We talked yesterday about the dust up in LA in advance of the big FCPA and money-laundering trial set to start next month.
Prosecutors sent new grand jury subpoenas to four Lindsey Manufacturing employees and CEO Keith Lindsey’s wife. Defense lawyers called the “new” investigation a pretext designed to improperly assist the government in preparing for the March 29 trial. The judge apparently agreed. He stopped the DOJ from using this week’s grand jury proceedings to question witnesses about the case.
Jan L. Handzlik, who’s defending Lindsey Manufacturing and Dr. Keith Lindsey, answered some questions for us about what’s been happening. Handzlik was a federal prosecutor in Los Angeles for several years, handling mainly fraud and other white-collar crime investigations and prosecutions. He also served for three years as one of the first FCPA compliance monitors, examining the conduct of a Swiss-U.S. company under a deferred prosecution agreement with DOJ.
FCPA Blog: You argued that the government was seeking to misuse the grand jury process. What did you mean by that?
Jan Handzlik: It appeared to us that the DOJ prosecutors were going to use the grand jury to prepare for trial rather than investigate new matters. That’s simply not permitted. The grand jury’s role ends once an indictment is returned.
FCPA Blog: But what if the DOJ prosecutors had uncovered new things to investigate and planned to seek a new indictment?
Jan Handzlik: Judge Matz gave them every opportunity to show that their investigation was somehow new and different from the pending charges. We never saw the declaration supporting their opposition, but It apparently didn’t pass muster. In fact, in its opposition brief, the Assistant U.S. Attorney admitted that the government “…was investigating these additional crimes long before….” they sought to speak to these witnesses about them. We also presented convincing evidence that the matters probably involved in the “new” investigation had been under scrutiny for at least 1 1/2 to two years.
FCPA Blog: FCPA cases against companies are usually resolved by pleas of guilty or deferred prosecution agreements. But Lindsey Manufacturing and its officers have been indicted and seem to be pushing for an early trial. Why?
Jan Handzlik: Two simple reasons: we’re not guilty of the charges and want to show this at the earliest opportunity. Second, a co-defendant, Angela Gomez Aguilar, has been denied bail and held in federal custody on these charges for nearly six months. Both the judge and Ms. Aguilar’s lawyer will not allow this matter to drag on longer than absolutely necessary. We fully support having a trial as soon as possible.
FCPA Blog: So if the government had managed to secure a new, superseding indictment, the current trial date would have been postponed?
Jan Handzlik: We think that was the government’s theory. It didn’t work out well in practice. The judge had made it very clear to the parties that this case would go to trial on March 29th, no exceptions. So if that’s what the DOJ prosecutors had in mind, they misjudged the situation.
FCPA Blog: Thanks for talking with us.
Jan Handzlik: You’re most welcome.
Editor’s note: Jan Handzlik represents Lindsey Manufacturing Company and CEO Keith Lindsey. Lindsey’s CFO, Steve K. Lee, is represented by Janet Levine of Crowell & Moring.