White Collar Crime Grand Jury Considerations and Parallel Proceedings

Any systemic understanding of white collar crime demands an extraordinarily nuanced understanding of procedural issues which attend a variety of white collar criminal investigations and proceedings.  Two of the more hotly debated issues involve whether the American grand jury actually continues to serve valid and ethically defensible public policy objectives and the extant to which parallel proceedings in white collar criminal cases implicate important constitutional rights as a consequence of prosecutorial cooperation and the potential sharing of information.  A review of the substantive arguments underlying these debates illustrates the fact that the issues have become increasingly intense and polarized even among normally calm legal and criminological scholars.  Some view the grand jury mechanism as a valuable buffer before criminal charges are filed HYPERLINK httpwww.questia.comPM.qstaod5000761789(Neely, 2002)  whereas others characterize it as an ineffectual rubber stamp to be easily manipulated by prosecutors HYPERLINK httpwww.questia.comPM.qstaod5007028748(Kuckes, 2003).

In the same way, some view parallel proceedings as an efficient mechanism for streamlining related legal issues whereas others warn of the dangers these more comprehensive types of conceptual proceedings pose to certain constitutional and individual rights HYPERLINK httpwww.questia.comPM.qstaod5002005038(Bortner  Miller, 2003).

What is needed is a more objective type of analytical discussion of the proffered benefits and alleged dangers in order to determine whether grand juries and parallel proceedings positively impact the administration of criminal justice or whether they instead contribute to substantial countervailing negative impacts such analyses suggest that the dangers and abuses associated with grand juries in white collar cases tend to outweigh the ostensible benefits and that parallel proceedings are in fact very useful so long as they conform to certain criteria and limitations which respect the same types of rights guaranteed in non-parallel proceedings.

Grand Juries  A Comparative Analysis
As an initial matter, there is a great deal of tension surrounding the propriety and the effectiveness of grand juries in white collar contexts because of serious differences between theoretical purposes and practical applications.  There can be no doubt, for example, that the grand jury does not always function in practice in the ways articulated theoretically.  One legal scholar has even gone so far as to list the disdainful characterizations attributed to the grand jury as a tool of the Executive, rubber stamp, total captive of the prosecutor, prosecution lapdog,  ignominious prosecutorial puppet HYPERLINK httpwww.questia.comPM.qstaod5000761789(Neely, 2002, p. 176) and to further note the frequent quotation cited in law reviews to the effect that the prosecutor could even get the grand jury to indict a ham sandwich HYPERLINK httpwww.questia.comPM.qstaod5000761789(Neely, 2002, p. 176).

Given the severity of such commentary, it is necessary to more closely examine whether and the extant to which the grand jury ideals are actually achieved in practice unfortunately, it would appear the modern grand jury practices fall well short of the historical and theoretical ideals.

From a theoretical perspective, a grand jury mechanism tends to derive its fundamental legitimacy and praise from three premises.  First, a grand jury is frequently praised as a constitutional benefit designed to protect common citizens from unjust or tyrannical government prosecutions.   Second, a grand jury is often portrayed as an important pre-charge mechanism for ensuring that criminal charges are not initiated unless a proper factual framework for the charges are established before an the independent individuals which comprise a grand jury.  Third, a grand jury is designed in theory to function as a buffer between potential abuses by government authorities and individual citizens.  At the federal level, for instance, The Fifth Amendment provides that an individual cannot be held to answer a felony offense unless the grand jury has rendered indictment or presentment on the charges HYPERLINK httpwww.questiaschool.comPM.qstaod5000761789(Neely, 2002, p. 171).

