Welcome to our listener-supported podcast, Money Talk, uncompromised absolute financial truths behind financial perceptions with host, Ed Sutkowski and Chuck LeFebvre. Let’s listen in.
Chuck LeFebvre: This is Chuck.
Ed Sutkowski: I am Ed and today’s Coffee Break special is a topic is A Lawyer’s Stock and Trade, typically fear, greed, the government, and revenge, with a bit of an emphasis today on greed. Our special guest is Kevin Evans, an attorney, a nationally recognized Colorado-based trial attorney. Kevin secured his law degree from the St. Louis University School of Law in 1984. He was the editor in chief of its law periodical. His practice areas are criminal defense, securities regulation, contract, and commercial litigation, and perhaps more recently wealth accumulation and trust compliance. Kevin, welcome.
Kevin Evans: Good morning, Chuck and Ed, how are you?
Chuck: Doing well.
Ed: Kevin, tell us about your favorite case, your most interesting engagement.
Kevin: I would say my most interesting engagement was actually an internal investigation. I’ve done a number of these over the years, both in the US and abroad, and it ties nicely into today’s topic of greed because it shows you and your audience what can happen when one demonstrates greed or exhibits greed, coupled with hubris on the one hand, and when one demonstrates a sufficient degree of remorse and willingness to do the right thing on the other. What I’m talking about is a situation that I had a few years back in Afghanistan. I was called in by a USAID contractor to represent it in an internal investigation related to a Foreign Corrupt Bribery Act investigation by the government. The government had actually taken action against one of its competitors, my client’s competitors in that country, and the competitor did it the absolutely wrong way, and my client- I like to think that my guys did the right way. What happened to the competitor was it too was accused of FCPA violations, which aren’t hard, by the way, when you’re operating in countries like Afghanistan and the Middle East and India, where that’s a standard operating procedure for how companies operate over there. Unfortunately, when American companies decide to do business over there, they’re tainted or they’re limited by what they can do with respect to operations by having to comply with US law, even though operating abroad. The competitor decided that it was going to thumb its nose at the government and take the position that it did nothing wrong, when, in fact, the evidence was quite the contrary. As a result, it was indicted. It was found guilty, it was debarred and my client didn’t want to suffer the same consequences. I was called in to help it out, ended up on three occasions over in Kabul, for probably all told about a month and a half, maybe two months during that time period on three separate occasions. I like to say it’s the only time that I know of that I’ve had a Kalashnikov pointed at me. We conducted our foreign- our forensic review of the documents with computers on one visit. We did interviews, lined up interviews, and interviewed vendors and others on the second and third visits. When all was said and done, we concluded that there were some minor violations, but nothing that would capture the attention of criminal prosecution and made self-disclosures, which resulted in small fines, a letter quite frankly from the USAID special agent involved thanking us for the cooperation and suggesting that this is the way companies should operate in the future when they’re dealing with the government connection with overseas investigations, and my client to this day remains alive and well.
Ed: Kevin, what was the allegation that this client did?
Kevin: The allegations with respect to the companies in this particular area, and not just my client but others were that they were paying local government officials to help facilitate things that we take for granted here, things like electricity, running water, security, and permits. The accusation or the investigation centered around whether my client had made such payments to facilitate the acquisition of those items, bribes so to speak when they otherwise should’ve gone through proper channels.
Ed: Are you suggesting that, for example, utilities was simply a given in this country, that you have to pay for in a sense of an upfront charge?
Kevin: Yes. In fact, I kind of joked earlier about having a Kalashnikov pointed at me. That really was no joke at the time. That’s just the way things operate over there. In fact, we were advised before I headed over that don’t be surprised if you’re stopped in an intersection by someone dressed in a police uniform, carrying rifles, and demanding to see your passports. Do not give them your passports because what’ll happen is they’ll take them and they’ll demand bribes to get them back to you. So, carry color copies of your passports. We were, in fact, stopped at an intersection by two- I’m assuming they were police officers. My bodyguard at the time had just left the car detail, security detail and he was my bodyguard for the security company that provided my security services while I was over there. There was a heated row between himself and one of the police officers, and the other one circled the car and pointed the rifle at me through the window, and I asked afterward what was that exchange about because it was in– I don’t know whether it was in Pashtun or Darya, I suppose it was in Darya. The bodyguard said- I told him that I knew his boss and if he demanded one cent from us and he was going to be looking for a new job the next day. We escaped without having to pay the bribe, but that’s just the way of doing business in countries like that.
