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By Dan Levine
SAN FRANCISCO, April 17 (Reuters) - The U.S. Justice Department in San Francisco has instituted new oversight for complex cases, a federal prosecutor said, following a failed drug conspiracy prosecution against delivery service FedEx Corp .
U.S. Attorney Brian Stretch, in an interview with Reuters last week, said his staff has identified about 20 of the office's most complex cases to undergo "investigative progress reviews." He declined to identify any specific matters but said such cases would likely include corporate fraud and complicated drug investigations.
Every two months, the lead prosecutor assigned to such a case will meet with supervisors in the office, including the U.S. attorney, Stretch said. Management will receive regular updates on the investigation, help decide novel legal issues, and ensure the case receives proper resources.
"This allows everybody in chain to be sharing in real time a lot of the decisions on these larger investigations," Stretch said.
The new protocols were put in place after Stretch ordered a review of the FedEx case to improve future prosecutions. In that case, prosecutors obtained a grand jury indictment in 2014 against the courier service alleging it had knowingly helped internet pharmacies ship illegal pills. The Justice Department abruptly dropped all charges four days into trial last year amid evidence the company had actually tried to cooperate with the government on combating such pharmacies.
The judge commended the decision, saying it was clear FedEx was "factually innocent." An attorney for FedEx called the prosecution "an epic institutional failure."
Stretch's office is currently investigating a phony accounts scandal at Wells Fargo & Co.
John Zach, a former federal prosecutor in Manhattan who investigated SAC Capital, said unit chiefs in that U.S. attorneys office closely monitored cases but line prosecutors did not usually meet with top officials until it was time to decide if someone would face charges.
The problem in the FedEx case was that prosecutors, including supervisors, did not recognize the significance of cooperation evidence that FedEx had highlighted before the company was charged, FedEx attorney Cristina Arguedas said.
The new oversight system "is certainly a good idea," Arguedas said, although its success will depend on whether supervisors look at the actual evidence or rely on a single prosecutor's interpretation.
Stretch declined to comment on FedEx case details, but said no one wants to have to dismiss a case during trial.
"It is my expectation that this new review process can only aid with such situations," he said. (Reporting by Dan Levine; Editing by Bill Trott)