What Is "Substantial Assistance" Under Federal Law??

Federal sentencing law does not provide a fixed definition of “substantial assistance.” Instead, in federal criminal cases, “substantial assistance” refers to efforts to help with the investigation or prosecution of another person’s offense. In this context, substantial assistance comes from cooperating with law enforcement, the federal prosecutors, or both.

In addition to its role in sentencing, “substantial assistance” is a key concept in federal securities law. Section 20(e) of the Exchange Act authorizes the SEC to take enforcement action against anyone who aids and abets a violation of the Act. It also requires that the assistance have been “substantial” enough to support liability.

A reduction for substantial assistance is a reduction in potential punishment, not a reduction of the charges. Even if the government agrees that a defendant’s assistance was substantial, they are still liable for the conduct that led to their charges.

Acceptance of responsibility and substantial assistance are distinct forms of mitigation. While acceptance of responsibility refers to the defendant’s conduct in relation to their own offense, substantial assistance refers to the defendant’s conduct in relation to someone else’s offense.

Because these two forms of mitigation apply in different contexts and address different conduct, defendants can potentially earn both a § 3E1.1 reduction for acceptance of responsibility and a § 5K1.1 reduction for substantial assistance.

Section 3E1.1 of the Federal Sentencing Guidelines authorizes a two-level reduction for acceptance of responsibility. If the defendant also complies with 18 U.S.C. § 3583(e) and does not pursue an appeal, this section authorizes an additional level reduction. In contrast, § 5K1.1 does not specify a particular reduction. Instead, the reduction depends on the prosecutor’s evaluation of the substantial assistance provided.

Can Substantial Assistance Reduce a Sentence Below a Mandatory Minimum?

While a substantial-assistance reduction can be used to seek a sentence below the advisory guideline range, it does not, on its own, permit an imposition of a sentence below a statutory mandatory minimum. Under U.S.S.G. § 5K1.1, which states, “Upon 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,” a government motion must be filed before a substantial-assistance reduction can be imposed.

Does a Government Motion for Substantial Assistance Guarantee a Reduction?

A government motion does not guarantee any particular reduction, although its filing of a substantial-assistance motion indicates the government’s agreement that a defendant provided substantial assistance. For example, the government might file a motion stating that, “The defendant has provided substantial assistance in the investigation and prosecution of the underlying offense and the offenses of other individuals,” but still oppose a substantial-assistance departure. “While this reduction is recommended by the government, it is not the government’s authority to decide the amount of the reduction in federal sentencing. However, the government may have strong views about the reduction and share them with the court.”

What Determines the Amount of a Substantial-Assistance Reduction?

The sentencing judge alone determines the amount of any substantial-assistance reduction. After the government files its motion, the sentencing judge will set a date for hearing the motion. The sentencing judge will then decide how much of a reduction (if any) the defendant is entitled to.

What Are the Limits of a Substantial-Assistance Reduction?

The sentencing guidelines apply when they are applicable, but they do not govern substantial-assistance reductions. Under U.S.S.G. § 5K1.1, the substantial-assistance reduction is a departure. This means that the sentencing judge can grant a substantial-assistance reduction even if the guidelines would not otherwise warrant an offense-level reduction or a reduction in the sentencing range.

Is a Substantial-Assistance Reduction and a Sentence Below the Mandatory Minimum the Same?

There is a major difference between a substantial-assistance reduction and a sentence below the statutory mandatory minimum. While a substantial-assistance reduction is a departure under the Federal Sentencing Guidelines (U.S.S.G. § 5K1.1), a sentence below the statutory mandatory minimum is a departure under 18 U.S.C. § 3553(e). The government may invoke § 5K1.1 without invoking § 3553(e), and in the case of _Melendez v. United States, 518 U.S. 120 (1996)_, the Supreme Court held that, “When authorized by 18 U.S.C. section 3553(e), the district court may impose a sentence below a mandatory minimum.”

Does a Substantial-Assistance Reduction Work like a Percentage Reduction?

The federal government did not prescribe a particular percentage reduction for a substantial-assistance departure. Instead, the U.S.S.G. is only one factor when calculating a defendant’s potential reduced sentence, and other considerations apply when calculating substantial-assistance reductions as well. These considerations include the defendant’s potential reduced sentence under U.S.S.G. § 5K1.1.

How Do Judges Decide Whether Assistance Is Substantial?

Useful information, documents, undercover work, and testimony can all constitute assistance. In substantial-assistance motions under U.S.S.G. § 5K1.1, judges will consider how significant and useful the assistance was, and they will focus on several factors:

• How truthful, complete, and reliable the information provided by the defendant was;
• The nature and extent of the defendant’s cooperation, including his willingness to provide documents and testify at trial;
• The resulting injury or danger to the defendant or the defendant’s family; and
• Whether the defendant provided the assistance promptly.

