Promised Immunity Under Proffer Agreement Requires Suppression of Evidence

April 21, 2014
By Parker Scheer LLP on April 21, 2014 3:33 PM |

In a recent opinion, a judge at the United States District Court, District of Massachusetts ruled that the evidence obtained by the government pursuant to the defendant's agreement to provide it in exchange for immunity may not be offered against the defendant, despite the government's arguments that the defendant waived his immunity under the proffer agreement and that its use of the evidence constituted a permissible "derivative use" under the agreement.

In United States v. Scott, the defendant learned that he was the target of a federal investigation into alleged mortgage lending fraud in February 2009. The defendant entered into a proffer agreement with the U.S. Attorney's Office, drafted by the government, which provided him certain immunities. Specifically, the proffer agreement provided that "no statements made or other information" provided by the defendant would be used directly against him (with certain exceptions not relevant), but the government would be permitted to "make derivative use of, or may pursue any investigative leads suggested by, any statements made or other information" provided by the defendant.

Pursuant to the agreement, the defendant participated in eighteen total proffer sessions, during which he provided information and about 800 documents relevant to the government's investigation. During the second proffer session, the defendant agreed to permit government agents to access and copy the hard drives of his server and office computers. Later, on May 15, 2009, the government presented the defendant with a FBI consent-to-search form, authorizing the government to make forensic images of the storage drives on the computer and server. The defendant signed the consent-to-search form, and FBI agents imaged the computer and server.

During the course of the criminal investigation, the defendant filed for bankruptcy. In 2010, as part of the bankruptcy proceeding, the defendant provided the bankruptcy trustee with his server, computer, and 29 boxes of business records. Shortly thereafter, the trustee's office reported to the U.S. Attorney's Office and the FBI that the records that had been imaged from the defendant's machines during the bankruptcy may be indicative of mortgage fraud. The trustee later dismissed the defendant's bankruptcy case, but did not return the defendant's records to him, as the U.S. Attorney's Office had requested that the trustee provide them to it.

The trustee held the records while the U.S. Attorney's Office applied for a warrant. In support of the warrant, the U.S. Attorney's Office relied largely on the data that the FBI had obtained from the imaged data obtained from the defendant's machines on May 15, 2009. A judge issued the warrant, the U.S. Attorney's Office obtained the records from the trustee, and charges were filed against the defendant.

In considering the defendant's motion to suppress the evidence, the federal judge considered both the effect of the consent-to-search form on the proffer agreement, and the government's claimed "derivative use" of the information in obtaining a warrant to seize the very same records from the trustee's possession.

First, the judge rejected the government's argument that the signed consent-to-search form made the information the government obtained on May 15, 2009 exempt from the terms of the proffer agreement. The government never explained to either the defendant or his attorney that the consent-to-search form would operate in any way to waive or modify the immunity promised under the proffer agreement. Additionally, the defendant would not reasonably have understood that by signing the form, he was foregoing the bargained-for protections of the proffer agreement. The judge noted that "due process requires that the government adhere to the terms of any immunity agreement it makes," and here, "[t]he question... is... whether the government effectively duped [the defendant] into waiving the guarantee that evidence he provided would not be used directly against him." Finding that the defendant had not intended any such waiver in signing the consent-to-search form, the judge suppressed the evidence obtained by the government during the May 15, 2009 search.

The government next claimed that the use of the information obtained from the defendant's machines on May 15, 2009 - to support the application for a warrant - was a permissible "derivative use" under the proffer agreement. The judge again disagreed, noting that, to be "derivative," the use must be secondary to the original use. Here, the original use of the information was to assist in a criminal investigation, but, pursuant to the proffer agreement, that information could not be used directly against the defendant. The government's claimed derivative use, however, was no different - it used the information gathered to obtain a warrant to seize the exact same information, to then be used in prosecuting the defendant under the guise of a "derivative use." It made no difference that the government might have been able to obtain the information lawfully by other means under the Fourth Amendment, because the defendant's constitutional protections under the Fifth Amendment extended more broadly. Thus, because the proffer agreement prohibited the government from using any statement "or other information" that he provided against him - and the server and computer data constituted such "other information" - due process required that the government be held to the promise of immunity under the agreement, and that the records obtained from the bankruptcy trustee also be suppressed.