Federal grand juries have a maximum of 23 members, 16 of whom must be present to form a quorum. Indictments are returned by a vote of 12 or more members. Federal grand juries typically sit for a term of 18 months and meet at regular intervals. Grand juries can use the court’s power to subpoena evidence. A subpoena (which translates, essentially, as “subject to sanction”) commands someone to do something. The subpoenas are actually issued by the court clerk’s office.
The prosecutor will go to the court clerk’s office and obtain blank subpoenas. The prosecutor then fills them in, putting in the name of the person or corporation that is being subpoenaed, and telling them what they have to do (testify or produce documents) and when they have to do it. The prosecutor then has someone–often a police officer or federal marshal–serve the subpoena on the person the government seeks to compel.
Someone who receives a subpoena from a grand jury has three choices: (1) comply with the subpoena; (2) convince a court that he or she does not have to comply with it; or (3) refuse to comply and be held in contempt.
You comply with a grand jury subpoena by doing what it tells you to do. If it says you are to show up before the grand jury at a given time on a specified date and testify, you do that. If it says you are to show up at that date and time and produce documents or other evidence for the grand jury to review, you do that.
If you think you shouldn’t have to comply with the subpoena, you would need to persuade the court to quash the subpoena. The two main defenses to quash a grand jury subpoena would be that by that making you comply with it would violate your constitutional rights or that what it asks you to do is “unreasonable or oppressive”. Usually though the court in such actions will usually modify the subpoena so that you are ordered to answer questions that do not violate your constitutional rights and ordering that the grand jury does not ask questions that if answered would violate your constitutional rights. Where you are claiming that the subpoena is unreasonable or oppressive the Court usually will modify the subpoena so that you will be able to do what it tells you to do.
If you simply refuse to do what the subpoena orders you to do, the prosecutor, acting on behalf of the grand jury, will ask the court to hold you in civil contempt. Unless you have a very good reason for not complying, the court will do so.
Civil contempt is not a crime. It is, instead, a way the court coerces you into doing what the grand jury wants you to do. Once you’re held in civil contempt, you will be locked up until you agree to comply with the subpoena or until the grand jury’s term ends, whichever comes first. Once the grand jury has been dissolved, the subpoena is no longer valid and you can’t be held in contempt. Of course, a prosecutor can re-subpoena you to testify before a new grand jury and if again you refuse, you can be held in civil contempt and locked up until that grand jury’s term ends, which could be another year and a half or even two.
1. Keep Your Attorney Close At Hand. Your lawyer can’t be with you in the grand jury room, but he can be right outside the room and you have the right to consult with him after each and every question. In fact, you can spend as much time as you need conferring with your lawyer, as long as you are not attempting to disrupt the grand jury process. You can also leave the grand jury room in order to brief your attorney about the questions being asked and your responses. In most federal jurisdictions you can also take notes of any questions asked during the grand jury session. These can later be shared with your attorney.
2. Don’t Agree to Interviews With The Government Before Your Appearance. You are under no obligation to talk to government agents before the grand jury process begins. Some Assistant United States Attorneys trick unrepresented persons into interviewing with federal agents prior to the beginning of the grand jury session. The letter accompanying the witness’ subpoena may ask or direct the witness to appear an hour or two early at the grand jury room or the U.S. Attorney’s Office. These pre-grand jury interviews are dangerous and ill-advised and the government has no authority to compel them. You may make a harmful admission during one of these interviews. In addition, you may be accused of lying to a government agent during the interview. Lying to government agents during an interview, like lying to the grand jury, is a federal crime. At the grand jury session, however, there will be an official recording and/or transcript of the proceedings, so there will be no dispute about what you say. The pre-grand jury agent interview will not be recorded. Two federal agents will take notes of what you say and it will be their word against yours in the event of a dispute.
3. Don’t Be Bullied Or Misled About Grand Jury Secrecy. Federal grand jurors, grand jury court reporters and the prosecutors running the grand jury are under a strict duty to keep any “matter occurring before the grand jury” a secret. This duty is codified in Rule 6(e) of the Federal Rules of Criminal Procedure. Violations of this rule can result in sanctions or criminal contempt charges against a prosecutor. But the rule of secrecy does not apply to federal grand jury witnesses. If you are a grand jury witness, you have the right to tell the whole world about your grand jury testimony. Of course, it may not be in your interest to do this-you may want to keep your appearance before the grand jury under close wraps. You need to understand, however, that it is your call and not the government’s. It does not matter even if the federal prosecutor attaches a cover letter to the grand jury subpoena, informing the witness that revealing the contents, or even the existence, of the subpoena “may impede” a criminal investigation. An experienced criminal tax defense attorney knows how to respond to such requests or demands made by the federal prosecutor.
4. Insist On Grand Jury Secrecy For The Government. Recall that Rule 6(e) prohibits the government from revealing “a matter occurring before the grand jury.” This prohibition of course covers the content of grand jury testimony. But it goes much further. The government cannot even reveal that you appeared before the grand jury or that you have been subpoenaed or scheduled to appear. Many prosecutors and agents get sloppy about this and reveal that a person or company has been subpoenaed. In addition, some grand juries have waiting rooms where multiple witnesses are invited to wait until they are called. In these situations, each witness is told, in effect, that the other witnesses waiting with him have been summoned to appear “before the grand jury.” On other occasions, members of the press, who know what day the federal grand jurors meet, have been tipped off to be at the courthouse entrance, so that they can see a grand jury witness enter and draw the obvious conclusion. An experienced criminal tax defense attorney should be vigilant in guarding against these abuses and should put the federal prosecutors handling your appearance on notice not to violate grand jury secrecy with such maneuvers.