These considerations are very different from those that apply when evaluating a defendant’s request for an acceptance-of-responsibility reduction. Of course, these are all considerations that judges can use. They can (and will) use different considerations, and they can consider any other factors that they believe are important. For example, federal judges can consider whether the defendant has committed similar offenses in the past.

When evaluating a defendant’s request for a substantial-assistance reduction, judges will evaluate (i) the nature and extent of the defendant’s cooperation with law enforcement officials and federal prosecutors; (ii) the nature and extent of the assistance that the defendant gave to law enforcement officials and federal prosecutors during investigations and prosecutions of other individuals; (iii) the usefulness of the defendant’s assistance and the extent to which the defendant’s cooperation helped law enforcement officials and federal prosecutors investigate and prosecute the defendant’s targets; (iv) whether the defendant provided the assistance promptly; (v) the truthfulness and completeness of the defendant’s assistance; and (vi) the injury or danger to the defendant and the defendant’s family.

Crucially, U.S.S.G. § 5K1.1 does not require that any arrest or conviction result from the defendant’s assistance. Instead, § 5K1.1 measures the assistance rendered rather than the results that the government obtained from the defendant’s assistance. This is consistent with the reasoning in the Supreme Court case that explains § 5K1.1, and this is consistent with the reasoning that federal courts use to apply § 5K1.1 as well.

While not technically required for a substantial-assistance reduction under U.S.S.G. § 5K1.1, an arrest or conviction as a result of the defendant’s assistance is important for prosecutors to demonstrate that the defendant provided “substantial” assistance.

While not technically required for a substantial-assistance reduction under U.S.S.G. § 5K1.1, an arrest or conviction as a result of the defendant’s assistance is important for prosecutors to demonstrate that the defendant provided “substantial” assistance. In these cases, prosecutors will emphasize the value of the assistance obtained, how the defendant gave it (e.g., testimony), and why a substantial-assistance reduction is warranted.

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

How Does Rule 35 Work After Federal Sentencing?

Fed. R. Crim. P. 35(b) governs substantial-assistance reductions after a defendant’s original sentencing. Under Rule 35(b), only the government may initiate a substantial-assistance reduction, and Rule 35(b)(1) generally requires government motions for a Rule 35(b) reduction to be filed within one year after the sentencing date. Fed. R. Crim. P. 35(b)(2) provides an exception to this one-year requirement in two scenarios: (i) the government learned about the defendant’s substantial assistance after the one-year period began; and, (ii) information about the defendant’s substantial assistance became useful after the one-year period began.

If either of these scenarios applies, the government can file a Rule 35(b)(2) motion seeking a substantial-assistance reduction. If (i) applies, i.e., the government learned about the assistance after the one-year mark, but before filing, the government must file promptly after learning about the assistance. If (ii) applies, i.e., the government learned about the assistance within the one-year mark, but only later learned that the assistance was useful, the government must file promptly after the assistance become useful. This applies whether the government learned about the usefulness of the information later because: (a) the government has just completed its investigation, or (b) newly available information has made the defendant’s assistance useful. In either case, for the government to seek a substantial-assistance reduction after one year, it must disclose the timing of its discovery.

In any case in which the government files a Rule 35(b) motion, Fed. R. Crim. P. 35(b)(4) permits the court to reduce the sentence to a level below the applicable statutory minimum. In addition, Rule 35(b) substantial-assistance reductions do not require a full resentencing proceeding. In fact, the relevant rules for Rule 35(b) motions establish the procedure, and these rules do not require a full resentencing proceeding.

However, a Rule 35(b) substantial-assistance reduction does not eliminate the sentencing judge’s discretion to determine whether a substantial-assistance reduction is warranted. Rather, it only gives the government the exclusive ability to request a substantial-assistance reduction after the defendant’s original sentencing. The government’s request is only one factor when determining whether a substantial-assistance reduction is warranted, and other factors apply as well.

When determining whether a Rule 35(b) substantial-assistance reduction is warranted, federal courts consider the following factors: (i) the nature of the defendant’s assistance and the timing of that assistance; (ii) whether the defendant voluntarily provided truthful information; (iii) whether the defendant provided the assistance without the threat of prosecution; and, (iv) the resulting injury or danger to the defendant or the defendant’s family members. These factors are used when the government affirmatively seeks a Rule 35(b) substantial-assistance reduction, and courts use them to determine whether a reduction in the defendant’s remaining sentence is warranted.

Can Prosecutors Refuse to Reward Cooperation after a Proffer?

