## Facts

- A federal grand jury investigated whether a Pennsylvania consulting firm and its president violated the Foreign Corrupt Practices Act (FCPA) by making corrupt payments to secure business with a foreign, state-owned bank.
- The firm earned nearly $8 million in success fees from projects for which a bank official served as operations leader.
- The firm paid more than $3.5 million to the bank official’s sister, despite no evidence she worked on the financed projects or otherwise provided meaningful services.
- A lawyer maintained an office at the firm and had periodic consultations with the firm’s president, including brief interactions about one successful project.
- The president told the lawyer he planned to pay the bank official to prevent delays; the lawyer advised what aspects of contemplated conduct would be illegal.
- The government issued a grand jury subpoena to the lawyer seeking testimony about communications and advice.
- The firm and its president moved to quash based on attorney-client privilege and work-product protection.
- The government sought enforcement under the crime-fraud exception and submitted an ex parte affidavit describing investigative facts supporting suspected FCPA violations.
- The district court found a sufficient basis to proceed, conducted an in camera examination of the lawyer outside the presence of both sides, ruled the crime-fraud exception applied, and ordered the lawyer to testify.

## Issues

1. What standard governs whether a district court may conduct an in camera examination of a witness when the government invokes the crime-fraud exception?
2. Whether the district court abused its discretion by using ex parte materials and non-adversarial in camera procedures in a grand jury privilege dispute.
3. Whether the district court abused its discretion in finding the crime-fraud exception defeated attorney-client privilege and work-product protection, compelling the lawyer’s grand jury testimony.

## Decision

- The Third Circuit affirmed the order enforcing the subpoena and compelling the lawyer’s testimony.
- The court held that the threshold standard from United States v. Zolin applies to deciding whether to conduct an in camera examination of a witness in the crime-fraud context.
- The court held the district court did not abuse its discretion in relying on an ex parte affidavit and using closed in camera questioning procedures given grand jury secrecy and the court’s discretion to structure review.
- The court held the district court did not abuse its discretion in concluding there was a reasonable basis to suspect (i) an FCPA violation and (ii) use of the lawyer’s advice in furtherance of that violation.

## Legal Principles

- A court may conduct in camera review (including in camera examination of a witness) upon a factual basis adequate to support a good-faith belief by a reasonable person that in camera scrutiny may reveal evidence establishing the crime-fraud exception.
- The crime-fraud exception applies where there is a reasonable basis to suspect (1) the client was committing or intending to commit a crime or fraud and (2) the attorney’s services were used in furtherance of that misconduct.
- District courts have substantial discretion to craft ex parte and in camera procedures in grand jury matters to protect secrecy while evaluating privilege claims.
- Appellate review of the ultimate application of the crime-fraud exception is for abuse of discretion, with underlying legal questions reviewed de novo.

## Conclusion

The Third Circuit upheld enforcement of a grand jury subpoena compelling an attorney’s testimony, ruling that Zolin’s threshold governs in camera witness examinations and that ex parte, non-adversarial in camera procedures may be used in grand jury investigations when the record supports applying the crime-fraud exception to pierce privilege.


In re Grand Jury Subpoena, 745 F.3d 681 (3d Cir. 2014)