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United States v. Conti

United States Court of Appeals for the Second Circuit

January 26, 2017, Argued; July 19, 2017, Decided

Nos. 16-898-cr (Lead) 16-939-cr (con)

Opinion

 [*66]  JOSÉ A. CABRANES, Circuit Judge:

This case—the first criminal appeal related to the London Interbank Offered Rate ("LIBOR") to reach this (or any) Court of Appeals—presents the question, among others, whether testimony given by an individual involuntarily under the legal compulsion of a foreign power may be used  [*67]  against that individual in a criminal case in an American court. As employees in the London office of Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. ("Rabobank") in the 2000s, defendants-appellants Anthony Allen and Anthony Conti ("Defendants") played roles in that bank's LIBOR submission process during the now-well-documented heyday of the rate's manipulation.2 Allen and Conti were, for unrelated reasons, no longer employed at Rabobank by 2008 and 2009, respectively. By 2013, they were among the persons being investigated by enforcement agencies in the United Kingdom [**4]  ("U.K.") and the United States for their roles in setting LIBOR.

The U.K. enforcement agency, the Financial Conduct Authority ("FCA"),3 interviewed Allen and Conti (each a U.K. citizen and resident) that year, along with several of their coworkers. At these interviews, Allen and Conti were compelled to testify and given "direct use"—but not "derivative use"—immunity.4 In accordance with U.K. law, refusal to testify  [*68]  could result in imprisonment. The FCA subsequently decided to initiate an enforcement action against one of Defendants' coworkers, Paul Robson, and, following its normal procedures, the FCA disclosed to Robson the relevant evidence against him, including the compelled testimony of Allen and Conti. Robson closely reviewed that testimony, annotating it and taking several pages of handwritten notes.

For reasons not apparent in the record, the [**5]  FCA shortly thereafter dropped its case against Robson, and the Fraud Section of the United States Department of Justice (the "DOJ") promptly took it up.5 Robson soon pleaded guilty and became an important cooperator, substantially assisting the DOJ with developing its case. Ultimately, Robson was the sole source of certain material information supplied to the grand jury that indicted Allen and Conti and, after being called as a trial witness by the Government, Robson provided significant testimony to the petit jury that convicted Defendants.

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864 F.3d 63 *; 2017 U.S. App. LEXIS 12942 **; 2017-2 Trade Cas. (CCH) P80,060; 2017 WL 3040201

UNITED STATES OF AMERICA, Appellee, v. ANTHONY ALLEN AND ANTHONY CONTI, Defendants-Appellants.1

Subsequent History: As Corrected September 26, 2017

Prior History:  [**1] On Appeal from the United States District Court for the Southern District of New York.

This case—the first criminal appeal related to the London Interbank Offered Rate ("LIBOR") to reach this (or any) Court of Appeals—presents the question, among others, whether testimony given by an individual involuntarily under the legal compulsion of a foreign power may be used against that individual in a criminal case in an American court. As employees in the London office of Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. in the 2000s, defendants-appellants Anthony Allen and Anthony Conti ("Defendants") played roles in that bank's LIBOR submission process during the now-well-documented heyday of the rate's manipulation. Defendants, each a resident and citizen of the United Kingdom, and both of whom had earlier given compelled testimony in that country, were tried and convicted in the United States before the United States District Court for the Southern District of New York (Jed S. Rakoff, Judge) for wire fraud and conspiracy to commit wire fraud and bank fraud.

While this appeal raises a number of substantial issues, we address only the Fifth Amendment issue, and conclude as follows.

First, the Fifth Amendment's prohibition [**2]  on the use of compelled testimony in American criminal proceedings applies even when a foreign sovereign has compelled the testimony.

Second, when the government makes use of a witness who had substantial exposure to a defendant's compelled testimony, it is required under Kastigar v. United States, 406 U.S. 441, 92 S. Ct. 1653, 32 L. Ed. 2d 212 (1972), to prove, at a minimum, that the witness's review of the compelled testimony did not shape, alter, or affect the evidence used by the government.

Third, a bare, generalized denial of taint from a witness who has materially altered his or her testimony after being substantially exposed to a defendant's compelled testimony is insufficient as a matter of law to sustain the prosecution's burden of proof.

Fourth, in this prosecution, Defendants' compelled testimony was "used" against them, and this impermissible use before the petit and grand juries was not harmless beyond a reasonable doubt.

Accordingly, we REVERSE the judgments of conviction and hereby DISMISS the indictment.

United States v. Allen, 2015 U.S. Dist. LEXIS 112156 (S.D.N.Y., Aug. 17, 2015)

CORE TERMS

LIBOR, compel testimony, indictment, trader, fifth amendment, grand jury, Defendants', district court, cooperation, Self-Incrimination, rates, derivative, confession, requests, immunized testimony, harmless, banks, interviews, exposure, compulsion, immunity, Fifth Amendment, submitter, sovereign, cases, foreign government, investigations, prosecutions, currencies, questions

Criminal Law & Procedure, Commencement of Criminal Proceedings, Interrogation, Voluntariness, Evidence, Procedural Matters, Preliminary Questions, Admissibility of Evidence, Constitutional Law, Fundamental Rights, Procedural Due Process, Self-Incrimination Privilege, Defendant's Rights, Right to Remain Silent, Prosecutor's Comments on Defendant's Silence, Search & Seizure, Scope of Protection, Self-Incrimination Privilege, Immunity, Compelled Testimony, Defenses, Ignorance & Mistake of Law, Trials, Examination of Witnesses, Burdens of Proof, Allocation, Independently Discovered Evidence, Role of Courts & Prosecutors, Standards of Review, Harmless & Invited Error, Evidence, Accusatory Instruments, Indictments, Appellate Review, Contents, Challenges, Dismissal, Burdens of Proof