18 Aug Always Document Immunity Agreements: It Protects All Parties
David Mark worked at a real state and investment company and suspected the company’s involvement in a large-scale mortgage fraud scheme. He and his girlfriend voluntarily reached out to the FBI. After FBI agents and an AUSA interviewed, Mark understandably expressed concern of prosecution. The prosecutor assured him that as long as he cooperated, the government would not prosecute him. The prosecutor did not reduce this promise in writing, but acknowledged the existence of an informal immunity agreement. This was the beginning of the fateful failures of counsel to document immunity agreements recounted in U.S. v. Mark, No. 13-10579, slip op. (9th Cir. July 31, 2015).
In February 2011, the prosecutor and FBI agent called Mark in preparation for the upcoming trial against the company and its officers, and spoke to him for over an hour. The agent prepared a report memorializing the conversation, but the government did not call Mark to testify.
Six months later, Mark received a target letter in the mortgage fraud scheme and was indicted. During trial, after learning for the first time the prosecutor promised Mark immunity, Mark’s attorney moved to dismiss the indictment and the trial court suspended trial and held a hearing on whether Mark was immune from prosecution. The prosecutor claimed that unlike when they spoke to Mark in February 2011, in July 2011 Mark was uncooperative and pretended not to remember anything when they contacted him. The FBI agent testified he could not recall the conversation, and neither he nor the AUSA had notes of the call. The district court denied the motion to dismiss and found that the July 2011 call happened as described by the government. The jury convicted Mark.
Mark filed a motion for reconsideration of his motion to dismiss based on the new evidence that after he subpoenaed phone records between his cell phone and the US Attorney’s Office, the records confirmed the February 2011 call, but not the July 2011 call, which undermined the prosecutor’s testimony that it took place at all. The district court failed to explain why, despite the new phone records, it chose not to hold a further evidentiary hearing or reconsider its earlier order denying the motion to dismiss, and denied the motion to reconsider finding insufficient grounds to conduct an evidentiary hearing.
On appeal, the Ninth Circuit reversed. Under well-settled law, the district court could only deny the motion to dismiss based on an immunity agreement if it concluded that Mark breached that agreement. The government has the burden of proving breach by a preponderance of the evidence. The appellate court found that in light of the scant record supporting the government’s claim of breach and clear evidence that key details of the government’s story were inaccurate, the district court abused its discretion when it failed to either grant the motion for reconsideration or order an evidentiary hearing. The phone records confirmed the February call and agents confirmed the call in their notes, but the July call was not corroborated by phone records, nor any notes of the purported call. The government did not dispute that ordinarily, a target letter to a witness who previously had an immunity deal would describe the defendant’s breach, but the letter did not do so. During oral arguments, prosecutors declined the Ninth Circuit’s invitation to conduct an evidentiary hearing to submit further evidence to support its claim. In light of the gaps and contradictions in the record, the Ninth Circuit reversed the district court’s denial of the motion to reconsider and remanded with directions to dismiss the indictment.
Mark got very lucky; his failure to take precautions could have been disastrous. This is a textbook lesson of the importance of documenting immunity deals, both in terms of the deal itself and any claim of breach. Verbal grants of immunity and undocumented breaches create uncertainty. Immunity deals are common in cases involving white-collar crime. Promises of leniency in exchange for cooperation are key to many such prosecutions. The prosecution’s inexplicable failure to disclose the cooperation agreement to Mark’s trial counsel is also troubling. Finally, the government’s failure to document an alleged breach — when that breach is the only thing that permitted prosecution — is equally dumbfounding. Careful documentation of such a momentous agreement and its application was in the interest of all the parties, and in the interest of justice.
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