No business or person ever wants to end up in a situation where law enforcement comes knocking at their door. However, the unfortunate reality is that it can happen to anyone at anytime so it is best to be as prepared as possible.
Andrea Tazioli and Nicole Stanton from the law of firm Quarles & Brady recently stopped by the Lovitt & Touché Learning Academy to speak at a seminar on internal investigations and privilege issues. Andrea is a Partner who practices in the areas of White Collar Crime, Government/Internal Investigations and Commercial Litigation. Nicole has served as defense counsel for several local and national companies covering all types of disputes, from breach of contract, to negligence to fraud.
Government investigations cover three primary areas: search warrants, interviews by government/regulatory agencies, and subpoenas/civil investigative demands (CID).
When people think of search warrants, many think of the dramatic scenes one would see on an episode of Law & Order or any other crime drama, but the majority of the time it as simple as someone showing up at your front door and handing a piece of paper to your receptionist.
A search warrant is a court order that allows law enforcement to conduct a search for specific things. In order for a warrant to be issued, the law enforcement or regulatory authority must go before a court and submit an affidavit saying that they believe there is evidence of a crime at your location. Search warrants can be executed via state law or federal law.
Andrea and Nicole recommend that your company should have a policy and procedures in place so that your employees know how to handle a response to a search warrant. At least three people at your company should know these policies and procedures, ideally people who are always on your premises.
An important step to take to prepare for a search warrant is to have all of your documents segregated into the following categories: Attorney-Client Privileged Documents, Work Product Privileged Documents, and Non-Privileged Materials. Electronic records should be back up and stored off-site.
Before the search, a representative from your company should always request a copy of the search warrant prior to the search and ask to see identification/proof of authority. During the search, you should always have a couple of people monitoring what the agents are doing. Employees should be instructed not to interfere with the search. Customers should be escorted from the area of the search.
The primary goal in dealing with a search warrant is complying with it. You can ask for permission to see the warrant to ensure that they are only looking in the places they are authorized to search. Sometimes it can be helpful to work with law enforcement and assist them in their search so that you are protecting other clients’ information. It is important to always be cognizant to not obstruct justice.
Every company should have procedures in place for how employees and corporate executives should handle being approached by an agent for an interview.
Employees who are approached by law enforcement or a regulatory agency have three options: refuse the interview, speak with the agent, or speak with the agent only if their counsel is present (whether that is a company counsel or their own personal counsel).
Your company cannot dissuade employees from speaking with agents or attempt to influence employee’s statements to agents.
It is important to make sure that you have the audio of the interview be recorded for your records.
Subpoenas/Civil Investigative Demand (CID)
A Subpoena is a document that you will typically get in the mail, asking you to provide evidence in accordance with a civil case, civil investigation or criminal case. For businesses, it is often a request for documents relating to a customer or a procedure in your company.
Civil Investigative Demands (CIDs) have the same effect as a subpoena, and are used frequently by the Attorney General Office in Arizona for fraud cases. Responses to subpoenas or CIDs should be overseen by your in-house legal department or an outside counsel.
When responding to a subpoena or CID, your company should assert all relevant objections. It is recommended that you contact the prosecutor or government agent just to get an idea of what the investigation is about and to see whether you are a target or not.
During the collection of the documents, make sure to not hand over any documents that have attorney-client privilege and make sure that none of the documents are destroyed.
Thank you to Andrea and Nicole for taking some time to discuss how you can prepare for regulatory agencies or law enforcement appearing unannounced at the workplace. For more information on this matter, please contact your Lovitt & Touché representative!