Chuck: Kevin, if you had succumbed to that situation, if you had paid a bribe to them, is that the kind of thing that ends up being in violation of this statute then?
Kevin: No, that would not because I was not the initiator, I was being forced to– I would’ve been forced to engage in that act in order to avoid potentially life-threatening situations. No, that would not be a situation where the government will look askance, but it’s more of a situation where a company is permissively soliciting assistance from government officials, and it doesn’t even have to be money, it can be gifts and non-monetary items, and that’s a situation where you do want to follow the FCPA.
Ed: Kevin, I like to focus your attention on the Chicago contractor investigation, would you discuss that to the extent you’re able to?
Kevin: Sure, that is another perfect example, Ed, of what greed can do to you. It can really take you down. In this case, it did. I was actually in the early ’90s appointed- it was when I was in Chicago working as partner in a firm in Chicago, I was actually engaged by the state and the special prosecutor to investigate a situation where a government contractor, I will not name names, but a government contractor was suspected of cheating the state over a number of years on a number of projects that happened to be in road building construction area. We hired the chairman of Northwestern University’s Statistics Department to create a statistically valid sample, so we’re going to go rip up roads across the Chicago area, by coring them. We cored a number of samples, had that analysis done, it turns out that, in fact, yes, the contractor was supplying much less material in the roadways than it was being paid for, resulting in the roadways tearing up much sooner than one would have expected. Guess who got the contract to repair those roadways? We brought an action against the contractor, demonstrated that, in fact, the contractor had– Even though it had a golden egg relationship with the state, that wasn’t enough for this contractor, and greed prevailed, cheated the state on a number of road projects over the years to the tune of millions of dollars. As a result of that investigation in the case, that contractor is no longer.
Ed: Other examples of greed, could you help us there, and as it relates to, let’s say, financial greed? Well, to say financial greed is redundant, but let’s talk about some obvious greed situations.
Kevin: Well, I would like to say that sometimes the government gets it wrong when they investigate situations for greed and stuff, but sometimes they may get it right. They just don’t prove their case because of the lawyer on the other side. It’s not just limited to companies, individuals find themselves in this situation as well. I, a number of years ago, represented a professional who was accused in over 40 counts of demanding, soliciting and accepting kickbacks in the healthcare area and that individual was indicted and we went to trial along with some of the individuals from the healthcare companies that were accused of participating in that scheme, so that the professional would use the product of one particular company over another. That was the alleged reason why the payments were made. At the end of the day, we were successful after a three-month jury trial and persuading a jury, and ultimately, the Eighth Circuit Court appeals that our client was innocent, or let’s put it this way, was not guilty. That individual went through hell in the meantime, a year of investigation culminated in a three-month trial, and imagine the anxiety and the emotional strain that placed on both himself and his family and all because of the almighty dollar. It rears its ugly head in virtually every case that I’ve been involved in.
Ed: Kevin, I’d like to have you think about and tell us about the timeframes, the preparation, the process of the jury trial, the emotional impact on you, getting up for it, coming down from it, quite a brain damage for you, isn’t it? How do you handle this?
