WHEN THE DEPARTMENT OF JUSTICE KNOCKS DOJ Enforcement Trends: What to Expect and How to Respond Jacqueline Arango Shareholder 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 Respond Grand 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 § 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 5 th 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

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 Considerations DOJ 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  5 th Amendment Issues  Stay of Civil Proceedings?

Other Considerations Internal 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