Based on recent remarks by U.S. Department of Justice (DOJ) leadership, many more companies should expect to face white collar criminal investigations in the months and years to come.
In October 2021, Deputy Attorney General Lisa Monaco stated that the DOJ “will urge prosecutors to be bold in holding accountable” corporate executives, and emphasized that many white collar crimes constitute national security threats.1 In March 2022, Attorney General Merrick Garland affirmed that “the prosecution of corporate crime is a Justice Department priority.”2
In support of this increased focus on corporate crime, the DOJ’s 2022 budget request included a plan to fund more than 900 Federal Bureau of Investigation (FBI) agents to support its White Collar Crime Program.3
As a result, Wisconsin companies and their attorneys should be aware of what to expect – and know what steps to immediately take – if they find themselves in the thick of a federal investigation.
Wisconsin businesses should also consider what proactive measures they can take now to strengthen their compliance culture.
How is the FBI involved in a federal white collar prosecution?
The FBI is the division within the DOJ responsible for investigating a wide range of federal crimes and national security matters. The FBI typically receives information or referrals from the public, one of the 93 U.S. Attorney’s Offices nationwide, or federal regulatory agencies.
In the white collar or business law context, the FBI often focuses on complex investigations in the areas of money laundering, corporate fraud, financial institution fraud, embezzlement, fraud against the government, and health care fraud, among others.4
Rebecca Furdek, Minnesota 2015, is an associate with
Husch Blackwell LLP in Milwaukee, where she concentrates her practice on government investigations and litigation.
Salvador Hernandez, a former senior executive with the Federal Bureau of Investigation and chief compliance officer, is a senior compliance and ethics advisor with
Husch Blackwell LLP in St. Louis, Missouri, focusing on compliance program development and government investigations.
How and when might I learn that the FBI is looking at my company?
You may learn about a pending investigation by your employees, business partners, or customers simply telling you that they have been contacted by the FBI.
More formally, you may instead receive either a federal grand jury subpoena or a letter from a U.S. Attorney’s Office, or a civil inquiry from a regulatory agency conducting an investigation parallel to the FBI.
In some instances, the first indication of an FBI investigation may be the execution of a search warrant at your company. By the time you hear about an FBI investigation, there is generally a significant possibility of federal criminal charges for at least one investigated entity or individual.
The FBI has contacted employees or obtained and delivered subpoenas or other legal process. What steps I should take in response?
Take these steps:
advise relevant employees to keep discussions of the matter on a “need to know” basis, whether with colleagues or third parties;
do not alter, destroy, or conceal potential evidence;
if responding to subpoenas or other legal process, issue internal guidance to preserve all records and prospective evidence – similar to a typical litigation hold in civil litigation;
advise relevant employees that they are not required to speak with the FBI should they be contacted;
if statements are made to the FBI, ensure their accuracy; the making of a false statement to federal law enforcement is a federal offense under 18 U.S.C. § 1001;
anticipate the possibility of the execution of a search warrant at your company by establishing internal notification and response procedures. If applicable, consider that investigative steps may also occur at other site locations of your company;
consider engaging external counsel experienced in white collar defense work to help you evaluate the situation and assist with a response. If you do engage external counsel, also consider recommending “pool counsel” for current and certain former employees who would enter into a common interest agreement with company counsel; and
to establish parameters around contact by the government with represented persons and entities, company counsel should contact the attorney within the U.S. Attorney’s Office or the administrative agency handling the matter to advise of representation.
The FBI has arrived to execute a search warrant at my company. Now what?
The responding employee should advise company leadership of the FBI’s presence and request the presence of the appropriate legal representative for the company.
Employees should be advised to comply with the FBI’s requests and to assist in providing the items listed in the warrant.
An employee familiar with the company’s IT systems and storage should be available to assist with data identification and segregation of protected or privileged communications. To the extent your company hires a forensic expert, consider whether they may be engaged to work at the direction of counsel.
The company’s legal representative or external counsel should:
advise the FBI agent leading the search that he/she represents the company and that all inquiries or requests for information should be directed to him/her;
review the search warrant and affidavit, in particular, the “Items to be Seized” list to ensure that the search remains within scope;
assist in identifying protected or privileged communications that should be segregated or retained; and
ensure the completeness and accuracy of the inventory of seized items prepared by the FBI.
We’ve responded to the subpoenas and the FBI has completed its search. What should we be doing now?
continue to emphasize to relevant employees that they should not discuss the matter outside the company, and to continue to minimize internal, nonprivileged discussion. This is particularly important guidance in the era of prolific social media use;
consider the importance of maintaining attorney-client privilege in any discussions with employees knowledgeable about the matter;
continue operating under the constraint of doing nothing to alter, destroy or conceal evidence, and strictly maintain your “litigation hold” mentality regarding both physical and electronic documents and other materials. It is not uncommon to receive follow-up questions or document requests weeks or months after initial contact; and
continue to work with your external counsel, including seeking an evaluation of the strength of the company’s internal controls. Note that that the DOJ’s Justice Manual describes factors, such as adequacy and effectiveness of a company’s compliance program, that federal prosecutors consider in the investigation phase, as well as in determining whether to bring charges or negotiating a plea.5
Conclusion: Awareness Is Key
While most companies and lawyers would hope to never make use of this advice, Wisconsin corporate counsel should nevertheless be aware of the increased white collar enforcement trend recently signaled by DOJ leadership.
Even without the imminent threat of an investigation, this is a good time for businesses to be generally aware of what to expect in the event they face an investigation, as well as what they might do to prepare for or avoid one.
This article was originally published on the State Bar of Wisconsin’s
Business Law Blog. Visit the State Bar
sections or the
Business Law Section webpages to learn more about the benefits of section membership.
1 Deputy Attorney General Lisa O. Monaco Gives Keynote Address at ABA’s 36th National Institute on White Collar Crime, U.S. Department of Justice, Oct. 28, 2021.
2 Attorney General Merrick B. Garland Delivers Remarks to the ABA Institute on White Collar Crime, U.S. Department of Justice, Mar. 3, 2022.
4 See White Collar Crime, Federal Bureau of Investigation.
"9-28.300 – Factors to Be Considered,”
Justice Manual, U.S. Department of Justice.