On December 9, 2015, in United States v. Gorski, the US Court of Appeals for the First Circuit applied the crime-fraud exception to attorney-client privilege and ordered the disclosure of certain attorney-client communications. The court emphasized that the exception is triggered by the intent of the client to use the lawyer’s services in furtherance of a crime or fraud, not the intent of the lawyer ( (1st Cir. Dec. 9, 2015).)

The United States indicted David Gorski for fraudulently representing his company Legion Construction (Legion) as being owned by a disabled veteran in order to obtain government contracts under the government’s Service-Disabled Veteran Owned Small Business Entity (SDVOSB) contract policy. The government alleged that, from 2005 to 2010, Gorski manipulated the ownership structure of Legion to make it appear that it was owned and controlled by a pair of veterans, when in fact he, a non-veteran, was the main owner and operator. Gorski retained Legion’s attorney Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C. (Mintz Levin) and his personal attorney Elizabeth Schwartz during this period, and the government alleged that they were retained to assist with the fraudulent restructuring.

The government issued subpoenas to Mintz Levin and Legion seeking documents related to Legion’s ownership and its SDVOSB status. Mintz Levin and Legion withheld production of certain documents on the basis of attorney-client privilege. The district court ultimately determined that, while all of the documents at issue were relevant and facially privileged, the crime-fraud exception applied with respect to the Mintz Levin communications, because it was reasonable to believe that Gorski intended to use Mintz Levin to perpetuate his fraud. The court did not apply the crime-fraud exception to Gorski’s communications with Schwartz because it found that she had no role in the fraudulent submissions related to Legion. Both sides appealed.

The First Circuit held that the crime-fraud exception applied to Gorski’s communications with both Mintz Levin and Schwartz. In the First Circuit, the party invoking the crime-fraud exception must make a prima facie showing that:

In order to make a prima facie showing, the court only requires a reasonable basis to believe that the lawyer’s services were used to help the client in her crime or fraud. The First Circuit agreed with the district court that there was such a reasonable basis with respect to the communications with Mintz Levin. While the district court found that this did not apply to Schwartz because she did not participate in any fraudulent submissions regarding the contracts, the First Circuit disagreed with that reasoning. The attorney-client communications need only be intended by the client to facilitate the fraud, regardless of the intent of the attorney.