How to plead the 5th more than 100 times and still win

LOS ANGELES -- With his attorney sitting by his side in the witness stand of a Los Angeles federal courtroom, recent Chinese immigrant and business owner Tony Hang looked down at a piece of paper to aid him in invoking his Fifth Amendment right against self-incrimination for the 100th time.

The trial in May included several seldom-seen elements. Not only was it brought under the False Claims Act -- a type of case rarely taken to trial, much less a jury -- but multiple defendants invoked the Fifth Amendment.

Presiding over the case, U.S. District Judge Michael Fitzgerald informed the jurors this was not a criminal trial, and they were allowed to draw an adverse inference from Hang's invocation of the Fifth Amendment.

After deliberating for about a day, the jury came back with a complete defense verdict.

"To be fair, this wasn't something that we wanted to do; this is what we had to do," said Hang's attorney, Paul Murphy, who defended him along with Daniel Csillag, both of Murphy Rosen LLP in Los Angeles.

Meanwhile, Jason Liang and John Ly of Liang Ly LLP, representing Hang's co-defendant and vice president of his company, Mark Grieco, also advised their client to plead the Fifth. He did so, multiple times, and also was fully vindicated by the jury.

Hang had been accused of smuggling shipments of the food additive glycine into the U.S. from China. Since the U.S. government declined to pursue the case, business consultant David Ji -- a former friend and mentor of Hang's -- hired his own counsel to pursue the lawsuit. He claimed Hang, through his import/export business Unichem, defrauded the government out of millions of dollars in anti-dumping tariffs.

Jason Liang, left, and John Ly of Liang Ly LLP

The defense team also overcame the problem of their clients testifying Unichem suffered a computer failure that caused the loss of all shipping documents relating to the period when they were supposed to have defrauded the government. United States v. Pacific Chemical International Inc., 14-CV7203 (C.D. Cal., filed Sept. 15, 2014)

The trial became a battle of credibility, the defense attorneys said.

"The single most important thing was making sure the jury liked Tony Hang. If they didn't like him, I think we would have been done," Murphy said in a post-trial interview about how he and his team overcame the possible inferences made by their client taking the Fifth.

"In my mind, if there was a moment when we won the case, it was when after invoking the Fifth, I took Hang on direct and he got to tell the jury his story," Murphy continued.

"We wanted the jury to focus on him as a person and not on him as the invoker," Murphy explained. "At one point a very genuine story came out about him and when he first came to Los Angeles, and for the first time in his life he flies in and he sees palm trees. It was a really human moment, and he was genuinely happy and expressing himself in a way that showed emotion."

Murphy said that was the best moment of the trial "because now, if the jury was going to rule against him, they had to rule against Tony the human being and not the invoker."

"I can tell you that on a strategy basis ... we wanted to be able to say to the jury, 'Look, he has his bumps and bruises and flaws,' but it was absolutely crucial that I could stand up during closing argument and say, 'You know what he never did to you? He never lied.'"

Echoing Murphy's sentiment, Ly said another key factor to the defense teams' success was their ability to highlight certain credibility issues with their clients' accuser.

Ji, the relator and whistle blower represented by Michael Magnuson of the Law Offices of Michael Magnuson LLP, had been convicted of a felony prior to the trial.

"One of the advantages we had is that Ji, the relator, just wasn't credible, and we were able to argue at the end of the day, that we were the ones being truthful even though we invoked the Fifth because we didn't lie to the jury, and we can contrast that with Ji, who lied multiple times to the jury," Ly said. "I think that was a tough argument on its face to make in a vacuum, but that's why we have trials and evidence, and we were able to blunt the impact of our clients' invocation."

"We were also able to poll the jury afterwards," Ly recalled, and at least one of the jurors noted that she, too, had experienced server issues at work. Ly said that "the server issue wasn't as harmful as we thought, partly because we really prepped the jury for it during voir dire."

The other hurdle the defense team had to overcome was the missing server full of records. Ly said the defense strategy was to address the issue of the missing server early, during voir dire.

"I think a lot, if not most, of the jurors felt that it was important to have these documents. But I think we were able to preview that before the jury and ask them, 'Hey, have you ever dealt with a server failure?'" Ly said. "We really prepared them for this issue, so it didn't come as a shock."

Liang said both Hang and Grieco retained criminal defense counsel and were advised that due to the possibility of parallel criminal proceedings, they were advised to plead the Fifth. The two defense teams petitioned to stay the case until the statute of limitations had run out on any potential criminal proceedings, but Fitzgerald denied their request.

"Independent criminal defense counsel is telling us, 'Personal liberty has to take the front seat, so they will take the Fifth.'" Liang said.

While technically a civil trial, Liang said the case was quasi-criminal in nature, which created extra challenges for the defense.

"We walked into it with no affirmative defenses, no counterclaim, nothing you would normally throw up in a civil case," Liang said. "To me this is one of the most challenging civil cases I've ever faced because of how melded the elements of a criminal defense case were with the elements of how a civil trial proceeds. ... Unlike a criminal case, the burden of proof was significantly lower."

The trial proved almost precedent setting with Csillag making a burden of proof argument his colleague Murphy said may end up at the Supreme Court as an issue in another False Claims Act case.

Such cases brought by a relator and whistleblower are treated the same in respect to burden of proof as if they were brought by the government itself. What Csillag and the defense team argued in the middle of trial is that while a relator and whistle blower does step into the role of the government in a False Claims Act where the government has chosen not to pursue, the terms "U.S. government" and "relator" are not interchangeable.

While Fitzgerald ultimately did not go where no judge had gone before and grant defense counsel's motion to change the burden of proof to "clear and convincing," he did pause to listen to Csillag's argument.

"What did Congress mean when it said 'United States'? Did it mean just the United States as a party or did it mean the United States or the relator on the behalf of the United States?" Csillag told the judge. "The statute does have a distinction between the United States and the relator. Those terms are not used interchangeably."