X
    X
    X
    X

    Locke Lord QuickStudy: Fifth Circuit Creates Confession Carve Out for Corporate Criminal Defendants

    Locke Lord Publications

    White CollarA fundamental pillar of criminal law has long been a defendant’s Sixth Amendment right to confront their accuser. Part and parcel to a defendant’s Sixth Amendment right is the “Bruton doctrine,” which precludes out-of-court confessions by a non-testifying defendant that incriminate another defendant.1 The Fifth Circuit’s recent opinion in United States v. Gibson,2 however, makes clear that the Bruton doctrine will not insulate criminal defendants from confessions by non-testifying co-defendants that refer to non-defendant corporate entities as opposed to individual defendants.

    Defendant Gibson, III (“Gibson”), was the President, CEO, and Administrator for a Partial Hospitalization Program (“PHP”) in Houston, Texas, when he was convicted on a mix of substantive and conspiracy counts for healthcare fraud, Anti-Kickback violations, and money laundering.3 At Gibson’s trial, an FBI agent testified that Gibson’s co-defendant, who was also an employee of the PHP, confessed that the PHP would pay cash for patient referrals and that the co-defendant received checks in connection with the referrals.4 The co-defendant did not testify at the trial.

    As the President, CEO, and Administrator of the PHP, Gibson argued that this violated his Sixth Amendment right and presented what is known as a “Bruton problem” because Gibson was not able to confront the confessing employee.6 As the Gibson Court itself explained, if a confession of a non-testifying witness “obviously refer[s] directly to someone, often obviously the defendant,” it violates the Sixth Amendment under Bruton.7

    Still, the Fifth Circuit ruled against Gibson. Despite Gibson’s managerial role, the court reasoned that the confession did not specifically name Gibson or obviously refer to Gibson — only the PHP as an entity.8 Therefore, given the many employees at the non-defendant PHP, the confession would not “powerfully incriminat[e]” Gibson before the jury.9

    The Fifth Circuit also made it clear that the Gibson carve out is undoubtedly the Circuit’s interpretation of the Bruton doctrine. The Gibson Court specifically expounded on its recent opinion in United States v. Nanda.10 The trial court in Nanda admitted into evidence a letter from a non-testifying co-defendant confessing to corporate wrongdoings by a corporate entity that did not mention any specific individuals.11 Even though the government repeatedly stressed that defendant Nanda was a central figurehead of the company throughout trial, the Fifth Circuit held that there was no Bruton violation because the letter only referenced the non-defendant corporate entity.12 Given that the corporate wrongdoing involved a number of other individuals, the Fifth Circuit in both cases reasoned that the “confession ‘could have referred to any of them.’”13

    The Fifth Circuit’s Gibson opinion also creates a Circuit split. The Eleventh Circuit, in United States v. Schwartz,14 held that admitting the confession of a non-testifying co-defendant that incriminated an unindicted company that defendant Schwartz controlled was a Bruton violation. Contrary to Gibson, the Schwartz Court reasoned that “the Government was relying on the jury to equate Schwartz with the corporations named in the codefendant statement . . . .”15 While a Circuit split never guarantees Supreme Court review, the Court could very well clarify the issue in the future.

    The takeaway from Gibson is clear — the Government will view employee confessions incriminating a non-defendant entity as fair game in a criminal trial, and such admissions are virtually immune from confrontation when the declarant does not testify. Corporate executives in managerial roles should be more incentivized than ever to employ the use of internal investigations to detect criminal activity immediately upon suspecting any irregularities.

    ---

    [1] See United States v. Bruton, 391 U.S. 123 (1968).  See also Gray v. Maryland, 523 U.S. 185 (1998); Richardson v. Marsh, 481 U.S. 200 (1987).

    [2] 875 F.3d 179 (5th Cir. 2017).

    [3] Id. at 184–85.

    [4] Id. at 194–95.

    [5] Id.

    [6] Id.

    [7] Id.

    [8] Id.

    [9] Id.

    [10] 867 F.3d 522 (5th Cir. 2017).

    [11] Id. at 526–28.

    [12] Id.

    [13] Gibson, 875 F.3d at 194–95; Nanda, 867 F.3d at 527–28.

    [14] 541 F.3d 1331 (11th Cir. 2008).

    [15] Id. at 1353.

    Explore Additional Topics

    Disclaimer

    Please understand that your communications with Locke Lord LLP through this website do not constitute or create an attorney-client relationship with Locke Lord LLP. Any information you send to Locke Lord LLP through this website is on a non-confidential and non-privileged basis. Therefore, do not send or include any information in your email that you consider to be confidential or privileged.