Rights of U.S. Citizens Abroad

Many criminal statutes that are now used in white-collar prosecutions originated in far different contexts. The Racketeer Influenced and Corrupt Organizations Act (RICO) (18 U.S.C. ” 1961 et seq.) was enacted in 1970 to fight the “highly sophisticated, diversified and widespread” activity of organized crime, as was the 1968 wiretap law (18 U.S.C. ” 2510 et seq.). Now, both are often used in white-collar prosecutions. Similarly, statutes enacted to fight the “war on drugs” came to have significant impact on business prosecutions. The same may turn out to be true of the government's newly acquired weapons in the “war on terror.” For example, two recent Second Circuit decisions may have serious implications for the constitutional rights of U.S. citizens living abroad who become involved in increasingly global antitrust and anti-bribery investigations. The cases, however, are about the 1998 bombings of American embassies in Nairobi, Kenya, and Dar es Salaam, Tanzania. In re Terrorist Bombings of U.S. Embassies in East Africa (Fourth Amendment Challenges), 552 F.3d 157 (2d Cir. 2008), petition for cert. filed (U.S. Aug. 31, 2009) (No. 09-6231); In re Terrorist Bombings of U.S. Embassies in East Africa (Fifth Amendment Challenges), 552 F.3d 177 (2d Cir. 2008), cert. denied, Odeh v. United States, 129 S. Ct. 2765 (2009).

Fourth Amendment Rights Abroad

Thirty-five years ago, the Second Circuit characterized as “well settled” that “the Bill of Rights has extraterritorial application to the conduct abroad of federal agents directed against United States citizens.” United States v. Toscanino, 500 F.2d 267, 280 (2d Cir. 1974). Accordingly, it ruled that Fourth Amendment protections against search and seizure applied beyond the “continental limits” of the United States. No exceptions were carved out. In Embassies in East Africa, however, it restricted its pronouncement because that decision did not expressly address the extraterritorial application of the Warrant Clause, which prohibits searches without a warrant based on probable cause except in exigent circumstances such as an arrest.

Defendant Wadih El-Hage, a U.S. citizen and one of the defendants on trial for the bombings, moved to suppress evidence from a warrantless search of his residence in Kenya based in part on electronic surveillance in that country. The district court recognized that U.S. citizens abroad have some Fourth Amendment rights, but was “unclear” whether the Warrant Clause applied. The court then held: 1) evidence gathered pursuant to the “foreign intelligence” exception would not be suppressed; 2) even if the Warrant Clause was inapplicable, the search still had to be reasonable; and 3) the search was reasonable. The Second Circuit affirmed notwithstanding Toscanino, calling the decision a matter of first impression because neither the U.S. Supreme Court nor any other circuit court had addressed this question squarely. Although the Fourth Amendment does apply to searches conducted by the U.S. government against U.S. citizens abroad, a warrant is not required. Searches merely have to be “reasonable.”

The court based its decision in part on United States v. Verdugo-Urquidez, 494 U.S. 259 (1990), which held that the Fourth Amendment did not apply to searches performed by U.S. agents outside U.S. borders, against non-U.S. citizens. It also agreed with the Ninth Circuit that “foreign searches have neither been historically subject to the warrant procedure, nor could they be as a practical matter.” Embassies in East Africa, 552 F.3d at 170, citing United States v. Barona, 56 F.3d 1087, 1092 n.l (9th Cir 1995). It concluded that “foreign searches of U.S. citizens conducted by U.S. agents are subject only to the Fourth Amendment's requirement of reasonableness.”

Although these decisions were in the national security context, it is unlikely that a different result will obtain in white-collar cases. U.S. employees working for U.S. companies overseas will likely not be protected by the principle that warrantless searches are per se unreasonable and permitted in only limited exceptions. Evidence that could not be seized in the United States without a search warrant can be seized from a foreign office or residence, provided that the search, in hindsight, was “reasonable.” With little or no prior judicial oversight, the mere fact of finding incriminating evidence may bootstrap a search without probable cause into reasonableness.

