Experienced Government Investigations Attorneys
We hear about government investigations every day. This article will discuss federal government investigations from the point of view first of the individual, then from the point of view of a corporation.
Different federal agencies can start investigations. The top gun is the Federal Bureau of Investigation (FBI), which protects the United States against terrorist and foreign intelligence threats, and enforces criminal laws of the U.S. They combat public corruption, criminal organizations, major white-collar crime, and significant violent crime.
Many federal agencies have their own investigative enforcement offices within the U.S. Department of Justice that investigate violations of that particular agency’s regulations. Most major federal agencies also have an Office of the Inspector General, or Criminal Investigation Division (CID).
Investigations into Individuals
There are investigations of individuals, and investigations of corporations. Individuals being investigated sometimes find out when they get a knock on the door by law enforcement officers, receive a letter from a US Attorney’s Office, or get a subpoena. Agents may come to their home or office with a search warrant.
Talking to Investigators
The first question you have to consider is whether you should talk to the investigator, the agent or other law enforcement officer. Their job is to make you feel like you should as if not doing implies you are hiding something.
Being Served With A Search Warrant
Sometimes you have no choice as to what to do. If you are served with a search warrant, the government has convinced a judge that there is reason to believe you have evidence of a crime. It might be a crime by you, or someone else. There could be a wiretap on your phone. People you talk to may be cooperating with the government, wearing a wire, or recording your phone call.
If you are served with a search warrant, it is best to talk to a lawyer before talking to anyone. If you talk to the investigator and say anything inaccurate, you can be subject to charges for that alone, and often the lie, the obstruction of justice is easier to prove than any underlying crime.
So it is not inappropriate to decline to talk if you are surprised by an investigator until you have had an opportunity to consider the situation and talk to a lawyer. Obviously, you have to comply with any legal document served to you, in accordance with the terms of the document. It may give you time to produce or may require immediate production or access to search.
Talking to Your Attorney: Privileged Information
In other instances, you have time to consider calling an attorney. You may be subpoenaed to appear or produce documents before a Grand Jury. You should have a lawyer go over what privileges you may have to object to what they are asking. If you do not raise an objection to disclose something that is privileged, you waive the privilege.
You need to consult with an attorney as to what is or is not privileged. Your lawyer will examine your situation. Your lawyer should first try and learn what your status is by talking to the prosecutor. You may be a “target” of the investigation, a “subject,” or a “witness.” You can move from being a “witness” to being a “subject,” to being a “target,” as the investigation progresses.
You may or may not be permitted to decline the interview with the agent. If you accept and talk to them, there may be privileges against answering certain questions. Those privileges may not apply to yourself, but to someone else, and you should advise the agent that you need time to review the matter with your attorney, rather than risk infringing on someone else’s privilege.
If you speak with an attorney, the attorney will help you figure out what the questioning is about, and can work out some arrangement with the investigator about the interview. The attorney may advise you to remain silent or talk only upon an immunity grant.
Cooperating With the Government
In extreme circumstances, if you are guilty, you may be able to reduce your punishment by cooperating with the government.
Interviews by a Federal Agent
If you are a federal employee, the agency’s Office of Inspector General (OIG) may contact you and say they need to talk. Most federal agencies have an OIG, and the agencies usually have, as a condition of employment, that employees are required to speak with OIG agents.
Violations of agency regulations often are crimes. They could be as simple and innocuous as an incorrect time slip. Ralph Kramden on “The Honeymooners” had a major anxiety attack when he was called to appear at the IRS office. When he arrived, they told him they just called him because he forgot to sign his tax return.
Agents Showing Up Unannounced
The agent may show up unannounced at your desk at the office, or you may get a call or letter requesting the interview. You then have a decision to make, whether to talk to them or not. You are never required to talk, but there may be serious repercussions if you do not. You should think about it first, and if you are concerned, talk to a lawyer.
It could be a criminal investigation, or, in the alternative, solely an administrative action (that could result in loss of the job.) You should figure out which it is, first.
