Federal Immunity Agreements: Use and Derivative Use Immunity

Welcome to Spodek Law Group. Our law firm is one of the premier federal defense law firms nationwide. We have over 50 years of combined experience - handling tough cases, situations that require tough legal knowledge and know-how. We can help you - if you find yourself in a tight situation where words like federal immunity agreement are part of the conversation. Federal immunity doesn't protect you from prosecution. It protects prosecutors from your silence. This is the fundamental truth about immunity agreements that nobody explains until it's too late. The government deliberately offers use immunity instead of transactional immunity because it preserves their option to charge you later. That option never goes away. Welcome to Spodek Law Group. Our goal is to give you the real truth about federal immunity - not the sanitized version prosecutors want you to believe.

Here's what most people don't understand. When you testify under a federal immunity agreement, you're creating a roadmap. Every lead you provide, every name you mention, every document you reference - prosecutors can follow those trails. What evidence did they discover from those leads? That's "independent evidence." And independent evidence can absolutely be used to prosecute you. Your immunized testimony becomes the blueprint for building the case against you.

This isn't theoretical. This is how the system was designed to work. The federal government made a deliberate choice decades ago to offer only use and derivative use immunity rather than transactional immunity. Transactional immunity would prevent any prosecution for the subject matter you testify about. That's too much protection. That limits prosecutors too much. So they don't offer it. Period.

The Immunity Illusion: Why Federal Protection Isnt What You Think

Most people hear "immunity" and think protection. That's the whole point of the word, right? But in the federal system, immunity is something diferent entirely. Its a tool prosecutors use to extract testimony from reluctant witnesses. The protection part? It's narrower than you think.

Under 18 U.S.C. Section 6002, the government can compel your testimony by giving you "use and derivative use" immunity. Here's what that actually means. Your actual statements - the words you say - cant be used against you directly in a criminal trial. And evidence that flows directly from those statements theoretically cant be used either. That's the derivative use protection.

But there's a massive loophole. Prosecutors can still investigate you. They can still build a case against you. They just have to prove that their evidence came from "independent sources" - sources that existed before you testified or that they would have found anyway. This is called the Kastigar burden, from the 1972 Supreme Court case Kastigar v. United States, which blessed this whole arrangement.

Think about what that means. You testify. You mention names. You describe transactions. Prosecutors write it all down. Then they go interview those people you named. They subpoena records from those transactions. They built an entirely "independent" case using the leads you handed them on a silver platter. And because they claim the evidence came from an independent investigation, they can prosecute you anyway.

The Supreme Court said this was constitutionally sufficient to replace your Fifth Amendment rights. Use and derivative use immunity is "coextensive" with the Fifth Amendment privilege, they ruled. Transactional immunity - actual complete protection - would afford "broader protection than the Fifth Amendment privilege, and is not constitutionally required." Read that again. The government is only required to give you the bare minimum.

Use vs Derivative Use: The Loophole That Gets People Convicted

Let's break down exactly how this works because the distinction matters.

Use immunity means prosecutors can't introduce your actual testimony against you at trial. They can't play a recording of you saying incriminating things. They can't quote your words directly. Your testimony is off limits as evidence.

Derivative use immunity extends that protection to evidence that comes from your testimony. If you testify about a meeting on March 15th, and prosecutors then go find documents from that meeting they didnt know about before, theoretically those documents are "fruit of the poisonous tree." They can't use them.

But here's where it gets dangerous. The government has a massive advantage in proving "independent source." Before they even offer you immunity, smart prosecutors are already documenting what they know. They create detailed memos showing exactly what evidence they had before you testified, when they got it, and where it came from. The Justice Department actually has internal guidance requiring prosecutors to do exactly this.

So by the time your testimony adds anything new, they already have a paper trail proving there investigation was well underway. The new leads you provide? They claim they would have found them anyway through their existing investigation. Your testimony just "confirmed" what they already knew. That's their argument. And courts often buy it.

The Kastigar hearing - were the government has to prove its evidence is independent - sounds like real protection. The government bears a "heavy burden" to prove non-use. But a heavy burden doesnt mean an impossible burden. Prosecutors who plan ahead almost always win these hearings. Theyve been preparing for them since before they offered you immunity.

Todd Spodek has watched clients discover this the hard way. They walk into proffer sessions thinking there cooperating. They walk out having provided the prosecution with exactly what it needed to build an "independent" case. The irony is crushing. Your attempt to help yourself becomes the roadmap for your own prosecution.