Fifth Amendment Rights Abroad

In a parallel decision regarding Fifth Amendment rights, the defendants also challenged statements made to U.S. agents during their detentions and interrogations in Africa. The district court refused to suppress statements made by the defendants during the extraterritorial investigation, finding that the oral warnings provided by the U.S. agents were sufficient to inform defendants of their Miranda rights. Embassies in East Africa, 552 F.3d 177 (2d Cir. 2008).

“The applicability of the Fifth Amendment to this prosecution differs from our analysis of the Fourth Amendment's applicability,” the panel's opinion explained at the outset. Unlike unreasonable searches and seizures, which the Fourth Amendment prohibits “regardless of whether unlawfully obtained evidence is ever offered at trial, a violation of the Fifth Amendment's right against self-incrimination occurs only when a compelled statement is offered at trial against the defendant.” Thus, under the Fifth Amendment, it does not matter if the origin of the statement is foreign or domestic or the declarant is foreign or domestic: the statement cannot be admitted at a U.S. trial if it was “compelled.” In other words, the principles underlying Miranda warnings do apply to overseas interrogations because “no person” tried in the civilian courts of the United States can be compelled “to be a witness against himself.” Nevertheless, the panel held that U.S. agents abroad do not need to recite Miranda warnings verbatim to U.S. citizens detained overseas. “Where a suspect has no entitlement to counsel under law of the foreign land, it would be misleading to inform him falsely that he was guaranteed the presence or appointment of an attorney ' and Miranda does not require the provision of false assurances.” Because U.S. law does not “govern the terms of their detention or interrogation” abroad, it was not improper for the U.S. agents handling the interrogation to acknowledge “the possible disparity between rights established by the U.S. Constitution, on the one hand, and the availability of counsel and entitlement to the assistance of counsel under the law of the detaining authority, on the other hand.” Miranda does not require U.S. agents to study a suspect's rights under local criminal procedure and provide that information before questioning a suspect detained overseas, the court concluded.

The panel repeatedly cited Duckworth v. Eagan, 492 U.S. 195 (1989), a case concerning a domestic investigation, which refused to endorse a “rigid” application of Miranda. By analogy to Duckworth, the Second Circuit decided that U.S. agents may merely inform the detainee “that counsel rights depend on local law, and that U.S. agents will afford the accused whatever rights are available under local law.”

The Second Circuit's curtailment of Fifth Amendment rights in cross-border law enforcement shows the other side of the location issue, after the Supreme Court refused to recognize a right to remain silent in the United States based on fear of foreign prosecution. United States v. Balsys, 524 U.S. 666 (1998) left open the possibility that the right to remain silent under the Fifth Amendment would apply to situations of a truly “cooperative prosecution” between the U.S. government and a foreign government. However, the Third Circuit has severely limited that exception, finding “cooperative prosecution” only where “prosecutorial actions at issue essentially transform foreign efforts into a domestic prosecution.” In re Impounded, 178 F.3d 150 (3d Cir. 1999). A mere joint investigation between the U.S. and foreign governments is not enough to trigger the right to remain silent, unless there is a fear of domestic prosecution.

Conclusion

The globalization of the U.S. economy has brought with it the globalization of criminal investigations, especially in antitrust and FCPA cases. Today, with the expanded number of treaties and memoranda of understanding between the United States and foreign governments, evidence is gathered from around the world for U.S. prosecutions. Yet, the message to U.S. citizens working abroad is that the scope of constitutional rights differs based on the location. U.S. citizens under criminal investigation by U.S. agents while located overseas cannot rely on the well-established protections of warrants and Miranda warnings. This development is fraught with risk, especially because of the expansive theories of liability used by the U.S. Department of Justice in its ever expanding international investigations.

Jonathan S. Feld ([email protected]), a member of this newsletter's Board of Editors, is a partner at the national law firm Katten Muchin Rosenman LLP, where he focuses on civil and criminal enforcement matters. Laura A. Brake is an associate in the firm's Litigation Department.

