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Emergency Responses to Government Investigations: “They Say They Have a Search Warrant. What Do We Do?”Jeff Jensen Husch Blackwell LLP
Modern Search Warrants
National coordinated investigations Covert record collection and interviews Electronic surveillance Physical surveillance
Modern Search Warrants
Surprise approachEarly AM executive interviewsSimultaneous search warrant Pre and post surveillanceEmbedded whistleblowersOn-site interviewsDumpster dives
Follow-up electronic subpoenas
Solutions/Preventative Measures
Extrapolate from early warning signs Pay attention to interviews of former
employees/law enforcement rumors/blended HR issues with compliance investigations
Advise senior executives in advancehow to react to surprise interview attempts
Solutions/Preventative Measures
During Search Warrant Execution Contact lead prosecutor Contact other offices/executives likely to be approached Educate employees likely to be present – context and candor Interview options No discussions Avoid any form of record destruction or removal Avoid typing and texting
Maintain attorney client privilege
Early Warning Signs
Persistent pattern of whistleblower allegations High-level whistleblower allegations or exit interviews Non-economic accounting decisions Spiking quarterly results of key metrics Media reports of corporate improprieties Mentions of law enforcement involvement by opposing
counsel or transactional counter-parties Law enforcement interviews of former employees
Alarm Bells
Civil inquiries from agencies that frequently conduct parallel investigations (IRS, EPA, HHS, Attorneys General…)
SEC notice of preliminary investigations Targeted FGJ subpoenas High-level executive interviews by law enforcement Search warrants
Common, Critical Mistakes Whistleblowers:
Retaliation – over-reaction Assuming only internal reporting – under-reaction
Ignoring: Media interest BBB and other consumer advocates Plaintiff’s bar
Waiting for the Wells Notice Hands-off approach with DOJ, USAOs, SEC Search warrant response
If You Have to Be ProsecutedNPAs and DPAs
Enforcement Focus Insider Trading FCPA Money Laundering Revenue/Expense Recognition Municipal Bond Offerings Health Care Fraud FCA Dodd-Frank IRS Whistleblowers
Obstruction of Justice
Tougher to position Company as victim Loss of credibility during negotiations Easier case for prosecution to make Greater jury appeal
Avoiding the Problem in the First Place
Tone from the top Robust and dynamic compliance program Over-react to repetitive or high-level compliance concerns Conduct exit interviews and elevate compliance concerns
revealed Shape – don’t wait – for enforcement conclusions Honest early assessments and transparency Seek prosecution of wrongdoers Never, ever retaliate or destroy records
