A proffer agreement (also known as a queen for a day agreement) is a written agreement between the prosecutor and an individual allowing the individual to provide information about a crime or possible crime to the government, with the assurance that his words will not be used against him in the government's case-in-chief in the event of a subsequent trial. Think of it as a sneak preview you are giving to the prosecutor of what your likely testimony will be if you become a government witness. Unlike an immunity agreement or a plea bargain agreement, a proffer agreement will not protect you from the government's later derivative, or indirect, use of your statements. In other words, the prosecution is free to use your statements to follow investigative leads and to advance the case. The proffer itself, which is given in a proffer session attended by you, your attorney, the prosecutor and the case agent, is almost always informally seen as a prelude to a written immunity or plea bargain agreement, provided that the government, in its sole discretion, finds your proffer truthful. (In fact, there is no reason for you ever to make a proffer absent this informal understanding.) But the informal understanding will not be contained in the written proffer agreement. The written proffer agreement will instead recite that the proffer is being given without any assurances whatsoever. Traditionally, written proffer agreements allowed the government to use your statements against you for impeachment purposes in a subsequent proceeding, but only if you took the stand and gave testimony materially inconsistent with your proffer. In recent years, government drafted proffer agreements also allow use of your entire proffer statement against you at trial, even in the government's case-in-chief, if any portion of your trial defense (including your attorney's opening statement or cross-examination questions) is in any way materially inconsistent with anything you said in your proffer session. This means that if your proffer session does not result in a plea bargain or immunity agreement, and you are indicted and go to trial, your ability to present a defense may be severely hampered. Thus, proposed government proffer agreements submitted to you and your white-collar crime attorney should be examined by both of you with the utmost of care.
The prosecutor likes proffers. Since she is contemplating a plea bargain or immunity agreement, she does not want to buy a pig in a poke. (In case you were wondering, you are the pig.) She has to know what you will say at later trials of those who will be charged and she has to look you in the eye in order to determine whether you are credible. (She will protect herself by ensuring that any future plea bargain or immunity agreement will contain language nullifying the plea bargain or immunity deal in the event that you recant any part of your proffer.) Even if the proffer does not result in a plea bargain or immunity agreement, the prosecution has gained. As mentioned earlier, the prosecutor and agent will usually have some new leads. Further, having seen and interviewed you, the prosecutor is in a better position to cross-examine you some day. If you admitted some wrongdoing, the prosecutor will also feel more self-confident about indicting you, even if she cannot use your words against you, because she will "know" that you are guilty.
Why would you ever want to proffer? Because, and only because: 1) you have exposure; 2) indictment is a foregone conclusion if you don't work out a plea deal or immunity agreement; 3) you want a plea deal or immunity agreement; and, 4) the prosecutor will not give you either without first hearing your proffer. Even in this scenario, as noted above, proffering is a high-risk venture.
It is usually not worth the risk to proffer, even in the above scenario, unless: 1) the prosecutor is absolutely trustworthy; 2) a plea agreement (or immunity deal) is contemplated by both sides if you tell the truth at the proffer session; 3) your attorney, the prosecutor and the case agent are all on the same page regarding the general contours of the contemplated plea agreement and the general outline of what you are likely to reveal at the proffer session; and, 4) you are prepared to tell the full truth at your proffer session. There are two potential dangers associated with declining to proffer and/or plea bargain at the pre-indictment stage. If the Big Enchilada or another major player comes in and makes a deal while you are holding out, it will significantly reduce your chances of receiving a large Section 5K1.1 Guidelines reduction. Additionally, the prosecutor may very well react to your refusal to proffer by ginning up a specious money laundering count or artificially increasing the "amount of loss" caused by your alleged offense, greatly enhancing your potential Guidelines exposure. (On the other hand, since the Guidelines have now been rendered advisory by the Supreme Court, it is easier for federal judges to hand down sentences below the recommended Guidelines range even without a 5K1.1 Guidelines motion for reduction of sentence by the government.)
