Increased Enforcement Is Your Cue to Be Prepared
As the government ramps up its enforcement efforts, particularly in the financial, environmental and health care-related industries, it has never been more important for individuals
and businesses to be prepared to respond to a knock on the door from federal or state authorities.
Attorney General Eric Holder recently highlighted the government’s focus on business crime when he declared to the House Judiciary Committee that detection and enforcement efforts in fiscal year 2012 resulted in an astonishing recovery of approximately $4.2 billion. In addition, in the past three years alone, the Department of Justice has filed nearly 10,000 financial fraud cases against individuals and businesses, which has many believing there is legitimate reason to fear an increasing criminalization of business practices.
Mental preparation for an impending investigation is essential even if you do not believe that your company has done anything unlawful. Not only can your company and colleagues be convicted, but from the moment you are served with a warrant, the way in which you and your employees respond can have serious ramifications for your business. With that in mind, your company should have a program in place to cooperate with an investigation, yet protect privileged materials and trade secrets and minimize ongoing business interruption. Some general approaches to keep in mind:
Think Fast and Act Slow. You should be prepared. There is no more important time to simultaneously think fast and act slow than when initially served with a warrant. Therefore, it is important to act in a measured, careful and deliberate manner. Get a trusted attorney involved—confidence and credibility is everything in this type of stand-off.
Determine Scope of the Investigation. As soon as the warrant is served, it is critical that your company immediately determine the scope of the government’s authority in relation to the immediate investigation. By reviewing the face of the warrant, you will be able to quickly determine the seriousness of the matter, as well as the defined area that the agents can search. The fact that a warrant is being executed is notable in and of itself because it likely means that a neutral magistrate has been convinced that evidence of a crime is located on the premises.
Avoid Obstruction at All Costs. All too often, headlines appear in the media reporting not only criminal charges against a business but also additional charges filed as a direct result of the manner in which its executives and employees handled themselves during the investigation. Your cooperation can go a long way in establishing credibility with the prosecutor, and there is no need to tack on an obstruction or other charge for completely avoidable behavior. Your focus should be on message discipline—do not complain and do not explain. It is important to remember, for instance, that a war-rant only requires you to allow access.
Define Roles within Your Organization. This will be immediately important during a crisis, i.e., make
clear distinctions between the company and individual officers. Your company has its own privilege that is vitally important to protect, and each member of the organization must respect this reality. Identify ahead of time who will be the point of contact with law enforcement and remember that Miranda has no application in most investigations.
Interview Key Personnel. At the very first opportunity, your company should instruct its counsel to interview key personnel to determine how the company or its representatives could be involved in the potential criminal activity. Importantly, you must determine whether the agents were directing their search at any particular employees, the type of files that the agents were seeking, and in what areas of the company were the files located. It is also imperative that you know the answer to the three questions a prosecutor will ask each employee involved in its investigation: What did you know? When did you know it? What did you do about it?
There is no benign interaction with the government—agents knocking on your door have arrived because they believe a law has been violated and someone is responsible. However, considering the agents and prosecutors do not know where their investigation will
lead, your company can position itself favorably by being prepared, complying with the law, and conducting its own investigation into what might have caused law enforcement to suspect wrongdoing at your place of business. 
Justin Whitworth, an associate attorney at Graves Bartle Marcus & Garrett, contributed to this article.
Todd P. Graves, former U.S. attorney for the Western District of Missouri, is a partner with the commercial litigation firm Graves Bartle Marcus & Garrett.
P | 816.256.3173
E | todd.graves@gbmglaw.com
Return to Ingram's June 2013.