Why Federal Prosecutors Never Offer Real Protection

Transactional immunity is what you actually want. It's what the word "immunity" suggests to most people. With transactional immunity, you cannot be prosecuted for any offense about which you testify. Full stop. Complete protection. You talk, they can't charge you for anything related to what you discussed.

The federal system doesnt offer transactional immunity. Ever. Some states do. New York offers it in certain situations. But federal prosecutors? Never.

Why not? Becuase transactional immunity would force prosecutors to make hard choices. If granting you immunity means they can never prosecute you for the underlying conduct, they have to decide upfront wheather your testimony is more valuable then your prosecution. That's a commitment they don't want to make.

With use immunity, they get the best of both worlds. They get your testimony. They use your leads to build there case. And they preserve the option to prosecute you later if they can claim independent sources. You think your protected. Your not.

The Department of Justice requires approval from senior officials before any immunity grant. Every request goes through the Criminal Division. The statute - 18 U.S.C. Section 6003 - requires the U.S. Attorney to determine that the testimony "may be necessary to the public interest." Notice that language. The public interest. Not your interest. The government's interest in getting your testimony.

And once they have it, they can come back for you. Kastigar explicitly allows this. As long as they prove independent sources, your immunized testimony doesn't protect you from prosecution. You gave up your Fifth Amendment rights for something that looks like protection but isnt.

The Proffer Trap: How Queen for a Day Becomes Your Prosecution Blueprint

Before formal immunity comes the proffer, this is where things get really dangerous.

A proffer agreement - sometimes called "queen for a day" - is an informal session where you meet with prosecutors and tell them what you know. In exchange, they promise not to use your statements "directly" against you. Sounds similar to immunity, right? Its not even close.

Proffer letters are basically the weakest form of protection available. Unlike formal immunity granted by a court, proffer agreements are just contracts between you and that specific prosecutor's office. They dont bind other prosecutors. They don't bind state authorities. They don't prevent derivative use of your information.

This is where it gets terrifying. In a proffer session, you sit down with federal agents and prosecutors. They ask questions. You answer. Maybe for hours. You think you're being helpful. You're actually providing an intelligence briefing for your own prosecution.

Every piece of information you share becomes a lead they can follow. Every name becomes a witness they can interview. Every document you mention becomes something they can subpoena. The proffer letter protects your actual words from being used at trial. It doesnt protect you from being prosecuted based on what your words revealed.

And here's the real kicker. If the prosecutor decides you lied during the proffer - even about something minor, even about something you genuinely misremembered - the agreement is voided completely. Everything you said becomes directly admissible. No protection at all. 18 U.S.C. Section 1001 makes it a federal crime to make any materially false statement to federal investigators. One wrong word and you've committed a new federal offense during your "cooperation."

At Spodek Law Group, we see this constantly. Clients who thought they were saving themselves by cooperating. Clients who answered questions for hours, thinking they were protected. Then they discover the proffer was really just an extended interrogation session where they provided the blueprint for their own prosecution.

What Oliver North Learned About Federal Immunity

The Oliver North case is the most famous example of immunity gone wrong - or maybe immunity working exactly as designed, depending on your perspective.

North was a National Security Council staff member involved in the Iran-Contra affair. Congress wanted his testimony about the scandal. He invoked his Fifth Amendment rights. So Congress granted him immunity under 18 U.S.C. Section 6002 and compelled him to testify.

North testified publicly before Congress, nationally televised, explaining his role in the covert operations. Then federal prosecutors indicted him anyway. He was convicted on three felony counts.

But wait - didnt he have immunity? Yes. Use and derivative use immunity. And thats exactly why his convictions were eventually reversed.

The appeals court found that prosecutors couldn't prove their evidence was completely independent of North's immunized testimony. The court ordered a "witness by witness" review of all 89 grand jury witnesses and 32 trial witnesses to determine if any of them had been influenced by hearing Norths televised testimony. If even one witness used Norths immunized statements to "refresh their memory," the evidence was tainted.

Former National Security Adviser Robert McFarlane admitted his trial testimony was "colored" by Norths congressional statements. That was enough. The case collapsed. Charges were eventually dismissed entirely.

So immunity worked for North, right? Eventually. After years of litigation. After being convicted. After fighting through multiple appeals. After spending countless dollars on legal fees. The process itself was punishment - even though the convictions were ultimately reversed.