Kevin: Well, it’s funny you should say that. I’m going to go back to when I was a young lawyer in my very first trial, and this was a situation where greed probably was not the modus operandi of what happened in that situation, but I think it will be entertaining for your listeners. This happened in Chicago, a suburb of Chicago Heights, and again, I was a very young lawyer at the time. It was my first significant jury trial, and my partner and I, a former first assistant US Attorney in Chicago, were called in to represent owners of an apartment complex who renovated the apartment complex and we’re renting to Section 8 tenants. The city of Chicago Heights was– There’s no other way to say it, the leadership was quite prejudiced at the time, I assume things have changed there, and pulled my clients in and told them, “You’re not renting to those people,” as a quote. My client said, “Well, I don’t know what you mean by those people, but we’re renting to who we feel are good tenants and these people are good people and we’re renting them.” The city officials described what would happen to their property if, in fact, they continued to rent a Section 8 tenants. Lo and behold, we proved their trial, and by the way, again, we were called in right before trial to handle this case, we replaced the previous lawyers, it became apparent to me that the case was not ready to be tried. We filed an appeal. We found an issue that we could appeal to the Seventh Circuit, which bought us about a year of time between briefing, argument, and decision. During that time we investigated, continued to investigate. We found the person who the city officials had paid to set fire in various apartment buildings at my client’s place, in other words, commit arson. We obtained immunity for that person from both the state and the feds brought that person back to testify. The person testified at trial that, in fact, he was paid to ignite my client’s building all because they rented to section 8 tenants. You asked me that the strain it takes on a lawyer, I will tell you that following that trial, again, this was my first trial and it’s gotten much better over the years, but after that trial, I literally was- coming down off of that victory, which was a fairly significant victory for the client and for the community, it really left me incapacitated for about a week, and how there was little I could do. It does take an emotional drain on not just the client, but the lawyers who have to day in and day out present their case, prove their case, investigate their case, and hopefully, at the end of the day, my case will prevail.
Chuck: Kevin, it causes me to wonder a little bit, I mean, discovering that the person you’re investigating committed arson, at some point and again, it just goes back to your story about Afghanistan, and one would never have imagined getting into a practice where you’re investigating financial misdeeds, you would run into so many situations where your personal safety would seem to be an issue. I, for one, would be a little bit afraid of my own personal safety if I discovered in the course of an investigation that I had uncovered an arsonist. I just wonder, how often does that kind of thing come up?
Kevin: I guess it depends on your tolerance for what I like to call excitement. In my line of work, I’ve been very fortunate over the years. I’ve had really, really interesting cases and matters. Not infrequently, Chuck, do they involve situations where you have to at least think about it. My wife and I have these conversations. My wife, by the way, has been good enough to put up with me for almost 37 years now. We’ve had a number of these conversations. She’s the one who typically raises them because I’m either too near-sighted or not careful enough to be concerned about it, but she is. We have those conversations not infrequently.
Ed: Kevin, what if the client’s lying? Have you had any occasion where a client is just a great salesman initially, but you then discover that the representations being made are fabricated and what do you do?
Kevin: Yes. That’s the easy way to answer that question, Ed, is yes. I have had a few, and they’re not easy to navigate because you’re torn on the one hand between your ethical obligation to represent your clients and not leave them hanging versus not participating in ongoing efforts to lie and deceive. I will tell you that in the few cases that I’ve had where that’s occurred, I’ve made it very clear to the client that I would not do their bidding in terms of misrepresenting or “lying to the government” if it ever comes up. I will not do that. If they’re going to insist on it, then they need to find themselves another lawyer. I’ve made it clear that we’re going to- you have done something wrong and it’s in your best interest to make self-disclosure to the government that you’re going to do as well, and if you’re not willing to do it, then you’re going to find yourself another lawyer. In the most recent situation I had of this where there was a raid on a client where we got called in after the raid, actually, we got called in during the raid. It became apparent that the client had violated, breached intentionally or otherwise, virtually every government contract that they had ever touched over the course of 15 years, including Secret Service contracts. I put my foot down and said, “We’re going to make appropriate disclosures here, we’re going to be completely truthful and honest, and if you don’t like it, go find yourself somebody who you want to do your bidding.” The client listened. We made a healthy, healthy disclosure, and the client paid a chunk of money, walked away with a chunk of money as well from the sale of the company and no one went to prison. I would think that at the end of the day, for even those for whom greed is an undeniable trait of theirs, prison and the loss of liberty trumps money. In my experience, when the client understands that that’s the case, they’re willing to listen, at least the clients that I’ve represented in the past are willing to do the right thing.
Ed: You’re suggesting that leverage is prison terms.
Kevin: I’m sorry?
Ed: Leverage, you may think about selling a case, and you’re not, but let’s assume a personal injury lawyer and I know some of them, their leverage is the jury trial, fear of going to a jury trial for the possibility of having multiple dollars in damages versus a settlement. On your side of the ledger, I’m speaking as to any criminal matter, the leverage is going to trial, losing, and going to jail, although I understand the food isn’t so bad.
