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What to Do When Your Company Is the Subject of a Government Investigation

Sterling Miller

Executive Summary 
Nothing is more disconcerting than being contacted by the government when it starts investigating your company. As corporate counsel, your response will dictate in large part, what follows next, what’s being investigated and how you respond. You will know the seriousness of the circumstances fairly quickly, depending on what tools the government uses for its initial contact with your company. Regardless of how it starts, there are many things common to any company’s response to a government investigation.

Which agency is looking at your company?
The first thing to determine is which agency is asking for information. Once you know which agency is investigating, start to determine whether the issues are civil or criminal (or potentially both). For example, the Department of Transportation does not have criminal enforcement powers, but the Department of Justice does. Regardless, any civil investigation can morph into a criminal investigation under the right circumstances.

How were you contacted?
How you are contacted by the government means a lot. Here are three key ways the government will contact a company under (or part of an) investigation:
Civil Investigative Demand (CID) – A civil subpoena from the government directed to the company. Nothing criminal is present. A CID can command documents, interrogatories, witness testimony, or any combination thereof. Failure to comply can subject the company to court sanctions. The government may serve a CID on any person or business in any jurisdiction in the United States and in any foreign country, provided such service complies with due process requirements.

Grand Jury Subpoena – A criminal investigation is underway and, if your company is a target or subject, bad things are possible. Unlike a civil
subpoena, failure to comply or adequately comply with a grand jury subpoena can mean a criminal charge of obstruction of justice. It also means the government is well underway with whatever case it is looking to bring.

Search Warrant – The company is the target, law enforcement has convinced a judge of probable cause of a crime, and evidence of that crime resides on your company’s premises. While in-house counsel should meet with the lead agent and ensure the search is limited to the areas listed in the search warrant (get a copy), they must not interfere in any way with the execution of the warrant. You should get outside counsel on the phone immediately.

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