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INSIGHT: Covid-19 Alters Business-as-Usual for DOJ Investigations

April 7, 2020, 8:01 AM

The Covid-19 pandemic has caused unprecedented business interruptions across a number of industries, and the Department of Justice is no exception.

Federal prosecutors have been forced to adapt operations to account for state-wide lockdown requirements, social distancing, and other precautions, while a patchwork of federal district court orders define new constructs for criminal and civil proceedings. And recently, amid this ever-evolving situation, the DOJ asked Congress to grant it certain emergency powers as the coronavirus outbreak begins to affect the timing of court proceedings and the DOJ’s ability to conduct investigations.

While it is unlikely that the current set of proposals will gain the traction needed for Congressional approval, it has become clear that the realities of dealing with DOJ investigations during this national emergency have altered the practice of white-collar criminal defense, at least for the time being.

Even without a Congressional grant of expanded powers, federal prosecutors will find ways to deal with the difficulties imposed by Coronavirus, most likely by using tools already at their disposal.

DOJ’s Proposals and Related Constitutional Concerns

A complete list of the DOJ’s proposals to lawmakers has not been made publicly available, but reportedly included requests to:

  • Grant the attorney general the power to ask the chief judge of any district court to delay court proceedings during national emergencies;
  • Pause the statutes of limitations for criminal investigations and civil proceedings for up to one-year following a national emergency; and
  • Expand the use of videoconferencing for criminal appearances and arraignments with or without the consent of the defendant.

Some of these requests naturally raise concerns about constitutional rights and civil liberties. A “pause” on post-arrest procedures could mean a person remains under arrest until the declared emergency is decidedly over.

With the potential for a curtailment in the rights of criminal defendants, several lawmakers (both democrats and republicans) publicly criticized the DOJ’s requests. Sen. Mike Lee (R-Utah), Sen. Rand Paul (R-Ky.), Rep. Justin Amash (I-Mich.), Rep. Hakeem Jeffries (D-N.Y.), and Rep. Alexandria Ocasio-Cortez (D-N.Y.) all spoke out against the proposals. And the CARES Act, signed into federal law on March 27th, now permits chief judges to allow video or audioconferencing for certain criminal proceedings only with the defendant’s consent after consultation with counsel.

DOJ’s Response to Backlash

In response to the wave of media reporting and questions about constitutional implications, Kerri Kupec, the DOJ’s Director of the Office of Public Affairs, swiftly defended the proposals. Kupec clarified that Congress had requested the DOJ to submit “suggested proposals necessary to ensure that federal courts would be able to administer fair and impartial justice during pandemic.” She also noted that the draft suggestions were developed in consultation with both Congress and the federal judiciary.

With courts closing and grand juries not meeting, Kupec explained that prosecutors may be unable to indict criminals before statutes of limitation expire, and “dangerous criminals who have been arrested may be released because of time limits,” adding that “criminals should not be able to avoid justice because of a public-health emergency.”

DOJ Charters Course in Absence of Emergency Powers

While it is unlikely that the DOJ’s requests—as currently drafted—would obtain Congressional approval, it is clear that the DOJ is looking for ways to manage the pandemic’s impact on its cases. Witness meetings and proffers with DOJ attorneys have been delayed, international travel stymied, and even physical deliveries of document productions have been curtailed in favor of electronic delivery. But even without Congress’s grant of emergency powers, federal prosecutors already have a “toolbox” to deal with timing constraints resulting from the Covid-19 crisis.

First, chief judges of federal courts across the country have already issued general orders closing courthouses, postponing deadlines, and suspending hearing dates. The chief judge of the Northern District of Illinois, for example, continued all plea and sentencing hearings scheduled through the last week in April, excluded these continuances under the Speedy Trial Act, and is allowing for consensual videoconferencing for certain criminal proceedings per the CARES Act.

Likewise, the chief judge of the Eastern District of New York extended the time within which a preliminary hearing must be held from 14 days (if in custody) or 21 days (if not in custody) after the initial appearance to 60 days, excluded all time until April 27 under the Speedy Trial Act, and is also allowing for videoconferencing per the CARES Act.

Furthermore, the DOJ can utilize another well-settled tactic—tolling agreements—to extend investigative deadlines. The DOJ already routinely utilizes these agreements, as needed, to pause the running of the statute of limitations for an agreed upon time period while an investigation progresses.

If delays due to lock-down orders or prohibitions against non-essential travel impede the DOJ’s ability to proceed with an investigation, the DOJ may be asking investigation targets to agree to a “pause,” typically around 3-6 months in duration.

In more rare circumstances, the DOJ might address the need for more time to file by reconsidering charging decisions. For instance, the typical five-year statutes of limitation that apply to most white-collar offenses can be enlarged to 10-years if the fraud “affected” a financial institution.

Likewise, conspiracy charges can also extend the default statute of limitations under some conditions. But the practice of “tacking on” charges to extend a statute of limitations is generally disfavored and likely to be challenged in court proceedings. However, if prosecutors can demonstrate that such charges are consistent with the DOJ’s principles of prosecution and relevant case law, then this tactic may prove successful for the DOJ.

Finally, many investigation targets continue to deliver voluminous document productions to the DOJ in response to subpoenas or voluntary requests. Government officials can certainly take advantage of any “downtime” to scrutinize these materials and prepare for future action or procure leads for other enforcement activity.

During this period, all companies—but, especially those in highly regulated industries—would be well advised to continue their vigilance and maintain proactive compliance measures despite the excessive disruptions to business-as-usual.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

Author Information

Gina LaMonica is a partner in Perkins Coie’s White Collar & Investigations practice. She has extensive experience representing companies and individuals in a wide range of white collar criminal matters, as well as complex securities and civil litigation.

Beth Palmer is an associate in Perkins Coie’s White Collar & Investigations practice. She represents clients facing criminal and civil enforcement actions brought by the DOJ, the SEC, and the CFTC. She has assisted clients in responding to allegations of securities fraud, financial fraud, and criminal antitrust violations and has participated in internal investigations relating to export compliance and whistleblower claims.

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