Dec 23, 2020
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As described in earlier modules, government investigators do not act without having a specific intention. If they ask questions or subpoena documents, they likely already have invested thousands of hours and they believe they can build a case. When they start talking with people in a company, they want to gather more evidence. Their investigations will be in an advanced stage, but the witnesses may not know anything about the nature of the inquiry. Some investigators will try to intimidate or trap witnesses.
When initially approached, people that work for companies may get nervous. They may:
If the company does not help team members understand the nature of an inquiry, those team members may get themselves and the company into deeper troubles. Remember that the investigators want to prevail. Victory for them means some type of sanction, injunction, disgorgement, finding, or conviction. Investigators do not earn promotions by letting companies or individuals off the hook. On the contrary, their careers advance when their investigations lead to penalties. They may try to appear friendly, saying they only want the truth.
Yet people should always remember the wisdom of President Reagan, who warned of nine words that an American never wants to hear:
How Investigators Start:
The investigative team starts gathering evidence in a number of different ways. The investigators may identify an employee, a group of employees, or other potential witnesses. If the investigators believe the prospective witnesses will help them build a case against the target, they will conduct an interview—either with or without someone to transcribe the exchange. Since the investigators would have to give any transcriptions of the interview to the opposing parties during the “discovery” phase, they may elect not to take notes or recordings of any kind. Business leaders may or may not know that the government has begun an investigation.
Other times, the government agents may want to show force. In those situations, the agents make a surprise visit, often loud, with an overwhelming display of firepower. Scores of people wearing dark windbreakers with large yellow letters (FBI, SEC, FTC, IRS, FDA, etc.) may show up to conduct a search.
Regardless of whether the government agents use subtle or strong-arm tactics, they always give a sign that more invasive activity will take place, putting a company and its employees in significant legal jeopardy.
The investigative tactics that the government agents use may dictate the appropriate response for people within the company. Our team at Compliance Mitigation offers insight that leaders may consider if they learn of:
Regardless of what approach the government investigators take toward a company or its employees, people should try to determine whether the agents consider the people or the company as:
If a person can determine the government’s posture toward the company from the beginning, that person can better assess the potential liability.
Our team at Compliance Mitigation encourages leaders of businesses to get competent legal advice—we are not lawyers and we do not offer legal advice. All of the information we provide comes from our experience of having gone through government investigations and having interviewed thousands of people that have gone through government investigations. We offer insight that business leaders may consider to protect themselves against being dragged into government investigations.
Experience convinces every member of our team that, despite sound business policies and internal audits, investigations can come unexpectedly. With thousands of regulations, people may operate a business that violates laws or regulations; ignorance of those laws or regulations, however, will not immunize them against an investigation.
On the other hand, regular training that shows a good-faith effort to comply with applicable statutes and regulations may limit a company’s exposure. With our nation’s commitment to big government and mass incarceration, we believe every business is vulnerable. Our team offers general guidelines, and real-life experience of what happens to people who get caught up in a government investigation.
Part 1: Informal Interviews
Sometimes, agents will show up at a person’s home, or approach a potential witness at some other non-threatening location. The agents may or may not advise the employee that the person has the right to decline to answer any questions. Also, the agents may inform the person that anything the person says could possibly be used against the person later. As a result, people who are not prepared to respond to a government investigator may consent to the interview, not knowing that he or she has the option to refuse.
If a government investigator approaches any citizen, the person may feel nervous. After all, if the investigator believes the person lied, the investigator may initiate criminal charges for lying to an officer. Further, that conversation could lead to enormous legal costs in the event that the government subpoenas the person for a deposition later. People who lack preparation or knowledge may not recall details when responding to questions; government investigators can twist words, or later use a person’s words to malign, or cast doubt on the person’s character.
A company should take proactive measures to prepare people for the possibility of a government investigation. It should also provide general training about a person’s rights in the event that a government agent asks for an interview. That training should include instructions, or options, that an employee may consider if approached by an agent. Some guidelines on training may include what a person should do if:
If an employee lets the company know that a government investigator made contact, the company may want to hire an attorney for the employee. The attorney may speak with the prospective witness to talk about rights the person may have. A prospective witness may decline to speak with the investigator, or the witness may choose to have an attorney present. The company’s lawyer may try to intervene and ask if the questions pertain to the company; if so, the company’s lawyer may ask for an opportunity to attend the interview with the witness.
If the company learns about the interview after the witness spoke with investigators, a lawyer should attempt to speak with the employee. Neither the company’s lawyer, nor anyone else, should make the person feel as if speaking with the government violated anything at all. By speaking with the employee, the lawyer should attempt to learn the substance of what the government wanted to know.