Many criminal statutes that are now used in white-collar prosecutions originated in far different contexts. The Racketeer Influenced and Corrupt Organizations Act (RICO) (18 U.S.C. ” 1961 et seq.) was enacted in 1970 to fight the “highly sophisticated, diversified and widespread” activity of organized crime, as was the 1968 wiretap law (18 U.S.C. ” 2510 et seq.). Now, both are often used in white-collar prosecutions. Similarly, statutes enacted to fight the “war on drugs” came to have significant impact on business prosecutions. The same may turn out to be true of the government's newly acquired weapons in the “war on terror.” For example, two recent Second Circuit decisions may have serious implications for the constitutional rights of U.S. citizens living abroad who become involved in increasingly global antitrust and anti-bribery investigations. The cases, however, are about the 1998 bombings of American embassies in Nairobi, Kenya, and Dar es Salaam, Tanzania. In re Terrorist Bombings of U.S. Embassies in East Africa (Fourth Amendment Challenges), 552 F.3d 157 (2d Cir. 2008), petition for cert. filed (U.S. Aug. 31, 2009) (No. 09-6231); In re Terrorist Bombings of U.S. Embassies in East Africa ( Fifth Amendment Challenges ), 552 F.3d 177 (2d Cir. 2008), cert. denied , Odeh v. United States , 129 S. Ct. 2765 (2009).

Fourth Amendment Rights Abroad

Thirty-five years ago, the Second Circuit characterized as “well settled” that “the Bill of Rights has extraterritorial application to the conduct abroad of federal agents directed against United States citizens.” United States v. Toscanino , 500 F.2d 267, 280 (2d Cir. 1974). Accordingly, it ruled that Fourth Amendment protections against search and seizure applied beyond the “continental limits” of the United States. No exceptions were carved out. In Embassies in East Africa, however, it restricted its pronouncement because that decision did not expressly address the extraterritorial application of the Warrant Clause, which prohibits searches without a warrant based on probable cause except in exigent circumstances such as an arrest.

Defendant Wadih El-Hage, a U.S. citizen and one of the defendants on trial for the bombings, moved to suppress evidence from a warrantless search of his residence in Kenya based in part on electronic surveillance in that country. The district court recognized that U.S. citizens abroad have some Fourth Amendment rights, but was “unclear” whether the Warrant Clause applied. The court then held: 1) evidence gathered pursuant to the “foreign intelligence” exception would not be suppressed; 2) even if the Warrant Clause was inapplicable, the search still had to be reasonable; and 3) the search was reasonable. The Second Circuit affirmed notwithstanding Toscanino, calling the decision a matter of first impression because neither the U.S. Supreme Court nor any other circuit court had addressed this question squarely. Although the Fourth Amendment does apply to searches conducted by the U.S. government against U.S. citizens abroad, a warrant is not required. Searches merely have to be “reasonable.”

The court based its decision in part on United States v. Verdugo-Urquidez , 494 U.S. 259 (1990), which held that the Fourth Amendment did not apply to searches performed by U.S. agents outside U.S. borders, against non-U.S. citizens. It also agreed with the Ninth Circuit that “foreign searches have neither been historically subject to the warrant procedure, nor could they be as a practical matter.” Embassies in East Africa , 552 F.3d at 170, citing United States v. Barona , 56 F.3d 1087, 1092 n.l (9th Cir 1995). It concluded that “foreign searches of U.S. citizens conducted by U.S. agents are subject only to the Fourth Amendment's requirement of reasonableness.”

Although these decisions were in the national security context, it is unlikely that a different result will obtain in white-collar cases. U.S. employees working for U.S. companies overseas will likely not be protected by the principle that warrantless searches are per se unreasonable and permitted in only limited exceptions. Evidence that could not be seized in the United States without a search warrant can be seized from a foreign office or residence, provided that the search, in hindsight, was “reasonable.” With little or no prior judicial oversight, the mere fact of finding incriminating evidence may bootstrap a search without probable cause into reasonableness.

