The Hidden Dangers of Federal Proffer Agreements.

What is a Federal Proffer?

A federal proffer meeting is an information-sharing meeting between an individual facing a federal investigation and prosecutors and investigators. The meeting is governed by a federal proffer agreement that outlines the terms under which the individual is required to share information.

In most cases, the proffer agreement restricts prosecutors and investigators’ use of the individual’s disclosures. These restrictions include:

• The prosecutors’ ability to use information shared during the meeting to convince a jury in a trial or a judge during an appeal (i.e., the prosecutors’ case-in-chief);
• The prosecutors’ ability to include information shared during the meeting in criminal complaints, indictments, and criminal appeals;
• The prosecutors’ ability to share the individual’s disclosures with other federal agencies; and,
• The prosecutors’ ability to share the individual’s disclosures with the media.

These restrictions are often intended to protect the individual’s interests during the federal investigation, but they leave federal prosecutors with a wide range of options.

These restrictions are subject to “case-in-chief” restrictions. While this prohibits the government from which it relies directly on a proffer during the government’s case-in-chief, it does not create blanket protection from a prosecution. Instead, it often provides a pathway for federal investigators to use leads derived from the proffer for further investigations.

They can then use newly-uncovered evidence, records, and testimony to secure a conviction.

Once a proffer, it becomes very common for the individual to not want to testify against the government. However, because a proffer agreement differs from a plea agreement or a cooperation agreement, the government may still pursue prosecution.

They may also enforce any proffer waivers to prohibit the individual from presenting defense evidence and arguments that contradict the individual’s proffer disclosures.

In United States v. Velez, 354 F.3d 190 (2d Cir. 2004), the district court ruled before trial that the defendant's proffer waiver would let the government introduce his proffer statements if the defense elicited testimony contradicting them; the defendant never testified and never offered that testimony, so the waiver was never actually triggered.

The district court enforced the proffer agreement and the defendant’s proffer waiver. The Second Circuit held that a knowing and voluntary waiver permitting the government to introduce a defendant's proffer statements to rebut contrary defense evidence or arguments is enforceable, and it rejected Velez's contention that the provision deprived him of the ability to mount a meaningful defense.

How do I know whether proffering is worth the risk?

What do Prosecutors Gain from a Federal Proffer Meeting?

A federal proffer meeting helps prosecutors evaluate two key aspects of an individual’s potential cooperation.

First, prosecutors use federal proffer meetings to gauge an individual’s credibility and informational value. Prosecutors may use documents, witness testimony, and circumstantial evidence (or the government’s evidence in a grand jury or federal investigation) to verify the accuracy of an individual’s disclosures.

Second, prosecutors evaluate the potential benefit of an individual’s information to their current prosecution or potential new prosecutions. The more an individual’s information helps prosecutors build a case against their co-defendants (i.e. a case-in-chief), the more negotiating leverage that individual will have in their proffer and plea negotiations.

The value of an individual’s proffer depends on how different their information is compared to other information that prosecutors already have in their possession or are likely to obtain. Generally, prosecutors value information that is new, credible, useful, and corroborated. Information that merely duplicates existing evidence or testimony may provide very little negotiating leverage for the individual offering that information.

The value of an individual’s proffer also often depends on how early they offer it. Individuals who co-operate early may be the only source for unique information that prosecutors can use to determine who else was involved in a federal crime. If other individuals are already cooperating and prosecutors already have the information, then later cooperating individuals may be less valuable to the government.

Regardless of the value of an individual’s proffer, prosecutors can use information from a proffer to strengthen cases against any potential co-defendants without strengthening the individual’s potential defense. This is true for both pre-indictment and post-indictment participants.

While pre-indictment participants may be less equipped to evaluate the government’s case, they still have to make informed decisions about the risks and benefits of proffering.

Post-indictment participants have the advantage of having more information about the government’s case through the discovery process, and so they are often better equipped to determine the value of their information and whether proffering is worth the risk.