Although the lawyer may advise the employee of his or right to counsel, no one should retaliate against the person in any way. Any type of retaliation or judgment could work against the company, potentially eliciting accusations of violating whistleblower statutes or obstruction of justice charges.
The best time to prepare for a government investigation would be before the government investigation begins. In other words, our team at Compliance Mitigation encourages leaders to train for best practices, consistent with the compliance manual. That training should include guidance for people to consider in the event that government investigators target them.
Part 2: How to Respond if Authorities Execute a Search Warrant
Although investigators may interview witnesses in private, trying to keep their inquiries under wraps, sometimes they choose a more intrusive approach to let the company, the company’s leaders, the media, and other businesses know that the company has become the target of a government investigation. Together with a law enforcement agency, like the FBI or the local sheriff’s department or police department, a cadre of officers may burst into the business. In those instances, the officers yell for everyone in the office to step away from the computers and stop what they’re doing.
When law enforcement officers execute a search warrant, they may be loud and intimidating. The people working in the office will likely not know what constitutional protections exist. For this reason, the company should train people on important steps they can take to protect themselves. Potential training topics include:
If investigators have gone to the trouble of getting a search warrant, it’s safe to assume that they intend to bring charges that will disrupt the company and the lives of many people that work in the company. The warrant differs from getting a subpoena, which authorizes the investigators to obtain documents or recordings voluntarily. To obtain a search warrant, the investigator must persuade a judge that the government has probable cause to believe that evidence of a crime exists in the location. The target of the warrant will not know that the investigator is communicating with the judge. As such, the target cannot work to defend against the argument that the investigator will make to the judge.
To show probable cause, the investigator may rely upon evidence gathered through an affidavit, recited under oath, that shows the reason(s) the government believes the target has participated in a crime. The warrant must define places to be searched, the people the investigators want to search, and the types of things the investigators wants to seize.
According to Rule 41 of the Federal Rules of Criminal Procedure, once a judge issues the warrant, the investigators have ten days to serve the warrant. In most cases, the officers show up between 6:00 am and 10:00 pm. The agents must provide the company with a copy of the warrant, and also with an inventory list of everything they’ve seized.
Investigators exercise search warrants when they want to catch a company and its team by surprise. A company can mitigate this disruption through appropriate training and preparation at various stages of the investigation—including, before, during, and after. Our team at Compliance Mitigation provides that specialized training.
Good training may protect the company against the shock and awe of a team of government agents executing a search warrant. Expect those agents to be loud and act aggressively as they try to show absolute control over the scene. The agents will likely gather the employees together and relegate them to a specific area of the business. These tactics can shake people into fear and induce some to cooperate in ways that go far beyond the scope of the search, which can expand the investigation.
Company leaders should prepare employees for what happens in a search, and how people may want to respond. If a search takes place, a company representative should ask to see a copy of the search warrant and also the identifying credentials of the people searching. It may make sense for the company to assign a “warrant team” to represent the company in the event of a surprise search warrant. People on the warrant team may have higher levels of training, so they can keep people calm and potentially limit the intrusiveness of the government investigation. The designated leader of the warrant team may want to take the following measures in the event of a surprise search warrant:
Although a government search is immediate and catches people by surprise, investigators can rely upon other tactics to gather evidence against a company and its leaders. On the surface, subpoenas may seem less intrusive, because agents aren’t coming in with loud fanfare. But subpoenas, grand jury investigations, and depositions can be extremely invasive and broad.
The agents may not need probable cause to convene a grand jury or to issue a subpoena. The requests may be extremely broad, asking for information that is difficult to produce—like records going back several years, or all email and text exchanges, or bank records and tax records.
Although witnesses will have substantial advance notice to comply with requests for the production of documents or testimony, such requests come with enormous liability. Failure to comply can result in charges for obstruction of justice. For this reason, the company and the employees should consult with counsel if they ever receive a subpoena. Further, the company should provide basic training to help all team members understand the process and implications.
The best time to protect a company would be before a government investigation begins. For this reason, the company should engineer a compliance and training program that identifies all corporate policies, processes, and procedures, pertaining to every aspect of the company. The company should have excellent, cloud-based record-keeping systems in place, and potentially a Customer Relationship Management software system that maps out the entire company journey, including:
Transparency can protect an honest company and its leaders from the enormous cost of a government investigation. With good training, the company can also protect itself in the event that something goes wrong, which could bring unwanted attention from government investigators.