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Crime Fraud Exception Overview
The crime fraud exception to attorney-client privilege is a legal doctrine that allows courts to order the disclosure of communications between an attorney and their client if there is evidence that the client is using the attorney’s services to further a crime or fraud. The exception is based on the public policy that the attorney-client privilege should not be used to shield criminal activity.
The crime fraud exception has a long history in the United States. The first case to recognize the exception was the 1816 case of United States v. Smith. In that case, the court held that the attorney-client privilege did not apply to communications between an attorney and a client who were conspiring to commit a fraud. The court reasoned that the privilege was intended to protect communications that were necessary for the client to obtain legal advice, and that it did not apply to communications that were used to further a crime.
The crime fraud exception has been applied in a wide variety of cases, including cases involving murder, fraud, and drug trafficking. The exception has also been used to order the disclosure of communications between attorneys and their clients who are suspected of engaging in terrorist activity.
The crime fraud exception is a powerful tool that can be used to uncover evidence of criminal activity. However, the exception is also subject to abuse. In some cases, prosecutors have used the exception to obtain evidence that would otherwise be protected by the attorney-client privilege. As a result, it is important for courts to carefully consider the facts of each case before ordering the disclosure of communications between an attorney and their client.
Elements of the Crime Fraud Exception
In order to establish the crime fraud exception, the government must prove the following elements:
* That the client was using the attorney’s services to further a crime or fraud;
* That the client intended to use the attorney’s services to further a crime or fraud; and
* That the attorney knew or should have known that the client was using the attorney’s services to further a crime or fraud.
The government can prove these elements through a variety of evidence, including:
* Testimony from the client or the attorney;
* Documents that show that the client was using the attorney’s services to further a crime or fraud; and
* Evidence that the attorney knew or should have known that the client was using the attorney’s services to further a crime or fraud.
Elements of the Crime Fraud Exception
The crime fraud exception to the attorney-client privilege applies when a client seeks legal advice or assistance to further a crime or fraud. To invoke this exception, the following elements must be established:
- The client was seeking legal advice or assistance to commit a crime or fraud. This element requires proof that the client’s primary purpose in seeking legal advice was to further a criminal or fraudulent activity. It is not enough to show that the client was aware that the advice or assistance could be used for illegal purposes.
- The attorney knew or should have known that the client was seeking legal advice or assistance to commit a crime or fraud. This element requires proof that the attorney had actual knowledge or a reasonable belief that the client’s purpose in seeking legal advice was to further a criminal or fraudulent activity. It is not enough to show that the attorney was negligent in failing to discover the client’s intent.
- The crime or fraud was contemplated or ongoing at the time the legal advice or assistance was sought. This element requires proof that the crime or fraud was either being planned or was already in progress at the time the client sought legal advice or assistance. It is not enough to show that the crime or fraud was merely a possibility or that it was committed after the legal advice or assistance was provided.
Examples of Criminal or Fraudulent Activities
Examples of criminal or fraudulent activities that may trigger the crime fraud exception include:
- Seeking legal advice on how to commit a murder
- Asking an attorney to draft a fraudulent contract
- Using an attorney to launder money
- Hiring an attorney to represent a client in a criminal case knowing that the client is guilty
- Seeking legal advice on how to avoid paying taxes
Burden of Proof
The party asserting the crime-fraud exception bears the burden of proving its applicability. The standard of proof required to invoke the exception is typically the preponderance of the evidence. This means that the party must demonstrate that it is more likely than not that the attorney-client communications were made in furtherance of a crime or fraud.
Standard of Proof
The standard of proof for establishing the crime-fraud exception is the preponderance of the evidence. This means that the party asserting the exception must show that it is more likely than not that the communications were made in furtherance of a crime or fraud. The preponderance of the evidence standard is a relatively low standard of proof, and it is often met by circumstantial evidence.
Scope of the Exception
The crime fraud exception applies to communications that are made in furtherance of a crime or fraud. This includes communications that are made before, during, or after the crime or fraud.
Types of Communications Subject to the Exception
The crime fraud exception applies to a wide range of communications, including:
- Communications between the client and the attorney
- Communications between the client and third parties
- Communications between the attorney and third parties
- Communications that are made in preparation for a crime or fraud
- Communications that are made to conceal a crime or fraud
Attorney Responsibilities
Attorneys have a significant responsibility when it comes to the crime fraud exception to the attorney-client privilege. They must balance their ethical obligations to their clients with their duty to uphold the law.
To protect their clients’ interests while complying with the law, attorneys should:
Steps Attorneys Should Take
- Be aware of the crime fraud exception: Attorneys must be familiar with the crime fraud exception and its potential implications for their clients.
- Evaluate the facts carefully: When faced with a potential crime fraud exception, attorneys should carefully evaluate the facts to determine whether the exception applies.
- Communicate with the client: Attorneys should communicate with their clients about the potential crime fraud exception and the risks involved.
- Consider withdrawing from representation: If the attorney believes that the crime fraud exception applies, they may consider withdrawing from representation.
- Seek guidance from other professionals: Attorneys may seek guidance from other professionals, such as ethics counsel or a judge, if they are unsure about how to proceed.
Case Law and Examples
The crime fraud exception has been applied in numerous court cases, providing guidance on its interpretation and scope. Here are some notable examples:
Landmark Cases
- Swidler & Berlin v. United States (1984): The Supreme Court held that the crime fraud exception applies when a client seeks legal advice to further a crime or fraud.
- In re Grand Jury Proceedings (Bank of Nova Scotia) (1988): The Second Circuit ruled that the exception can be invoked even if the crime or fraud is not ultimately committed.
Application in Different Factual Scenarios
- Tax Evasion: The exception has been used to obtain attorney-client communications related to tax evasion schemes (e.g., United States v. BDO Seidman, LLP (2013)).
- Money Laundering: Courts have allowed the exception to access communications involving money laundering activities (e.g., United States v. Doe (2011)).
- RICO Violations: The exception has been applied in cases involving violations of the Racketeer Influenced and Corrupt Organizations (RICO) Act (e.g., United States v. Kramer (2016)).
Comparison to Other Exceptions
The crime fraud exception shares some similarities with other exceptions to attorney-client privilege, such as the waiver exception and the self-defense exception. However, there are also some key differences.
One similarity between the crime fraud exception and the waiver exception is that both exceptions require the client to have voluntarily disclosed the privileged communication. In the case of the crime fraud exception, the client must have disclosed the communication in furtherance of a crime or fraud. In the case of the waiver exception, the client must have disclosed the communication for some other purpose, such as to obtain legal advice or to prepare for trial.
Another similarity between the crime fraud exception and the self-defense exception is that both exceptions allow the attorney to disclose the privileged communication if necessary to prevent the client from committing a crime or fraud. In the case of the crime fraud exception, the attorney must reasonably believe that the client is planning to commit a crime or fraud. In the case of the self-defense exception, the attorney must reasonably believe that the client is in imminent danger of being harmed.
One key difference between the crime fraud exception and the waiver exception is that the crime fraud exception is not subject to the client’s intent. This means that the attorney can disclose the privileged communication even if the client did not intend to waive the privilege.
Another key difference between the crime fraud exception and the self-defense exception is that the crime fraud exception is not limited to situations where the client is facing criminal charges. The attorney can disclose the privileged communication even if the client is only planning to commit a crime or fraud.
