Ifrah quoted on criminal discovery procedures in high profile white collar matters

Discovery To Chart Course In Edwards Case
By Hilary Russ
Law360, New York (June 20, 2011) — Defense attorneys for former Sen. John Edwards will be getting clues about what the government has up its sleeve as federal prosecutors in North Carolina begin to hand over what could be hundreds of thousands of documents.

At a scheduling hearing slated for Tuesday, the judge is expected to hear about discovery issues and plot a course for how fast the case will proceed, including how much time the government has to produce evidence to defense lawyers and how long the high-profile case could take to get to trial.

The case — in which Edwards is accused of violating campaign finance law to cover up his extramarital affair and love child — was scheduled for what would have been a lightening fast trial date of July 15. But both sides asked the court the push back the pre-trial motion deadlines and the trial date in order to account for the “large volume of evidence” that prosecutors said they would begin handing over last week.

“White collar financial fraud cases … typically tend to be very paper-intensive, and this will be one of those cases,” said Kenneth B. Julian, a partner at Manatt Phelps & Phillips LLP, who is not involved in the Edwards case. “The number one item on the government’s list is tracking the money.”

Prosecutors say Edwards secretly used at least $925,000 in donations from 100-year old Rachel “Bunny” Mellon, widow of a banking heir, and Fred Baron, the finance chair of Edwards’ campaign, who died in 2008, to conceal his affair with Rielle Hunter, who was a videographer on Edwards’ campaign.

After a two-year investigation, a federal grand jury indicted the former Democratic senator and two-time presidential hopeful on June 3, accusing him in a six-count indictment of conspiracy, illegal campaign contributions and submitting false statements to the Federal Election Commission.

But even as they’re digging through the evidence in preparation for a trial, defense attorneys are expected to first attack the legal theory behind the government’s case. The salacious indictment against Edwards charts unexplored legal ground that could make the case tricky — but not impossible — for prosecutors to prove.

In particular, the case centers on the novel idea that nearly $1 million in private gift money — allegedly used to hide the pro-family values candidate’s extramarital affair and resultant child during the 2008 presidential election cycle — actually amounted to campaign donations that should have been reported to the government.

Defense attorneys will likely challenge that idea in a key pre-trial motion to dismiss the case. If the judge rejects their motion, and if no plea deal can be reached, the case would continue to trial, where the evidence would be front and center.

Discovery is already underway, according to the motion filed June 10 by prosecutors, who indicated they should be able to finish producing much of their evidence by June 30.

“It’s going to be all about tracking the money and how it’s spent, and they’re going to be turning that over to defense,” Julian said.

Bank statements, campaign and personal expenditures, credit card payments and other financial documents — all of which would have been drudged up by subpoena during the long grand jury investigation — will likely be turned over to Edwards’ attorneys. The government would also probably produce a financial expert from the IRS or FBI to put together a timeline of transactions, as well as witnesses who could testify about how Edwards and others may have spent the money, Julian said.

Financial information is also likely to include bills and receipts for airplane trips, hotels, housing payments, meals, cars, doctors’ visits and other expenses that Edwards and his handlers allegedly arranged for Hunter in order to conceal the affair in the midst of the presidential campaign.

In addition, the government could produce thousands of pages of correspondence involving Edwards, Mellon, Baron, Hunter, Edwards’ former aide Andrew Young and others allegedly involved in the case, said Robert J. Anello, a principal at Morvillo Abramowitz Grand Iason Anello & Bohrer PC.

Then too, prosecutors could also produce numerous FTC reports filed by the Edwards’ campaign in order to show the absence of the necessary disclosures of the expenditures, as well as video tapes or public statements Edwards made in which he first denied the affair, said Evan Barr, a partner at Steptoe & Johnson LLP.

“It stacks up in terms of volume,” Barr said. “Obviously that’s a considerable amount of material that can’t be digested in two weeks.”

Document production will only increase as the case nears trial, when so-called Jencks material — witnesses’ grand jury testimony — makes its way to defense attorneys, who will pore over it looking for statements that could be used to cast doubt on a witness’ motives or credibility.

Even so, the government would not be likely to turn over as many documents as it would for accounting fraud or securities fraud cases, which can end up producing millions of pages, experts said.

With so much evidence coming just from the government, the case could take anywhere from six to 18 months to actually make it to trial, depending largely on the temperament and timing of the judge who is eventually assigned to the case, lawyers said.

“As many documents as there will be in the case, I suspect the government is proceeding in good faith,” said Jeff Ifrah, founding partner of Ifrah PLLC.

Ifrah said he once had a case in Los Angeles in which the U.S. Securities and Exchange Commission produced a million documents. These had to be put in a warehouse, un-indexed, and then the judge in the case gave the defense team just two months to look over them.

But that’s not standard, he said.

“The government doesn’t do document dumps or data dumps on defendants in a high-profile case like this,” Ifrah said. “They’re not going to want to get into allegations of discovery abuses.”

And in the Edwards case, prosecutors have already spent significant time honing their evidence down to the most relevant documents and testimony. They are likely to present Edwards’ attorneys with one to two banker’s boxes of key evidence that will help draw the chief outlines of their case, Ifrah said.

“Typically in high-profile cases you get a lot of discovery that you don’t really end up looking at. The government has to gather so much information from so many sources,” Ifrah said. “I suspect boxes and boxes of documents, after being indexed, are likely going to go untouched [by the defense].”

Edwards’ lead attorney, Gregory Craig of Skadden Arps Slate Meagher & Flom LLP, did not reply to a request for comment for this story.

A spokeswoman for the U.S. Department of Justice declined to comment.

The case is USA v. Johnny Reid Edwards, case number 1:11-cr-00161, in the U.S. District Court for the Middle District of North Carolina.

–Editing by Eydie Cubarrubia.