By Solomon L. Wisenberg
Solomon L. Wisenberg is a partner and co-chair of the white-collar criminal defense practice group of Nelson Mullins Riley & Scarborough, LLP.
Just what is a proffer and what are the perils of entering into a proffer agreement (also known as a proffer letter) with the federal government? Proffer or "queen for a day" letters are written agreements between federal prosecutors and individuals under criminal investigation which permit these individuals to tell the government about their knowledge of crimes, with the supposed assurance that their words will not be used against them in any later proceedings. (The individuals can either be witnesses, subjects, or targets of a federal investigation, although it is subjects and targets who provide most proffers.)
If you enter into one of these agreements, you will proffer information orally in a proffer or queen for a day "session" attended by you, your attorney, the Assistant U.S. Attorney ("AUSA") and one or more federal agents. (In recent times, regulatory attorneys have been attending proffer sessions, when the government is engaged in parallel civil and criminal investigations.) You should think of a proffer session as a sneak preview in which you show the federal authorities what you can bring to the table if they cut a deal with you.
Most proffers are made with the informal understanding that the government if satisfied that you are telling the truth in the proffer session, will subsequently enter into a formal, written immunity agreement or plea bargain agreement with you. (But don't expect to see that informal understanding reflected in the written proffer agreement that you and your attorney will sign. In fact, in the overwhelming majority of cases, the formal, written proffer agreement will explicitly state that no promises of either immunity or a plea bargain have been made.) Accordingly, your attorney and the prosecutor should have already informally worked out, before you ever sit down for the proffer session, a basic understanding of: 1) what you are likely to proffer; and, 2) what the contemplated post-proffer immunity or plea agreement will look like. To the extent that either part of this informal understanding is not perfectly clear to you, your attorney, and the federal prosecutor, you are heading into exceedingly dangerous territory. Why? Because proffering will almost always harm you if post-proffer immunity/plea discussions fall apart and the government decides to indict you. For the same reason, if the prosecutor is not trustworthy or if you are not prepared to tell the complete truth, the proffer session should never take place.
Why are proffers so risky, since your words are not supposed to be used against you at a subsequent trial? To begin with, unlike immunity or plea agreements, proffer agreements do not prevent the government from making derivative use of your statements. In other words, although the government cannot use your actual proffer session statements against you in its case-in-chief, it can use the information that you provide to follow up leads and conduct further investigations. If those leads and further investigations capture new evidence, such evidence can be used to indict and convict you. Even if the prosecutor is not able to develop new information from your proffer, he will gain a tactical advantage from seeing (at the proffer session) how you fare under the pressure of tough questioning, how you present yourself as a witness, and, most importantly, what your theory of the case is. This will better prepare him to build his evidence against you and to cross-examine you at trial, should you choose to testify, and will thus boost his self-confidence. Moreover, if, like many suspects, you implicate yourself in criminal activity during the proffer session, the prosecutor will feel better about prosecuting you, because he will "know" in his heart of hearts that you are guilty. (If the AUSA believes that you lied during your proffer session, he can indict you under Section 1001 of the federal criminal code for false statements to the government. As a practical matter, this is almost never done.)
But there are even bigger risks in proffering. Virtually all proffer agreements allow the government to use your statements against you for impeachment purposes if you take the stand in a subsequent proceeding and testify inconsistently with your proffer. And the version of the proffer that will be compared to your trial testimony, in order to see whether you should be impeached, is the version that was interpreted and written down by government agents. More ominously, in recent years many government-drafted proffer agreements allow the use of your statements against you if any part of your defense, including questions your lawyer asks of government witnesses on cross-examination, is inconsistent with your proffer. These broadly worded agreements, which have been consistently upheld at the federal circuit court level, may effectively deny you the right to present a defense at trial if your anticipated post-proffer immunity or plea deal does not come through. Why? Because if any part of your defense is deemed to be inconsistent with your proffer, and if that proffer implicates you in any way, the entire proffer will be admitted against you at trial. Thus, your attorney may find herself in the unenviable position of failing to contest key portions of the government's case, declining to cross-examine certain witnesses, and choosing not to put you on the stand, all in an effort to prevent your damaging proffer statements from coming before the jury. Proposed proffer agreements submitted to you for your and your attorney's signatures should be examined with great care.
