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One lawyer whispered furtively to her neighbor. Another shifted uneasily in his seat. A third rolled her eyes and groaned. Beyond that, the nation’s top criminal defense lawyers sat in silence at a Feb. 21 luncheon at a Miami Beach, Fla., hotel as Deputy U.S. Attorney General Larry Thompson defended the Bush administration’s anti-terrorism policies. Though some had previously voiced indignation over new detention rules and the monitoring of attorney-client conversations, many lawyers attending the midwinter meeting of the National Association of Criminal Defense Lawyers (NACDL) seemed more concerned with another issue: staying out of jail. Last spring, Florida defense lawyer and former federal prosecutor Donald Ferguson pleaded guilty to money laundering charges related to fees he accepted in a drug case — the first such “receipt and deposit” conviction of a lawyer. Since then, the criminal defense bar has been working under a cloud, says Ferguson’s lawyer, Neal R. Sonnett of Miami. A former NACDL president and head of the ABA’s Criminal Justice Section, Sonnett is the defense bar’s point man on this issue. He says there is a growing reluctance among lawyers to take cases for which they could be targeted for prosecution. And now he fears a bad situation may be getting worse. Efforts by the European Union and other nations to make lawyers “gatekeepers” of the financial system may further impede the ability of criminal defense lawyers to properly represent their clients, he warns. “If a lawyer is required to file a suspicious activity report on a client,” Sonnett says, “then the entire client relationship has been destroyed.” WARNING SHOT Ferguson was already serving time for money laundering as the result of a 1996 plea agreement when he was charged a second time. The second case, however, was the first arrest of a lawyer for simply depositing client fees that he knew stemmed from drug dealing. “I think Ferguson was used as a poster boy for the threat of prosecution of lawyers,” says Sonnett. “The government has now shown that they can prosecute lawyers for acceptance of fees.” Since Ferguson pleaded guilty, Sonnett says there have been “at least half a dozen” cases in South Florida where defense lawyers have turned down clients for fear of drawing the scrutiny of prosecutors. Criminal defense lawyers attribute much of their uncertainty to the unsettled nature of the law. Sonnet requested a meeting with DOJ officials during the waning days of the Clinton administration after the NACDL had received “hundreds” of calls from defense lawyers across the country concerned with efforts to prosecute lawyers. “The sense we left with after that meeting was that there was no desire on the part of the DOJ to draw any kind of guidelines,” says Sonnett. “There was substantial sentiment in the department to preclude anybody from hiring lawyers with any kind of ill-gotten gains,” a policy that Sonnett contends “destroys the presumption of innocence.” Present at the DOJ meeting was James K. Robinson, former chief of the U.S. Justice Department’s Criminal Division, now a partner at the Washington, D.C., office of New York’s Cadwalader, Wickersham & Taft. Robinson counters that defense lawyers often have less-then-honorable reasons for seeking such guidance. “It becomes very difficult for prosecutors to promulgate guidelines without creating roadmaps for defense lawyers to undermine the policy of the government,” Robinson says, “a policy which says that criminal proceeds cannot be used for any purpose.” Defense lawyers say money laundering prosecutions of attorneys should be limited to cases where a lawyer has taken fraudulent legal fees to hide a client’s dirty money. Short of that, lawyers say they simply want to know how deeply they have to look into a client’s background to be inoculated against prosecution. “The only way this will be seriously modified would be through some congressional enactment,” says Robinson, “and I frankly would be surprised if Congress would address it in a fashion that defense lawyers would like to see.” The NACDL Money Laundering Task Force had been preparing recommendations to Congress last summer, but that effort died after Sept. 11, says Sonnett. He acknowledges that the Bush Justice Department has not weighed in yet on this issue, but adds that “the fact there has been no overt signal [from the current Justice Department] is of little comfort.” Brian Sierra, a spokesman for the Justice Department, did not return calls seeking comment. ROOTS OF THE WAR The current debate has its roots in the Money Laundering Act of 1986, which barred monetary transactions involving “criminally derived property.” An amendment passed by Congress a year later added a “safe harbor” for fees necessary to preserve a defendant’s right to counsel. Since then, however, defense lawyers say prosecutors have ignored the safe harbor provision, instead looking to a pair of 1989 U.S. Supreme Court cases involving the forfeiture of legal fees. In those cases, the court held that there is no right to use tainted funds to pay a lawyer. U.S. v. Monsanto, 491 U.S. 600; Caplin & Drysdale v. U.S., 491 U.S. 617. Defense lawyers like Howard M. Srebnick of Miami’s Black, Srebnick & Kornspan say