A your company would ever be the subject becomes publicly known, - PDF document

G White Collar Criminal Defense Alert April 2001 What to Do When the Government Knocks on Your Door By R. Scott Thompson, Esq. and Stefanie P . Tavaglione, Esq. lthough it may seem unimaginable that When the investigation of the company A your company would ever be the subject becomes publicly known, employees should be of a government investigation, it could apprised of the fact that an investigation has happen. In fact, Federal and local law enforcement commenced. The message should be clear, and regulatory agencies are constantly investigating concise, and designed to avoid unnecessary alarm, corporations and it is likely that at some point over but should also convey the gravity of the situation. the lifetime of your business, you will be the subject Keeping employees informed helps to minimize of, or otherwise involved in, a government speculation and allows you to plan your response investigation. Would you know what to do in this with more freedom. situation? The following information is intended to familiarize you with some of the issues you would You must keep in mind that well-intentioned, face if you became the subject of a government lawful statements to employees concerning an investigation, and to assist you in preparing an investigation may later be misinterpreted as an investigation management plan. attempt to obstruct justice. Alerts to employees, created with counsel ahead of time, provide the Stage One: best message with minimal risk of obstruction Preparing for the Worst charges against the company. It would be wise to When employees learn that a government create a written record of the message delivered to investigation is under way, a certain amount of employees—this will provide protection in the chaos inevitably ensues. By creating an event that there is ever a question as to what the investigation management plan ahead of time, employees were told. Additionally, if possible, the some of the panic and confusion can be minimized. company’s counsel should conduct meetings with Portions of this plan can be included in your employees, rather than company managers or company’s standard internal policy manual and directors. This will provide maximum protection distributed to all employees. It would be prudent and lessen the chance that employees will perceive for you to designate key personnel to administer the the meeting as coercive rather than an effort to plan and give an oral presentation annually in protect the company’s legal rights. conjunction with other training. This document is published by Lowenstein Sandler PC to keep clients and friends informed about current issues. It is intended to provide general information only. Roseland, New Jersey Telephone 973.597.2500 L 65 Livingston Avenue www.lowenstein.com 07068-1791 Fax 973.597.2400

G Stage Two: Stage Three: The Government Agents Show Up Government Agents Interview Employees Once the government agents are convinced If the agents’ investigation takes them to your that there is reason to proceed with the company’s place of business, it is likely that they investigation, they may come to your company’s will want to conduct interviews. Your employees place of business to gather information. It is must be made aware that government agents may therefore important that your employees be drop in unexpectedly requesting to interview prepared ahead of time and that they are familiar company employees. Or, as is more often the case, with your company’s investigation management they may visit your employees at their homes. plan. These surprise interviews provide the government with enormous psychological advantages because First, the plan must address a method where all the employee will feel pressure to cooperate with visitors are received and asked to wait at a central the agents. Additionally, many employees will not reception desk until they have presented proper understand, due to the informal nature of the credentials and the purpose of their visit has been interview, that the information they provide can be established. Next, your plan should advise used against either the company or the employee employees to notify senior management in criminal proceedings. immediately if they are approached by government agents at your place of business. The plan also You can attempt to request that the agents arrange all interviews through company counsel; Employees should understand that they are not however, it is not likely that this request will be obligated to voluntarily speak with government honored. It is therefore important that, before agents, and that they cannot be penalized for investigation begins, employees be made aware of refusing to do so. their rights. Employees should understand that should include the name of a criminal attorney they are not obligated to voluntarily speak with who can be consulted immediately in an government agents, and that they cannot be emergency situation. Beyond legal counsel, you penalized for refusing to do so. Employees are must designate an investigation manager and a completely within their rights to politely refuse to team who can be called together quickly if an answer questions. investigation commences. The investigation manager will be responsible for dealing directly You should advise the employees of the with the agents. Furthermore, the plan should advantages to refusing to answer questions. First, include a method for employees to report to the it gives the employee time to reflect on the facts investigation manager all contacts by law surrounding the investigation, and avoids the enforcement or regulatory personnel. pressure of an immediate interview. Most importantly, refusing to answer gives the employee

G time to consult with an attorney. If, after hoping that the former employee might feel less consulting with an attorney, the employee chooses loyal to the company and will be more cooperative to consent to the interview, the employee may then with the investigation than current employees. request to have the lawyer present during the First, you should address this issue with your interview. Employees should understand that it is current employees as part of your investigation in their interest to have a third party present management plan, making them aware of the fact during any interview so that a record of the that they could be contacted after their current interview can be made on behalf of the employee employment ends. You should encourage them to or the company. contact the company if this situation ever arises. You must remember, however, that the decision If you learn that an investigation has whether or not to speak with the agents always commenced, you should attempt to contact all rests with the employee. The company must not former employees believed to possess important ask the employees not to speak with the agents— information regarding the company. You should such conduct could be considered obstruction of make an effort to conduct meetings with these former employees in person, and, as with current ...company counsel should...speak with each employees, it may be best for company counsel to interviewed employee immediately after the conduct the meetings. During these meetings, interview to determine what information was former employees should be referred to separate given to the agents. legal counsel, thus relieving the company of any justice. You may request that employees inform the possible conflict. The former employee should also company if and when they are approached by an be advised that it would be sensible for them to agent. Likewise, you may request to have company request to have their counsel present during any counsel (or counsel to represent the employee government interviews. Corporate counsel must specifically) present during the interviews (being be clear, however, in explaining that the decision of careful to explain to the employees that the whether or not to cooperate with the government attorneys represent the company, and not the rests entirely with the individual. If the former employee, if that is the case). If this request is not employee agrees to cooperate with the government granted, company counsel should, at the very least, agents and consents to an interview, he or she speak with each interviewed employee immediately should be asked to meet with corporate counsel after the interview to determine what information after the interview to discuss the substance of the was given to the agents. questions asked and information offered during the interview. Finally, do not forget about former employees. Government agents often begin an investigation of a company by questioning former employees,