UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 15-4080

In Re: GRAND JURY SUBPOENA

---------------------------

UNDER SEAL 1; UNDER SEAL 2,

Intervenors - Appellants,

v.

UNITED STATES OF AMERICA,

Respondent - Appellee.

Appeal from the United States District Court for the Western 

District of North Carolina, at Charlotte. Max O. Cogburn, Jr.,

District Judge. (3:13-mc-00107-MOC-DCK-1)

Argued: October 27, 2015 Decided: March 23, 2016

Before KEENAN, WYNN, and DIAZ, Circuit Judges.

Affirmed by unpublished opinion. Judge Wynn wrote the opinion,

in which Judge Keenan and Judge Diaz joined. 

ARGUED: Jeffrey Bryan Wall, SULLIVAN & CROMWELL LLP, Washington, 

D.C., for Intervenors-Appellants. Amy Elizabeth Ray, OFFICE OF 

THE UNITED STATES ATTORNEY, Asheville, North Carolina, for 

Respondent-Appellee. ON BRIEF: Steven R. Peikin, Beth D. 

Newton, SULLIVAN & CROMWELL LLP, New York, New York; Jack M. 

Knight, Jr., Phoebe N. Coddington, WINSTON & STRAWN LLP, 

Charlotte, North Carolina; Michael S. Schachter, Alexander L. 
2

Cheney, Nicholas W. Chiuchiolo, WILLKIE FARR & GALLAGHER LLP, 

New York, New York; Brian S. Cromwell, Sarah F. Hutchins, PARKER 

POE ADAMS & BERSTEIN LLP, Charlotte, North Carolina, for 

Intervenors-Appellants. Jill Westmoreland Rose, Acting United 

States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, 

Asheville, North Carolina, for Respondent-Appellee.

Unpublished opinions are not binding precedent in this circuit.
3

WYNN, Circuit Judge:

In this white-collar criminal matter, a federal grand jury 

has been investigating whether commodities traders engaged in 

misconduct. At the heart of this appeal is whether evidence

that the grand jury sought and that otherwise might be 

privileged is nonetheless discoverable because the crime-fraud 

exception to the attorney-client privilege applies.

Grand jury investigations are confidential, and we are thus 

barred from including here much detail. But just because we may 

not write about particulars does not mean that we either lack 

them or have failed to consider them. On the contrary, we have 

reviewed this matter thoroughly and conclude that the district 

court did not clearly abuse its discretion in holding that the

government successfully made a prima facie showing that evidence

that might otherwise have been shielded from discovery enjoys no 

such protection due to the crime-fraud exception. Accordingly, 

we affirm.

I.

Two traders who are the subject of a grand jury 

investigation (“Traders”) worked for a bank executing block 

futures trades for large investors. In 2010, a private 

regulatory body inquired into various trades, investigating 

potential front-running, i.e., misusing material information 
4

about impending trades for personal gain. See United States v. 

Mahaffy, 693 F.3d 113, 120 (2d Cir. 2012). 

In November 2010, the regulator sought to interview the 

Traders and others in connection with the suspicious activity. 

The bank that employed the Traders engaged an attorney 

(“Lawyer”) to represent the Traders and the bank vis-à-vis the 

regulator. Lawyer met the Traders individually and collectively 

and then participated in the interviews.

In December 2010, Lawyer followed up with the regulator by 

written submission. The written submission, for which the 

Traders’ feedback was sought, asserted legal and factual 

defenses of the suspect trades. The submission asserted, for 

example, that the Traders “flatly denied having entered 

proprietary orders in advance of and with knowledge of any 

customer block order” and noted that “each trader gave clear, 

consistent and undeniable explanations of why such trading was 

not even feasible.”

At a later point in time, the government began 

investigating the Traders’ suspicious trading activity. And in 

July 2013, a federal grand jury looking into whether any crimes 

had been committed issued a subpoena to Lawyer, seeking 

documents relating to Lawyer’s representation of the Traders, 

especially regarding the November 2010 interviews and the 

December 2010 written submission to the regulator. While 
5

others, including the bank, waived any applicable attorneyclient privilege, the two Traders did not. They therefore 

intervened and sought, along with Lawyer, to quash the grand 

jury’s subpoena. 

A magistrate judge denied the motions to quash. But the 

district court remanded the matter to the magistrate for an in 

camera review. Upon review, the magistrate judge yet again 

denied the motions. And the second time around, the district 

court agreed. The district court held, among other things, that 

the crime-fraud exception applied here, where the Traders’ 

communications with Lawyer were made “precisely to further the 

Traders’ criminal scheme” of misusing information about 

impending trades for personal gain. The Traders appealed to 

this Court.

