Reed Smith Client Alert

For those persons in the midst of a federal “white collar” criminal investigation, an oftentimes crucial – and always difficult – decision is whether to “proffer” to the government. That decision just became tougher in any investigation conducted in the Western District of Pennsylvania, because the Pittsburgh U.S. Attorney’s Office recently made a small but important change to the language of its standard proffer agreement.

Because every case is unique, an experienced “white collar” criminal defense attorney should be consulted prior to engaging in any proffer.

In a white collar criminal investigation, a proffer can occur before an indictment is handed down by a grand jury. Proffers are postured as informal, “off the record” meetings, and typically occur between the government (generally the Assistant U.S. Attorney (“AUSA”) and one or more federal agents) and a person in whom the government has taken an interest. But such meetings are hardly inconsequential – proffers can be vital to the resolution of a criminal matter. Usually the person being interviewed is either a “target” of the investigation – someone the prosecutor regards as a potential criminal defendant because the government has substantial evidence linking the person to the commission of a crime – or a “subject” of the investigation – someone whose conduct is within the scope of the grand jury’s investigation, but who has not yet been classified by the government as either a “target” or a “witness.” A “witness” is someone who has information relevant to the investigation, but who is not under suspicion.

In the proffer, the person answers questions from the AUSA and the investigating agent (from, e.g., the FBI or the IRS) in the hopes of showing either that he engaged in wrongdoing and should be considered for immunity or a plea agreement, or that he had no involvement in the crime and should not be charged. A proffer is often a prerequisite to a plea agreement: the government wants to know what it’s getting before entering into a deal. No court reporter is present; the only record of the meeting is the handwritten notes taken by the person’s attorney and the investigating agent. After the proffer, the government reduces the agent’s notes into a proffer statement, which is typically contained in an investigative report traditionally referred to as a “302” – short for FBI Form FD-302.

Before any proffer, the government presents a proffer agreement that the person being interviewed and his attorney must sign. The proffer agreement – also called a proffer letter – sets the terms of the proffer, including how the government, going forward, will use the information from the interview. Crucially, the agreement states that the government, with important exceptions, will not use the information directly against the person in any subsequent legal proceeding (which is why a proffer is often called a “Queen For A Day” agreement). Without this promise of limited immunity, it is doubtful that anyone would risk their Fifth Amendment protections to voluntarily admit to the government what he knows or did. But a proffer agreement typically states that the government can use the information obtained in the proffer to follow leads and otherwise advance its investigation – known as “derivative use.”

The Pittsburgh U.S. Attorney’s Office’s recent change to its standard proffer letter comes into play with those exceptions permitting the government to directly use the proffer statements against the person interviewed. Formerly, the standard proffer agreement language used by AUSAs in the Western District of Pennsylvania said that a person’s proffer statements could be introduced at a legal proceeding – most notably at trial or sentencing – only if that person took the witness stand and testified in a manner contrary to what was said in the proffer. In other words, if the government reasonably believed that the person was lying from the stand, it could introduce what was said in the proffer to impeach the person’s testimony.

On April 11, 2013, the Pittsburgh U.S. Attorney’s Office began using additional language in its standard proffer agreement that broadens the government’s potential use of proffer statements at trial, sentencing, or other legal proceedings. The current text reads (with emphasis added):

If client should subsequently testify at any trial or hearing contrary to the proffer, or present a position contrary to the proffer through witness testimony or through written or oral argument by counsel, the government is completely free to use client’s statements from the proffer, and the documents or physical or electronic evidence furnished by client, at any stage of the prosecution of the client.

This new language brings the Western District of Pennsylvania’s standard proffer agreement in line with that of other districts within the Third Circuit. In its opinions of United States v. Hardwick, 544 F.3d 565 (3d Cir. 2008), and United States v. Vella, 414 Fed. App’x 400 (3d Cir. 2011) (unpublished opinion), the Third Circuit has upheld the government’s use of this language. This means that criminal defense lawyers in the Western District of Pennsylvania can no longer prevent the introduction of proffer statements as evidence simply by keeping their clients off the witness stand. Now, counsel must carefully plan and execute their opening and closing statements, cross-examination of the government’s witnesses, presentation of defense witnesses, and arguments at sentencing or other hearings, in ways that do not contradict what was said in the proffer. This can hamstring a defense.

Prosecutors from the Pittsburgh U.S. Attorney’s Office have implied that they will only introduce those portions of a proffer statement that relate to the defense’s contradictory statement, rather than the entire record of the proffer. Courts, however, view proffer agreements the same as other contracts between consenting parties, meaning that outside statements not contained in the written agreement – known as parol evidence – are typically ignored. The written language of the proffer agreement is what controls, and a plain reading of the new text gives the Western District of Pennsylvania’s prosecutors the discretion to introduce the entire proffer statement in response to any contradiction, no matter how minor or isolated. After the first crack, the entire dam can burst.

In the Western District of Pennsylvania, an unsuccessful proffer – an interview not resulting in a plea agreement, immunity, or waiver of charges – now comes with increased risk at trial, sentencing, and other legal proceedings. Anyone considering a proffer agreement from the Pittsburgh U.S. Attorney’s Office should engage experienced “white collar” counsel for a careful assessment. The Federal Rules of Criminal Procedure and Evidence, for example, provide protections that can be preserved if no proffer agreement is entered into, which may be the proper avenue in certain situations. If the best course is to proffer, then meticulous preparation is needed beforehand to aid in the presentation of a truthful and accurate proffer.

A decision to “go it alone” or to use an attorney who is not familiar with proffers and their pitfalls is fraught with risk. The Pittsburgh U.S. Attorney’s Office has upped the ante with its decision to change the terms of its standard proffer agreement. Counsel and their clients should be ever-mindful that what clients say in a proffer can increasingly be used against them in the courts of the Western District of Pennsylvania.


Client Alert 2013-137