Eleventh Circuit Rejects Criminal Defendant’s Claim That Digital Technology Requires Increased Scrutiny Of Federal Prosecutors’ Improper Review of Privileged Emails

The Eleventh Circuit recently refused to set aside a bank fraud conviction, rejecting defendant’s argument that advances in technology should change the way court’s adjudicate alleged violations of attorney-client privilege.  While the appellate court agreed that defendant’s attorney-client privilege was breached by federal prosecutors, the court refused to overturn defendant’s 78-month sentence because he had failed to meet his burden to show he was prejudiced by the privilege breach.

 

The defendant, Stephen DeLuca, the president and sole shareholder of Delco Oil, Inc. in Florida, was convicted (after a mistrial) of fraudulently submitting false statement to lending institutions regarding the company’s accounts receivable and inventory and obtaining loans on reliance on the fraudulent information.

 

When the FBI raided Defendant’s office and seized computers and hard drives prior to his indictment, DeLuca notified the government that the data included privileged communications. The government offered, and DeLuca signed, a stipulation providing a procedure to exclude privileged communications from the investigation.  It provided that an FBI computer analyst would segregate any communications to or from DeLuca’s attorneys based on a list of attorneys provided by DeLuca.  These segregated communications would then go to an FBI “filter team” who were not members of the prosecution team, who would notify DeLuca if it believed any communications were not privileged, or that the privilege had been waived.  DeLuca could then dispute the determination, and the communications at issue would not be provided to the prosecution team until a magistrate judge ruled as to privilege.

 

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