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If you hire US counsel, listen to them

A word of advice to foreign entities or citizens who elect to retain US counsel in connection with criminal and/or regulatory investigations: if you go through the trouble of hiring them, then listen to them.

Afghanistan: US regulatory agencies are on the prowl Pal Teravagimov

I recently was retained by an Afghanistan national/bank owner and Afghanistan bank after the national was visited and contacted on several occasions by representatives of the Department of Treasury and SIGAR (Special Inspector General for Afghanistan Reconstruction).  Following years of tax payer money poured into Afghanistan and “diverted” from its intended purpose (having spent time in Afghanistan on another investigation, stories from the field are infuriating), the Department of Justice has decided to try and “follow the money” in an effort to recoup what it can.

Convinced based on what I was told that the Afghanistan bank I was hired to represent was intent on revamping procedures to avoid blacklisting and interested in helping US investigators in their efforts, I was able to secure a meeting with a high ranking Treasury Department official as well as members of the DOJ task force assigned to the investigation in an effort to learn of and understand their concerns; before doing that, the Afghanistan bank was informed of the consequences of me doing this if the bank subsequently decided not to follow through with its expressed intentions.

 The agreed upon plan was to do what US regulators, prosecutors and the International Financial Crimes Task Force considered necessary and appropriate to be able to avoid blacklisting and hold the bank up as an example to other Afghanistan financial institutions.  Following a meeting with the Afghanistan national in Dubai to address questions of interest to the DOJ prosecutors, it became apparent that I needed confirmation and additional information.  The client declined to allow me access and to provide the requested information, and I was forced to withdraw. The suspicions of Treasury and DOJ thus were confirmed.

Having placed the Afghanistan clients in a very favorable position with US authorities, and well on the way to accomplishing the planned objective, the clients took umbrage at what the US authorities were requesting in the way of information and cooperation.   

Thus my advice. If you hire US counsel to help you with criminal and/or regulatory problems in the States, listen to them.  Otherwise, don’t engage such help.  You can do yourself more harm than good in believing you can use US counsel only as a mouthpiece, and can talk your way out of a problem. 

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12 September 2014

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