Given the risk involved, why would you even want to make a proffer if you have criminal exposure? For one reason and one reason only: if you are facing imminent prosecution and need an immunity agreement or plea bargain deal, you usually cannot get either, particularly in white-collar cases, without first making a proffer.
In my view, persons without any criminal exposure should not be making proffers. It is important to understand that the number of individuals (of interest to the government) falling into the "no exposure" category in a typical white-collar investigation is very small or infinitesimal. (An eyewitness to a bank robbery has no exposure. An eyewitness to a bank fraud scheme is often a co-worker who aided and abetted or helped cover-up the scheme. All it takes for a jury to find you guilty of aiding and abetting an unlawful fraud scheme is 1) your knowledge of the unlawful scheme; and 2) any act on your part, no matter how small, which furthered that scheme. In order to have no exposure to criminal charges in a white-collar case, your conduct must be equivalent to that of the classic innocent bystander in a bank robbery. ) If you and your experienced white-collar attorney are certain, however, that you are totally without exposure, and the government wants to interview you, you first need to decide whether to honor the request. If you decline an interview, the AUSA can either ignore you or subpoena you to testify at the grand jury or trial. If subpoenaed, you can answer questions under oath from a hostile prosecutor or refuse to testify unless given immunity. If you truly have no exposure, you theoretically have no right to demand immunity. But how can you ever really be sure, in a white-collar investigation, that you have no exposure? What if other witnesses, subjects or targets, who have yet to give statements, end up implicating you or contradicting your version of events? When you invoke the Fifth Amendment privilege against self-incrimination, it is extremely difficult from a practical standpoint for the government to force you testify without granting you immunity. If, on the other hand, you agree to be interviewed by the government, with your attorney at your side throughout the entire session, the interview should be conducted without a proffer agreement. That way, in the extremely unlikely event that something goes awry and you get indicted, you can present yourself to the jury as a person so blameless and innocent that he voluntary talked to the government with no strings attached. In the much more likely event that the interview goes as expected and you become a government witness, the defendant's attorney will not be able to impeach you with the terms of the proffer agreement.
Is it worth the risk to make a proffer if you have criminal exposure? That depends on the answers to some predicate questions. Is indictment a foregone conclusion if you fail to strike a deal with the prosecutor? Assuming the certainty of indictment, how strong is the government's case, and how strong of a defense do you have? If your defense is strong, do you have the resources to weather a lengthy federal white-collar trial? If you are convicted after trial, what is your maximum possible sentence under the United States Sentencing Guidelines ("Guidelines")? Are you prepared to serve it? What is your likely Guidelines sentence? (In white-collar cases the difference between the maximum possible Guidelines sentence received post-trial and post-plea bargain is often immense. This is because of the availability under the Guidelines of "downward departures" for defendants who plea bargain, and also because white-collar Guidelines sentences are heavily dependent on the amorphous "amount of loss" caused by the defendant, an amount that is regularly manipulated by federal fraud prosecutors. You should not even think of making a proffer unless your attorney has thoroughly examined all possible scenarios under the Guidelines. Even though the Guidelines are now advisory, rather than mandatory, they still must be considered and consulted by all federal judges and should continue to play a major role in the sentencing decisions of most of these judges.) How specific and how good of a deal is being informally dangled in front of you if the proffer goes as planned? If the prosecutor is demanding a felony plea, will this result in the forfeiture of a professional license depriving you of your livelihood? Do you care? Is the prosecutor offering a downward departure under Section 5K1.1 of the Guidelines? (This is of immense importance because a downward departure can operate in some instances like a get-out-of-jail-free card.) Do the written plea agreements in the prosecutor's office typically contain a government promise to recommend a downward departure in return for the defendant's truthful cooperation or do the agreements only offer to consider such a recommendation in the government's sole discretion? Has the prosecutor already received permission from his superiors to offer a downward departure or will that decision have to pass through a committee? Do the judges in the federal district where you are under investigation usually follow the prosecutor's downward departure recommendations? How significantly do the judges depart below the recommended Guidelines range in white-collar cases? Does the proffer agreement contain the traditional narrow provision allowing the government to impeach you with your proffer statement in a subsequent proceeding if your testimony is materially inconsistent with your proffer, or does it contain the newer, broader provision allowing the government to use your proffer statement against you if any part of your defense is inconsistent with any part of your proffer? Is the prosecutor trustworthy? Are you prepared to tell the truth during the proffer session and in subsequent debriefings and testimony?