Kevin: That’s exactly right. If the circumstances warrant, yes, that card is a good card to play. Typically, clients will listen to you when you play that. That’s not to say that I haven’t had cases where I thought, and I’ve had several by the way, where I thought the government substantially overreached and engaged in what I consider to be unethical behavior. We could go on for two hours today with me regaling you with stories about law enforcement across the board, pick your agency, pick your acronym, who was engaged in unethical behavior. We have actually- in those instances, we’ve made it clear to the client, “Look you could lose this, you could go to jail, but in our opinion, we think this is a case which is worth trying and we think you have a reasonable chance of prevailing.” We’ve taken several of those cases to trial, and knock on wood, the clients were acquitted at the end of the day. Primarily in large measure, because the juries just don’t like bad action, bad conduct by law enforcement.
Ed: Picking a jury, what do you look for in picking a jury, Kevin?
Kevin: There is no right answer on that, Ed. It really depends on the case, it depends upon your client, age, ethnicity, believe it or not, it does matter regardless of what anybody wants to say and the type of case it actually is. For instance, a number of years ago, I had a criminal trial in Lincoln, Nebraska of all places, and this is one of those cases where I thought the government overreached. My partner and I at the time were representing Hudson Foods which accused of- I don’t know if you recall the E. coli outbreak many years ago that took all the Burger King patties off the market. That was what the case resulted from. My client was accused of lying to USDA officials in connection with that investigation where they did no such thing. We took that to trial, the question was, when we selected the jury, who do we want? In that case, there was a banker who was being considered as a potential juror. We decided that that would be the perfect juror for us because he has to deal with government regulations on a day in and day out basis, as honest as they could be. Here we have a company that’s objected to a healthy degree of government regulation as well. Turns out that that was the perfect fit for us because he ended up being the foreman. After about half an hour of deliberation, the conclusion of a three-week trial, the jury came back with not guilty for everybody. You do look for certain characteristics, but it’s really dependent upon the nature of the case and the client.
Ed: Your longest trial. How long did your longest trial last?
Kevin: Six months.
Chuck: Oh, wow.
Ed: Six months?
Kevin: We didn’t have a trial on Fridays.
Chuck: Didn’t know you were on the OJ team.
Kevin: It stemmed from it– This was in the ’90s in the CBOE, the pits in Chicago. We represented one of the significant traders in the Yen pit, who was indicted along with 13 other traders for violating trading rules, and basically agreeing to make trades to the advantage of the traders and the disadvantage of clients. That case lasted, I kid you not, for six months, although we only had four days of trial each week. It was a six-month ordeal.
Chuck: Kevin, do you have circumstances or have you been involved in cases where you are just sure that you’re investigating someone, or litigating against someone who had engaged in some financial malfeasance, but you just couldn’t get the evidence, you just couldn’t put the case together? Or is there- generally if you dig hard enough, you’re going to be able to find it somebody is really engaged in misconduct?
Kevin: I have to scratch my head, nothing’s coming to mind where we thought there was a case that we just couldn’t prove. I think I’ve got a case now, Chuck, it’s in the trust and estates area where we did a significant amount of investigation, free filing. It was a year’s worth of investigation with court orders and court subpoenas for information from financial institutions and others, that allowed us to put that case together. Without that evidence, it would have been very difficult to put together a case. We had a healthy degree of suspicion that there had been a good deal of wrongdoing by the defendants. Without the evidence that we were able to gather during the investigation stage, it would’ve been very difficult to pull the trigger on it and file.
Chuck: That’s where the government has an advantage here because, for a private party, you really don’t get any compulsory investigatory tools until you put something on file, whereas the FBI prosecutor can convene a grand jury and issue subpoenas and that kind of thing, which is what allows them to dig into some areas that us lowly folks don’t necessarily get to see. Am I reading that right?
Kevin: For the most part, you’re correct. Although the case I just alluded to was in the trust and estates area. There were certain statutes that permit under the circumstances that we have in this case, there were certain statutes to permit you to ask the court for assistance gathering trust records and things of that nature before filing a suit. It was as a result of that process that we were able to put the case together. In that sense, I felt like agents gathering the evidence in advance of the case being filed. Again, absent that, the ability to utilize those statutes and gather that information that would’ve been difficult to put the pieces together.
