New Jersey Defense Lawyers Challenge Subpoenas That Request Information Regarding The Sources Of Their Fees

The New Jersey Supreme Court heard argument this week on whether criminal defense lawyers can be required to turn over documents detailing the origin of their fee payments while a criminal case is pending against their client.  The Court’s decision could have a significant effect on criminal practice in New Jersey.  

In the underlying case, thirty-four individuals were indicted for racketeering and conspiracy. Prosecutors claim that they were part of an international criminal gambling enterprise that involved $2.2 billion in bets over a 15-month period.

Ten days after the indictment, the State opened a new investigation into alleged post-indictment money laundering activities by some of the thirty-four defendants. Prosecutors eventually served grand jury subpoenas on their defense attorneys for payment receipts, bank deposit tickets, payment ledgers, check copies and other records.  The defense lawyers appealed the trial court’s decision denying their Motion to Quash the Subpoenas.

The Appellate Division found that prosecutors could secure attorney’s fee records by subpoena in the investigation of defendant’s post-indictment activities.  The Appellate Division, however, stayed the enforcement of the subpoenas until the criminal matter was resolved.

Before the New Jersey Supreme Court, the New Jersey Attorney General argued that the stay effectively quashed the subpoenas and shut down the grand jury investigation.  Additionally, the State expressed its concern to the Court that the five-year statute of limitations will run before the underlying criminal matter has resolved.

The defense lawyers argued that allowing prosecutors to subpoena defendants’ attorney records before the underlying cases have resolved would dissuade lawyers from handling such criminal matters. In other words, it would have a significant chilling effect on the ability of defendants to retain counsel, because attorneys would be wary of becoming part of a money laundering probe. Additionally, providing these types of records would give prosecutors unfair access to discovery activities and trial strategy, although producing the records in redacted form could alleviate such concerns.

In response to these arguments, the State argued that there no indication that lawyers would be dissuaded from taking these types of cases.  The State added that enforcing the subpoenas would send a message to defense attorneys that they should know where their payments are coming from and that defendants can not use tainted funds to cover their legal bills.

Defense lawyers throughout the state eagerly await the Court’s decision.   A decision in favor of the State will have lasting effects on the representation of criminal defendants in New Jersey.

The case is In re State Grand Jury Investigation, case number 072552, before the New Jersey Supreme Court.