The U.S. District Court for the Southern District of New York last week sustained claims of work product privilege with respect to information the government obtained during an investigation into alleged guaranteed investment contract (GIC) rigging. Defendants Peter Ghavami, Gary Heinz and Michael Welty are currently on trial for rigging bids for GICs, instruments sold by financial institutions to the issuers of municipal bonds. Third-parties sought to claw back privileged communications made unwittingly to government cooperators who were employees of corporate entities asserting privilege. Communications were made in the course of conversation to cooperators by other employees who were targets or subjects of the government investigation.
The court’s primary basis for barring the government’s use of the communications was that they were protected by work product privilege. Several of the communications were made between and among individuals subject to investigation, and thus “in anticipation of litigation.” Work product, which can only be waived if the disclosure substantially increased the risk that it would be obtained by an adversary, was not waived by disclosure to a third party whom the claimants did not know was a government agent. Further, because some of the communications were privileged under the attorney-client doctrine, the remainder were protected under the joint defense doctrine, which protects communications to other persons that share a common legal interest. This had the practical effect of precluding the government from using information obtained from cooperating witnesses such as former or current employees of the company at which the privilege claimants worked.
United States of America v. Ghavami, No. 10 Cr. 1217 (KMW)(JCF) (S.D.N.Y Jun. 5, 2012).