Breach of Cooperation Agreement: What Happens Next??

• In Ricketts v. Adamson, 483 U.S. 1 (1987), the U.S. Supreme Court upheld Arizona’s ability to revive murder charges after the defendant refused to testify in the trial of a co-defendant.
• To prove a breach, the government must meet the preponderance of the evidence standard.
• In several circuits, a “trivial lapse in performance” by the cooperator will not release the government from its cooperation agreement. These circuits require the cooperator to commit a “material breach” of the agreement.
• In general, once a cooperator has pleaded guilty, he or she cannot withdraw the guilty plea after committing a breach of the cooperation agreement.
• If the cooperator was expected to provide witness testimony in other cases, the government will need to disclose their misconduct as “Giglio material.” In Giglio v. United States, 405 U.S. 150 (1972), the U.S. Supreme Court held that the government must disclose, in appropriate circumstances, (i) agreements to provide benefits to potential witnesses in exchange for their testimony and, (ii) information that tends to impeach the witness’s credibility.
• If the cooperator is receiving protections under the Witness Security Program, his or her protections under 18 U.S.C. §3521 will end if the cooperator violates the memorandum of understanding signed with the U.S. Marshals.
• Corporate deferred prosecution agreements (DPAs) impose the same continuing duties on the company and its employees. These agreements also contain provisions addressing corporate-level breach of the agreement, and violating the agreement generally results in revocation of the deferral.

How will a court decide whether I materially breached?

How can I determine whether I can be charged again after a cooperation agreement?

• There is no uniform federal rule specifying how the government must give notice of a cooperator’s alleged breach. Instead, most cooperation agreements will contain provisions specifying notice and hearing procedures.
• Due process is relevant here.- When a court is ruling on the issue of whether a cooperator breached their agreement in order to decide the appropriate sentence, Federal Rules of Criminal Procedure 32(i)(3)(B) states the court “must rule on the dispute, or make a finding that the resolution of the dispute is not necessary to the disposition of the case.” However, most cooperation agreements call for a hearing that is separate from the cooperator’s sentencing hearing.
• Some cooperation agreements will also state that the U.S. Attorney’s Office has sole discretion to determine whether the cooperator has materially breached. If the government chooses to charge the defendant again, the court may accept the U.S. Attorney’s Office’s determination, but if a material question of fact is at issue, the court will consider whether the government’s determination is consistent with the defendant’s due process rights under the Fifth Amendment.

  What is a “material” breach of a cooperation agreement?

A material breach is defined as “a violation of the conditions of the agreement that deprives the government of a substantial benefit of the cooperation it expected from the defendant.” In other words, a violation of the agreement which substantially defeats the government’s expectation of the defendant’s cooperation will constitute a material breach of the agreement.

• He may have not known about the alleged material breach, or may have not had time to make a material mistake or take a corrective action, prior to the government’s filing of a new criminal complaint or indictment. However, a late correction does not automatically cure a completed cooperation breach.
• An arrest does not automatically constitute a material breach of the agreement.- While most cooperation agreements make specific provisions addressing their termination if the cooperator violates the agreement, the parties must still comply with the procedural requirements (if any) set forth in the agreement, and the government must prove the alleged material breach by a preponderance of the evidence.

Can Dismissed Charges and Protected Proffer Statements Be Used?

As we discussed in our section on the definition and consequences of a material breach of a cooperation agreement, a material breach typically entitles the government to pursue one or more of the following remedies:

• Revival of previously dismissed federal charges;
• Use of previously protected statements in a criminal prosecution;
• Termination of sentencing protection (e.g., by applying the offense level in the underlying conduct that the defendant agreed to admit, rather than any offense level for a plea-reduction agreement);
• Withdrawal of sentencing protection (including a withdrawal of the sentencing-benefit and/or a request for sentencing protection under USSG §1B1.8);
• Referral of a cooperator to the Office of Inspector General (OIG) or other relevant authorities; and,
• Termination of benefits (including withdrawal of protected status in the Witness Security Program) under 18 U.S.C. § 3521.

If a cooperator materially breaches a cooperation agreement, the government must prove (i) there is an agreement, (ii) the government has substantially performed, (iii) there has been a material breach, (iv) the breach is not excused by the cooperator’s performance, (v) the cooperator did not waive the agreement, (vi) the statute of limitations has not expired, and (vii) damages are sufficient to justify prosecution.

As a result of the government’s substantial performance and the cooperator’s material breach of the cooperation agreement, the following will typically hold:

• (i) No Double Jeopardy Bar. The government will not be barred by double jeopardy in a prosecution on counts that the government agreed to drop.
• (ii) No Statute of Limitations Defense. Most cooperation agreements waive the cooperator’s right to a statute of limitations defense in a prosecution on counts that the government agreed to drop. Courts have generally enforced such statute-of-limitations waivers where they are made knowingly and voluntarily.
• (iii) Revival of Charges. For a federal criminal prosecution to resume, the government will need to file a new indictment or request an order reinstating the dismissed charges.