The grand jury, at the federal level, is therefore an explicit constitutional guarantee and benefit.   This constitutional guarantee is intended to require prosecutors to present an evidentiary framework based on factual information through which a grand jury weighs whether there is probable cause to believe that a crime has been committed this probable cause burden of proof is lower than in an actual criminal case and is intended to allow independent grand juries to protect individuals from criminal charges when the prosecutors cases are weak.  There are therefore a number of alleged benefits.  First, it is hoped that government will be prevented through the grand jury mechanism from using the threat of criminal prosecution in cases for which the evidence is weak or circumstantial.  Theoretically, this will compel prosecutors to conduct more thorough investigations and to refrain from oppressive measures or abusive uses of the criminal justice system.  Second, and more generally applicable, it has been argued by some that The constitutional lore, nurtured by the Supreme Court, is that the federal grand jury is a protective bulwark, whose central mission is to protect civil liberties and shield citizens from unfounded or abusive criminal charges HYPERLINK httpwww.questiaschool.comPM.qstaod5007028748(Kuckes, 2003, p. 1).

The grand jury is therefore theoretically described as a procedural means by which to safeguard individual rights, by which to maintain the broader legitimacy of civil liberties socially, and by which to check potential abuses by misguided or oppressive government prosecutors.  From a purely theoretical perspective, in short, the grand jury seems a truly worthwhile and beneficial feature of the criminal justice system the problem, however, is that the grand jury does not function in a purely theoretical world in which these idealistic notions are ever realized.

A review of the academic literature clearly demonstrates that few explicitly provided constitutional rights are as controversial as the grand jury.  This is basically because grand juries do not seem in practice to generate the desired benefits quite the contrary, grand jury proceedings are often viewed by knowledgeable practitioners and interested scholars as procedural hurdles easily traversed and manipulated by prosecutors.  Although prosecutors are theoretically portrayed as being required to persuade a grand jury, the research instead suggests that grand juries tend in the majority of cases to accept the prosecutorial cases rather uncritically.  This is associated with one proffered shortcoming of the grand jury more specifically, it has been argued that the procedural and structural nature of the grand jury is such that a prosecutor is able to lead a grand jury without being check by defense attorneys in ways that would be true in an actual criminal trial.  One leading scholar argues, for instance, that the disconnect between the rhetoric and reality of the grand jury is not a coincidence, or a historical vestige, but a central and important feature of the modern federal criminal justice system. Most knowledgeable observers would describe the federal grand jury more as a handmaiden of the prosecutor than a bulwark of constitutional liberty HYPERLINK httpwww.questiaschool.comPM.qstaod5007028748(Kuckes, 2003, p. 2).  It is this notion of a disconnect between theoretical ideals and practical realities which lends credence to the assertion that the grand jury mechanism is far less beneficial to individuals and civil liberties than its advocates  would have the American public believe.  An additional shortcoming is the dominant role played by the prosecutor.  An irony is that the grand jury is characterized as a buffer when in fact the knowledge received by grand juries is carefully controlled and manipulated by prosecutors in order to secure indictments.

To be sure, a grand jury cannot properly perform its constitutional mandate unless it has access to fair and objective information and the research strongly suggests that prosecutors frequently present information favorable to their positions while downplaying or simply withholding information which might exonerate the individual.  The grand jury is therefore not a balanced or even an objective procedural protection because of the way that prosecutors are able to control access to relevant facts and information.  This has been especially true with respect to the treatment of exculpatory evidence and has led one researcher to suggest that  A prosecutorial obligation to present substantial exculpatory evidence to the grand jury that would oppose a finding of probable cause is essential to an independent and informed determination of probable cause  HYPERLINK httpwww.questiaschool.comPM.qstaod5000761789(Neely, 2002, p. 184).  The truth, it would appear, is that more safeguards are needed if the grand jury is going to be able to achieve its stated objectives in practice because the abuses it intends to prevent are nevertheless occurring.  The benefits of the grand jury, though noble and worthwhile, are fundamentally illusory in practice.

