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SOX: Unintended Consequences for Laywers

Norm Pattis was the first to raise the red flag. On Feb. 16 at his blog Crime & Federalism, he noted the indictment of a Connecticut lawyer "in what appears to be a test case of a Sarbanes-Oxley amendment to the federal criminal code." The indictment, announced Feb. 16 by Connecticut U.S. Attorney Kevin J. O'Connor and reported the same day in the Hartford Courant, charged Greenwich lawyer Philip D. Russell with obstructing justice and destroying evidence concerning child pornography. The government alleges that Russell destroyed a church computer allegedly containing child porn downloaded by a church employee. What made the charge novel was the government's use in this child-porn probe of a law designed to target corporate wrongdoing. As Pattis explained then:

"Russell ... has been charged with violating 18 U.S.C. Section 1519. That provision makes it a crime to tamper with potential evidence in 'contemplation' of a federal investigation. Unlike pre-Sarbanes-Oxley tampering statutes, there need not be an investigation in place or even imminent as a predicate for prosecution. The statute appears to criminalize what was once considered prudence by defense counsel. The mens rea for such crimes is now virtually limitless."

With a new report this week by Associated Press writer John Christoffersen, Arrest Sparks Worries over Implications of Corporate Law, the case is attracting even wider attention. Christoffersen writes:

"The arrest of a prominent attorney on charges of destroying evidence in a child pornography investigation is raising alarm bells that a law targeting corporate accounting schemes could be used to prosecute lawyers over work done on their clients' behalf."

He quotes New York University law professor Stephen Gillers, who says:

"Every criminal defense lawyer in the country has to be alarmed at the indictment. It's going to upset a lot of assumptions about how lawyers can represent clients. I think this is a boundary-pushing case."

And in the Stamford Advocate, reporter Martin B. Cassidy says the case could become a landmark test of SOX and could set a precedent making criminal defense lawyers vulnerable to federal charges. He quotes Mark DuBois, chief disciplinary counsel for the Connecticut Bar Association, who says:

"The question is what's evidence and when does something become evidence? How prescient does a lawyer need to be? Now if you guess wrong you've got big problems, because it is a serious crime."

Pattis says the charges raise many questions for which he has no answers.

"Once again, the law of unintended consequences results in overcriminalization: A law designed to prevent accountants and lawyers from shredding forms has become a tool in child pornography prosecutions. No one will care much about that. But what happens tonight if you find cocaine in your child's bedroom?"

Posted by Robert J. Ambrogi on March 6, 2007 at 05:17 PM | Permalink | Comments (0)


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