Fifth Amendment Rights Abroad

In a parallel decision regarding Fifth Amendment rights, the defendants also challenged statements made to U.S. agents during their detentions and interrogations in Africa. The district court refused to suppress statements made by the defendants during the extraterritorial investigation, finding that the oral warnings provided by the U.S. agents were sufficient to inform defendants of their Miranda rights. Embassies in East Africa, 552 F.3d 177 (2d Cir. 2008).

“The applicability of the Fifth Amendment to this prosecution differs from our analysis of the Fourth Amendment's applicability,” the panel's opinion explained at the outset. Unlike unreasonable searches and seizures, which the Fourth Amendment prohibits “regardless of whether unlawfully obtained evidence is ever offered at trial, a violation of the Fifth Amendment's right against self-incrimination occurs only when a compelled statement is offered at trial against the defendant.” Thus, under the Fifth Amendment, it does not matter if the origin of the statement is foreign or domestic or the declarant is foreign or domestic: the statement cannot be admitted at a U.S. trial if it was “compelled.” In other words, the principles underlying Miranda warnings do apply to overseas interrogations because “no person” tried in the civilian courts of the United States can be compelled “to be a witness against himself.” Nevertheless, the panel held that U.S. agents abroad do not need to recite Miranda warnings verbatim to U.S. citizens detained overseas. “Where a suspect has no entitlement to counsel under law of the foreign land, it would be misleading to inform him falsely that he was guaranteed the presence or appointment of an attorney ' and Miranda does not require the provision of false assurances.” Because U.S. law does not “govern the terms of their detention or interrogation” abroad, it was not improper for the U.S. agents handling the interrogation to acknowledge “the possible disparity between rights established by the U.S. Constitution, on the one hand, and the availability of counsel and entitlement to the assistance of counsel under the law of the detaining authority, on the other hand.” Miranda does not require U.S. agents to study a suspect's rights under local criminal procedure and provide that information before questioning a suspect detained overseas, the court concluded.

The panel repeatedly cited Duckworth v. Eagan , 492 U.S. 195 (1989), a case concerning a domestic investigation, which refused to endorse a “rigid” application of Miranda. By analogy to Duckworth, the Second Circuit decided that U.S. agents may merely inform the detainee “that counsel rights depend on local law, and that U.S. agents will afford the accused whatever rights are available under local law.”

The Second Circuit's curtailment of Fifth Amendment rights in cross-border law enforcement shows the other side of the location issue, after the Supreme Court refused to recognize a right to remain silent in the United States based on fear of foreign prosecution. United States v. Balsys , 524 U.S. 666 (1998) left open the possibility that the right to remain silent under the Fifth Amendment would apply to situations of a truly “cooperative prosecution” between the U.S. government and a foreign government. However, the Third Circuit has severely limited that exception, finding “cooperative prosecution” only where “prosecutorial actions at issue essentially transform foreign efforts into a domestic prosecution.” In re Impounded, 178 F.3d 150 (3d Cir. 1999). A mere joint investigation between the U.S. and foreign governments is not enough to trigger the right to remain silent, unless there is a fear of domestic prosecution.

Conclusion

The globalization of the U.S. economy has brought with it the globalization of criminal investigations, especially in antitrust and FCPA cases. Today, with the expanded number of treaties and memoranda of understanding between the United States and foreign governments, evidence is gathered from around the world for U.S. prosecutions. Yet, the message to U.S. citizens working abroad is that the scope of constitutional rights differs based on the location. U.S. citizens under criminal investigation by U.S. agents while located overseas cannot rely on the well-established protections of warrants and Miranda warnings. This development is fraught with risk, especially because of the expansive theories of liability used by the U.S. Department of Justice in its ever expanding international investigations.

Jonathan S. Feld ([email protected]), a member of this newsletter's Board of Editors, is a partner at the national law firm Katten Muchin Rosenman LLP, where he focuses on civil and criminal enforcement matters. Laura A. Brake is an associate in the firm's Litigation Department.