Chuck: I’ll tell you what–
Ed: Go ahead. Pardon me.
Chuck: I was going to say what prompted my original question about this was when you made this allusion earlier to the government overreaching that Lincoln, Nebraska case, where the charge ended up being making a false statement to an agent. It strikes me I’ve seen this a few times, where if a federal prosecutor or a federal agent for some agency, they’re digging into an investigation of some substantive crime, and they can’t quite put the case together, that’s almost their final method of venting their frustration, as they levy a charge at somebody for making a false statement. It sounds like that might’ve been what happened there. That’s what led to my question about, well, gee, how often is that really a realistic outcome where a crime was committed, but you can’t prove it?
Kevin: Let me take your question in a bit of a different direction and give you another example in the false statement arena. Several years ago when I was in Chicago, I also represented a plant manager of Rockwell, who was accused of providing false statements to the government and assisting in the submission of false claims to the government in connection with material and products that were used on the Space Shuttle program. This was another situation where my partner and I at the time got called in literally on the eve of trial because the client was dissatisfied with the representation the client is receiving, including the fact that the previous lawyer walked into a polygraph. This was before the government got wise and just started putting what I call anti-Kastigar provisions in their proper agreements with people, their interview agreements with people which are now quite frequent. They weren’t at the time. We found out that the DOD, the Department of Defense agency was actually investigating the case. Went to a prime witness, a former employee at that plant for an interview, and the employee was no friend of what the government was trying to do, went down to the basement, came up with a box of documents, and he said, “Here, this will prove the innocence of my client.” The agent started looking through the documents and gave the box back to them. The witness said, “I don’t want to see this.” Never shared it with the prosecutor. As far as I’m concerned, I consider that to be hiding or secreting exculpatory evidence.
Chuck: Oh, wow.
Kevin: The intention of the court in a Kastigar hearing, which like I said, are very rare these days if they even exist anymore, the judge, an old-timer, hard-nosed but very by the book, looked at the first assistant US Attorney who was the lead government attorney on the case and said, “Look, I’m going to deny the motion to dismiss on the basis of Kastigar violation, but Mr. Prosecutor,” I won’t use his name, “Mr. Prosecutor, if this case ends up in my courtroom on Monday morning, and we’re set to pick the jury, I’m going to report you to the bar.” That afternoon, we got free trial diversion and all the defendants were essentially free to go. That sounds like a great result and it was, but you got to understand that in the meantime, my client went bankrupt. He lost his job, lost his family, his wife divorced him, all because of what I consider to be a rogue agent.
Chuck: There’s not a lot of accountability there. The accountability is losing the case. But there doesn’t seem to be a lot of career accountability in situations like that. Am I wrong about that?
Kevin: I think you’re absolutely right about it. Maybe they may take that a little more seriously these days, particularly if you’re a Republican and you got Democratic house looking over your shoulder. For the most part, you’re absolutely right.
Ed: You’re dealing with a deck that’s stacked against you. The prosecution has access to all this information. The idea is to win at all costs, irrespective of what is said to be the case. Prosecutor has an enormous investment in the case, doesn’t want to look badly in front of his superiors, and has got to press the case. Where is the character of some of the folks that would do that? Do they have no regard for the rights of the subjects that they’re beating up, Kevin, what’s going on?
Kevin: Well, I don’t want to leave the impression that all prosecutors are really only looking at to put a notch in their gun. I’ve had a few instances over my career where I have had a healthy degree of respect for the ultimate decision of the prosecutor, one relatively recently. I was representing the former CFO of a solar panel company that had received a $400 million loan from the Department of Energy under Obama’s green energy initiative, and this prosecutor thought that there had been some false statements made to the Department of Energy that resulted in these loans. She put a lot of money into the investigations, including a few trips over to Germany. I had to investigate panels shipped overseas, but at the end of the day, I was able, through the submission of a few white papers, to convince her that the evidence really didn’t bear out and that no action should be taken against my client, and then she did the right thing. I’ve got other stories like that where prosecutors have done that, but by the same token. I’ve got situations where the prosecutors have not done that. One case in point, although I wasn’t involved in the case, people can read about it. It’s a really fascinating and nearly horrific situation out of Chicago in Naperville, where a prosecutor and his agents committed perjury, suborn perjury on the stand to try to secure convictions in a murder case. This was a state prosecutor. Scott Therough had started a program at Northwestern University called the Innocence Project, got involved in the case, and we were able to prove on the eve of execution that the person was innocent and that’s a situation where you- that’s an extreme situation and this is a very extreme situation, but where you had a prosecutor and his agents who eventually conceded that they committed perjury during the trial and they were willing to put an innocent man to death. It’s really disturbing.
