Second Circuit Reverses Rabobank LIBOR Convictions Over Foreign Compelled Testimony

On July 19, 2017, the Second Circuit Court of Appeals held in United States v. Allen, No. 19-CR-898 (JAC), 2017 WL 3040201 (2d Cir. 2017) that the Fifth Amendment’s prohibition on the use of compelled testimony in American criminal proceedings applies to the use of testimony compelled by a foreign sovereign.

The court further held that when the government makes use of a witness who has been exposed to a defendant’s compelled testimony, the government bears the “heavy burden” to prove that the witness’s exposure to the compelled testimony did not “shape, alter, or affect the evidence used by the government.”  Allen, 2017 WL 3040201, at *13.

This decision illustrates a key challenge to prosecutions in U.S. courts arising from cross-border investigations in which foreign governments are conducting parallel investigations following procedures that may differ from those used in U.S. criminal investigations.  It also suggests that the Second Circuit (and likely other federal courts) are unlikely to relax the constitutional standards applicable to U.S. criminal prosecutions to accommodate the difficulties confronted by U.S. authorities in developing evidence from foreign investigations.