And North had every advantage. He was a public figure with resources to fight. His immunized testimony was nationally broadcast, making taint obvious. The time gap between testimony and prosecution was short. Most defendants dont have those advantages.

Independent Counsel Lawrence Walsh said afterward: "I urged them not to grant immunity. This is a very serious warning that immunity is not to be granted lightly." He was right. But his warning is for Congress and prosecutors - not for you. You dont get to decide wheather immunity is granted. You just get to live with the consequences.

One Wrong Word: How Everything Becomes Admissable

Here's something that keeps federal defense attorneys up at night. Your immunity protection - however limited it already is - can evaporate completely based on a single statement.

If prosecutors conclude you lied during your immunized testimony, the agreement is void. Not limited. Not reduced. Void. Everything you said becomes fair game. Every statement you made, thinking you were protected, suddenly becomes evidence against you.

And it doesn't take much. You don't have to tell a dramatic lie about something important. A minor inconsistency can be enough. A date you got wrong. A meeting you forgot about. Details that got fuzzy over time. Prosecutors can characterize any of these as false statements.

Remember: 18 U.S.C. Section 1001 applies during proffer sessions and immunized testimony. Making a false statement to federal investigators is itself a federal crime. You can be prosecuted for the lie even if the underlying conduct wasn't criminal.

Martha Stewart didn't go to prison for insider trading. She was acquitted of that. She went to prison for making false statements during the investigation. The cover-up became the crime because the statements she made - trying to explain her conduct - were deemed false.

Michael Flynn pleaded guilty to making false statements to FBI agents. Not to any underlying offense. Just to the statements themselves. The interview that he thought was routine became the basis for federal charges.

This is why proffer sessions and immunity agreements are so dangerous. Your trying to be helpful. Your trying to explain. Your trying to cooperate. And every word you say is being evaluated for potential inconsistencies that can void your protection or create new criminal liability.

One wrong word. One forgotten detail. One statement that contradicts something else you said years ago. Thats all it takes. And suddenly the immunity you thought you had dosent exist anymore.

Letter vs Formal Immunity: The Dangerous Difference

Not all immunity is created equal. The type you receive matters enormously.

Formal immunity - statutory immunity under 18 U.S.C. Section 6002 - is ordered by a federal court. The U.S. Attorney applies for the order, a judge grants it, and the witness is compelled to testify. This is the strongest form of use immunity available. Its binding. It's enforceable. Its documented in court records.

Informal immunity - sometimes called "letter immunity" or "pocket immunity" - is just an agreement. The prosecutor sends you a letter promising not to use your statements. You rely on that promise. But its not a court order. It's not binding on anyone except the prosecutor who signed it.

Here's the critical difference that catches people: informal immunity is not binding on other jurisdictions. If a federal prosecutor in the Southern District of New York gives you letter immunity, prosecutors in the Eastern District aren't bound by that promise. State prosecutors definitely aren't bound. The deal you made with one office doesn't protect you from prosecution by another.

Spodek Law Group has seen cases where clients cooperated fully under letter immunity with federal prosecutors, then faced state charges based on exactly the same conduct. The federal immunity agreement? Worthless against state prosecution. Different sovereign, different rules.

Even within the federal system, letter immunity is weaker. Courts have held that while verbal agreements can be enforceable, written agreements provide better protection. But "better" isn't "complete." And the terms of letter immunity are often narrower then defendants realize.

When someone offers you immunity, the first question isnt "should I take it?" The first question is "what kind of immunity is this, exactly?" Read the letter. Understand what its promising. Understand what its not promising. Because what it doesn't say can destroy you.

What You Should Actually Do When Offered Immunity

If your facing an immunity offer, you need to understand your options clearly.

Option A: Accept the immunity and testify. Your testimony is protected from direct use. But you provide leads that can be investigated. You create a record that can be scrutinized for inconsistencies. You give up your Fifth Amendment right to remain silent in exchange for limited protection.

Option B: Negotiate for better terms. In some situations, you can push for broader protection. Not transactional immunity - federal prosecutors won't offer that. But you might get better language in the agreement. Clearer protections. More specific limitations on derivative use.

Option C: Invoke the Fifth Amendment and refuse. If you have formal immunity, you can be held in contempt for refusing to testify. The immunity order compels your testimony. Refusing means potential jail time. But if you're only facing a proffer request - an informal invitation to cooperate - you can simply decline.