5. Let Your Attorney Accept Service Of The Subpoena. Your attorney should arrange with the prosecutor to accept service of the grand jury subpoena on your behalf. This spares you the embarrassment of being personally served by FBI agents at your home or in the workplace. What if the agents don’t know or care that you have an attorney, and decide to serve you personally anyway? You should politely accept service, tell the agents that you have an attorney, and decline to answer any and all substantive questions about the case. Refer all questions to your attorney. What if you don’t yet have an attorney when you are personally served with the grand jury subpoena? Politely accept service and tell the agents that you will decline to answer any substantive questions until you have had the opportunity to obtain an attorney. You are under no obligation to do anything other than accept service of the subpoena. If you say anything at all about the case to the agent you could be making dangerous admissions that may be used against you at a later time. For example, let’s say that you are being investigated in connection with an alleged tax fraud scheme involving foreign trust accounts. Assume that there are no documents which on their face tie you to any such trust accounts. Then an FBI Special Agent (or an IRS Criminal Investigation Division Special Agent) serves you with a grand jury subpoena for all records related to those foreign trust accounts. When she serves the subpoena, the agent asks: “Are you going to cooperate?” You respond: “Yes, I’ll cooperate. You’ll get the documents.” What have you done? You have just admitted to the government that you possess or have access to the foreign trust account documents. You have in effect acknowledged a connection between yourself and the foreign trusts. If you instead respond to the agent as follows: “I’m sorry, but I have an attorney and she will be contacting you,” you have admitted nothing.
6. Learn The Difference Between Types Of Grand Jury Subpoenas. Federal grand jury subpoenas are for (a) testimony (ad testificandum); (b) documents or objects (duces tecum); or (c) both. The face of the subpoena will inform you which type of subpoena you received. You will be subpoenaed as an individual or as a custodian of records for a business entity. In many instances, individuals have the right to refuse to answer grand jury questions by invoking the Fifth Amendment’s Privilege against Self-Incrimination. Corporations and other business entities, however, cannot invoke this privilege. But since a corporation operates through human agents, it must designate a custodian of records when subpoenaed by the federal grand jury. Under Supreme Court case law the corporate custodian is only required to answer a narrow category of questions, related to how the subpoenaed documents were searched for and gathered. If you are properly subpoenaed as a business custodian, it is very important that you limit your answers to this narrow category of questions. Prosecutors love to get corporate custodians into the grand jury room and ask extra questions. These questions might seem innocuous, but they are often very dangerous. You need to have your criminal tax defense lawyer with you for consultation, right outside of the grand jury room, to insure that you are not tricked into answering one question too many. Some federal prosecutors have recently started the practice of issuing one subpoena to a person in that person’s individual capacity and his custodial capacity. This tactic is dangerous, confusing, and, in my view, unauthorized. It is tantamount to issuing one subpoena to two persons or companies. Your criminal tax defense attorney should insist on two separate subpoenas-one for you as an individual and one to the company’s custodian of records.
7. Don’t Testify If You Have Exposure. If you are subpoenaed for testimony in your individual capacity, you may be able to avoid answering substantive questions by invoking the Fifth Amendment’s Privilege against Self-Incrimination. This is true even if you are not a target of the investigation. The right to invoke the Privilege against Self-Incrimination is much broader than most witnesses realize. If a truthful answer to a grand jury question would even tend to incriminate you, you can invoke the privilege and refuse to answer. An answer tends to incriminate you if it furnishes a link in the chain that might lead to your conviction. Can a person who is totally innocent of wrongdoing invoke the privilege? Absolutely! The Supreme Court has ruled that the privilege protects the innocent as well as the guilty. An innocent person wants to invoke the privilege to keep from being ensnared by a mistaken, incompetent, or unscrupulous prosecutor. By consulting with an experienced criminal tax defense attorney, you should not fall into such a trap.
8. Review Your Prior Testimony. Some federal prosecutors like to call witnesses back to the grand jury to testify on multiple occasions. This is dangerous, because it can cause you to inadvertently give inconsistent testimony under oath. Under §1623(c) of the federal criminal code, the government can prosecute you for testifying to two irreconcilably contradictory statements under oath, and the government does not even have to prove that either of the statements in question was false. When you are called back to the grand jury to testify for a second time, your criminal tax defense attorney should insist on your right to review ahead of time the official transcript of your first session. In this way, you can refresh your recollection as to your earlier testimony, correct any mistakes, and prepare yourself for the upcoming session. The Federal Courts have ruled that grand jury witnesses, even if they have not been called back to testify for a second time, have an inherent right to review a transcript of their earlier testimony.
9. Know If You Are A Witness, Target Or Subject. Other than violating certain testimonial and constitutional privileges, the federal grand jury can pretty much do what it wants so it is important to determine if you are considered to be a witness, a subject or a target. A witness should pose the least risk at the IRS is looking for information to go after someone else. A target is the one that IRS is looking to come after – the IRS does not subpoena targets due to a person’s 5th amendment right against self-incrimination. A subject is someone who at the time is not a target but could become one later on. It is this determination that is most troubling but it is possible and not unusual for cases under suspicion for tax crimes be removed from consideration for criminal prosecution. An experienced criminal tax defense attorney is instrumental in determining whether you are a witness, target or subject.
What Should You Do?
You should never attempt to face these risks without the help of an experienced criminal tax defense attorney. The tax attorneys at the Law Offices Of Jeffrey B. Kahn, P.C. located in Los Angeles, San Diego, San Francisco and elsewhere in California are highly skilled in handling tax matters and can effectively represent at all levels with the IRS and State Tax Agencies including criminal tax investigations and attempted prosecutions, undisclosed foreign bank accounts and other foreign assets, and unreported foreign income.
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