In general, you should do anything possible to avoid a grand jury appearance unless you have absolutely no exposure. The risks are high and the benefits few of a grand jury appearance. (The attorney is not allowed into the grand jury during the appearance, but the client is allowed to come out and consult with him after every question.) Though there are only two official categories of people appearing before the grand jury to give testimony, targets (those more likely than not to be indicted) and subjects (anyone with evidence within the grand jury's purview), a three category system of target-subject-witness has informally evolved. Under this system, targets are more likely than not to be indicted, subjects are under some suspicion but have not yet reached target status, and witnesses are people not under current suspicion who simply have relevant evidence to give. These distinctions are still relatively meaningless, because a non-target's status can change to target at any time. No prosecutor worth his salt will ever promise you that your status as a witness is permanent. Since the grand jury has a right to every man's evidence, how do you keep out of its clutches? The privilege against self-incrimination is quite broad. Any question the truthful answer to which may tend to incriminate you can be met by invocation of the privilege. Of course the privilege must be invoked in good faith, but as a practical matter it is very difficult for the government to successfully resist its invocation. If a white-collar client has any non-frivolous claim of exposure due to his criminal activities, he should be legitimately able to invoke the privilege against self-incrimination.
As noted earlier, if you are the primary target of the prosecution, you will want your attorney to conduct, if resources permit, a shadow grand jury. In addition to allowing you to monitor the government's investigation, this affords you the opportunity to lock in the witnesses' stories, through affidavits, just like the government seeks to do in front of the real grand jury. In this way, if the witness later changes his story, your attorney's private investigator can take the stand and impeach him. You should also seriously consider entering into a joint defense agreement with other witnesses, subjects, or targets, in order to be able to trade information, if you so desire, without having it fall into the hands of the prosecution. A word of caution is in order here, though. Prosecutors usually hate joint defense agreements, viewing them as obstructionist in nature. Such agreements often act as great motivators for the prosecution team, which assumes that the alleged crime is even greater than originally anticipated because of all the players involved in the joint defense agreement. Also, many corporations will no longer enter into joint defense agreements with employees and former employees because it is now the policy of the Department of Justice that corporations entering into such joint defense agreements may not be fully capable of cooperating with the government.
A competent white-collar crime attorney should always be keenly aware of the chief law enforcement agent, or case agent, assigned to your case. Being friendly to the case agent is usually highly beneficial, resulting in good will and the obtaining of information. Occasionally you will draw a lazy, inexperienced, or poor agent. Monitor his indiscretions closely. These can be used to good effect at trial, though this is a very dangerous game, as juries typically fall in love with law enforcement agents. You should also consider the use of the media if it will help advance the goals of the case or if the United States Attorney's Office is leaking to the press. In political corruption cases, for instance, portraying the client as the subject of a political vendetta is, depending on the locale and jurisdiction, sometimes an effective tool. Just make sure that it is the client's interests being advanced by use of the media, and not the white-collar attorney's career goals. Also be aware that your white-collar defense attorney's statements to the media may be used against you, as an admission by an authorized agent, if the federal prosecutor assigned to your case is very aggressive. This is rare, but it does happen.
If the white-collar crime client works in a highly regulated field (such as the securities industry) or controls a company that makes its livelihood through government contracts, the government is in a position to whipsaw the client. The government's burden of proof is much lighter than beyond a reasonable doubt in the civil and regulatory arena. If the government decides to shut your business down as part of an effort to put pressure on you or to bring about a global settlement, your options can be greatly limited. Moreover, by engaging in parallel civil and criminal proceedings, the government can try and force you in the civil suit or regulatory action to choose between asserting the privilege against self-incrimination, which often has very negative consequences, or testifying and having that testimony available for use against you in the criminal case.
If your attorney is skilled or lucky enough to obtain immunity for you, you should not lose too much sleep worrying over whether the immunity is transactional (that is, covering an entire category of behavior) or derivative use testimonial in nature (that is, covering direct or indirect use of your testimony or statements). Though transactional immunity is preferred, as a practical matter, derivative use immunity is quite broad in scope, and it is extremely difficult to successfully prosecute someone who has been given such immunity as long as the agreement has not been nullified due to the subject's breach of the agreement. Derivative use immunity can be ordered by the court, pursuant to Title 18, United States Code, Section 6002, or can be negotiated through the vehicle of a letter immunity agreement between your attorney and the AUSA. A prosecutor can also immunize you through the use of pocket or informal immunity. This is an oral offer of immunity, typically given to low level witnesses who have committed some minor wrongdoing and are reluctant to talk. Pocket immunity is every bit as enforceable as the more formal kind if it is given by a federal prosecutor. It is simply more difficult to prove in the event of a dispute. Occasionally, an inexperienced agent will offer pocket immunity to a subject or target, either not realizing what he is doing or not realizing that a particular individual is in fact a key wrongdoer. Most federal courts have held that federal law enforcement agents who offer immunity without the knowledge of federal prosecutors cannot bind these prosecutors.