Friday, November 15, 2013

From Criminal to Star Witness – The Paradox of Cooperating Witnesses in White Collar Cases

Frank DiPascali Mug Shot

Despite Bernie Madoff’s claim that he alone perpetrated the roughly seventeen billion dollar ponzi scheme, the government has pursued charges against a number of other individuals.  After a five-year investigation, at the heart of the prosecution’s case is a cooperating witness.  In August 2009, Frank DiPascali, Madoff's former Chief Financial Officer, pled guilty to ten counts of fraud, conspiracy, and other charges, and admitted to the court, “I helped Bernie Madoff and other people carry out a fraud."  In the ongoing case that began in October against five former employees of Madoff’s financial firm, DiPascali is expected to testify and provide key evidence in hope of reducing the length of the prison sentence he will likely receive. 

Because conspiracies are secret by their nature, prosecutors often rely on cooperating witnesses to prove these cases.   A cooperating witness is a person who participated in the crime and is willing to assist the investigation and/or testify about the roles played by the co-conspirators.  Usually a witness cooperates in hope of mitigating the severity of the punishment the witness faces for his own involvement in the criminal activity.  These cooperation agreements are typically included within a plea agreement and require the witness to admit his criminal conduct, plead guilty, and agree to assist the government in its investigation and prosecution of other individuals.  If the government deems the assistance “substantial,” it will file what is known as a §5K1.1 motion and request that the court depart downward from the recommended guidelines sentencing range for the cooperating witness.  In turn, this reduces the witness’s likely punishment.

The government’s use of cooperating witnesses such as DiPascali has raised concerns in recent years about jurors’ overreliance on cooperating witness testimony and the justice system’s inability to balance out that effect.  Neuschatz et al. (2008) conducted one of the first psychological studies regarding the effect of informant and cooperating witness testimony on juror decision making.  In that study, participants acting as jurors read trial transcripts that included testimony from an accomplice who allegedly acquired information through involvement in the alleged crime.[1]  The experimenters manipulated whether the jurors also learned that the cooperating witness received sentencing incentives in exchange for his/her testimony.  The participants were then asked questions regarding whether they would convict the defendant, and to what they attributed the witness’s motivation for coming forward.  The results indicated that information about the cooperating witness’ incentive (e.g., leniency or reward) did not affect participants’ verdict decisions.  With regard to the witness’s motivation for testifying, the experimenters noted that the participants overwhelmingly committed what is known as the fundamental attribution error – they ignored the contextual and situation factors (i.e., receiving leniency) and instead attributed the witness’s motivation to dispositional factors (i.e., the witness wanted to “do the right thing”).  Essentially, the jurors accepted the witness’s testimony without considering the witness’s motive or inducement to fabricate.

Beyond the limited social psychology research on the topic, many other concerns about cooperating witness testimony have emerged.  For instance, some surmise that, because cooperating witnesses in white collar criminal prosecutions are less likely to have extensive criminal backgrounds and appear sophisticated and presentable, jurors may be more likely to believe them than the typical jailhouse “snitch.”[2]  Many have also noted the “cooperation paradox” as a sign of the unfairness of the use of cooperating witnesses: those who are the most culpable, have the most information about the criminal activity, and face the greatest penalties are the ones most likely to be offered cooperation deals to testify against low-level individuals.[3]

Defendants have also been somewhat restricted by the courts in their ability to attack cooperating witness testimony.  In Daubert v. Merrill Dow Pharmaceuticals Inc., the Supreme Court noted at least three safeguards the accused has to discredit unreliable testimony: (i) cross examination, (ii) presentation of contrary evidence, such as that provided by expert witnesses, and (iii) judicial instructions to the jury.  However, the Fifth Circuit recently affirmed the district court’s refusal to allow defense counsel to cross examine a cooperating witness regarding the witness’s actual exposure under the Federal Sentencing Guidelines.  The Fifth Circuit held that these limitations did not violate the Confrontation Clause.  Additionally, the Fourth Circuit held that understanding the ramifications a cooperating witness’s plea agreement, and thus the witness's motivations, did not require expert testimony.  Rather, this was a matter of “common sense” and one that the jury could decide for itself without the aid of expert testimony.

This is not to say that the government’s use of cooperating witness testimony is completely without safeguards.  Prosecutors have a constitutional duty to disclose any incentives offered to cooperating witnesses in addition to strict ethical guidelines to disclose information regarding cooperation agreements.  Courts have also adopted cautionary jury instructions regarding how much weight the jury should give to cooperators’ testimony.  Ultimately, perhaps the best safeguard is a skillful cross examination.  Richard Bistrong, who in 2007 cooperated with the FBI and Department of Justice and testified against others in a criminal Foreign Corrupt Practices Act case, endured three weeks of cross examination by six separate defense attorneys.  Afterward, he explained that “[i]t was difficult and there was nothing that could have prepared me for what I endured on the stand over that period of time.”

Kyle O'Grady
Senior Editor, Criminal Law Practitioner

Image by United States Marshals Service [Public domain], via Wikimedia Commons.

[1] Control groups in the study were not exposed to testimony from the cooperating witness.
[2] Ellen S. Podgor, White-Collar Cooperators: The Government in Employer-Employee Relationships, 23 Cardozo L. Rev. 795, 802-803 (2002).
[3] See, e.g., id. at 799; Stephen J. Schulhofer, Rethinking Mandatory Minimums, 28 Wake Forest L. Rev. 199, 212 (1993).


  1. Interesting outcome from the psychological study involved in relation to white-collar defendants. Based on that result, it seems the resources and means available under the law for defendants are both limited and insignificant, and possibly creating a Fifth Amendment due process problem.

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