‘Yeah, We Lied’: Messages Show Prosecutors’ Panic Over Missteps In Federal Case
FEB 25, 2021 | REPUBLISHED BY LIT: FEB 25, 2021
Newly disclosed documents from inside the U.S. attorney’s office in Manhattan capture a sense of panic and dread among prosecutors and their supervisors as one of their cases collapsed last year amid allegations of government misconduct.
The materials include a rare look at sensitive emails and text messages between junior prosecutors and their overseers after a federal judge began to inquire about lapses that ultimately led the Justice Department to abandon a conviction in a case it had already won.
Prosecutors in the Southern District of New York wrote each other in March 2020 that “yeah, we lied” in a letter to Judge Alison Nathan about a key document it had failed to share with defense lawyers. The office later retreated from that characterization, arguing instead the trouble resulted from a rush to file papers under a tight deadline.
In another newly revealed exchange, one supervisor in the terrorism and international narcotics section emailed his co-chief after the problems began to surface that the trial team had done some “pretty aggressive stuff here over the last few days.”
“This is going to be a bloodbath,” the other supervisor replied.
Earlier, a junior lawyer on the case suggested they “bury it” in a stack of other papers they provided the defendant, apparently in hopes the critical document would be overlooked during the rush of the trial.
Judge Nathan did not conclude the U.S. attorney’s office engaged in intentional wrongdoing, but she has referred lawyers there to the Office of Professional Responsibility at Justice Department headquarters, a unit that investigates attorney misconduct. The judge also asked FBI inspectors to probe separate allegations against FBI agents on the case.
Nathan expressed astonishment that the disaster continues to unfold. In its latest filing, seven months after the judge began to demand detailed explanations, she said the government had come clean about yet another failure.
“The trial team’s failure to promptly investigate the origins of [the key document] and to communicate about discovery with other governmental agencies reflects a systematic disregard of their disclosure obligations,” the judge wrote. “Prosecutors then compounded these missteps through a sustained pattern of refusing to fess up.”
The extraordinary saga unfolded in a case against Ali Sadr Hashemi Nejad, accused of violating American sanctions laws against Iran by moving millions of dollars in payments for his family business through the U.S. financial system. His lawyers, Brian Heberlig and Reid Weingarten, have since ensured Sadr will face no immigration-related consequences from the failed prosecution.
“The prosecutorial misconduct in this case has been shocking and disappointing,” Heberlig told NPR. “We applaud Judge Nathan’s decision to fully expose this extraordinary saga to prevent it from happening again.”
The U.S. Attorney’s office had sought to shield their internal communications from public view. But the judge found there’s a significant public interest in understanding what went wrong and ensuring it never happens again.
“The Court hopes that as the Southern District of New York puts this unfortunate chapter behind it, these documents will provide other prosecutors and members of the public some insight into how the Government came to so badly mishandle its ethical obligations in this case, some deterrence for misconduct in future prosecutions, and some assurance that the judiciary treats these matters with the utmost seriousness,” Nathan wrote.
A spokesman for Acting U.S. Attorney Audrey Strauss declined comment on the matter. The office had previously pledged to overhaul its training for prosecutors to prevent the sort of systemic shortcomings the Sadr case identified. With the exception of one supervisor who has left the government for private law practice, the other prosecutors remain in the U.S. attorney’s office.
A spokesman for the Justice Department unit that investigates lawyer wrongdoing didn’t offer any comment on the judge’s referral in the Sadr case. Transparency advocates have long criticized that office, known as OPR, for taking too long and for operating in secret.
On Wednesday, Senate Judiciary Chairman Dick Durbin, D-Ill., and Utah Republican Sen. Mike Lee introduced legislation that would expand the jurisdiction of the department’s well-regarded inspector general to scrutinize attorney misconduct. They said the move is needed to enhance accountability and oversight.
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Judge Castigates SDNY Prosecutors’ Conduct in Prosecution of Iranian Businessman
U.S. District Judge Alison J. Nathan said that the actions of the Manhattan U.S. Attorney’s Office had eroded public trust in the criminal justice system by making “countless” belated disclosures to lawyers. While their client’s conviction was vacated, Steptoe & Johnson attorneys have pursued evidence they suspected the government had withheld.
Originally Published: 16 Sept. 2020 | Republished by LIT: 25 Feb, 2021
A Manhattan federal judge on Wednesday castigated federal prosecutors in the Southern District of New York for “repeatedly” withholding exculpatory evidence in the case of an Iranian businessman convicted of funneling more than $115 million through the American financial system.
In a blistering 43-page opinion, U.S. District Judge Alison J. Nathan said that the actions of the Manhattan U.S. Attorney’s Office, known for its fierce sense of independence and pride, had eroded public trust in the criminal justice system by making “countless” belated disclosures to lawyers representing Ali Sadr Hashemi Nejad before, during and after his trial earlier this year.
While the case against Sadr was ultimately dismissed with prejudice following his conviction in March, Sadr’s Steptoe & Johnson LLP attorneys have aggressively pursued evidence they suspected the government had withheld. In June, then-U.S. Attorney Geoffrey Berman acknowledged a spate of “discovery-related issues” and determined that it would “not be in the interests of justice to further prosecute this case.”
Nathan, who presided over the two-week trial, at the time demanded “specific answers” to concerns that had been raised by the defense, as well as a full accounting of any material that had not been turned over. She also ordered prosecutors to identify any government attorneys and supervisors responsible for withholding evidence.
