Menendez Case Brings Back Memories of Computer Associates Prosecution

An interesting article in the New York Times this weekend about the Senator Menendez prosecution brought back memories of an earlier example of the aggressive use of obstruction of justice by the DOJ. According to this weekend’s article entitled How a Last-Ditch Effort to Save Menendez from Prosecution Backfired, Menendez’s attorney met with prosecutors in September 2023 to provide information about certain financial payments that were the subject of government scrutiny in an effort to prevent the Senator from being indicted. As those in the white collar field know, such meetings are not unusual during investigations. According to the Times, despite the meeting, Menendez was indicted in relation to those financial payments less than two weeks later. Again, not an unusual course of events. But there was something of note about the charges in the case. Though not contained in the original indictment, a superseding indictment from March 2024 included a count of obstruction of justice under 18 U.S.C. section 1503 related to that meeting between defense counsel and the prosecution in September. According to the superseding indictment, Menendez engaged in obstruction because he “caused” his counsel to “make statements regarding the bribe money… which statements [he] knew were false, in an effort to interfere with an investigation….” See Superseding Indictment at 62-63 (March 5, 2024). Importantly, the Times makes clear that Menendez’s counsel engaged in no wrongdoing of any kind. 

While the Menendez indictment utilizes a different obstruction statute, the case brings back memories of another obstruction charge from over 20 years ago.

In 2002, the DOJ and SEC investigated accounting practices at a computer software company called Computer Associates. Early in the investigation, the government requested that the company retain counsel and investigate the matter. The company complied and retained an outside law firm in February 2002. The indictment in the case describes what the government alleged happened next.

Shortly after being retained in February 2002, the Company’s Law Firm met with the defendant Sanjay Kumar [former CEO and chairman of the board] and other Computer Associates executives [including Stephen Richards, former head of sales,] in order to inquire into their knowledge of the practices that were the subject of the government investigations. During these meetings, Kumar and others did not disclose, falsely denied and otherwise concealed the existence of the 35-day month [accounting] practice. Moreover, Kumar and others concocted and presented to the company’s law firm an assortment of false justifications, the purpose of which was to support their false denials of the 35-day month practice. Kumar and others knew, and in fact intended, that the company’s law firm would present these false justifications to the United States Attorney’s Office, the SEC and the FBI so as to obstruct and impeded (sic) the government investigations.

… Kumar knew that this explanation was false and intended that the company’s law firm would present this false explanation to the United States Attorney’s Office, the SEC and the FBI as part of an effort to persuade those entities that the accusations of the former salespeople were un- founded and that the 35-day month practice never existed.

See United States v. Kumar, 617 F.3d 612, 616-19 (2d Cir. 2010); see also United States v. Kumar, 2006 WL 6589865 (E.D.N.Y. Feb. 21, 2006); Indictment, United States v. Kumar 30-32 (E.D.N.Y. Sept. 22, 2004).

In response to this alleged conduct, the government in the Computer Associates case indicted the employees with violation of 18 U.S.C. section 1512(c)(2) for seeking to “knowingly, intentionally and corruptly obstruct, influence and impede official proceedings, to wit: the Government Investigations.” In response to the charges, the defense community expressed great alarm and counsel for the employees filed a motion to dismiss. While the motion was denied at the trial level, many anticipated a legal challenge to the charges on appeal if the defendants lost at trial. The higher courts, however, did not have the opportunity to examine the issue as everyone in the matter pleaded guilty.

While there are certainly important distinctions between the Menendez indictment and the Computer Associates case, they both raise important questions about the protections of the role of defense counsel and the future of presentations to the government during the investigatory stage. We will have to wait for the outcome of the trial to see whether the appellate courts have an opportunity to weigh-in on the legal theory this time around. 

(LED)