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