SOURCE: Post & Schell PC

December 01, 2010 10:05 ET

Unprecedented Indictment of In-House Counsel on Obstruction Charges Sends New Message to Attorneys: Re-Think How You Advocate on Behalf of Clients

Peter D. Hardy, Esq. -- Author of Just-Published "Criminal Tax, Money Laundering and Bank Secrecy Act Litigation" and a Former U.S. Prosecutor and Current White Collar Defense Partner Post & Schell PC -- Says Implications of Obstruction and False Statements Charges Against Pharmaceutical Company Lawyer Are Significant

PHILADELPHIA, PA--(Marketwire - December 1, 2010) - The unprecedented indictment on obstruction charges of an in-house counsel for a major pharmaceutical company may ultimately alter or temper how lawyers employed by or representing corporations advocate on behalf of clients, according to Peter D. Hardy, Esq., a former U.S. prosecutor and now a partner in the white collar defense, compliance and risk management practice group of law firm Post & Schell PC.

The charges -- six counts of obstruction of justice and making false statements in response to a federal investigation -- are similar to those that have been brought in the past against corporate executives and government officials. But in the November 9, 2010 indictment, the Department of Justice for the first time charged an in-house attorney with obstruction for actions taken in the course of mounting a corporate defense. The attorney is accused of withholding documents and making false statements in response to an investigation by the U.S. Food and Drug Administration into the company's possible promotion of a drug for unapproved uses. Details are available at http://www.justice.gov/opa/pr/2010/November/10-civ-1266.html.

"The government is sending a clear message that there is no difference -- legally, ethically or practically -- between a CEO attempting to obstruct an investigation of a corporation and a lawyer attempting to obstruct an investigation in the course of representing that corporation," said Mr. Hardy, author of Criminal Tax, Money Laundering and Bank Secrecy Act Litigation (BNA Books, November 2010).

The action, according to Mr. Hardy, could have the effect of:

  • Prompting lawyers to be especially cautious: The indictment reinforces the importance of scrupulous document production protocols when responding to government inquiries and subpoenas.

  • Reinforcing the importance of due diligence: The situation underscores the need for appropriate due diligence by counsel (outside and in-house) before making factual representations to the government.

  • Chilling some legitimate advocacy on behalf of clients: Although the allegations in this case are serious, the indictment may have the general effect of tempering even some legitimate advocacy by attorneys employed by or representing corporations; they may be nervous that their representations to the government will be misinterpreted and/or turn out to be based on poor information.

  • Sends a cautionary reminder about "cover-ups": The indictment is something of an admonishment to all attorneys, executives and officials -- beware of cover-ups, or of any action that gives the appearance of being a cover-up. "This is something of a repeat of the classic lesson of Watergate, Martha Stewart and other cases: The 'cover-up' can be worse than the alleged underlying crime," Mr. Hardy said.

For more information, or to schedule an interview with Mr. Hardy, contact Katarina Wenk-Bodenmiller of Sommerfield Communications at (212) 255-8386 or katarina@sommerfield.com

About Criminal Tax, Money Laundering and Bank Secrecy Act Litigation
Criminal Tax, Money Laundering and Bank Secrecy Act Litigation (BNA Books, November 2010) is a 1,600+ page legal treatise that focuses on the entire range of complex legal, factual, pragmatic and tactical issues present at every stage of the high-stakes criminal cases handled by the IRS -- from investigation to indictment to trial to sentencing -- and has been well-reviewed by prominent members of the national criminal tax and white collar bar. It discusses tax shelter cases, anti-money laundering compliance, and more. For more information, visit http://storefront.bnabooks.com/epages/bnastore.sf/en_US/?ObjectPath=/Shops/bnastore/Products/1856.

About Peter D. Hardy, Esq.
Peter D. Hardy, a former federal prosecutor, is a Partner in Post & Schell's national White Collar Defense, Compliance & Risk Management Practice Group. His practice focuses on the counseling and defense of corporations, directors, officers, managers, professionals and others, across a broad spectrum of industries, who may face allegations of business-related or other misconduct.

Mr. Hardy has significant experience in complex criminal matters at the investigative, trial, and appellate levels. Before coming to Post & Schell, Mr. Hardy served for six years as an Assistant United States Attorney for the U.S. Attorney's Office in Philadelphia, and for five years as a Trial Attorney for the Department of Justice, in the Criminal Enforcement Section of the Tax Division in Washington, D.C. Prior to joining the Department of Justice, Mr. Hardy served as a judicial law clerk for U.S. District Judge George E. Woods, and for U.S. Court of Appeals Judge Cornelia G. Kennedy, in Detroit, Michigan.

Mr. Hardy has particular expertise in allegations of tax fraud, voluntary disclosures to the IRS, financial institution crime, money laundering, health care fraud, mortgage fraud, bankruptcy fraud, identity theft, environmental crime, and public corruption. 

Mr. Hardy is the author of Criminal Tax, Money Laundering and Bank Secrecy Act Litigation, published in November 2010 by BNA Books, a major legal publishing house.

About Post & Schell PC
Post & Schell provides litigation, corporate, transactional, regulatory, compliance, consulting and educational services locally, regionally and nationally to a broad spectrum of proprietary and not-for-profit industries. The firm concentrates on providing these niche services in sophisticated and complex matters.

Post & Schell lawyers work extensively in industries including banking and financial services, professional services, energy, manufacturing, retail, and healthcare and pharmaceuticals. The firm routinely handles the most complex and sensitive issues in these industries. Areas of specialization include white collar defense, internal investigations, compliance, commercial litigation, intellectual property protection and appellate law. 

Established in 1968, Post & Schell currently has approximately 165 lawyers in 7 offices: Washington, D.C.; Philadelphia, Pittsburgh, Harrisburg, Allentown, and Lancaster, PA; and Princeton, NJ.

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