April 30, 2021

What to Do When the Government Shows Up at Your Business

by David Thomas, Esq., and Kathryn Wallrabenstein, Esq., Taft Stettinius & Hollister, LLP

“Hi there, I’m Special Agent Johnson. Who’s in charge here?”

How Does This Happen?
In a world of increasing regulatory complexity (and differing interpretations of those regulations!), every business needs to be prepared for an unexpected visit by government agents with a grand jury subpoena or search warrant. Investigations can be triggered by anonymous complaints, disgruntled employees, unhappy competitors and even data analytics employed by regulatory agencies. Just like you prepare for lost data, natural disasters and other unexpected events, a wise company is prepared for unexpected government interaction.

What Do We Do?
In the short run, do as little as possible. The things you say and do in the first 24 to 48 hours will shape the ultimate outcome of the investigation. You are setting the tone for the entire investigation and need to strike a balance between complying with legal obligations and protecting the interests of your business. In particular, interviews with agents and the production of documents may bind a company, waive an important legal privilege or create legal exposure for your business, its owners and employees. “We have nothing to hide” and “we are fully cooperating with authorities” are great soundbites, but bad advice in a world of increasing civil and criminal liability.

And avoid the temptation to handle things yourself. Everything you do creates an impression and may have unintended consequences. If you move a server or boxes of files, it might be seen as tampering with evidence. Securing information from employees with interviews could be regarded as interfering with a witnesses.

You and your company have accomplished a lot in your industry. Now, the best thing you can do is hire experienced lawyers who focus on representing businesses involved in government investigations. They can help you evaluate risk, conduct employee interviews, review documents and respond to the inevitable ongoing requests for information by the government. And most important, everything the lawyers do for you is privileged and confidential.

What Can I Do Today?
The good news here is that good planning and record keeping can either prevent these investigations in the first place or substantially reduce the costs when they happen. Be aware of the legal obligations in your industry, keep meticulous records and have a clear and established policy for retaining those records. And stay current. Laws and regulations are changing constantly, and it is critical that businesses closely monitor developments.


Thomas

Wallrabenstein
Avoid the temptation to handle things yourself. Everything you do creates an impression and may have unintended consequences. If you move a server or boxes of files, it might be seen as tampering with evidence. Securing information from employees with interviews could be regarded as interfering with a witnesses.