Important Note for Federal Employees
If you are a federal employee, you need to know whether declining the interview is a “fireable” offense. Any interview by an OIG agent must start with a warning, even if they just approach you at your desk in the office. The kind of warning they give you is important. You can tell from the warning when they are investigating a crime, or whether it is an administrative action, only.
If the agent gives you a “Garrity warning,” it is a criminal investigation. The warning says that you are ‘being asked to provide information as part of an internal or administrative investigation and that the interview is voluntary, and no disciplinary action will result from refusing to answer questions.
Your silence can be used in an administrative proceeding, for whatever it is worth, and any statement you do choose to make can be used in criminal or administrative proceedings.’
If you are facing a criminal investigation, it be prudent to talk to an attorney before being interviewed.
You may instead get a “Kalkines warning,” which says that you are involved in an ‘internal or administrative investigation, and “you must answer” the questions. Failure to answer may result in disciplinary action and dismissal.’ The key difference is that in an interview where you have received this warning, your answers cannot be used in a criminal proceeding.
In exchange for that, you must fully answer the questions, or be subject to disciplinary proceedings. You are not being investigated as part of a federal criminal case, but you must talk to the OIG agent as a condition of your employment, and you can be fired if you do not.
Do Not Lie To An Agent
Keep in mind the worst thing you can do is lie to the agent or destroy evidence since perjury or obstruction of justice is often easier to prove than the underlying crime. So take your time before being interviewed, think about what you might be asked, and what you might have to answer, and then maybe consult a lawyer.
Just Because You’re Being Investigated Doesn’t Mean There’s Evidence You Are Guilty.
Just remember that people in power are often the subject of investigations. Governors, sports legends, Chief Executive Officers, general counsel of mutual funds, Controllers, heads of government, federal and state public officials, directors, officers, lawyers, auditors, accountants, bankers, politicians, business leaders and wealthy individuals – all are investigated every day.
They are often investigated on multiple issues, such as:
- Securities and foreign exchange trading
- Compliance procedures
- Conflicts of interest
- Benchmark manipulation
Investigations into Corporations
Just like individuals, there are investigations into corporate conduct every day. These investigations are performed by:
- The Department of Justice
- The U.S. Securities and Exchange Commission
- The Federal Trade Commission (FTC)
- The antitrust division of the US Department of Justice (DOJ)
- The State Attorney General and the European Commission (EC)
- The Department of Defense (DoD)
- The Financial Industry Regulatory Authority (FINRA)
- The Federal Energy Regulatory Commission (FERC)
- The Internal Revenue Service (IRS)
- Health and Human Services (HHS)
- The Food and Drug Administration (FDA)
- TheOffice of Foreign Assets Control (OFAC)
- Comptroller of the Currency (COO)
- The National Highway Traffic Safety Administration (NHTSA)
- The Public Company Accounting Oversight Board (PCAOB)
- The Federal Reserve
- Congressional committees,
- The Office of Inspector General
They all conduct investigations through their investigative wings, usually called the Office of Inspector General (OIG), or Criminal Investigative Division (CID).
Every agency is charged with enforcing its laws and regulations, and their staff is paid to keep busy with investigating conduct that might be criminal. Governmental regulations are complicated, and many violations are inadvertent or easily explained, and not criminal at all.
Priorities of the DOJ vary with time.
U.S. Foreign Corrupt Practices Act (FCP)
Now, the US Foreign Corrupt Practices Act (FCP) and similar anti-corruption laws are being aggressively enforced, involving multinational corporations, private equity funds, and individuals. Investigations are conducted by the DOJ, SEC, and even the UK Serious Fraud Office. Whistleblowers often initiate these investigations – involving, for example, sales practices, permits, licenses, and improper payments.
Antitrust investigations can result in huge recoveries by the DOJ for the government. The DOJ antitrust investigations of national and international cartels have resulted in more than 1 billion in fines, and more than 50 criminal cases, annually. International price-fixing and bid-rigging is a top priority.
