Crime in the Suites: An Analyis of Current Issues in White Collar Defense
Posts Tagged ‘Self-incrimination’
Jul 08
2014

The Right to Remain Silent Does Not Extend to Computer/Phone Passwords

Recently the Massachusetts Supreme Judicial Court ruled that under certain circumstances, a court may compel a criminal defendant to provide the password to encrypted digital evidence without violating the defendant’s constitutional rights. This is an increasingly prevalent issue that has divided courts across the country and may be presented to the United States Supreme Court for review soon.

Leon Gelfgatt was indicted in 2010 for allegedly operating a mortgage fraud scheme that fraudulently collected more than $13 million. During the investigation, Massachusetts state troopers seized four computers, all of which were protected by encryption software that Gelfgatt refused to remove. Lawyers for the Commonwealth of Massachusetts filed a motion in Superior Court asking the court to compel Gelfgatt to enter the password for his encryption software so that law enforcement could review the contents. The Superior Court denied the motion, stating that the Commonwealth was asking for the defendant’s assistance in accessing potentially incriminating evidence.

In a 5-2 ruling, the Massachusetts Supreme Court reversed the lower court ruling and held that police could compel Gelfgatt to decrypt his files, because he told investigators that the computer belonged to him and he had the encryption key. The majority opinion reasoned that Gelfgatt’s disclosure to investigators that he had the password to access the encrypted materials was sufficient to satisfy the “foregone conclusion” exception to the Fifth Amendment protection against self-incrimination. The court did not specify if Gelfgatt would have been compelled to decrypt the computers if he did not tell law enforcement that he owned the computers and had the ability to decrypt them, which may limit the reach of this opinion.

In a strong dissenting opinion, two justices found compelling a criminal defendant to decrypt the files is the functional equivalent to forced self-incrimination.

After the decision, one of Gelfgatt’s lawyers indicated that they planned to appeal the decision to the U.S. Supreme Court, which has not yet considered the issue that has divided jurisdictions across the country.  In 2012, the U.S. Court of Appeals for the Eleventh Circuit held that a man under criminal investigation could not be compelled to decrypt his computer hard drives for the government without a showing by the government of specific knowledge about the contents of the hard drive, an opinion referred to by the dissenting opinion in this case.

In a time when law enforcement is increasingly relying on digital evidence in building cases against criminal defendants, issues regarding encryption and password protected materials will continue to arise.  We hope the Supreme Court will grant an appeal and clarify that law enforcement cannot compel criminal defendants to decrypt files without violating the Fifth Amendment right against self-incrimination.

Mar 12
2012

Nevada Case Points to Perils of Assertion of 5th Amendment in Civil Cases

One of the hardest decisions on which a lawyer may be called upon to advise a client in civil litigation is the decision whether to assert the Fifth Amendment privilege. On the one hand, the overlap between pending civil and criminal matters may make it dangerous for the client to make statements that could incriminate him or her in the criminal case. On the other hand, while the assertion of a Fifth Amendment right in a criminal case may not be used against a defendant, the assertion of that right in civil litigation may permissibly lead to an adverse inference against the client in that lawsuit. There are a variety of strategies for dealing with this tension, including seeking a stay of the civil proceeding or a more limited protective order in the civil litigation.

While there are many approaches to dealing with these issues, a recent case in Nevada reinforced the lesson that blanket assertion of the Fifth Amendment may actually harm the client’s interest more than helping it. In Francis v. Wynn Las Vegas, LLC, 262 P.3d 705 (Nev. 2011), the Nevada Supreme Court upheld the lower court’s grant of summary judgment against a defendant on all claims and counterclaims based on the defendant’s overbroad assertion of the Fifth Amendment during his deposition.

In that case, the defendant owed a debt to the plaintiff, a Las Vegas casino, based on his marker. At the time of his deposition, the defendant was a party in the civil litigation and was also being prosecuted by local law enforcement. During the deposition, defendant asserted his Fifth Amendment privilege in response to nearly every question, including whether he was married, whether he lived alone, whether his father was still living and the names of his father and mother. 262 P.3d at 709. After Wynn Las Vegas filed a summary judgment motion, Francis sought to reopen discovery and “gave vague indications that Francis would like to withdraw his privilege. 262 P.3d at 710. The district court denied the request and castigated Francis for his blanket assertion of the privilege:

[Y]ou can’t use the 5th Amendment as a sword and a shield. You can’t sit in a deposition and – what’s your father’s name? Right to remain silent. Do you have a cell phone? Right to remain silent. That’s the most ridiculous exercise of the 5th Amendment I think I’ve ever seen.

Id. The court also refused to permit Francis to withdraw his assertion of the privilege.

On appeal, the state supreme court upheld the district court’s rulings and rejected Francis’ assertions that the court had penalized his exercise of the privilege by not permitting him to withdraw his assertion of the privilege and that the court should have accommodated his privilege by granting his request to reopen discovery. While the Court recognized the importance of protecting the valid assertion of a Fifth Amendment privilege, the Court found that Francis’ overbroad assertion of the privilege was unjustifiable and noted that Francis had not sought any other relief from the district court to protect his privilege (such as requesting that his deposition be sealed). After balancing the prejudice to the plaintiff, the Court found that the district court did not abuse its discretion in the way in which it had balanced the competing interests of the parties.

In Francis, the defendant’s inability to explain why he had conducted no discovery during the discovery period may have doomed him on summary judgment, regardless of his abusive exercise of the privilege against self-incrimination. But the lesson of this case is still one that sounds obvious when you say it out loud: A party in a civil proceeding should only assert the Fifth Amendment privilege when there is a basis to do so, and only as to those questions or other requests which genuinely pose a risk of self-incrimination (as understood in Fifth Amendment jurisprudence).

And while there may be strategic reasons to seek broad protection under the Fifth Amendment, counsel should be prepared to seek alternative means to protect a client’s interest before discovery is completed and before dispositive motions are filed so that the balance of interests will not weigh against the client’s interests in the litigation. Those who instead use a broad-brush approach to the assertion of the privilege will find themselves doing their clients a significant disservice.

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About Ifrah Law

Crime in the Suites is authored by the Ifrah Law Firm, a Washington DC-based law firm specializing in the defense of government investigations and litigation. Our client base spans many regulated industries, particularly e-business, e-commerce, government contracts, gaming and healthcare.

Ifrah Law focuses on federal criminal defense, government contract defense and procurement, health care, and financial services litigation and fraud defense. Further, the firm's E-Commerce attorneys and internet marketing attorneys are leaders in internet advertising, data privacy, online fraud and abuse law, iGaming law.

The commentary and cases included in this blog are contributed by founding partner Jeff Ifrah, partners Michelle Cohen and George Calhoun, counsels Jeff Hamlin and Drew Barnholtz, and associates Rachel Hirsch, Nicole Kardell, Steven Eichorn, David Yellin, and Jessica Feil. These posts are edited by Jeff Ifrah. We look forward to hearing your thoughts and comments!

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