- On November 5th 2015, Anthony Allen and Tom Conti, both previously employees of Rabobank, were convicted by a court in New York of wire fraud and bank fraud as a result of their conduct in manipulating the London Interbank Offer Rate (“LIBOR”). In the first appeal brought against a LIBOR conviction anywhere in the world, they appealed their convictions to the United States Court of Appeals on 5 grounds. This article deals with the issue relating to whether testimony obtained under compulsion of a foreign power may be used against that individual in a criminal case in the United States.
2. The appeal was heard in January of this year and judgment which allowed the appeal, was handed down on July 19th
3. In deciding the appeal the Court came to three significant conclusions on the use of compelled testimony in US court. Firstly, the Fifth Amendment (the right to silence) prohibition on the use of compelled testimony in American criminal proceedings applies even when a foreign sovereign has compelled the testimony lawfully.
4. Secondly, when the government makes use of a witness who had substantial exposure to a defendant’s compelled testimony, it is required at a minimum to ensure that the witnesses’ review of the compelled testimony did not shape alter or affect the evidence used by the government.
5. Thirdly, 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.
6. The issue arose in this case because during the Financial Conduct Authority’s investigation into the manipulation of LIBOR, it had conducted compelled interviews pursuant to section 171 of the Financial Services and Markets Act 2000 with Mr. Allen and Mr. Conti.
7. Furthermore, having conducted those interviews as well as others with colleagues of Mr. Allen and Mr. Conti, the FCA decided to bring enforcement action against a colleague Mr. Robson. During the course of these enforcement proceedings, the FCA disclosed to Mr. Robson the evidence it held against him which included the compelled interviews of Mr. Allen and Mr. Conti. Ultimately the FCA proceedings against Mr. Robson were stopped but the Department of Justice took over the cause and finally Mr. Robson became a cooperating witness in the DOJ prosecution of Allen and Conti.
8. Although Mr. Robson did not prove testimony directly to the grand jury that indicted Mr. Allen and Mr. Conti, the evidence from Agent Weeks relied substantially on his information. Mr. Robson testified at the trial.
9. The Court had to consider two issues: firstly was the prosecution entitled to rely on the compelled interviews conducted by the FCA with Allen and Conti and secondly, was the prosecution entitled to rely on the evidence of Robson who before entering into a cooperation agreement with the Department of Justice, had seen and considered the evidence provided by Allen and Conti in their compelled interviews.
10. In considering the appeal, the Court gave much thought to the implication sits decision could have on international cooperation and the investigation of complex cross border financial crime such as the manipulation of LIBOR or the spot foreign exchange markets. It stated unequivocally that it was certain that the development of these types of investigations must not affect the fairness of trials in the United States and that if as a consequence of joint investigations, foreign nationals are to be tired in the United States they should not be denied the full protection of a “trial right” which is regarded as absolute and fundamental in US courts.
11. Finally, the Court went on to consider the admissibility of the Mr. Robson’s evidence at trial in light of the fact that he had seen the FCA compelled interviews of the two defendants. Once again its judgment was unequivocal stating that the burden rested on the prosecution to prove beyond reasonable doubt that the witness’s evidence had not been in any way tainted by that which he had seen said by Mr. Allen and Mr. Conti under compulsion.
12. For many years suspects who have been the subject of investigations into their conduct which has taken place both here and in the United States have faced grave uncertainty about the use to which information they provide under compulsion could be put in the United States. This decision therefore comes as a welcome clarification of the issue and will go some way in addressing the enormous anxiety faced by those attending compulsory interviews. The decision also serves to highlight the contrast between the United States where the right against self-incrimination is sacredly safeguarded and the United Kingdom where the right appears to be coming under constant and considerable pressure.