United States v. Allen
2017 U.S. App. LEXIS 12942
| 2d Cir. | 2017Background
- Anthony Allen and Anthony Conti, U.K. citizens and former Rabobank LIBOR submitters, were compelled to give testimony to the U.K. Financial Conduct Authority (FCA) in 2013 under direct (but not derivative) use immunity; refusal risked imprisonment.
- The FCA provided compelled transcripts of Allen’s and Conti’s interviews to Paul Robson (a Rabobank JPY submitter), who annotated and reviewed them while preparing for an FCA enforcement meeting.
- The FCA later stayed proceedings and the U.S. Department of Justice (DOJ) prosecuted Robson; he cooperated, pleaded guilty, and provided information to the DOJ.
- Robson became a key government witness: his grand jury and trial testimony supplied material, and in some respects unique, evidence against Allen and Conti, including allegations that Allen directed submitters to favor traders.
- Defendants were tried in S.D.N.Y., convicted of wire fraud and conspiracy, and then raised a Kastigar/Fifth Amendment challenge on appeal asserting the DOJ used their compelled U.K. testimony (directly or derivatively) via Robson.
- The Second Circuit held the Fifth Amendment bars use of compelled testimony compelled by a foreign sovereign in U.S. criminal proceedings; it found the government failed its Kastigar burden to prove Robson’s testimony was untainted and reversed and dismissed the indictment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Fifth Amendment bars use in U.S. criminal proceedings of testimony compelled by a foreign sovereign | Gov’t: foreign-compelled testimony does not implicate the Fifth Amendment; at most other doctrines might apply | Allen/Conti: the Self-Incrimination Clause forbids any use of compelled testimony in U.S. trials, even if compelled abroad | Held: Fifth Amendment applies; compelled foreign testimony cannot be used in U.S. prosecutions against the testifying defendant |
| Standard for assessing taint when a government witness reviewed defendant’s compelled testimony | Gov’t: Kastigar burden met by showing independent sources and corroboration; witness denials sufficient | Defs.: When a witness had substantial exposure to compelled testimony and changed account, prosecution must prove the exposure did not shape/alter testimony; mere denials insufficient | Held: Under Kastigar, government must prove at minimum that exposure did not shape/alter evidence; bare generalized denials are legally insufficient when pre-exposure statements materially differ |
| Whether Robson’s testimony was tainted by his review of the compelled FCA transcripts | Gov’t: Robson’s testimony (plus corroborating docs and other witnesses) was independently sourced and untainted | Defs.: Robson’s FCA testimony (pre-exposure) materially differed from his later testimony; his annotations and notes indicate derivative use and contamination | Held: Robson’s post-exposure testimony was materially different and likely shaped by exposure; government failed Kastigar burden; evidence was tainted |
| Whether any use of tainted evidence was harmless (trial and grand jury) | Gov’t: documentary evidence and other witnesses made error harmless | Defs.: Robson provided unique, critical eyewitness evidence (including that Allen issued instructions); his input was material to indictment and verdict | Held: Error was not harmless beyond a reasonable doubt at trial; grand-jury use was also not harmless; convictions reversed and indictment dismissed |
Key Cases Cited
- Kastigar v. United States, 406 U.S. 441 (1972) (establishes use-and-derivative-use immunity and places heavy burden on government to prove all evidence is from sources wholly independent of compelled testimony)
- Bram v. United States, 168 U.S. 532 (1897) (confessions compelled abroad cannot be admitted in U.S. courts if involuntary)
- Colorado v. Connelly, 479 U.S. 157 (1986) (voluntariness for Due Process requires coercive police activity; distinguished by court here as a Due Process case)
- United States v. Hubbell, 530 U.S. 27 (2000) (government’s use of compelled testimony can require dismissal; government must show independence of evidence used to indict)
- United States v. North, 910 F.2d 843 (D.C. Cir. 1990) (D.C. Circuit standard: exposure of witnesses to immunized testimony that refreshes, focuses, or shapes testimony constitutes impermissible use)
- United States v. Poindexter, 951 F.2d 369 (D.C. Cir. 1991) (reinforces that testimony shaped by exposure to immunized statements is prohibited)
- United States v. Nanni, 59 F.3d 1425 (2d Cir. 1995) (government bears burden of proving harmlessness/independence under Kastigar)
- United States v. Hinton, 543 F.2d 1002 (2d Cir. 1976) (dismissal required where the same grand jury heard immunized testimony subsequently used against witness)