Originally published by the Journal of Commerce in December 2017
While Special Counsel Robert Mueller continues his investigation, the recent guilty plea entered by Trump former National Security Advisor Lt. Gen. Michael Flynn (Ret.) serves as a reminder that when you are interviewed by a law enforcement agent, you better be sure what you say is accurate!
In Lt. Gen. Flynn’s case, he was interviewed by the Federal Bureau of Investigation (FBI) and the FBI was able to establish some of this statements were materially false. Those statements are listed on the Information as:
(i) On or about December 29, 2016, FLYNN did not ask the Government of Russia’s Ambassador to the United States (“Russian Ambassador”) to refrain from escalating the situation in response to sanctions that the United States had imposed against Russia that same day; and FLYNN did not recall the Russian Ambassador subsequently telling him that Russia had chosen to moderate its response to those sanctions as a result of his request; and
(ii) On or about December 22, 2016, FLYNN did not ask the Russian Ambassador to delay the vote on or defeat a pending United Nations Security Council resolution; and that the Russian Ambassador subsequently never described to FLYNN Russia’s response to his request.
Flynn’s plea is to a violation of 18 U.S.C. § 1001. Some version of this provision has been in the law since 1909. The statute currently reads:
(a) Except as otherwise provided in this section, whoever, in any matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States, knowingly and willfully-
(1) falsifies, conceals, or covers up by any trick, scheme, or device a material fact;
(2) makes any materially false, fictitious, or fraudulent statement or representation; or
(3) makes or uses any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry;
shall be fined under this title, imprisoned not more than 5 years or, if the offense involves international or domestic terrorism (as defined in section 2331), imprisoned not more than 8 years, or both. If the matter relates to an offense under chapter 109A, 109B, 110, or 117, or section 1591, then the term of imprisonment imposed under this section shall be not more than 8 years.
The Statement of the Offense filed in the case (1:17-cr-00232-RC) makes clear that Lt. Gen. Flynn was in contact with the Russian Ambassador to the United States, along with officials in the Trump campaign and later the Transition Team, and the substance of those contacts belied his statements. For those interested, the Statement of the Offense can be found here: https://www.justice.gov/file/1015126/download, and the Information can be found at: https://www.politico.com/story/2017/12/01/michael-flynn-federal-charges-full-text-274421.
While Lt. Gen. Flynn’s dilemma arises in the context of a high profile and politically charged situation, his troubles are worth talking about in the context of international trade because they serve as a serious reminder that lying is stupid, but guessing isn’t much better. True, in the trade context, one is typically interviewed by other than the FBI. Equally true, not all members of the public are more guarded when an investigator/agent is in the room. However, even talking with representatives of Customs and Border Protection should be cause for concern. You do not have to be a criminal defense lawyer to have it be obvious there were more Flynn misstatements than are recited in the filings. However, the easy case for the government to make is a 1001 violation. If there is documentation that says one thing, the witness lies about what it says, and that lie is material, the case is made.
It works similarly in the trade context. The criminal cases one typically sees are those involving antidumping or countervailing duty evasion. Why? Because it is usually very complicated to explain how international trade really works. U.S. Attorneys generally don’t understand it and so can’t clearly explain it, plus juries generally don’t get it! However, it is easy for a jury to understand that goods were not correctly described and the net result is lots of money was due, was not paid and the government was defrauded. Due to the complexities of international trade, one often sees the government filing mail fraud and wire fraud charges. Why? Again, because they are much easier to explain to a jury. For exa
mple, the phony documents were sent via email.
The Flynn situation serves as a reminder for companies to have a robust policy in place that defines how one deals with inquiries from any level of government, and the steps to have in place so that witnesses do not end up in trouble. Obviously, not every inquiry warrants full blown legal team involvement, but who makes that call?
It is hopefully the rare exception where someone outright lies to an investigator. There is a natural tendency to want to engage when someone is being nice, but beware, even a slip of the tongue when trying to be helpful can cause problems later, especially when clarifying details do not 100% match what was originally stated. The better course of action is to evaluate the context of the inquiry, review the relevant paperwork and interview any witnesses first, and then decide who talks to the investigators. This column is not intended to make the pitch to always call your attorney before talking with the government, although never a bad idea when the inquiry is beyond routine. Rather, the point is make sure you have a process in place that gets any inquiry from a government official to the right level within the company, a full set of paperwork is retrieved/witnesses interviewed, the overall situation is evaluated by the proper personnel before any answers/documents are provided to any investigator, and there is a process in place that dictates whether company personnel, outside experts or some combination of the two are the ones to provide responses to the investigators. This is definitely one of those situations where – better safe than sorry!