Second Circuit Sends Shivers Down DOJ’s Spine: Compelled Foreign Testimony Invalidates Prosecution

July 20, 2017  |  The Insider: White Collar Defense and Securities Enforcement

Yesterday, a monkey wrench was thrown into the DOJ’s ever-increasing, multi-jurisdictional cooperation in white collar cases. In United States v. Allen, the U.S. Court of Appeals for the Second Circuit held that the prohibition against the use and derivative use of a defendant’s compelled testimony – the Kastigar protections – applied even when the testimony was required by UK regulators in a joint U.S.- UK investigation. Despite prosecutors’ best efforts to avoid their investigation being tainted by statements compelled by UK regulators, the Second Circuit overturned a conviction and dismissed an indictment where a witness had reviewed the defendant’s compelled testimony. Thus, where multiple countries are investigating the same allegations of misconduct, a subject forced to provide evidence in a foreign country cannot have that testimony used in a prosecution against him in the United States – at least in the Second Circuit. Because common U.S. investigation partners, like the UK, regularly utilize compelled testimony in connection with their investigations, the DOJ now has to navigate a minefield when exchanging information with international partners. [...]

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