July 20, 2017

Court overturns the convictions of two former Rabobank traders, finding Fifth Amendment rights were violated; Willkie argues successful appeal for both defendants.

Willkie won reversal and complete dismissal of all charges against the first defendants charged with LIBOR manipulation in a cornerstone case before the United States Court of Appeals for the Second Circuit.

In a decision dated July 19, 2017, the Court reversed the judgments of conviction and dismissed the indictment of Willkie client Anthony Allen and Anthony Conti, former Rabobank traders, in the first London Interbank Offered Rate LIBOR manipulation case to reach the Second Circuit (or any court of appeals). Willkie partner Michael Schachter argued the appeal on behalf of both defendants. The case was handled by Mr. Schachter, partner Peter Burrell and associate Casey Donnelly. The Willkie team also included associates Maxwell Bryer and Cole Mathews.

The Second Circuit highlighted that this appeal presented the question, among others, of whether the Fifth Amendment of the U.S. Constitution permits testimony given by an individual involuntarily under the legal compulsion of a foreign power to be used against that individual in a criminal case in an American court. As employees in the London office of Rabobank, a Dutch bank, in the 2000s, Mr. Allen and Mr. Conti played roles in that bank’s LIBOR submission process. Defendants, citizens of the United Kingdom, had earlier given compelled testimony in that country and were tried and convicted in the United States before the United States District Court for the Southern District of New York (Jed S. Rakoff, Judge) for wire fraud and conspiracy to commit wire fraud and bank fraud.

The Court found that although Defendants’ appeal raised a number of substantial issues, it needed to address only the Fifth Amendment issue, and concluded as follows:

First, the Fifth Amendment’s prohibition on the use of compelled testimony in American criminal proceedings applies even when a foreign sovereign has compelled the testimony.

Second, when the government makes use of a witness who had substantial exposure to a defendant’s compelled testimony, it is required under Kastigar v. United States to prove at a minimum, that the witness’s review of the compelled testimony did not shape, alter, or affect the evidence used by the government.

Third, a bare, generalized denial of taint from a witness who has materially altered his or her testimony after being substantially exposed to a defendant’s compelled testimony is insufficient as a matter of law to sustain the prosecution’s burden of proof.

Fourth, in this prosecution, Defendants’ compelled testimony was “used” against them, and this impermissible use before the petit and grand juries was not harmless beyond a reasonable doubt. Accordingly, the Second Circuit reversed the judgments of conviction and dismissed the indictment against both Mr. Allen and Mr. Conti.

The case, U.S. v. Anthony Allen and Anthony Conti, Nos. 16-898-cr (Lead) 16-939-cr (con), has received widespread international media attention, including feature articles (noting Willkie’s role) in the Financial Times, Wall Street Journal, New York Times, Bloomberg and Reuters, among others.

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