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Troubling twist on Sarbanes-Oxley Act

By Diane Karpman

Diane Karpman
Karpman

There is an unwritten rule that you are not supposed to talk about currently pending cases. But there is also a breathtaking new case in Connecticut that demonstrates a completely unanticipated application of ideas whose genesis is the Sarbanes-Oxley legislation. It has scary implications.

A lawyer for a church is indicted for obstruction of justice because he destroyed “evidence” contained in a former choir director’s laptop. The computer contained child pornography. The lawyer is charged with violations of the Sarbanes-Oxley Act. The act was designed to prevent accountants from shredding documents if an investigation was foreseeable, rather than already pending.

“Whoever knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States or any case filed under title 11, or in relation to or contemplation of any such matter or case, shall be fined under this title, imprisoned not more than 20 years, or both.” This section (18 U.S.C. § 1519) applies to everyone, not just publicly traded companies. 

The sequence of events in the Connecticut case is troubling. Unbeknownst to anyone, the FBI began a criminal investigation of the church’s choirmaster on Oct. 6. On Oct. 7, another church employee (maybe the Church Lady?) discovers the porn on the choirmaster’s computer. On Oct. 8, church officials sealed and wrapped the laptop, treating it as evidence, and retained the services of the lawyer. On Oct. 9, church officials and the lawyer confronted the choirmaster. Also on Oct. 9, the lawyer took the laptop apart, thereby causing the computer to be unavailable for an official proceeding.

The government is not claiming that the defendant attorney had either actual knowledge or reason to know of the law enforcement investigation of the choirmaster, or any activity involving the laptop. Lawyers cannot destroy evidence, and Rule 5-220 prohibits the suppression of evidence.

But what are you supposed to do, let your client sit with a ticking time bomb waiting for the federal prosecutors to investigate? There are literally hundreds of federal agencies, from the Department of Justice, to the postal service, to the Veterans Administration that you can now worry about.

Just where are we and our clients going to put all the things that could be classified within the penumbra of this section? Just about all lawyers’ garages are filled with former client files. Does this case suggest that in addition to the files, we should be adding all computers, cell phones or other stuff? 

By the way, this is not just any local street front church, but has many prominent parishioners. It was the boyhood church attended by former President George H.W. Bush (41), while growing up in Greenwich, Conn. (New York Times 2-26-07.)

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