How to react if your company is under investigation for white-collar crime

Embezzlement, money laundering, tax evasion and commercial bribery are common white-collar crimes that authorities regularly investigate. Oftentimes these alleged crimes happen without executives even knowing someone in their organization is committing them. However, ignorance does not count as a
If authorities come knocking on your company’s door, how do you respond? Facing a subpoena, search warrant or questioning is a serious matter, and company executives need to think and not just react.
“Law enforcement officers want to catch you off guard; they don’t want you to be prepared,” says Christian E. Picone, partner, Business Litigation, Berliner Cohen. “They watch for that incriminating quick response or an almost natural desire to help law enforcement without thinking about the long-term impact of that initial interaction.”
Smart Business spoke with Picone about the responses business leaders should offer.
What can company leaders expect when authorities walk in unexpectedly?
Authorities may serve a subpoena, a search warrant or may just want to ask questions.
A subpoena may involve an order to appear in court or to produce physical evidence. However, authorities may ask for evidence without producing a subpoena because obtaining one takes time and effort. The company leaders can always agree to cooperate, but should ask for a subpoena. If an interview is requested, or when a request for physical evidence is made, you should contact an attorney to determine what is best for the company.
When it is acceptable to produce physical evidence without being served a subpoena? If it is a request for documents, company leaders should still first consult their attorney for the best response. The attorney’s job is to protect the client. Sometimes protecting the client means challenging the government’s ability to review a company’s information. That doesn’t mean challenge every request, but certainly have a professional ascertain who is in the government’s crosshairs, the company or someone else.
The time to request a subpoena is when there is any type of confidential client information that needs protection, such as any financial or medical records that can be considered private. The reason to require a subpoena or search warrant is to protect the company. The company is complying with a search warrant, and in the case of a criminal subpoena, the court will review the information responsive to the subpoena before releasing the information.
What are proper responses when a search warrant is served?
A search warrant means that a judge has reviewed an “affidavit of probable cause” and agreed to let authorities take certain documents and items from the business.
Company leaders need to review the items listed on the warrant and then contact theirs attorney. A search warrant limits what the government may seize — only what is listed on the search warrant and nothing else.
If authorities take items not listed on the search warrant along with items listed, it can become an arguable “issue of suppression,” which could help the client’s case.
What if the authorities just want to talk?
This is an issue that can cause great legal concern, primarily when it’s a federal inquiry. If during the interview a person falsifies, conceals, covers up or is in any way deceptive, it can become a felony even if the answer seemed harmless.
A perfect incriminating example — an executive might be foolish enough to pay money to be a supplier’s preferred customer. The money then goes into the pocket of the supply company’s general manager. When the FBI conducts an investigation, it may ask if the executive or company gave money to the general manager. If the executive denies paying any money to the supply company, this is now a federal violation. The FBI was only asking if the firm was a bribery victim. Had the person being questioned consulted with an attorney before answering questions, the violation could have been avoided.
A person gave an interview that was 98 percent correct. The 2 percent — one false answer — can result in felony charges.
The safest route when faced with an inquiry: be professional; before talking, discuss the matter with the company attorney or your own; and if you think it is safe, set up an interview with authorities.
Insights Legal Affairs is brought to you by Berliner Cohen