In today’s highly-regulated environment, many businesses and individuals face the risk of criminal liability or investigation. Additionally, incentives for whistle-blowers to come forward with information of potential wrong-doing increase the risks. State and federal agencies have relied on search warrants to surprise business executives, seize records and interview key employees before employees can be apprised of their rights. Because most businesses are ill-prepared to deal with search warrants and are slow to respond and protect their interests, business executives and employees may unknowingly waive important rights, allowing agents to obtain valuable evidence. In light of these risks, it is imperative businesses develop a plan to deal with an unexpected search warrant or government investigation.
Know the Signs of an Investigation.
Receiving a search warrant is a definitive sign that a business is the target of an investigation, but there may be earlier signals of an investigation which allow preparations to be made. For example, a business may have received a grievance through their internal hot lines or be notified of other misdeeds through internal audits and investigations. Another early sign of a government investigation includes field interviews of company employees by government agents. These often happen at the employee’s home and are initiated by agents adept in approaching individuals and persuading them to speak. Employees should be encouraged to inform their employer if they have been contacted by government agents.
Assemble a Response Team.
Businesses should assemble a response team of legal counsel and a response coordinator tasked with protecting the organization’s interests, monitoring the execution of the search warrant, communicating with the lead investigative agents and training employees how to handle investigations and search warrants. It is important for businesses to establish a relationship with competent legal counsel who has experience defending government investigations. Having an established relationship allows counsel to become familiar with all aspects of the business and to intervene immediately upon the presentation of the search warrant at the business. A response coordinator should be designated at each facility to manage the response of the facility and employees. The response coordinator should be trained in interacting with the lead agent and should try to obtain as much information as possible by procuring a copy of the search warrant, documenting the actions and communications of the agents and requesting an inventory of all company property seized by the agents.
Employees should be instructed to immediately contact one of the members of the response team if a search warrant is presented at the facility or if the employee is made aware of other signs of an investigation. Upon receiving notification of a search warrant, the response team may decide to close the office for the day and send employees home.
A criminal investigation can be stressful and intimidating for employees, particularly those approached by agents to be interviewed. Provide employees with information and communicate guidelines in case they are interviewed by agents. Remind employees to be professional and courteous in all dealings with government agents. Being courteous, however, does not mean the employee is required to talk to the agents. While they are free to speak with agents, employees should be aware of the potential pitfalls. Warn employees that, without preparation by reviewing dates or documents, they are likely to give the agents wrong information. Regardless of whether the information an employee provides is correct, it will all be memorialized in the agent’s written report and could be used later against the business. Finally, advise employees that they are entitled to consult with legal counsel prior to an interview or have legal counsel present during the interview.
It is also important to tell employees what not to do. They should never attempt to destroy or alter files or documents, lie to a law enforcement agent, interfere with or attempt to obstruct the execution of a search warrant or attempt to influence the statements or testimony of a witness. Such activities are criminal in nature and will only exacerbate the situation.
Consider Waiving Privilege.
Businesses should consider whether to waive their attorney-client, work product or self-evaluation privileges and disclose the findings of any internal investigations or audits performed after the search warrant has been executed. While the Department of Justice no longer requires waiver of privileges to gain cooperation credit, there is still a considerable amount of pressure to waive these privileges and disclose the results of an internal investigation or audit to the authorities. Once waived, privileged communications and information could become discoverable in ancillary proceedings. However, disclosing the findings of an internal investigation could also gain goodwill with the government and lead to a more favorable resolution. If the business decides to disclose the findings, the findings should be accompanied by a summary of any remedial steps taken to resolve the problems discovered, including employee disciplinary actions, implementation of procedures to prevent future misdeeds or victim compensation.
For better or for worse, a business’s response to a search warrant will have a significant impact on the resolution of the investigation. Taking the time to implement a response plan can prevent confusion and mistakes during the execution of a search warrant and ultimately lead to a better outcome for the business. If you need assistance developing a response plan, contact a member of Dinsmore & Shohl’s White Collar Crime Group or Corporate Group.