “to testify before a grand jury regarding limited aspects of her legal representation of the Targets, which testimony the [special counsel’s office] believes will reveal whether the Targets intentionally misled [the Department of Justice] about their work on behalf of a foreign government and foreign officials.”

“The attorney-client privilege ‘is the oldest of the privileges for confidential communications known to the common law,’” aiming “to encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance of law and administration of justice.” United States v. Jicarilla Apache Nation, 564 U.S. 162, 169 (2011) (quoting Upjohn Co. v. United States, 449 U.S. 383, 389 (1981)). The privilege “applies to a confidential communication between attorney and client if that communication was made for the purpose of obtaining or providing legal advice to the client.” In re Kellogg Brown & Root, Inc., 756 F.3d 754, 757 (D.C. Cir. 2014).

The doctrine of the crime-fraud “[e]xception comes into play when a privileged relationship is used to further a crime, fraud, or other fundamental misconduct.” In re Sealed Case, 676 F.2d at 807. “Attorney-client communications are not privileged if they ‘are made in furtherance of a crime, fraud, or other misconduct.’” In re Grand Jury, 475 F.3d 1299, 1305 (D.C. Cir. 2007) (quoting In re Sealed Case, 754 F.2d 395, 399 (D.C. Cir. 1985)). “To establish the exception . . . the court must consider whether the client ‘made or received the otherwise privileged communication with the intent to further an unlawful or fraudulent act,’ and establish that the client actually ‘carried out the crime or fraud.’” In re Sealed Case, 223 F.3d 775, 778 (D.C. Cir. 2000) (quoting In re Sealed Case, 107 F.3d 46, 49 (D.C. Cir. 1997)).

To satisfy its burden of proof as to the crime-fraud exception, the government may offer “evidence that if believed by the trier of fact would establish the elements of an ongoing or imminent crime or fraud.” In re Grand Jury, 475 F.3d at 1305 (internal quotation marks omitted). It “need not prove the existence of a crime or fraud beyond a reasonable doubt.” In re Sealed Case, 754 F.2d at 399. “The determination that a prima facie showing has been made lies within the sound discretion of the district court,” id. at 400, which must “independently explain what facts would support th[e] conclusion” that the crime-fraud exception applies. Chevron Corp. v. Weinberg Grp., 682 F.3d 96, 97 (D.C. Cir. 2012). The D.C. Circuit has “approved the use of ‘in camera, ex parte proceedings to determine the propriety of a grand jury subpoena or the existence of a crime-fraud exception to the attorney-client privilege when such proceedings are necessary to ensure the secrecy of ongoing grand jury proceedings.’” In re Grand Jury Subpoena, Judith Miller, 438 F.3d 1141, 1179 (D.C. Cir. 2006) (quoting In re Sealed Case No. 98–3077, 151 F.3d 1059, 1075 (D.C. Cir. 1998)). “[I]n camera, ex parte submissions generally deprive one party to a proceeding of a full opportunity to be heard on an issue, and thus should only be used where a compelling interest exists.” In re Sealed Case No. 98-3077, 151 F.3d at 1075 (internal citation and quotation marks omitted).

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