WHEN THE DEPARTMENT OF JUSTICE KNOCKS
DOJ Enforcement Trends: What to Expect and How to Respond
Jacqueline ArangoShareholder
Akerman Senterfitt
What types of crimes and entities are being targeted?Foreign Corrupt Practices Act Health Care Industry – Pharmaceuticals and Life Sciences
Emerging Markets – China and India
More Individuals – more than 50 in past 3 years
What types of crimes and entities are being targeted? (cont.)Health Care Fraud Creation of Health Care Fraud Task Forces
Criminal Enterprises
Major providers – such as corporations, hospitals
What types of crimes and entities are being targeted? (cont.)Mortgage and Lender Fraud
Money Laundering Structuring
Currency Reporting Violations
Financial Institutions who play a role financial crimes
What types of crimes and entities are being targeted? (cont.)
Insider Trading
Professionals/Gatekeepers Accountants and Auditors
Attorneys and In-House counsel
How is a Criminal Matter Likely to Come Up?Agency referral from a complaining victim
Civil lawsuit alleging RICO or other fraud allegations
False Claims Act complaint Questioning of Witnesses/UC Investigation
How is a Criminal Matter Likely to Come Up? (cont.)Authorized Investigative Demand Issued by the U.S. Attorney’s Office
In Federal Health Care Investigations
For the production of records (not testimony)
OIG or other Agency Subpoenas May be used in Criminal and Civil proceedings
Limited to the Statutory Authority of the OIG or Agency
How is a Criminal Matter Likely to Come Up? (cont.)
Grand Jury Subpoenas May only be used in Criminal investigation
For Records and/or Testimony
Generally issued to Non-Target Third Parties
“What wine goes good with grand jury subpoenas?”
How is a Criminal Matter Likely to Come Up? (cont.)
Search Warrants Issued by a Magistrate Judge Upon Probable Cause
That Evidence of a Crime will be Found
Particularity/Scope/Nexus with Crime
Generally used to Obtain Evidence from Targets of the Criminal Investigation
How to RespondGrand Jury Subpoenas FRCrimP 17(c)(2) – Quash or Modify only if “Unreasonable or Oppressive.”
Ascertain from the Prosecutor whether the Witness is a Target or Subject -- U.S. Attorney’s Manual §9-11.151 states:
. . . it is the policy of the Department that an "Advice of Rights" form be appended to all grand jury subpoenas to be served on any "target" or "subject" of an investigation.
Corporations have no 5th Amendment Privilege
Attorney-Client Privilege applies (unless Crime Fraud Exception is established)
Search Warrants (cont.)Talk to Agent in Charge Whether Company is Target or Subject
Nature of Investigation
Location of Privileged Materials/Note Objection
Documents/Equipment Necessary for Business Operations
Permission to copy documents/obtain a back up disc
Obtain Inventory of Items Seized
How to Respond
How to Respond
Search Warrants Be Courteous and Calm
Call Defense Counsel ASAP
Read the Search Warrant/Ask for Affidavit
–Crime Investigated
–Scope of Warrant ie., Location, Documents, Files, Equipment
–Date of Warrant
Get names and contact info for Agent and Prosecutor
Search Warrants (cont.)Speak to Employees Advise of Rights regarding Interviews by Agents
–Right to Refuse
–Right to Counsel
Instruct not to Destroy, Remove or Conceal Materials
Instruct to be Cooperative
Assign an Employee to take Notes
Send Non-Essential Employees home
Search Warrants (cont.)Notify Board of Directors/Management D & O Insurance Issues
Notify Employees
Suspend Document Destruction Policies
Indemnification Issues Subject or Target of Investigation
Conduct within Scope of Employment
Hiring of Separate Counsel Best Practice
Joint Defense Agreement
Other ConsiderationsDOJ Policy on Prosecution of Business Orgs. Protections
–Atty/Client Privilege–Advancement of Attys Fees–Joint Defense Agreements
9 Factors for Consideration
Review Compliance Procedures Are systems appropriate given nature of business?
Parallel Proceedings 5th Amendment Issues Stay of Civil Proceedings?
Other ConsiderationsInternal Investigation DOJ Policy - Prompt and Thorough Investigation
Factor in Federal Sentencing Guidelines
Benefits/Risks of Voluntary Disclosure
Call Prosecutor Establish Rapport/Credibility
Gather Available Information
Discuss Cooperation