All of these questions must first be thoroughly considered for each potential defendant in each white-collar case. After that, here is the bottom line. Barring unusual circumstances, you should only proffer if the following conditions are met: 1) indictment is a foregone conclusion absent a proffer; 2) a reasonably specific plea deal (or an immunity agreement) is contemplated by both sides if your proffer is truthful and covers the anticipated topics; 3) you and your attorney have decided that, all things considered, you definitely want the contemplated plea deal (or immunity agreement); 4) the prosecutor is totally trustworthy; 5) the prosecutor will not be undercut or overruled by his superiors; and, 6) you are prepared to tell the whole truth at the proffer session and thereafter.
It follows from the foregoing that a seasoned white-collar attorney has crucial work to perform in determining whether you should proffer and insuring that any proffer you give turns out as planned. It cannot be emphasized enough that your attorney must do everything in her power to see to it that the prosecutor and investigating agent know exactly what you can and cannot say at the proffer session. (This is accomplished through attorney proffers and/or hypothetical discussions between prosecutor and defense attorney.) Both sides must understand the overall terms of the plea agreement that is contemplated, including the likely Guidelines range, assuming that the proffer is successful. Your attorney must thoroughly satisfy herself of the prosecutor's trustworthiness and the case agent's knowledge and support of whatever understandings and agreements have been worked out with the prosecutor.
Your white-collar attorney can also do much to enhance the mechanics of a successful proffer. Depending on the strength of your position in relation to the government, counsel may be able to negotiate regarding specific provisions of the written proffer agreement. For example, the government may agree to the traditional narrower clause, which allows it to use your proffer statement only for impeachment purposes. (I am even aware of two instances in which the government agreed that it would not impeach the suspect with his proffer statement unless the proffer led to a plea agreement. This allowed the suspect to make a relatively risk-free proffer. In both of these instances, however, the prosecutor was operating from a position of extreme weakness.)
The prosecutor, on rare occasions, consents to put in writing that the government contemplates an eventual plea agreement if, in its sole discretion, the government finds the proffer truthful. The terms of the plea are not discussed at all in writing when this is done, and the discretion to determine truth is still entirely in government hands, but such a provision may offer some additional peace of mind against the possibility of arbitrary refusal to negotiate a plea agreement. Although the prosecutor almost always refuses to put this in writing, it is my practice to begin each proffer session with an oral statement to the same effect and I have never had a prosecutor dispute it.
Finally, if there are certain things (such as the location of potential documents or witnesses) or subject areas that you do not wish to delve into until a plea agreement is signed, your attorney should attempt to limit the scope of the proffer session. This practice was more common 10 or 15 years ago than it is today. Moreover, if you limit the scope of the proffer session, the prosecutor is less likely to commit to the kind of plea bargain agreement you have in mind.
In summary, proffers are a high-risk venture within the federal criminal justice system. Under limited circumstances, they are a risk worth taking for the white-collar suspect. But you should never make a proffer without the guidance of an experienced and knowledgeable white-collar criminal defense attorney to help you analyze all of the relevant factors and limit all of the potential risks.