Hart-Scott-Rodino (HSR) or “Competition Notifications” in “Competition Investigations”
Hart-Scott-Rodino (HSR) or “competition notifications” in “competition investigations” by antitrust agencies occurs with mergers, acquisitions, and joint ventures. The investigation may zero in on a particular department of the Corporation, like conduct of audit committees, the Board, or particular corporate executives.
These investigations may involve securities, theft of trade secrets, Foreign Corrupt Practices Act, the False Claims Act, and they may result in internal investigations, grand jury, and regulatory agency subpoenas, and search warrants.
Environmental violations, for example, hazardous waste and disposal practices, are investigated by the EPA, and result in civil and criminal enforcement actions by the government. Actions under the Clean Air Act, Clean Water Act, and other federal environmental statutes can result in administrative or judicial actions, and result in fines, penalties, and injunctions.
Violations Related to Governmental Contracts
Investigations based on statutes and regulations relating to governmental contracts, like the Federal Acquisition Regulation (FAR), the Department of Defense FAR Supplement (DFARS), can result in:
- Breach of contract claims
- Delay and disruption claims
- In TROs
- Stay of contract
- Corrective action
- Mandatory disclosure
- Debarment proceedings
FDA and DOJ Criminal Investigations
In the healthcare field, there are, for example, FDA and DOJ criminal investigations, which include:
- False Claims Act cases
- Foreign Corrupt Practices Act investigations
- Stark law violations on self-referrals
- Kickback and marketing investigations
- DEA investigations into pharmacies
- SEC investigations of biotech security sales
- Investigations into improper charging practices.
SEC and DOJ Investigations
The SEC and DOJ are involved in multinational corporations investigations in the energy sector, such as:
- Corruption allegations
- Procurement issues
- Accounting and disclosure issues
- Compliance issues
- Improper use of company assets
The SEC and PCAOB investigate accounting firms concerning auditor independence, financial statements, and related issues. Defense contractors are investigated under the False Claims Act for misuse of congressional appropriations. And audit committees are investigated by the SEC regarding accounting fraud and whistleblower retaliation.
Immigration and Worksite Enforcement Issues
DOJ, ICE and State Attorney Generals investigate immigration and worksite enforcement issues. All the while, the U.S. Attorney’s Offices and the Department of Homeland Security (DHS) investigate immigration worksite enforcement violations.
Investigations are taking place every minute of every day in every city in the United States, and each agency of the federal government has a division charged with the responsibility of enforcing its provisions, through investigations and enforcement proceedings.
Subpoenas Served on Corporations
When served with a subpoena, corporations must take additional steps, that individuals do not. Corporations are made of many individuals. If any one of these individuals does something that violates the terms of the subpoena, the corporation will be held responsible. Therefore, they have to take special precautions to protect themselves, when complying with an investigation.
Grand Jury Subpoenas, Regulatory Subpoenas and Civil Investigative Demands (CID)
The government may issue a grand jury subpoena, a regulatory agency may issue a subpoena, or there may be a civil investigative demand (CID). An organized approach towards responding to the request must be executed. First, an employee must be designated to be responsible and collect the material and keep an inventory of what is provided.
Then the material has to be provided to an attorney to review, to see what complies, what is beyond the scope of the subpoena, and what is subject to some sort of privilege.
Notifying Records Custodians
That individual must notify all records custodians of the corporation to not destroy responsive documents, while the investigation continues. A Document Preservation Notice must be sent out, specifying what types of documents must be preserved and not altered. The IT department then needs to be informed not to perform any automatic deletions of electronic data.
The subpoena usually would not include requiring employees to produce non-business information that they keep on their personal devices. Withholding or altering documents can be obstruction of justice, which can be easily proven as a criminal charge than the underlying crime.
Search Warrants Served on Corporations
Search warrants on corporations should always result in an immediate call to an attorney. Corporate employees should not give consent to search any area beyond the area covered by the search warrant. An inventory should be made of everything taken.
Generally, the rules with regard to individuals apply to corporations. Corporations are composed of individuals and are treated as individuals. The same precautions should be taken by corporations as those taken by an individual, with regard to interviews.
Usually, though, they would start with consulting an appropriate attorney.