The “Advice Of Counsel” Defense.
Before we get into it: I am a lawyer. I am not your criminal defense lawyer. Nothing I write here in my silly little newsletter is legal advice. Don’t be an idiot. *deep breath* Okay!
Let’s say you go to your lawyer and say “Hey, I really don’t like this annoying person at work, Janet. But I got her, and everyone else in the office, to sign a birthday card for our coworker, Bob. Nestled in fine print on the back of the card was an authorization for me to kill Janet if she annoys me. Janet signed it. So I can murder her now, right?” Your lawyer, in a real “left shark” moment, sort of shrugs and goes back to reading his copy of Crypto For Dummies. At your murder trial for the killing of Janet, you tell the jury look, “I was relying on the advice of my attorneys, and I never intended to break the law.” What now? You get acquitted, right?
Obviously not! (Caveat for this day and age: I think?) I mean, the whole situation is obviously ridiculous. You can’t lawfully murder someone just because your lawyer said you could! You also can’t lawfully murder someone even if they consent to being murdered!1 But I used murder for this hypothetical because it’s obviously something you can’t lawfully do, no matter what your lawyer tells you. But what about…wire fraud?
As the defense trundles through its case in the trial of Sam Bankman-Fried, there’s been this sort of “feint” at using what’s known in the legal trade as the “advice of counsel” defense. I’ve seen lots of really terrible attempts at explaining it in recent coverage of the trial, but, as I’ve done enough for “call-out culture” lately, I’m not going to explicitly refer to any such attempts here. Rather, I’m going to do my best to explain it for you, and you can do with this information what you will, provided that what you choose to do isn’t, well, crime.
Before we get into the defense, though, we need to do a quick review of how the definition of criminal offenses works. There’s two parts: 1) the actus reus, or the “act;” and 2) the mens rea, or the “mental state.” It’s the second part that often trips people up, and it’s the reason why we’re doing this little review. Here’s an example: you can punch someone and kill them (the “act”), but whether you intended to actually kill them versus simply hurt them (the “mental state”) will support, alternatively, a charge of murder versus a charge of manslaughter. The vital takeaway from this is that, with crimes, it’s not simply the “what happened,” but also the “what were you thinking,” that matters.
Now let’s shift over to the main offense at stake in the SBF trial: wire fraud. To convict on a charge of wire fraud, the prosecution must prove specific intent; that is to say, intent to participate in the fraud, and intent to actually defraud people. This is tough stuff to prove! And, unlike in my household when I’ve said something to upset my wife, the defense of “I didn’t mean it” actually works here! But simply saying “I didn’t mean it” isn’t really a complete strategy, is it? What else can one say / do? Enter, the advice of counsel defense.
The advice of counsel defense is an affirmative defense, which means (simplifying greatly) that if the defense can prove certain elements, it negates liability. The advice of counsel defense has 4 key elements:
Defendant makes a complete disclosure to their lawyer;
Defendant seeks legal advice as to their conduct from their lawyer;
Defendant receives advice from their lawyer that their conduct is legal; and
Defendant relies on that advice in good faith.
There’s also a fifth factor that’s kind of implicit: to assert the advice of counsel defense, a defendant would have to waive attorney-client privilege. (More on this in a bit.) I wrote above that SBF’s team has been making “feints” at an advice of counsel defense. What does that mean? And why not run the full affirmative defense?
With respect to even the first element, we have a problem. Can SBF’s lawyers prove that he made a “complete disclosure” to FTX’s lawyers during the time he was running FTX, and, specifically, around when the applicable conduct occurred? How do we even define “complete?” If we argue that FTX—the entire business—was just one big fraud, is everything to do with it part of the factum that should have been disclosed? Maybe that’s going too far, but you see my point. Overall, being a company that seemed to have misplaced billions of dollars, lacked basic internal controls, etc., could FTX, or its management, ever conceivably have made a complete disclosure to their lawyers about anything? My brain hurts from even thinking about it.
But there’s a bigger obstacle, if you can believe it: waiving attorney-client privilege. In order for the defense to assert, and for the prosecution to probe, an advice of counsel defense, the defendant must, logically, waive attorney-client privilege with respect to the matters germane to that defense. But waiving privilege isn’t so simple, and it’s a matter of determining the ownership of the privilege. See, the attorneys we’re talking about here aren’t SBF’s own personal defense attorneys in the current trial, but rather, the attorneys engaged by FTX during the time at which SBF was running it. That attorney-client privilege is owned therefore, not by SBF the man, but by FTX the company. The two are different entities, and this is a common trap! It’s simply not his privilege to waive! And, for what it’s worth, I don’t think John Ray would’ve been keen to do SBF any favors, considering his statements about SBF and the way in which FTX was run. Of course, we don’t know about what, if any, conversations took place between SBF and his lawyers with the current FTX, or whether there exist any agreements (or even insurance policies?) that might cause FTX to consider supporting SBF in his defense. But, regardless, that’s not what’s happening, and so, as a formal affirmative defense, the advice of counsel defense isn’t available to SBF and his lawyers.