Option D: Challenge the immunity offer. In rare cases, you can argue that use immunity is insufficient protection for your specific situation. Courts almost never accept this argument. Kastigar settled the law. But in extreme circumstances, its worth exploring.

None of these options is good. That's the point. The system was designed to put you in a position where all your choices have serious downsides. Cooperate and risk providing the roadmap for your prosecution. Refuse and face contempt or miss the opportunity to help yourself. Accept immunity and hope the Kastigar burden actually protects you.

Todd Spodek tells every client the same thing about immunity decisions. This isn't about finding a good outcome. Its about damage control. Understanding which choice creates the least risk given your specific situation.

What you absolutley cannot do is make this decision alone. The stakes are too high. The traps are too hidden. The difference between formal and informal immunity, between use and derivative use, between cooperation that helps and cooperation that destroys - these distinctions require experienced counsel who understands how federal prosecutors actualy operate.

The Kastigar Burden: What "Heavy" Actually Means

The Supreme Court said the government bears a "heavy burden" to prove its evidence is independent of immunized testimony. That sounds protective. Courts ordinarily hold a Kastigar hearing before trial were the prosecution must demonstrate its evidence came from legitimate sources wholly independent of the compelled testimony.

But lets be realistic about what this means in practice.

The burden is "preponderance of the evidence" - meaning prosecutors just have to show it's more likely than not that the evidence is independent. Not beyond a reasonable doubt. Not clear and convincing. Just more likely then not.

And prosecutors prepare for Kastigar hearings in advance. The Justice Department manual requires prosecutors to document their evidence before granting immunity. They create detailed memos showing what they knew, when they knew it, and where it came from. By the time the Kastigar hearing happens, they have a paper trail supporting independence.

Yes, Oliver North won his Kastigar challenge. But his situation was unusual. His testimony was nationally televised. The potential for witness taint was obvious. He had resources to fight through years of appeals. Most defendants dont have those advantages.

For the average person facing a Kastigar hearing, the government's preparation usually wins. They anticipated this moment. They built there file accordingly. The "heavy burden" turns out to be managable when you've been documenting your independent sources all along.

This doesn't mean Kastigar protection is worthless. It means you cant rely on it as your primary defense. The best protection is not testifying in the first place - which means understanding whether you actually need to accept an immunity offer, or whether declining is the better choice.

The Real Question You Should Be Asking

Everyone focuses on the wrong question. They ask: "Will immunity protect me?" The real question is: "Should I be talking at all?"

Immunity agreements exist because prosecutors want your testimony. They think you have information valuable to their case. Sometimes that information is about other people. Sometimes its about you. Sometimes its about both.

Before you accept any immunity offer, you need to understand what prosecutors are actually after. Are you a witness? A target? A subject? These classifications matter. They determine how prosecutors view you and what risks you face.

If you're a witness - someone with information about others but no criminal exposure yourself - immunity might make sense. You testify, you help the investigation, you go home. The derivative use risk is lower because there's no underlying criminal conduct to prosecute you for.

If you're a target - someone prosecutors believe committed crimes - immunity is far more dangerous. Your not just providing information. You're potentially providing the roadmap for your own prosecution. Every lead you give them becomes another avenue to build the "independent" case.

And if you're a subject - somewhere in between, not clearly innocent but not clearly targeted yet - the calculus is complicated. Your testimony could move you into target status, or it could move you toward cooperation that genuinely helps. It depends on what you say, how you say it, and what prosecutors do with the information.

Call Spodek Law Group at 212-300-5196 before you talk to anyone else. Before you sign anything. Before you answer any questions. The consultation is free. The mistake of talking without us isn't.

This is why experienced federal defense counsel matters. Not just to review the immunity agreement. To help you understand whether you should be accepting any agreement at all. To evaluate your actual exposure. To advise on whether cooperation helps or hurts in your specific situation.

Federal immunity agreements are one of the most misunderstood areas of criminal law. People think immunity means protection. The reality is more complicated. Immunity means prosecutors get your testimony without being able to quote it directly. Everything else - the leads, the investigation, the potential prosecution - remains on the table.

The government designed this system. They benefit from confusion about what immunity actually means. Don't become another person who cooperated, thinking they were safe, only to discover their testimony created the blueprint for their own prosecution. Understand the real risks before you decideon  anything.