Legal history is replete with stories of persons or companies turning a manageable legal problem into a more serious one by trying to hide or destroy evidence, see Watergate and Arthur Anderson/Enron for two notable examples. A recent case involving a bus company executive provides a good case study in what not to do when facing a government investigation and the consequences of trying to hide or destroy evidence in an investigation.
Ralph Groen worked as a VP for Information Technology for Coach USA, a tour bus company. Beginning in 2009, the NY AG and the US DOJ began investigating Coach USA and another company forming a joint venture to corner the tour bus market in New York City and thereby drive up prices. The DOJ and NY AG sued the companies in 2012 and the companies settled in 2015 by agreeing to pay $7.5 million and breaking up much of the joint venture.
In October of last year, Mr. Groen was charged with and pled guilty to obstruction of justice for: 1) concealing the existence of and directing the destruction of backup tapes for the company’s email and other electronic records; 2) lying to Coach USA’s outside counsel regarding the existence of the backup tapes; 3) failing to provide policy documents showing the company’s backup tape policy; and 4) lying in his deposition about Coach USA’s document retention policy and procedures.
Last week, Mr. Groen was sentenced to 15 months in prison and fined $5,000.
Finding out you or your company is the subject of a governmental investigation can be terrifying. While the urge to destroy or hide potentially incriminating evidence is understandable—DON’T DO IT. Destroying or hiding evidence is a crime. As with Mr. Groen, you may turn a civil case against your company into a criminal case against you. Be honest with your lawyers regarding the existence of documents, let the lawyers fight over what gets produced. Hiding documents and lying to your own lawyers, or the government, turns a difficult situation into a terrible one and can land you in prison.
As the great Eric Clapton said, Tell the Truth.