II.

As an initial matter, we briefly address our subject matter 

jurisdiction over this appeal. Generally, “a district court’s 

order enforcing a discovery request is not a ‘final order’ 

subject to appellate review.” Church of Scientology v. United 

States, 506 U.S. 9, 18 n.11 (1992). In Perlman v. United 

States, however, the Supreme Court made clear that courts may 

review immediately a discovery order directing a third party to 

produce exhibits that were the property of an appellant who 

claims immunity or privilege. 247 U.S. 7, 12-13 (1918). And in 
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United States v. Jones, this Court, relying on Perlman, held 

that an order denying the motion of clients, who were targets of 

a grand jury investigation, to quash grand jury subpoenas issued 

to their attorneys, was immediately appealable. 696 F.2d 1069, 

1071 (4th Cir. 1982). Based on Perlman and Jones, we have 

jurisdiction to review the ruling regarding the grand jury 

subpoena at issue here. 

III.

On appeal, the Traders challenge the district court’s 

determination that the crime-fraud exception to the attorneyclient privilege applied and that the privilege thus provided no 

basis for shielding the subpoenaed documents and testimony from 

the grand jury.1 Our review is a deferential one: A district 

court’s determination that the government made a prima facie 

showing that the crime-fraud exception applies “should be upheld 

‘absent a clear showing of abuse of discretion.’” In re Grand 

Jury Proceedings #5 Empanelled Jan. 28, 2004, 401 F.3d 247, 254 

(4th Cir. 2005) (quoting In re Grand Jury Subpoena, 884 F.2d 

124, 127 (4th Cir. 1989)).

 1 The work-product privilege is not an issue on appeal. We 

therefore do not address it.
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A.

The attorney-client privilege protects confidential 

communications between clients and their counsel. “Its purpose 

is to encourage full and frank communication . . . and thereby 

promote broader public interests in the observance of law and 

administration of justice. The privilege recognizes that sound 

legal advice or advocacy serves public ends and that such advice 

or advocacy depends upon the lawyer’s being fully informed by 

the client.” Upjohn Co. v. United States, 449 U.S. 383, 389 

(1981).

However, the privilege’s justifications “cease as the line 

is crossed from legal advice given on how one may conform one’s 

actions to the requirements of the law . . . into the domain of 

contemplated or actual illegal prospective or on-going action.” 

Edna Selan Epstein, The Attorney-Client Privilege and the WorkProduct Doctrine Vol. 1, at 675 (5th ed. 2007). Accordingly, 

the attorney-client privilege is “lost . . . when a client gives 

information to the attorneys for the purpose of committing or 

furthering a crime or fraud.” In re Grand Jury Proceedings, 102 

F.3d 748, 750-51 (4th Cir. 1996). 

To overcome the attorney-client privilege and “secure 

[sought] evidence,” Union Camp Corp. v. Lewis, 385 F.2d 143, 145 

(4th Cir. 1967), the government must convince the court: (1) 

that “the client was engaged in or planning a criminal or 
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fraudulent scheme when he sought the advice of counsel,” and (2) 

that the attorney’s assistance was obtained in furtherance of 

the crime or fraud or was closely related to it. In re Grand 

Jury Proceedings #5 Empanelled Jan. 28, 2004, 401 F.3d at 251. 

The government need not “prove the crime or fraud” at the grand 

jury stage, nor is the government required to make its showing 

even by a preponderance of the evidence. Id. (quotation marks 

and citation omitted). Instead, only a prima facie showing must 

be made—i.e., “the proof ‘must be such as to subject the 

opposing party to the risk of non-persuasion if the evidence as 

to the disputed fact is left unrebutted.’” Id. (quoting Duplan 

Corp. v. Deering Milliken, Inc., 540 F.2d 1215, 1220 (4th Cir. 

1976)). 

Our recitation of the burden, especially our use of the 

word “rebut,” (incorrectly) suggests “that the party asserting 

the privilege may respond with evidence to explain why the 

vitiating party’s evidence is not persuasive.” In re Grand Jury 

Proceedings, Thursday Special Grand Jury Sept. Term, 1991, 33 

F.3d 342, 352 (4th Cir. 1994). But grand jury proceedings are 

closed and secret. Fed. R. Crim. P. 6. And we have long held 

that not only facts supporting the crime-fraud exception, but 

even the nature of the alleged crime or fraud itself, may be 

presented ex parte and held in confidence. In re Grand Jury 

Proceedings, Thursday Special Grand Jury Sept. Term, 1991, 33 
9

F.3d at 352-53 (citing In re Grand Jury Subpoena, 884 F.2d 124).

