A lawyer for Frank P. Quattrone on Tuesday urged an appeals court to throw out the investment banker's obstruction-of-justice conviction, arguing that faulty jury instructions made it easier for the government to prove its case.
Improper instructions allowed jurors to render a guilty verdict without finding that Quattrone meant to keep documents from the hands of investigators when he sent a December 2000 e-mail encouraging subordinates to clean up their files, his lawyers said.
"Knowledge of an investigation is not sufficient," defense lawyer Mark F. Pomerantz told the three-judge panel in Manhattan. "You need to know your conduct will have an impact on what the grand jury hears."
In May 2004, a New York jury found Quattrone guilty of obstructing justice, hindering a Securities and Exchange Commission probe and witness tampering. Quattrone has been sentenced to 18 months behind bars. The former Credit Suisse First Boston LLC star remains free pending the results of his appeal.
The Quattrone case centers on what he knew about federal document requests when he forwarded a 22-word message to staffers on Dec. 5, 2000, urging them to "clean up those files."
"I strongly advise you to follow these procedures," Quattrone wrote.
The defense argued that the banker merely passed along an innocuous reminder to follow bank policy that called for routine document disposal. They claim that Quattrone did not know papers from his unit had been subpoenaed by the government.
Prosecutors maintain, however, that Quattrone had the investigation squarely in mind when he told subordinates to pare their files. Two days before Quattrone sent the message, a company lawyer told him a grand jury probe had heated up. Hours before the electronic message went out, the same in-house lawyer advised Quattrone to get his own legal representation to deal with the investigations.
Forcing prosecutors to prove that defendants knew the specific contents of government subpoenas could severely limit obstruction-of-justice prosecutions to such figures as lawyers, Assistant U.S. Attorney David B. Anders told the appeals court.
"That would offer almost anyone else a built-in defense -- I can't be required to know what's in the subpoenas," Anders said.
But the defense team repeatedly cited last month's Supreme Court ruling on jury instructions that invalidated Arthur Andersen LLP's conviction. The court found that the instructions in the case wrongly allowed the jury to convict the accounting giant without also determining that Andersen acted with criminal intent when it tampered with documents related to client Enron Corp.
Quattrone's lawyers also claimed that the government was out of bounds when it questioned the defendant about a $2 million undisclosed payment from an initial public offering Quattrone handled. Quattrone has not been charged with a crime stemming from the underlying federal investigation of whether IPO shares were doled out as favors to key clients during the Internet boom years.
Anders told the court that Quattrone brought those questions on himself and that they were fair game based on the defense's case. Prosecutors declined to comment further.
"We're pleased with the argument," Pomerantz told reporters outside of the courtroom. "We think we have the better of it, and so we're hopeful."
Quattrone, who managed hundreds of people and earned $120 million in 2000, greeted former colleagues and family members with smiles and hugs before the court session began. Among those who attended on his behalf were a priest, his mother and his sister. Quattrone jokingly referred to the friends and relatives as "his posse."
In the days before yesterday's argument, the defense team had conducted a practice session with judges that included former appeals court judge and independent counsel Kenneth W. Starr.
The U.S. Court of Appeals for the 2nd Circuit could take weeks or even months to hand down a ruling, according to lawyers involved in the case.
"It's a very complex, difficult case argued at the margins of the law," appeals court Judge Richard C. Wesley told the lawyers at the end of the hour-long session.