Parallel Proceedings  Conceptualization and Cooperation
Conceptually, in a white collar criminal context, parallel proceedings essentially refer to a multilayered type of potential criminal and civil liability.  More particularly, Many white-collar crime statutes contain provisions authorizing both criminal and civil proceedings against the accused HYPERLINK httpwww.questiaschool.comPM.qstaod5002005038(Bortner  Miller, 2003, p. 942).  These statutory provisions can create special types of implications or consequences in white collar criminal cases.  First, although criminal defendants are generally most concerned with criminal sentencing concerns, the parallel proceedings phenomenon adds an additional dimension or concern because white collar criminal defendants must also be concerned with potential civil damages as well.  Such multilayered consequences arise, for instance, in white collar cases involving alleged securities fraud in which federal prosecutors pursue criminal penalties and regulatory agencies such as the Securities and Exchange Commission pursuer civil penalties.  Another common illustration is the situation where the Internal Revenue Service becomes involved in related criminal investigations and prosecutions. These civil consequences may be civil in nature or quasi-criminal in nature and involve such penalties as making restitution, forfeiting certain assets obtained in violation of the law, or the loss of various licenses or other privileges.  Second, the aforementioned statutes do not state which case has precedence as a result, it is not uncommon for white collar criminal defendants to be forced to defend themselves in closely related by separate legal proceedings.  Problems and debates arise from this reality because Concurrent litigation raises significant discovery,  constitutional,  and strategic issues for the both the defendant and the government HYPERLINK httpwww.questiaschool.comPM.qstaod5002005038(Bortner  Miller, 2003).   Closely related to these concerns are questions regarding the propriety of cooperation and information sharing between the criminal prosecutors and the regulatory agencies pursuing litigation against the white collar criminal defendants.

Disclosure issues are especially contentious and these issues arise from both grand jury proceedings and discovery procedures.  As a general rule, grand jury proceedings are secret and disclosure is not intended.  There are also important discovery rule differences in criminal cases and civil cases that raise important issues in parallel proceedings.  The discovery rules in civil scenarios are much more generous than in criminal cases where important constitutional rights can be invoked to limit discovery in important ways.  A white collar criminal defendant, for example, might invoke the Fifth Amendment right against self-incrimination in a criminal proceeding but have more difficulty preventing the disclosure of the same or related information in civil proceedings.  This type of issue often arises in parallel proceedings involving the Internal Revenue Service.  Indeed,
Many parallel proceedings involve the IRS because, although the IRS cannot try its own prosecutions, the governments interest in collecting unpaid taxes continues even after a criminal investigation is commenced. To assist the IRS in civil actions commenced to collect outstanding taxes, Congress has given the Service broad powers to issue summonses that authorize the IRS to examine books, papers, records, or summon an individual to give testimony under oath  HYPERLINK httpwww.questiaschool.comPM.qstaod5002005038(Bortner  Miller, 2003, p. 935)

These congressional authorizations can therefore function to circumvent traditional protections provided to criminal defendants when certain types of white collar crimes are involved.  Although the case law strives to create good faith rules in order to maintain the integrity of the separate proceedings, the reality is the information is disclosed in unique ways and that the accused is vulnerable in special ways in white collar criminal cases.  Improper sharing of information can lead to the undermining of fundamental constitutional rights such as the Fifth Amendment right against self-incrimination interestingly, the United States Supreme Court has upheld these congressional statutes providing special powers to regulatory agencies in parallel proceedings.  Information sharing is allowed so long as each proceeding pursues its evidence collection properly and does not seek to abuse the parallel proceedings in order to circumvent disclosure limitations and restrictions.  This is especially true in the evidence collection stage proceeding a grand jury because this evidence can later be shared even though grand jury proceedings are secret if an indictment is secured and criminal charges filed and criminal proceedings initiated.  Both prosecutors and regulatory agencies must seek to avoid bad faith actions because these are likely to be viewed negatively by the courts.

In the final analysis, white collar criminal cases are distinguishable in important respects from more conventional types of criminal cases.  The grand jury rules, both federally and in many state situations, seem beneficial to white collar criminal defendants but they also pose certain illusory benefits because of the dominant position of the prosecutors.  The research suggest that important reforms need to be made to the grand jury mechanism if its stated objectives are very to be realized in practice.  Parallel proceedings also raise special issues in white collar criminal cases.  The need in this case is the exercise of good faith to ensure that information sharing is not improperly used to circumvent civil liberties and fundamental constitutional protections.


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