What is a Reverse Proffer and When Should I Do One?

A reverse proffer is an exchange of information where prosecutors present an individual with information about the government’s case. If the individual speaks in response to what the government shares with him or her, this is a proffer.

If prosecutors offer a reverse proffer, it will be in the government’s best interests to share some of its evidence in order to evaluate the individual’s willingness to cooperate. However, even then, reverse proffers are not required.

A reverse proffer is optional and is almost always in the government’s best interests to insist that the individual speak first.

Still, individuals and their counsel can (and should) request a reverse proffer when appropriate.

When Can Prosecutors Use My Proffer Statements Against Me?

In a federal proffer agreement, a proffer waiver generally allows prosecutors to use an individual’s statements to impeach that individual’s testimony at trial.

In United States v. Mezzanatto, the Sixth Circuit upheld a negotiated waiver and a subsequent proffer breach that allowed the prosecutors to use the defendant’s proffer statements to impeach his testimony at trial.

Some appellate courts have also gone further. In some cases, they have upheld waivers that extend beyond the defendant’s own testimony to include defense witnesses, exhibits, and arguments.

United States v. Velez, 354 F.3d 190 (2d Cir. 2004), similar to an “impeachment-and-rebuttal” clause, could allow prosecutors to use proffer statements to impeach and to rebut “any testimony, evidence, or arguments, whether presented by the defendant, counsel, or a witness.”

This is true for cross-examination, the call of defense witnesses, and even in closing arguments.

An individual may inadvertently trigger a proffer waiver at trial when they adopt a trial position that contradicts their disclosures in the proffer. The government will claim that the defendant has, therefore, breached their proffer agreement. As a result, the government will argue that protected disclosures made during the proffer meeting should be admitted as evidence.

In the case of a dispute, the trial judge will make an evidentiary ruling on whether the proffer waiver was triggered. If the defendant breached their proffer agreement, then the proffer waiver may be enforced.

While it is the government’s responsibility to allege a breach, it is the trial judge’s responsibility to determine the admissibility of evidence.

If a breach is proven, then prosecutors may be permitted broader use of the individual’s proffer statements (i.e. the information the individual shared during the proffer meeting).

However, if a breach is not proven, the participant’s disclosures will remain subject to the restrictions of the proffer agreement.

When will the Government Be Allowed to Use an Individual’s Statements?

Generally, the government must prove a breach of the proffer agreement by a preponderance of the evidence. In other words, it must be more likely than not that the individual breached their agreement.

While the court will make this determination using the available information, it may hold an evidentiary hearing when necessary. This will include situations in which material facts related to the proffer breach remain disputed.

As a result, the participant’s statements may be used in the following scenarios:

• If a material breach is proven by a preponderance of the evidence.
• If a trial judge makes an in-camera ruling stating that the individual breached the proffer agreement.
• If the case against the individual is substantially similar to the case against the individual’s co-defendant.

Can a Defendant’s Proffer Admissions Increase Their Federal Sentence?

A defendant’s disclosures during a proffer meeting can increase their federal sentence if a judge considers the disclosures and finds them relevant and credible, provided the disclosures are not restricted by the proffer agreement, a cooperation agreement, or Section 1B1.8 of the United States Sentencing Guidelines.

The disclosure of “relevant conduct” during a proffer is the most common way to trigger an increase in federal sentencing. Section 1B1.3 of the Sentencing Guidelines allows judges to consider conduct that is not charged in an indictment but that is relevant to determining the appropriate offense level. Examples of conduct that could increase a defendant’s sentence include:

• Attributing a larger monetary loss to a defendant’s involvement in a fraud scheme.
• Attributing a larger quantity of drugs to a defendant’s involvement in a drug conspiracy.
• Attributing involvement in a conspiracy involving additional drug-related crimes.
• Showing a defendant’s role as a leader or organizer within a criminal enterprise.
• Showing the defendant’s involvement in multiple drug or fraud conspiracies.

