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Corporate Investigations and White-Collar Criminal Defense

— November 30, 2022

Individuals who are subjects and/or witnesses in either a government investigation or an internal investigation are encouraged to determine whether to obtain their own independent counsel

Corporate investigations – whether pursued by a state or federal government agency or internally through an investigations department or a third party (typically a law firm) – can have a massive effect on the reputation and financial interests of both business entities and individuals involved. In some cases, a corporate investigation can lead to criminal charges which can be fatal to a business’s future and result in the loss of freedom and/or one’s entire career for an individual. 

Because the stakes of a corporate investigation can be so high for both the businesses and individuals involved, it is important for relevant parties to work with experienced white collar civil and/or criminal defense counsel to protect their respective rights and interests and move forward in the most advantageous manner possible. 

What are Corporate Investigations?

It is helpful to think of corporate investigations as applying to two different but related concepts: 1) a corporate investigation pursued by a state or federal agency such as a state attorney’s general office, or the federal Securities and Exchange Commission (SEC); and 2) an internal investigation of a company and/or individuals involved at a company of potential wrongdoing, which is typically carried out by a general counsel’s office and/or a third party law firm. 

With a government corporate investigation, such investigations may occur in a variety of scenarios. On one end of the spectrum, a government agency may send out documents and/or information requests to a number of entities within a given field seeking information related to potential wrongdoing, even if there is not necessarily suspicion of particular wrongdoing at any specific subject of an investigation. At the opposite end of the spectrum, a government agency such as the FBI might conduct an unannounced raid of corporate offices, seizing computers and files and perhaps making arrests in the process. 

Between those two opposite sides of the spectrum, a government agency might typically issue a subpoena to a corporate entity (and/or to individuals within that entity), requesting categories of documents on specific topics, such as all emails and business records related to particular types of transactions. Such a request alone can be a major undertaking for a business, as it can often require that hundreds of thousands if not millions of business documents are collected, reviewed, and analyzed to properly and lawfully respond to the subpoena, which can take months and hundreds if not thousands of man hours. A document request might then be followed by a request from the government agency to speak with individuals at the business entity, which could include company executives, salespeople, HR representatives, and anyone else that the government thinks might have valuable information related to the subject of the investigation. 

No matter the procedures involved with the corporate investigation itself, the government agency involved will make decisions along the way regarding whether to expand the investigation, and ultimately whether to pursue an enforcement action – which can include criminal charges against both a business entity or individuals – or, hopefully for those involved, to end the investigation without further action. Note that while a business entity itself cannot serve time in jail or prison, a criminal charge can be brought against a business organization which generally means the end of that business’ existence, as was the case with the accounting firm Arthur Andersen. 

An internal investigation, on the other hand, is an investigation into potential wrongdoing within a business or other entity (e.g. a church) that is carried out by private parties, typically the board of directors or other management, with the intent of understanding what illegal or other problematic actions may have been taken within that entity. The purpose of such an investigation is for the entity to uncover the facts of a situation and take appropriate remedial measures. An internal investigation might occur after a government investigation has begun, or in anticipation of such an investigation. 

The procedures for an internal investigation have some commonalities with a government investigation. It is common for emails, phone records (including text communications), files and other documents to be collected and analyzed by attorneys, and for individuals within the entity to be interviewed by attorney investigators. A written report may or not be generated based on the needs and risks associated with the matter. The results of an internal investigation might be shared with relevant government agencies and/or the public, or they may be kept confidential.  

What is a White Collar Crime?

There is not necessarily a specific definition under the law for what constitutes “white collar crime.” Whether or not an alleged criminal act might be considered a white collar crime, a prosecutor has the power to investigate and bring charges against an individual (or business) with the potential for a criminal record, steep fines, and possible jail or prison time. 

That said, “white collar” tends to suggest a criminal act carried out by a person in a business and/or financial environment, and generally the term refers to a non-violent crime involving attempted financial gain to an alleged perpetrator and financial damage to alleged victims. The white-collar crime program of the Federal Bureau of Investigation (FBI) – the chief federal law enforcement investigation organization – focuses on white collar criminal acts such as corporate fraud (including falsification of financial information, insider trading, kickbacks, and tax violations), money laundering, securities, and commodities fraud, mortgage and financial institution fraud, and intellectual property theft and piracy. 

These are only broad examples, and there are an expansive amount of activities – again even ones that may seem like normal industry practice – that might fall within the umbrella of alleged white collar criminal activity. 

Furthermore, it should be noted that internal investigations can often address suspected illegal and/or problematic activity that is not financial in nature, and thus not typically referred to as a “white collar crime.” For example, an internal investigation might look into sexual harassment, hostile work environment issues, racial and other class-based discrimination, and how complaints and other responses to such issues are handled in the workplace. 

How an Attorney Can Help

When the state or federal government conducts a corporate investigation into suspected wrongdoing involving you or your business, it is important to work with experienced white collar criminal defense counsel. This is true even if no civil or criminal charges have been pursued, and even if you think there is little to no chance of such charges ensuing.

Women reviewing paperwork; image by Alexander Suhorucov, via
Women reviewing paperwork; image by Alexander Suhorucov, via

Experienced white collar defense attorneys understand that responding to a government investigation requires a delicate balance of meeting one’s legal requirements to cooperate with (and not obstruct) a government investigation, providing voluntary production of information to the government where advantageous to do so (including producing documents and making witnesses available for interview), and firmly asserting a client’s rights against government overreach, all in pursuit of an optimal outcome for the client. Additionally, in so doing, a skilled defense attorney will keep the company or individual’s “big picture” in mind, which includes evaluating the reputational and business outcomes for the client in addition to the purely legal results of the investigation. 

Thus, responding to a government corporate investigation often requires a much more complex and adept approach than would be applied in a typical civil litigation like an injury claim or business dispute, and thus it is important to work with a corporate investigations attorney who has the experience and skills to deftly maneuver the intricate nature of government investigations. 

Similarly, where an internal investigation is necessary and/or is being pursued without the participation or even knowledge of the government, it is similarly important for the relevant parties to work with experienced white collar defense counsel with the skills to effectively accomplish the goals of the internal investigation – including obtaining accurate factual findings – while maintaining confidentiality and properly determining what the scope and ultimate outcome of the investigation should be, including whether and how to share the findings with government authorities, shareholders, the public, and other relevant parties. 

Finally, individuals who are subjects and/or witnesses in either a government investigation or an internal investigation are encouraged to determine whether to obtain their own independent counsel to represent them in said investigation, as attorneys for a business do not necessarily represent the personal interests of the individuals within that company. 

Schedule a Consultation with an Experienced Attorney

Whether you or your business are the current or potential subject of a government investigation into suspected wrongdoing – or you are seeking to conduct an internal investigation, or you yourself may be facing the scrutiny of an internal investigation – it is important to work with experienced legal counsel to defend your interests.

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