Can the Government Also Use Statements That the Defendant Had Previously Made in Confidence?

As with previously dismissed criminal charges, most cooperation agreements expressly permit the government to use the statements previously protected under Rule 410 in the event the defendant materially breaches. While Rule 410 prohibits a prosecutor from using statements made by a defendant during plea discussions in a subsequent criminal case against that defendant, in United States v. Mezzanatto, 513 U.S. 196 (1995), the U.S. Supreme Court held that a defendant may knowingly and voluntarily waive his or her Rule 410 protections.

Following that decision, several circuits have upheld the government’s use of waiver in cases involving (i) the use of a defendant’s prior statements in rebuttal, and, (ii) the use of a defendant’s prior statements in the government’s case-in-chief.

If the defendant breached the cooperation agreement by misleading the government about his or her guilt in the charged offense, the government can use the defendant’s protected statements to impose the offense level in the underlying conduct, rather than any offense level resulting from a plea-reduction agreement. Under United States Sentencing Guidelines Section 1B1.8, the “plea agreements provision” prohibits the government from using “the defendant’s admission of guilt, or statements that the defendant agrees to let the government use, in a proffer meeting in order to calculate the offense level.” However, Section 1B1.8(b) explicitly permits the government to use statements previously made by a defendant when a defendant materially breaches his or her cooperation agreement.

Todd Spodek is the managing partner of Spodek Law Group, a second generation criminal defense firm that has been practicing since 1976.

How much can a cooperation breach increase my punishment?

• Relevant Conduct. After a breach, the government may use the defendant’s proffered admissions as “relevant conduct” to determine the Offense Level under the U.S. Sentencing Guidelines (USSG).
• Acceptance of Responsibility Reduction. If a defendant enters a plea agreement, he or she is typically entitled to a two- or three-level reduction for acceptance of responsibility under USSG §3E1.1. However, if the defendant breaches the agreement, he or she will likely lose this reduction.
• Obstruction Enhancement. If a defendant gives false testimony, a judge may apply a two-level obstruction enhancement under USSG §3C1.1.
• Perjury or False Declarations. Perjury under 18 U.S.C. §1621 and false declarations under 18 U.S.C. §1623 both carry statutory five-year maximum sentences. If a defendant’s breach involved providing false testimony, he or she may face charges under one or both statutes.
• False Statements in Connection with an Investigation. Similarly, lying to a federal agent during a proffer violates 18 U.S.C. §1001, which is also punishable by a maximum of five years of federal imprisonment.
• The Prosecution’s Motion for a Downward Sentence. Under 18 U.S.C. §3553(e), a judge can impose a sentence below a statutory mandatory minimum upon the government’s motion. However, in Melendez v. United States, 518 U.S. 120 (1996), the U.S. Supreme Court held that a Rule 5K1.1 motion alone cannot “pierce” a mandatory minimum. This means a defendant still needs a government motion under 18 U.S.C. §3553(e) to receive a sentence below the statutory mandatory minimum.
• Withdrawal of a 5K1.1 Motion. A cooperator sentenced under Rule 5K1.1 may also have his or her motion withdrawn. If the prosecutor discovers a lie before the court issues a sentence, he or she may withdraw the motion; if the judge discovers a breach, he or she may revoke the 5K1.1 departure.
• Lack of Sentencing Protections. In the absence of specific protections in a cooperation agreement, a defendant’s assistance may be considered as a factor in a judge’s determination of a just sentence. Substantial-assistance departures are granted in roughly one in ten federally sentenced cases.

Can I Force Prosecutors to File a Cooperation Motion?

If your cooperation agreements do not specifically entitle you to a substantial-assistance motion, your best bet is to attempt to negotiate with prosecutors. In most cases, this is possible, but it may require a cooperation attorney to intervene on your behalf.

What can I do if the government refuses to file a substantial-assistance motion?

In Wade v. United States, 504 U.S. 181 (1992), the U.S. Supreme Court held that a defendant’s challenge to a prosecutor’s refusal to seek a substantial-assistance sentence reduction should be reviewed under the same standard that governs other challenges to a prosecutor’s use of discretion. Thus, the defendant must show that (i) the prosecution is motivated by unconstitutional motives, or, (ii) that the decision is not rationally related to a legitimate government end.