As a result, defendants’ proffer admissions can increase the level of their sentencing offense level in a way that directly leads to longer federal prison sentences.

So, if they have a proffer agreement, does that make their statements inadmissible?

Not necessarily. A federal proffer agreement itself does not preclude the use of the participant’s disclosures as evidence in sentencing.

But the participant’s disclosures can become subject to sentencing restrictions if the participant has an express agreement restricting their use. Under Section 1B1.8 of the Sentencing Guidelines, disclosures during cooperation are exempt from sentencing consideration if the individual, the individual’s counsel, and the prosecutors have a written agreement restricting their use.

However, even if this restriction is included in a federal agreement, the participant’s disclosures will not be exempt if any of the following three exceptions apply:

• Prior knowledge: the prosecutors already had substantial evidence that allows them to reach a conclusion about the individual’s conduct independently of the individual’s cooperation disclosures.
• Breach of the agreement: the individual breached the agreement.
• False statements: the individual lied or made misleading statements.

Ultimately, the impact of an individual’s proffer disclosures in a federal sentencing will depend on several factors. These factors include:

• The terms of the proffer agreement;
• The terms of any applicable cooperation agreement;
• Whether Section 1B1.8 of the Sentencing Guidelines applies; and,
• The government’s use of the information shared during the proffer meeting.

Our federal sentencing lawyers can help you make an informed decision about whether to engage in a proffer meeting in order to avoid sentencing consequences, if that is a major concern. We offer reverse proffers and use of the United States Sentencing Guidelines to determine the value of our clients’ information and what protections are most important in order to protect our clients’ interests.

Finally, even if the information an individual shares is useful, it is still not guaranteed that the prosecutors will file a substantial assistance motion under Section 5K1.1. If prosecutors use the information to secure a conviction but do not file a substantial assistance motion, the individual can still be exposed to the sentencing enhancements their proffer disclosures may trigger.

This is the point at which most people call a lawyer. Spodek Law Group takes federal criminal defense cases nationwide from its New York and Los Angeles offices.

What Protections Should My Lawyer Negotiate Before I Speak?

There is no standard proffer letter. Different U.S. Attorney’s Offices use different letters, and within one office, the letters may differ in a material way. At Spodek Law Group, we are familiar with the federal proffer letters used by the prosecutors across the country, and we use this information when determining the protection and value of our clients’ information.

The federal proffer letters differ on, inter alia, the following topics:

• Derivative use
• Rebuttal clauses (impeachment)
• Sentencing protections
• Breach procedures
• Other considerations

Our federal defense lawyers can negotiate protections with prosecutors before our clients speak. Some examples of such protections are:

• Derivative Use: Ordinarily, federal proffer letters are silent on derivative use. The failure to include this issue in a proffer letter suggests that prosecutors believe that derivative use will not raise issues. When necessary, defense counsel can seek express contractual limits on the prosecutors’ derivative use.
• Sentencing: Federal proffer letters are silent on the subject of sentencing. While Section 1B1.8 of the Sentencing Guidelines can prevent information from being used in a defendant’s sentence, it is only helpful for certain defendants. With that said, it may be prudent for defense counsel to seek an express contractual restriction regarding sentencing.
• Notice of Breach: A federal proffer letter is silent on the procedures to determine whether a breach of the agreement has occurred. Defense counsel can request that the proffer letter include notice and response procedures for alleged breaches.
• Subject Matter: Ordinarily, participants in a federal proffer meeting are required to speak the truth about all subjects that prosecutors present. If needed, defense counsel can limit the participants’ questioning to specifically identified subjects.
• Judicial Approval: An ordinary federal proffer letter does not require judicial approval.
• Timing of Agreement: While defense counsel can seek to add language that is not present in the standard federal proffer letter, ordinary federal proffer agreements are not negotiated in detail. Usually, prosecutors draft a proffer letter and seek the participant’s agreement prior to the interview.

Can My Proffer Information Reach Other Agencies or Prosecutors?