Ed: What happened to them?
Chuck: That is amazing.
Ed: What happened to them, Kevin?
Kevin: Pardon me?
Ed: What happened to the folks who had committed perjury?
Kevin: This is one of those situations, getting back to Chuck’s comment before where you would have thought that there would have been severe disciplinary action taken. There were what I would consider slaps on the wrist given.
Chuck: Boy, I would characterize their behavior as attempted murder.
Kevin: I couldn’t disagree.
Chuck: It’s amazing.
Ed: Kevin, why do you do what you’re doing?
Kevin: My kids ask me that question, Ed, because during that healthcare fraud trial I was telling you about that resulted in my family moving to Denver where I opened up at Hogan Lovells Litigation, my practice in Denver, my kids saw me literally living on the road for a year. This goes back to one of your earlier questions. I was in Minnesota when the case was Federal Court Minnesota, that was in about various cities and towns in Minnesota over the course of a year. I counted that during that year I was out of town 300 days plus, which included the trial, and at the end of it, my youngest son who was quite the pistol, now he’s 30 years old, but he told his grandmother who told him that his dad was coming home that day, he said, “Daddy who?” It tugs at your heartstrings because those of us who do this practice, you spent so much time, it gets so much of our effort to others that sometimes there’s remorseful neglect. My God, my family stuck it out, stayed with me, I have a great family, but I do it because I’m a- I’m going to say an action junkie. If I’m going to be a lawyer, this is the kind of practice I wanted to engage in because there is so much variety. One day you could be a special prosecutor and investigating crimes by a company and the next day you can represent a company and pick your country or you can learn how to become a pediatric endocrinologist and representative doctor in one case, it just runs the gamut and it’s not one typical case. That’s why I do what I do. I find it exciting.
Chuck: I was told one time when I was- I think this was when I was still in law school and a mentor of mine who was a litigator who said, “If you want to be a Renaissance man, the way to go about that is to get yourself involved in litigation,” which is what you’re saying, Kevin. Ultimately, I decided I wasn’t a Renaissance man.
Kevin: I can’t say that I play an instrument. I can’t say that I can paint or draw. I don’t know that I would consider myself a Renaissance man, but the one thing that it does provide you the opportunity to do, particularly if you decide that you want to- the path that I chose which is the white-collar area, about half of my work’s white-collar, the other half is civil, but you tend to get involved in all types of different cases that require all types of different expertise and it requires you to hone up and become remotely knowledgeable about them all. I have found it to be quite challenging.
Ed: Kevin, is it fair to say that your only regret is the absence of any regret?
Kevin: Well, close. Like I said, the family is- there are times when I haven’t been able to devote as much time with the family as I would’ve liked. Being out of town for instance, for a year, while the kids were young and that wasn’t the only case where that happened but was something that I regret, but there are trade-offs, I guess. I guess that if I had to answer your question true or false, with no qualifications, I’d say true.
Ed: Chuck, anything else? Do we want to ask him any other questions about, does he shine his shoes? We’re already getting personal, Kevin, but it’s just the idea of the absence of regret and it sounds to me that you have two lives, two real lives. The personal side and the day job side. They blend together and what comes out is a nice moving picture. Is that fair?
Kevin: I think that’s fair and it really helps when- like I said, I’m not kidding, I have a saint for a wife who’s put up with me for 37 years, but she too enjoys hearing about it and I guess living that through me. I’m not sure I could have done this without somebody that’s supportive.
Ed: Well, Chuck, I think we both want to thank Kevin for his display of energy and professionalism and we’re just pleased that there are people like Kevin in the world that can spearhead an opportunity to save intellectual lives if not physical lives. Kevin, thanks for your time and effort.
Chuck: Thank you, Kevin.
Kevin: I appreciate it, guys. Take care.
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