What to do when a guy like John Rusnak walks into your law office - a good-looking banker with a heretofore unblemished record, now publicly blamed by his bosses for what could be one of the biggest financial frauds of all time?
The first task at hand, say veteran white-collar defense lawyers: get him to tell you the truth. The whole truth. As Rusnak's attorneys worked on damage control yesterday - announcing that their client was neither a fugitive nor a thief and that he was "cooperating" with authorities - other lawyers who specialize in such cases said the most important first step is finding out what happened.
Another key for the defense lawyer, the experts said, is to establish whether the client intended to defraud - something a prosecutor must prove in such a case.
"That's why it's critical to have the facts before you have anything else," said Franklin B. Velie, a white-collar defense lawyer at the Salans law firm in New York and a former federal prosecutor. "I tell people it's absolutely essential that they tell me the truth, no matter how embarrassing it is."
The second step: managing the media attention that comes with a major bank's allegation that $750 million of its money is gone - and your client is responsible.
Larry S. Gondelman, who focuses on white-collar criminal cases and securities enforcement investigations at Akin, Gump, Strauss, Hauer & Feld in Washington, said there's good reason for Rusnak's attorneys to quickly say their client didn't take money.
"You would want to know [from the client], Did any of this end up in your pocket, directly or indirectly?" Gondelman said. "If it didn't, and he's doing his job and it went bad, you've got something you can work with. He is not an embezzler. You can present him much more sympathetically than if he's stealing."
Why does that matter when the client still may have committed a crime? In such a high-profile case, Gondelman said, public perception is bound to affect how vigorously prosecutors and regulators pursue a penalty.
The third challenge: managing the client. Solomon L. Wisenberg, a Washington white-collar defense attorney who was a deputy independent counsel in the Whitewater investigation, wrote in an article on white-collar "prospects" that a client like Rusnak, no matter how sophisticated, is usually scared. "He wants to be told that things really are not that bad or that it is possible he will not be charged with a crime," Wisenberg wrote on Findlaw.com. "Give him hope, if it is ethically possible to do so."
Other advice includes: "Tell your client to shut his or her mouth."
Above all, Velie said, the lawyer must keep his client from concocting lies about what happened or destroying evidence. As the Enron case shows, cover-ups can make potential wrongdoing seem much more sinister, he said. "Whatever his problem was when he walked through the door, you don't want it to be worse walking away."
Another tactic: portraying the client as a small cog in a big scandal. When rogue trader Nicholas W. Leeson's $1.4 billion in losses helped bring down the British investment firm Barings PLC in 1995, his attorneys quickly moved to portray him as a scapegoat for much larger problems within the bank. Right away, they announced that Leeson would "consider" sharing what he knew about those problems so that he could face charges in England instead of Singapore, where Leeson had been based. The attorneys also hastened to note that, rather than earning the millions of dollars that had been erroneously reported, Leeson took home a salary of about $85,000 a year - the same amount Rusnak earned at Allfirst.
The advocacy worked - in part. Leeson was extradited to Singapore. But though his fraud shook the financial world, the trader spent just 3 1/2 years in prison after reaching a plea agreement. Upon his release in July 1999, the court did impose one more enduring condition: a strict limit on his spending.