Who is Bound by a Federal Proffer Agreement?

A proffer agreement generally binds only the parties identified in its text. These include the participants, the prosecutors bound by the agreement, and the U.S. Attorney’s Office where those prosecutors work. Generally, a U.S. Attorney’s Office in Washington, D.C. cannot bind prosecutors in Texas. It cannot bind state prosecutors and foreign prosecutors. It cannot bind the U.S. Department of Justice, and it cannot bind other federal prosecutorial offices.

If these protections are necessary, they must be explicitly included in the proffer agreement. Also, defense counsel can ask that the proffer letter include restrictions on sharing disclosures with non-signatory agencies.

Does a Criminal Proffer Agreement Protect me Against Civil Regulators?

No. Proffer agreements for criminal federal investigations do not automatically protect participants’ disclosures from civil regulators. While some regulatory and criminal prosecutors work in the same agencies, civil and criminal investigations can produce different results and a different level of liability.

Does a District Attorney Prosecute Federal Criminal Cases?

No. District attorneys are state or local prosecutors. They do not have the authority to prosecute federal criminal cases. Federal criminal cases are prosecuted by U.S. Attorneys and Assistant U.S. Attorneys.

Can I Rely on Rule 16 to Produce an FD-302 After Proffering?

No. Rule 16 does not apply until a grand jury returns an indictment. This means prosecutors need not produce a participant’s FD-302 during a pre-indictment investigation. An FD-302 is the report that federal agents take during proffer meetings. Even post-indictment, the government may resist producing the FD-302.

How Should I Handle Questions During a Proffer Meeting?

Federal proffer agreements generally contain provisions requiring participants to provide complete, truthful, and candid disclosures.

They generally do not include a provision stating that participants will only answer questions truthfully. Instead, they usually state that participants must provide a complete, truthful, and candid account of everything they know regarding the investigation. With this in mind, if you are answering questions truthfully but your answers are incomplete, prosecutors and investigators can still use this against you.

Can I Face Prosecution for False Statements During a Federal Proffer Meeting?

Yes. Under 18 U.S.C. § 1001, a person knowingly and willfully making a material false statement or representation to federal investigators or prosecutors can face criminal prosecution for a federal crime. This prohibition includes unsworn oral answers. Even if a person does not sign a formal written statement or swear an oath, the person can still be charged with a federal crime.

What is an FD-302?

An FD-302 is an agent’s interview summary. When a participant speaks during a federal proffer meeting, an agent takes notes and later drafts a formal report (the FD-302). However, the report may be an agent’s summary of the interview, or even the agent’s a verbatim transcript.

A participant’s FD-302 does not necessarily present a true and accurate summary of a participant’s statements. As a result, participants in federal proffer meetings must clearly identify their uncertain recollections and they must answer, if necessary, all questions.

It is critical that your defense lawyer does not allow you to guess if you do not know an answer. This is because guessing could lead to inconsistent statements. Even if you are innocent, guessing will create apparent inconsistencies that the prosecutors and investigators can later use against you.

What if my Defense Counsel Did Not Clarify a Question?

If a prosecutor’s question is ambiguous, your defense counsel must clarify before you answer. If a prosecutor asks a question in which the meaning is not clear, answering the question may not only result in an incorrect or incomplete answer, but also an incorrect interpretation of the answer.

We recommend our clients work with an attorney during the proffer meeting who can and will document disputes with the agents’ summaries. As a result, when an agent drafts the FD-302 and you have a dispute regarding the accuracy of the summary, your lawyer can refer back to the notes that your lawyer took during the meeting to defend your interests.

But a proffer meeting also is not the appropriate time for the time to present a defense; and, for a proffer meeting to be effective, prosecutors need to know that you will answer all their questions truthfully and candidly. If prosecutors feel you are being reticent, they can decide to stop their investigation or move against you.

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's attorneys defend federal criminal and white collar matters nationwide. Reach the firm at 212-300-5196.