prosecutors are now going even further, arguing that even if a defense lawyer didn’t know his fees were tainted, a showing of “deliberate ignorance” on his part could be sufficient. “How does a lawyer interact with a client?” he asks. “Even a lawyer who asks the right questions and doesn’t know whether to believe his client is put in an impossible position.” Prosecutors reject these arguments, noting that U.S. Attorney guidelines bar lawyer prosecutions based on such a theory. “The safe harbor provision, 18 U.S.C. � 1957, was originally put in under fear that the government would seek to charge attorneys for the payment of fees when the state of the law was unclear,” explains Barry Sabin, First Assistant U.S. Attorney for the Southern District of Florida. “Then the Supreme Court overturned the 2nd U.S. Circuit Court of Appeals holding in Monsanto, saying instead that the Sixth Amendment didn’t protect the right to the payment of tainted fees.” NOT A NORMAL FEE NEGOTIATION Srebnick says that his partner, veteran Florida criminal defense lawyer Roy Black, has joined the defense team of Fabio Ochoa, an alleged former member of the Medellin drug cartel in Colombia who was extradited to the United States on drug smuggling charges. In that case, Ochoa’s attorneys hired their own lawyer, Benedict P. Kuehne of Fort Lauderdale, Fla.’s Sale & Kuehne, to negotiate with Southern District of Florida U.S. Attorney Guy A. Lewis concerning their fees and the possibility they may be subject to forfeiture or money laundering charges. Ochoa’s lawyers say they have evidence that their client has untainted funds at his disposal. But Srebnick says that the Nov. 7, 2001, decision by the 11th U.S. Circuit Court of Appeals in U.S. v. Abbell, 271 F.3d 1286, may make things even harder for Ochoa’s lawyers. In that case, he says, the court held that clean money that is co-mingled with ill-gotten gains is just as dirty, and thus subject to forfeiture. Prosecutors counter that Abbell also states that the intent of the co-mingling must have been to launder the funds. Defense lawyers say that prosecutors in Lewis’ office make “no guarantees” as to Ochoa’s defense team’s method of payment. Srebnick says that criminal defense lawyers in Florida and elsewhere have begun to decline cash payments, are providing full disclosure to prosecutors when there is some doubt as to the origination of their fees and are declining to be paid by third parties. But other defense lawyers contend that some of their brethren are simply avoiding drug cases. Criminal defense attorney Patrick S. Hallinan of San Francisco’s Hallinan, Wine & Sabelli says this trend will have the effect of further straining an overwhelmed sector of the criminal justice system. “The Justice Department will end up forcing every defendant into the public defender’s office,” says Hallinan, himself unsuccessfully prosecuted in 1995 for alleged money laundering connected to a client’s drug smuggling ring. GATEKEEPER FEARS Defense lawyers are also worried about anti-money laundering initiatives brewing abroad. The international Financial Action Task Force, of which the United States is a member, is expected to issue recommendations as early as this summer that may require lawyers to report suspicious client transactions to federal authorities. If such a proposal is adopted by Congress, lawyers would become “gatekeepers” to the global financial system similar to the way banks — and now under the USA Patriot Act, insurance companies and securities firms — are now. “Those changes could seriously threaten the confidential relationship between lawyers and their clients, and the ability of clients to consult with lawyers with the trust and candor that confidentiality is intended to foster,” ABA President Robert E. Hirshon said in a statement last month announcing the creation of the ABA Task Force on Gatekeeper Regulation and the Profession. Those changes could include measures as minor as conducting simple due diligence and maintaining files on clients’ financial information to the filing of suspicious activity reports without a client’s knowledge. “If you start saying you’re going to have to report suspicious information, what client will not clam up instead of seeking the appropriate legal advice?” says Edward J. Krauland, a partner at the Washington, D.C., office of Steptoe & Johnson and chair of the ABA task force. He points to a distinction made by European Union regulations between giving “legal advice,” which is protected, and “participating in corporate and financial transactions,” which is not. “People who want to do legitimate transactions regularly ask lawyers to tell them whether they can or cannot do something under the law,” he says. The vagueness of the distinction has already led to litigation in Canada, where a court last year enjoined similar money laundering regulations. Robinson, also an adviser on global money laundering to the United Nations, concedes “there is a very legitimate concern when you impose a responsibility on a lawyer to be a whistleblower.” “What happens with these kinds of regulations will determine whether people have the right to independent representation,” warns Sonnett, “or whether lawyers are turned into informants.”

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