## Facts

- Anthony Allen and Anthony Conti, U.K. citizens and former Rabobank London employees, worked on the bank’s LIBOR submission process in the 2000s.
- In 2013, during overlapping U.K. and U.S. investigations into LIBOR manipulation, the U.K. Financial Conduct Authority (FCA) compelled Allen and Conti to give testimony under threat of imprisonment.
- The FCA provided only direct-use immunity under U.K. law, not derivative-use immunity.
- In an FCA enforcement matter against coworker Paul Robson, the FCA disclosed to Robson the evidence against him, including Allen’s and Conti’s compelled testimony.
- Robson closely reviewed the compelled testimony, annotated it, and took extensive notes.
- After the FCA dropped its case, U.S. prosecutors obtained Robson’s cooperation; he pleaded guilty and provided information to a U.S. grand jury and later testified at trial.
- Robson’s grand-jury and trial testimony was based in part on his review of Allen’s and Conti’s compelled FCA testimony and materially changed after that exposure.
- Allen and Conti were indicted and, after a pretrial Kastigar hearing, were convicted in the Southern District of New York of wire fraud and conspiracy to commit wire fraud and bank fraud.

## Issues

1. Whether the Fifth Amendment prohibits the use in a U.S. criminal case of testimony compelled by a foreign sovereign.
2. Under Kastigar, what burden the government bears when a key witness has had substantial exposure to a defendant’s foreign-compelled testimony.
3. Whether the government proved that the indictment and trial evidence (including Robson’s testimony) were derived from sources wholly independent of the compelled FCA testimony and, if not, whether any constitutional error was harmless.

## Decision

- The Second Circuit reversed the convictions and dismissed the indictment.
- The court held that the Fifth Amendment bar on the use of compelled testimony in U.S. criminal proceedings applies even when the compulsion is by a foreign government.
- The court held that, where a government witness had substantial exposure to compelled testimony, the government must prove at least that the exposure did not shape, alter, or affect the evidence the government used.
- The court concluded the government failed to satisfy Kastigar because it relied on generalized denials of taint despite evidence that Robson materially altered his account after reviewing the compelled testimony.
- The court found the improper use of the compelled testimony before the grand and petit juries was not harmless beyond a reasonable doubt.

## Legal Principles

- The Self-Incrimination Clause prohibits the use in American criminal proceedings of compelled testimony, regardless of whether a domestic or foreign sovereign compelled it.
- Once a defendant shows compelled testimony, Kastigar places on the prosecution the burden to prove that all evidence it proposes to use is derived from legitimate sources wholly independent of the compelled testimony.
- When a witness has had substantial exposure to a defendant’s compelled testimony, Kastigar requires a specific showing that the exposure did not shape, alter, or affect the witness’s evidence used by the government.
- A bare, generalized denial of taint is insufficient as a matter of law when a witness materially changes testimony after exposure to compelled statements.
- Use of tainted evidence before the grand jury and at trial requires reversal unless the government proves the error harmless beyond a reasonable doubt.

## Conclusion

The Second Circuit held that U.S. prosecutors may not use, directly or indirectly, testimony compelled by a foreign regulator and that the government did not meet its Kastigar burden where its key cooperating witness had substantial exposure to the compelled testimony; it therefore reversed the convictions and dismissed the indictment.


United States v. Allen, 864 F.3d 63 (2d Cir. 2017)