The scope of a defendant’s post-proffer remedies after federal prosecutors refuse to seek a substantial-assistance reduction under U.S.S.G. § 5K1.1 is extremely limited. This is largely the result of a decision of the U.S. Supreme Court: Wade v. United States, 504 U.S. 181 (1992). This case limits judicial review of prosecutors’ refusals to file assistance motions under U.S.S.G. § 5K1.1, and it limits this review even in cases where the prosecutor’s refusal is allegedly based on unconstitutional motives.

In Wade, the Supreme Court explained that while a prosecutor’s refusal to file a substantial-assistance motion may only merit judicial review if there are grounds to challenge the prosecutor’s underlying decision in constitutional court, a defendant may not compel judicial review simply by alleging that his cooperation is valuable. Instead, the defendant must allege facts that warrant judicial review, and this can include alleging unconstitutional motives.

The federal government, however, will argue in cases involving Rule 35(b) motions that the defendant’s substantial-assistance reduction was waived by the defendant’s alleged false statements during his proffer. For prosecutors, alleging that the defendant provided false information is not enough, but federal judges must consider the consequences of this allegation, a defendant’s proffer and substantial-assistance agreements do not shield him from additional federal criminal exposure if the defendant is lying to federal law enforcement officials and federal prosecutors.

Similarly, even if a defendant’s proffer and substantial-assistance agreements are written agreements which provide protections against prosecutors using a defendant’s proffer and substantial assistance against him, such agreements also contain provisions authorizing investigators to pursue derivative evidence. Specifically, derivative evidence includes evidence discovered as a result of the defendant’s assistance, as well as any evidence that investigators obtain during their attempts to implement the information that the defendant provided during his proffer and cooperation.

Further, the risks associated with cooperating with the federal government go beyond federal criminal exposure. While defendants often face the risk of retaliation from the targets of their cooperation efforts, in a substantial-assistance scenario, the risk extends to the defendant’s family as well.

While defendants may be entitled to remedies for substantial-assistance retaliation, they will need to show a substantial threshold of evidence to support their claims. In this case, Wade establishes that a defendant must allege facts sufficient to justify his request before a court will order discovery or a hearing. While this does not prevent the government from filing a substantial-assistance motion, it does prevent the government from using the government’s decision not to file a substantial-assistance motion to delay a defendant’s trial. As a result, the government must file a motion to delay if the government will use any of the defendant’s statements or efforts against him at trial, and the government’s request for a Rule 35(b) substantial-assistance reduction must not interfere with the defendant’s right to a speedy trial.

How Does Substantial Assistance Create Securities-Law Liability?

As discussed above, Section 20(e) of the Exchange Act authorized the SEC to enforce aiding-and-abetting liability in situations where the SEC has evidence that a person (i) has given substantial assistance with respect to a violation of the securities laws, and (ii) the person provided that substantial assistance “knowingly or recklessly.” These requirements establish liability when there is an underlying violation of the securities laws. In Apuzzo, the federal district court noted that proximate causation was not a required element for the SEC’s enforcement actions under Section 20(e).

While Section 20(e) authorizes enforcement actions by the SEC in situations where “substantial assistance” was provided, Central Bank of Nigeria PLC v. Bank of Credit and Commerce International, S.A. held that “the statutory language of Sections 20(a) and 20(e) of the Exchange Act [does] not authoriz[e] a private action for aiding and abetting.” The U.S. Supreme Court held that the securities laws do not impose liability on third parties who fail to prevent securities-law violations by others. This prevents third parties from being held liable for aiding and abetting when they are not primarily responsible for the violation. Consequently, the SEC may pursue aided-and-abetting liability in cases that present an SEC enforcement action, but not those that present a private action.

The Dodd-Frank Act amended Section 20(e) to include “recklessly” in 2010. Before the amendment, federal judges held that knowingly and recklessly were distinct. Instead, “recklessly” means not having regard to the consequences of your actions. The Supreme Court held that knowingly is higher than recklessly, and knowledge requires awareness of a particular risk, while recklessness involves only a failure to avoid a risk. In addition, Dodd-Frank also extended the SEC’s authority to pursue secondary liability in cases involving federal securities fraud violations under three additional federal securities statutes.

In the Daifotis case, the federal district court declined to apply the Dodd-Frank Act’s recklessness amendment retroactively. The judge noted that applying the recklessness amendment retroactively would allow the SEC to apply Section 20(e) to conduct that took place prior to the amendment.

Speak With a Federal Defense Lawyer

If you are dealing with any part of what this article describes, the next step is a conversation with a lawyer who handles these cases. Spodek Law Group is a second generation criminal defense firm practicing since 1976, representing clients nationwide from offices in New York, Brooklyn, Queens and Los Angeles. Call 212-300-5196 to speak with our team.