When challenging a prosecutor’s refusal to seek a substantial-assistance sentence reduction, a cooperator’s allegations of bad faith must be “substantial” and cannot “be the product of the vague, boilerplate allegations of the type contained in the pleading at issue.” If the defendant fails to provide such a threshold showing, the court will not hold a hearing to assess the prosecutor’s motives.

In United States v. Rexach, 1990, the Second Circuit reviewed a “discretionary cooperation clause,” which gave the prosecutor the ability to “file such an appropriately supported motion as he may deem warranted.” The court’s ruling turned on whether the prosecutor had been “honestly dissatisfied” with the defendant’s performance.

Will filing a cooperation motion guarantee me a sentencing reduction?

According to U.S. Sentencing Guidelines Section 5K1.1, “[u]pon motion of the government stating that the defendant has provided substantial assistance in the investigation or prosecution of another person who has committed an offense, the court may depart from the guidelines,” and the appropriate reduction is determined by the court. This section shows that a 5K1.1 motion does not independently mandate a reduced sentence and that the judge, not the prosecutor, decides whether (and how much) to reduce the defendant’s sentence based on substantial assistance.

Does a judge have the authority to grant a substantial-assistance reduction on his or her own?

No. For a judge to grant a substantial-assistance reduction, a prosecutor must file a motion that complies with Rule 35(b)(1). Specifically, the prosecutor must file the motion within one year of the date the sentence was imposed. A prosecutor may file the motion after a year if he or she can meet the requirements of Rule 35(b)(2). These requirements are satisfied if the cooperator failed to provide substantial assistance within a year due to factors outside the cooperator’s control, or if the information provided by the cooperator became useful only after the one-year period had expired.

What can I do if prosecutors break their promises?

Can a Cooperation Agreement be Breached by Prosecutors?

The government can also breach a cooperator’s agreement. In resolving cooperation-agreement cases, courts generally construe the agreements as contracts. When presented with conflicting interpretations, courts typically resolve ambiguities against the government as the drafter. When a party’s interpretation is based on plain language, appellate courts apply a de novo standard of review.

How Do I Defend Against a Prosecution or Sentencing Based on a Cooperatively-Related Breach?

A cooperator can defend against a prosecution or sentencing based on a cooperatively-related breach in many cases. However, he or she must typically object to the government’s conduct at sentencing. If the cooperator does not timely object, the federal court will review the objection under the plain error standard set forth in Federal Criminal Rule 52(b), which often is difficult to overcome.

In Puckett v. United States, 556 U.S. 129 (2009), the Supreme Court held that “the relevant time to challenge the government’s breach of a plea agreement is at sentencing. Failure to timely object is effectively a waiver of the challenge, subject to Rule 52(b)’s plain-error standard.” After the cooperator objects to the breach, the government may be entitled to a hearing to address his or her concerns; however, the prosecution’s substantial performance will need to withstand scrutiny in a hearing under the principles of Wade v. United States, 404 U.S. 257 (1971), if the prosecution refuses to seek a substantial-assistance sentence reduction.

How Does a Cooperator Overcome an Appellate Waiver?

If a cooperator’s agreement contains an appellate waiver, the cooperator’s grounds for challenging the government’s prosecution or sentencing will be limited. However, most circuits hold that these waivers do not bar claims that the government breached the agreement.

What Remedies are Available in the Event of a Breach by the Prosecution?

The U.S. Supreme Court has held that when a prosecutor breaches a cooperation agreement, the appropriate remedies include (i) specific performance, i.e., forcing the government to fulfill its promise, and, (ii) the withdrawal of the defendant’s plea. In Santobello v. New York, 404 U.S. 257 (1971), the Court stated that the government should be forced to “make good the bargain” unless it can show that specific performance would not be appropriate, in which case the appropriate remedy is the withdrawal of the defendant’s plea.

What Happens if I Obtain Resentencing?

If the appropriate remedy is resentencing, this typically does not occur before the judge who previously presided over the case. While not always possible, resentencing usually occurs in the same district, but before a different judge, as this minimizes any potential bias and provides an impartial assessment of the cooperator’s substantial assistance.

Can I Challenge a Government Breach in Federal Collateral Review?

If the government breached a cooperator’s agreement without justification and a remedy is not available on direct appeal, a cooperator can sometimes seek redress through a collateral review. However, this requires showing that he or she was denied due process. While most cooperation agreements contain collateral-review waivers, the validity of these waivers is subject to constitutional scrutiny; thus, a collateral-review waiver does not always bar a cooperator’s ability to claim that prosecutors breached their plea agreement.

Talk to Spodek Law Group

Every case turns on its own facts, and general information is no substitute for advice about yours. Todd Spodek, managing partner of Spodek Law Group, and the firm& #x27;s attorneys defend federal criminal and white collar matters nationwide. Reach the firm at 212-300-5196.