Page 5 - John Hundley 2014

Litigation Law Roundup

Sharp Thinking

No. 109 Perspectives on Developments in the Law from The Sharp Law Firm, P.C. February 2014

Crime-Fraud Rule May Apply Despite Lawyer Innocence

A trial court need not conduct an in camera review of the subject communications in order to hold that
they are subject to the crime-fraud exception to the attorney-client privilege, the Illinois Supreme Court
has reiterated.

Moreover, the court has reinforced prior precedent that the focus in such an inquiry is not on the
legitimacy of the services provided by the attorney, but on the intent of the client, and that the
communications may be subject to the crime-fraud exception if they are in furtherance of a crime or fraud
even though the attorney is ignorant and innocent of the wrongdoing. People v. Radojcic, 2013 IL
114197.

In Radojcic, the evidence indicated that the client had orchestrated a scheme under which a series of
apartment buildings were converted to condominiums, units in the condos were then sold to straw men
with fraudulently-obtained mortgages, which straw men then sold the units back to a client-affiliated entity,
which then operated them as apartments and received federal “Section 8” subsidies for them. The
attorney resisted application of the crime-fraud exception on the ground that his work in the condo
conversions and the deeding to the unit purchasers were legitimate legal work.

The Supreme Court rejected that logic, ruling that “even if the communications between Radojcic and
Helfand did not touch on the mortgage applications . . . any legal consultations between [them] that
related to the real estate transactions identified in the indictment furthered Radojcic's mortgage fraud
scheme.” “An attorney may be completely innocent of wrongdoing, yet the privilege will give way if the
client sought the attorney's assistance for illegal ends,” it said.

Moreover, the trial court need not necessarily conduct an in camera review to determine that the
crime-fraud exception applies, the court held. The need for in camera review often arises because “the
best and often only evidence of whether the exception applies is the allegedly privileged communication
itself,” the court noted. However, where other evidence establishes that the exception applies, in camera
review is unnecessary.

To find that the exception applies, the trial court must receive evidence sufficient to
provide “a reasonable basis to suspect the perpetration or attempted perpetration of a
crime or fraud” by the client and that the consultation with or services of the attorney were
somehow “in furtherance of” the client's illegal activity, the court said. Moreover, it ruled,
contrary to federal courts, that whether the crime-fraud burden had been satisfied would
be decided by de novo review, not by utilizing an abuse-of-discretion standard. The trial
court had found the exception was not established.

Wage Garnishments May Continue Despite Judgment Dormancy

Effective January 1, wage deduction proceedings against third parties no longer expire upon the
underlying judgment becoming dormant.

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Sharp Thinking is an occasional newsletter of The Sharp Law Firm, P.C. addressing developments in the law which may be of interest. Nothing contained in Sharp
Thinking shall be construed to create an attorney-client relation where none previously has existed, nor with respect to any particular matter. The perspectives herein
constitute educational material on general legal topics and are not legal advice applicable to any particular situation. To establish an attorney-client relation or to obtain legal
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