One of the sadder, often unspoken aspects of some major federal cases is that they are monumentally boring.  No dead bodies.  No bundles of narcotics.  No bags of cash.  None of the sexy stuff that people routinely associate with criminal law.  But that doesn’t mean lives aren’t ruined.

Reading the 9th Circuit’s decision in United States v. Goyal is brutally boring, the sort of work one prefers to avoid unless being well-paid to suffer.  To relate the facts of the case in any detail is to endure the pain again.  Suffice it to say that the government prosecuted Probhat Goyal, the former CFO of Network Associates, Inc. (better known for their product, McAfee antivirus) for violating GAAP by recognizing revenue in a way that would arguably have been better recognized by a different method given their sales model. 

The court held that the government failed miserably to prove that a crime occurred, and reversed the conviction and ordered that a judgment of acquittal be entered on all counts. 

A few questions pop into mind immediately.  Why would the government have thought it worthwhile to prosecute Goyal?  People in business, accountants and the like, may disagree about the most appropriate or prudent method of accounting.  So what?  Somebody told an AUSA that this was wrong, a fraud, and some clueless AUSA took the bait.  Big time prosecution ensued. 

The way this happens is that disputes, disagreements, arguments, that are the sort of life and death issues amongst geeks whose lives are wrapped around which calculation they believe to be “right” are dressed up in the language of crime.  Prosecutors may not have the slightest clue about business, but they have a well-developed library of phrases to link to otherwise innocuous conduct to smear it with evil. 

And then there’s the moment in time when a guy like Goyal, who as a corporate executive was fortunate to have the indemnification of his employer paying the freight, decided which lawyer would stand next to him.  He likely had a choice, and had he tagged the lawyer standing next to the one he actually chose, he likely would have been talked into strolling down to the United States Attorneys office to cut a deal. 

No one wins.

The odd are against you.

They will bury you and you will never see your family again.

But Goyal was fortunate that the attorney he chose was willing to make the fight and didn’t counsel his client to join don a jumpsuit.  It may have been the nature of the case, or may have been that his “white collar specialist” wasn’t some kid who was prosecuting other CFOs the week before and truly believed that the best and only solution for criminal defendants was to lay on the ground supine and offer themselves to the government.

Of course, it can’t be ignored that the case went to trial and verdict, meaning that the trial judge heard the evidence, assuming he was able to stay awake most of the time, and thought it sufficient to go to the jury.  Here’s a real kick in the pants, that the trial judge at a number of junctures could have shown the fortitude to kill this prosecution, this case without a crime, and didn’t.  They don’t like to do that.  They don’t like to be responsible for making really hard decisions that challenge the prosecution’s assessment of what’s a crime, what harms the public.  And when the judge punts, the government is given free rein.

Then there was the jury, who convicted Goyal, even though, as the 9th Circuit concluded, the evidence was so lacking that no reasonable jury could find him guilty.  No reasonable jury.  And yet they did. 

Cases like this tend to result in convictions for two reasons, neither of which bring much comfort.  First, they are boring and technical, so the jury defers to accountants on the witness stand telling them boring stuff and reaching boring conclusions that magically confirm what the government contends. 

Second, when cases are tedious, boring and seemingly pointless, there is a bone in the head of jurors that says the government wouldn’t be prosecuting this case if there wasn’t a crime.  You see, when there’s a dead body or a pile of coke, the jury can tell that a crime occurred.  When there are a bunch of accountants arguing about revenue recognition, their eyes glaze over and their mind drifts to the leeward islands, a trade wind blowing through their hair and a strawberry daiquiri giving them brain freeze. 

Admit it or not, there is an overwhelming sense that when the government prosecutes a person, it’s because he’s guilty.  We fight this perversion of our system wherever we can, but the hard truth is that this is the prevailing presumption in our society.  Denial serves no purpose and merely blinds us to reality. 

Probhat Goyal probably worked very hard to achieve the position of Chief Financial Officer at NAI.  He likely enjoyed a good life, the fruits of his labor.  He probably had a happy family who similarly enjoyed the world a well-paid CFO could provide.  And then one day, his world imploded and everything changed. 

With only the slightest change in the way the wind blew at various points, from the inception of the prosecution to the utterance of the word “guilty” by the jury foreman, things might have changed.  A prosecutor could have said that there’s no crime here, and the case died.  A lawyer could have said we have to cut a deal and Goyal would have gone to prison.  The judge could have said the evidence is crap and tossed the case.  The jury could have said the government failed to sustain its burden and acquitted Goyal. 

On appeal, Judge Richard R. Clifton wrote for the court that no jury could have found Goyal guilty beyond a reasonable doubt.  And with that, it’s over.  Except for Probhat Goyal.  Judge Alex Kozinski wrote in concurrence:

This case has consumed an inordinate amount of taxpayer resources, and has no doubt devastated the defendant’s personal and professional life. The defendant’s former employer also paid a price, footing a multimillion dollar bill for the defense.  And, in the end, the government couldn’t prove that the defendant engaged in any criminal conduct. This is just one of a string of recent cases in which courts have found that federal prosecutors overreached by trying to stretch criminal law beyond its proper bounds. See Arthur Andersen LLP v. United States, 544 U.S. 696, 705-08 (2005); United States v. Reyes, 577 F.3d 1069, 1078 (9th Cir. 2009); United States v. Brown, 459 F.3d 509, 523-25 (5th Cir. 2006); cf. United States v. Moore, 612 F.3d 698, 703 (D.C. Cir. 2010) (Kavanaugh, J., concurring) (breadth of 18 U.S.C. § 1001 creates risk of prosecutorial abuse).

This is not the way criminal law is supposed to work.  Civil law often covers conduct that falls in a gray area of arguable legality. But criminal law should clearly separate conduct that is criminal from conduct that is legal.  This is not only because of the dire consequences of a conviction — including disenfranchisement, incarceration and even deportation — but also because criminal law represents the community’s sense of the type of behavior that merits the moral condemnation of society. See United States v. Bass, 404 U.S. 336, 348 (1971) (“[C]riminal punishment usually represents the moral condemnation of the community . . . .”); see also Wade v. United States, 426 F.2d 64, 69 (9th Cir. 1970) (“[T]he declaration that a person is criminally responsible for his actions is a moral judgment of the community . . . .”).  When prosecutors have to stretch the law or the evidence to secure a conviction, as they did here, it can hardly be said that such moral judgment is warranted.

Mr. Goyal had the benefit of exceptionally fine advocacy on appeal, so he is spared the punishment for a crime he didn’t commit.  But not everyone is so lucky.  The government shouldn’t have brought charges unless it had clear evidence of wrongdoing, and the trial judge should have dismissed the case when the prosecution rested and it was clear the evidence could not support a conviction.  Although we now vindicate Mr. Goyal, much damage has been done.  One can only hope that he and his family will recover from the ordeal.  And, perhaps, that the government will be more cautious in the future.

Not everyone is so “lucky.”  That’s what it comes down to, luck.  While Judge Kozinski may hope that Goyal and his family will “recover from the ordeal,” he knows that they won’t.  Nor will the government “be more cautious in the future.” 

It’s hard to condemn this omission from Judge Kozinski’s otherwise stinging rebuke, but its needs to be said.  If we can’t expect some clueless kid prosecutor to possess the intelligence and appreciation to distinguish between a dead body and a bunch of accountants who disagree about revenue recognition, then where are the judges who have the guts to put a stop to this harm? 

There is a dead body in this case.  It’s the body of an innocent person.  It’s the body of Probhat Goyal.  And we know who murdered him.

H/T Doug Berman