The party asserting privilege may thus be forced to make a best 

guess as to the crime and evidence it must counter. Id.

The second crime-fraud prong, whether the attorney’s 

assistance was obtained in furtherance of the crime or fraud, 

“may be satisfied with a showing of a close relationship between 

the attorney-client communications and the possible criminal or 

fraudulent activity.” In re Grand Jury Proceedings #5 

Empanelled Jan. 28, 2004, 401 F.3d at 251. Further, “it is the 

client’s knowledge and intentions that are of paramount concern” 

in our analysis; the attorney need not be aware of any

illegality. Id.

Notably, communications “made with the intention of 

covering up the crime/fraud” can qualify under the second crimefraud prong and “will not be privileged.” Epstein, The 

Attorney-Client Privilege and the Work-Product Doctrine Vol. 1, 

at 684. In such cases, “the concealment or cover-up of its 

criminal or fraudulent activities by the client, the holder of 

the privilege . . . controls the court’s analysis of whether the 

attorney-client privilege may be successfully invoked.” In re 

Grand Jury Proceedings, 102 F.3d at 751.

In In re Grand Jury Proceedings, for example, “a question 

arose as to whether two lawyers, . . . at the request of the 

Bank, and acting innocently, gave somewhat false information 
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which might serve to cover up the Bank’s crime or fraud 

activity.” Id. at 750. The grand jury thus sought the 

attorneys’ documents and testimony. Id. This Court noted that 

“the concealment or cover-up of its criminal or fraudulent 

activities by the client, the holder of the privilege” controls 

the crime-fraud analysis. Id. at 751. And the Court was 

“satisfied” that the district court’s finding of a prima facie 

case was adequately supported where “the attorneys, unknowingly, 

furthered the Bank’s alleged fraud by referencing in various 

documents,” including in submissions to government regulators, 

fraudulent information. Id. at 751-52.2 

Ultimately, “the determination of whether a privilege 

applies [is] reserved for the trial judge.” In re Grand Jury 

Subpoena, 884 F.2d at 127. The trial judge engages in the twopronged crime-fraud analysis in the first instance. And in 

reviewing its determination, we are mindful of the Supreme 

Court’s warning that “[a]ny holding that would saddle a grand 

jury [proceeding] with minitrials and preliminary showings would 

assuredly impede its investigation and frustrate the public’s 

 2 This Circuit is not alone in holding that communications 

aimed at concealing a criminal or fraudulent scheme obliterate 

the privilege. See, e.g., In re John Doe Corp., 675 F.2d 482

(2d Cir. 1982) (holding that internal investigation intended to 

persuade third parties that no irregularity had occurred was 

part of cover-up and thus upended any privilege).
11

interest in fair and expeditious administration of the criminal 

laws.” United States v. Dionisio, 410 U.S. 1, 17 (1973). Not 

least for this reason, we uphold such determinations “absent a 

clear showing of abuse of discretion.” In re Grand Jury

Subpoena, 884 F.2d at 127.

B.

With this framework in mind, we have reviewed the 

particulars of this case and determined that the district court 

did not clearly err in determining that the government

successfully made a prima facie showing that the Traders engaged 

in a criminal or fraudulent scheme of misusing information about 

impending trades for personal gain. The district court’s 

determination that the Traders intended to avoid detection and 

continue their scheme in communicating with Lawyer, not least by 

having Lawyer misrepresent their activities to the regulator, is 

likewise supported by the record.

The Traders repeatedly argue that nothing “in the record” 

supports the district court’s determination here. Appellants’ 

Br. at 43. The Traders claim, for example, that “the Government 

lacks evidence” to support the crime-fraud exception and thus 

attempts to “fall[] back on the communications themselves” to 

make the necessary showing. Id. at 47. But the Traders, who 

were, by definition, excluded from the grand jury proceedings

and thus not privy to what evidence or theories the complete 
12

record contains, see Fed. R. Crim. P. 6, are tilting at 

windmills.

We, by contrast, have the full record, and we have reviewed 

it thoroughly. And on that basis, we conclude that the Traders 

have failed to make “a clear showing of abuse of discretion.”

In re Grand Jury Subpoena, 884 F.2d at 127. The district 

court’s determination that the government made a showing 

sufficient to support the crime-fraud exception must therefore

be upheld. See id. And because the exception annihilated any 

privilege inhering in the Traders’ communications with Lawyer, 

we need not address the Traders’ challenge to the district 

court’s ruling that some of the documents responsive to the 

grand jury’s subpoena were not privileged because they were 

intended to be disclosed to third parties.

IV.

For the reasons discussed above, the district court’s 

ruling is

AFFIRMED.