In the field of white collar litigation, there is tremendous pressure on both individuals and corporations to cooperate with the U.S. Attorney’s Office in the hopes of getting a reduced sentence or, ideally, a “deferred” or “non-prosecution” agreement. However, the decision to cooperate is one that should be carefully considered as it is not always in the client’s best interests, especially for an individual defendant, rather than a corporation. 

To get the benefit of cooperation, a defendant must first convince the Government to offer them a cooperation agreement. These agreements are not freely given to anyone who asks, but are carefully considered. Unfortunately, the Government rarely agrees to offer a cooperation agreement until after they have heard and evaluated all of the information which a defendant has to offer. 

That means that a client must be willing to forego all possible leverage and spill their guts to investigators without any promise of a cooperation agreement at the end of the tunnel. Worse yet, not only does the client have to answer all of the government’s questions about the acts being investigated, but it also has to provide information about any other illegal activities it may have engaged in, no matter how unrelated (i.e. illegal drug use, tax evasion, etc.).  

Ultimately, even if the client is completely open and honest with investigators, the decision to offer a cooperation agreement is based almost exclusively on the prosecutor’s belief as to whether they can use that information to make new arrests and convict other people. If they already know the information that you provided, then they don’t need your client’s cooperation. There are any number of reasons why a prosecutor may decide not to offer a cooperation agreement, which are completely outside of the client’s (and their lawyer’s) control. 

The risks associated with a failed attempt at cooperation are numerous. By submitting to questioning, your client is at a significant disadvantage at trial because it waived its right to remain silent and gave prosecutors a free preview. If the codefendants find out that the client tried to cooperate against them, coordinating a unified defense at trial becomes much more difficult. Plus, if the clientprovidesprosecutors with information about additional misconduct that it committed, the client could face additional charges. 

Sometimes, even a successful cooperation can have unexpected consequences. Asprosecutors continue to push the envelope in the types of prosecutions that are brought, they sometimes overstep their bounds and charge people for conduct that a judge or jury later determines does not even constitute a crime. Consider, for example, the recent landmark case of United States v. Newman, 773 F.3d 438 (2nd Cir. 2014), in which the appellate court reversed insider trading convictions, holding that the U.S. Attorney’s Office was prosecuting lawful conduct based on an erroneous definition of insider trading. There have been several cases like this where charges are dismissed against the defendants who fought the charges but where, ironically, the only people who ended up with criminal convictions were those who signed cooperation agreements and pleaded guilty to conduct that isn’t even a crime (and can’t have their conviction overturned because they waived their appellate rights)! Similarly, in the 2005 bidrigging prosecution of Marsh & McLennan Companies, Inc.,individual defendants were either acquitted or had their convictions overturned on appeal but the cooperating witness ended up with a criminal record. 

Of course, there are many cases where defendants benefit tremendously through cooperation, making the foregoing risks worthwhile. Accordingly, every case must be individually considered and analyzed to determine the appropriate strategy.