But that hasn’t stopped them from trying! SBF’s been testifying in court that FTX lawyers “were involved” in key FTX decisions, like drafting the terms of service and other user agreements, which users, of course, agreed to. Can users consent to being defrauded, thereby not making it fraud? Good question! But that’s a whole separate article-length dissection.
The point here is that references to the participation of lawyers were already contested way back before the trial even began. The objections make sense, to me. If you can’t formally raise the affirmative defense, these mentions of “attorneys were present” strike me as being kind of like the “trust me, bro” version of the actual defense. And we might laugh at the concept of a “trust me, bro” defense, but people do buy into that sort of thing. And the jury? They’re…people! It’s a dangerous game, most dangerous of all to the legal process.
If we had live video access to the courtroom, a fun game to play on SBF testimony days would have been the over/under on how many times we heard the word “Objection!” coming from the prosecution table. But alas, this would be no Depp/Heard, and we are left only to wonder.
Danger In Dagestan.
There’s been widespread media coverage of the events which took place at the Makhachkala Uytash Airport in Dagestan, Russia two days ago, as an anti-Jewish mob stormed the airport seeking to do violence on Jewish passengers on a flight which landed from Tel Aviv, Israel. But, if one can imagine, there’s even more to worry about here than meets the eye, and western awareness of Dagestan and its issues is perhaps not the best. To understand the issues, both overt and lurking, we first need to understand a bit about Dagestan itself.
Dagestan is a republic within the Russian Federation, making it a “state” in the way we might think of Alabama or Florida. But, as I’m sort of wont to point out, there’s a real danger in thinking about countries as being homogeneous with respect to their populations. Russia isn’t made up of just Russians. You’ve got *deep breath* Tatars and Chechens and Bashkirs and Chuvashs and Avars and Armenians and Ukrainians and Dargins and Kazakhs and Kumyks and Kabardins and…if you think I’m just making this up, here’s a really overwhelming chart with data from the Russian census. Contrary to what we might think, Russia is extremely multi-ethnic, and Russians from different parts of Russia can be enormously different. And nowhere is that truer of Russia than in its North Caucuses region, which includes, among others, Dagestan.
Probably the most famous, or rather, infamous reference to the North Caucuses we can place is that of Chechnya. For those of us who can remember the news back in the 90s, there was the absolutely brutal Battle of Grozny, which then spiraled into the First Chechen War, and then just a few years later, the Second Chechen War. War, separatist violence, and insurgency / underground rebellion have been the unfortunate hallmarks of Chechnya’s recent history, and for Dagestan too. The “why” here isn’t as complicated as you might think: Chechnya, and Dagestan, are majority Muslim, and their leaders wanted to separate from Russia, establish Islamic states, etc. From their perspective, these weren’t wars or terrorism, but rather, a jihad for the purpose of “liberating Dagestan and the Caucasus from the Russian colonial yoke.”(Sound familiar?) Russia, of course, wasn’t having it, and the rest, as they say, is history.
(For a rare look into Dagestan, I recommend the first half of this 2014 episode of Vice on HBO.)
Knowing at least a bit about this history is necessary in order to properly contextualize what we saw in Dagestan earlier this week. What took place was an abhorrent display of anti-Semitism in a country (Russia) that we might not think of as the sort of anti-Semitic hotbed as, say, Iran. But that’s sort of my point: when it comes to anti-Semitism, parts of Russia look a lot more like Iran than they do the rest of Russia. And it’s not like this comes as some sort of surprise to the Kremlin. They know all too well the sort of trouble that lurks in the North Caucuses. And while sure, Putin’s managed to “tame” Chechnya and now has the weirdly obsequious loyalty of Ramzan Kadyrov, the same is decidedly not true in Dagestan.
So, what’ve we got? Dagestan is a thorn in Putin’s side, and Russia’s got a fairly significant Jewish population. Seems like a pretty clear take: “we’re going to stop all the violence in Dagestan.” Right? Of course not. Not when there’s a more politically expedient move to make. Putin’s placed the blame for the Dagestan incident squarely at the feet of Ukraine and its allies, citing “interference” and “social media.” Perfect. And wholly believable to anyone inside Russia, and to literally no one else.
Here’s where it gets concerning: while Russia does have a sizeable Jewish population, it’s dwindled from roughly 232,000 in 2002 to roughly 84,000 in 2021. More concerning is that there is an actual Jewish population in Dagestan, though now comprising only about 300-400 families. In the context of escalating attacks against Jews worldwide, the Jews of Russia / Dagestan seem to be in a particularly rough spot. Will Russia guarantee their security? Or, more bluntly, what sort of security guarantees can the Russian state make to anyone in Dagestan? These are questions for which we have roughly zero chance at answers, which is troubling, to say the least.