“This serious dereliction requires a serious response,” she said.
On Wednesday, Nathan said that the prosecutors’ response was less than forthcoming, and had even revealed an “array of additional errors,” including even more disclosure failures and new admissions of misconduct related to the government’s handling of search-warrant returns. In one instance, she said, prosecutors lied to the court about its conduct.
“The cost of such Government misconduct is high. With each misstep, the public faith in the criminal-justice system further erodes. With each document wrongfully withheld, an innocent person faces the chance of wrongful conviction,” Nathan wrote.
“And with each unforced Government error, the likelihood grows that a reviewing court will be forced to reverse a conviction or even dismiss an indictment, resulting in wasted resources, delayed justice, and individuals guilty of crimes potentially going unpunished.”
The ruling ordered acting U.S. Attorney Audrey Strauss to certify within one week that every prosecutor in her office had read the opinion, and directed additional fact-finding to determine whether any lawyers on the prosecution either intentionally withheld exculpatory evidence or purposely misled the court about the late disclosures.
“Government lawyers wield enormous prosecutorial power,” Nathan said.
They must exercise it in a way that is fully consistent with their constitutional and ethical obligations. And it is the obligation of the courts to ensure that they do and hold them accountable if they do not.”
A spokesman for the U.S. Attorney’s Office declined to comment Wednesday afternoon.
Reid Weingarten and Brian Heberlig, who represented Sadr is the case, said that prosecutors’ failure to abide by their disclosure obligations had deprived their client of a fair trial.
“Had prosecutors disclosed the true facts, the court recognized that the trial might have been avoided altogether,” they said in a statement. “We are proud to have represented Mr. Sadr, an honest businessman and patriotic U.S. immigrant who did not deserve the mistreatment he received from the U.S. government in this case.”
Sadr, who has maintained his innocence, was charged in 2018 with violating the U.S. sanctions regime against Iran, after the Manhattan District Attorney’s Office referred an investigation to the U.S. Attorney’s Office.
The case centered on a $475 million contract that an Iranian company controlled by Sadr’s father had entered with a state-owned company in Venezuela to build low-income housing. According to his defense team, Sadr was an “adamant foe” of the Iranian government who was simply trying to keep his money out of the wrong hands.
Since the transaction was conducted in U.S. dollars, SDNY prosecutors had tried Sadr on the novel theory that he had induced U.S. banks involved in the transaction to export their financial services to Iran. That, prosecutors argued, put the banks at risk of potential penalties from the Office of Foreign Assets Control, or OFAC, the arm of the Treasury Department which oversees economic and trade sanctions based on U.S. foreign policy.
According to the opinion, however, the case had been marred by disclosure violations that continued “unabated” in the case for years.
Among the most egregious was the prosecutors’ failure to reveal, until the middle of trial, a letter from one of the banks involved in the underlying deal to OFAC flagging that one of the companies set to receive funds, a Turkish company named Stratus, appeared to be affiliated with an Iranian company of the same name.
Rather than turning it over, Nathan said, prosecutors offered differing explanations for failing to produce the letter to the defense and discussed “burying” the document among others that had already been disclosed.
When pressed for an explanation, Nathan said the U.S. Attorney’s Office misleadingly responded that the document had been newly marked and implied that prosecutors had told the defense that it was being disclosed for the first time.
“Indeed, the Court was misled,” Nathan wrote.
“What arguably occurred here is that at least some of the Government lawyers implemented and executed the strategy the prosecutors had discussed: to ‘bury’ [the letter] by deceptively hiding it among several other documents that had previously been disclosed. Having gotten caught in this effort, the Government then made a misleading representation to the Court, perhaps in an attempt to make its conduct appear better than it was.”
According to the opinion, 14 prosecutors, including seven line prosecutors, one special assistant U.S. attorney and six supervisors, worked on the case, and all had access to the document.
The failure to disclose it, she said, set off a “cascade of failures to timely disclose related materials” that would require additional investigation.
Beyond those, however, it was also revealed that investigators in the Department of Justice were “mining” at the outset state search-warrant returns for federal crimes without their own warrant, a misstep that was “likely unconstitutional because review of search-warrant returns must be done in conformity with the warrants themselves.”
The opinion called for “systemic solutions” at DOJ to the “manifold problems” highlighted in Sadr’s prosecution, including “policy and training procedures” for FBI agents, as well as AUSAs, who “must be trained to conduct proper due diligence about the conduct of investigating agents before making misleading representations to the court.”
If any government lawyers had knowingly submitted false statements, Nathan said, their conduct would constitute an “egregious ethical violation.”
Any errors, Nathan said, should be referred to the DOJ’s Office of Professional Responsibility for further investigation.
“The manifold problems that have arisen throughout this prosecution—and that may well have gone undetected in countless others—cry out for a coordinated, systemic response from the highest levels of leadership within the United States Attorney’s Office for the Southern District of New York,” Nathan said. “The Court implores the Acting United States Attorney to take seriously the numerous deficiencies set out in detail above and to take action to ensure future prosecutions brought under the aegis of her office do not suffer from the same.”
Under Nathan’s order, each trial team attorney is required to submit declarations about their handling of evidence by Oct. 16, and executive leadership for the U.S. Attorney’s Office was required to filed a brief by Oct. 30 arguing why no additional fact-finding or credibility determinations are necessary.
Sadr’s attorneys have the option to respond by Nov. 13.
