The scenario is unfathomable to an operating business, whether large or small: two federal agents show up at an employee's house, at night or in the early morning, asking about individuals or specific incidents in the company.
The agents can be from the IRS, FBI, homeland security or from an agency inspector general’s office. The instinctual reaction is to talk to the agents to show that there is nothing to hide and that nobody has done anything wrong. Unfortunately, that is precisely what the agents are seeking: for somebody to talk.
After nearly 25 years working in and around federal law enforcement, I have learned that these types of visits rarely end well for the target of the investigation. There is nothing wrong with assisting law enforcement. Indeed, it is quite often our civic duty to assist our Government in the investigation and enforcement of our State and Federal laws. The goal for the business-owner and employee alike, however, is to ensure that the accurate information is conveyed to law enforcement in a manner that cannot be viewed as incriminating to the individual or the business.
When it comes to the point that a law enforcement agency decides to visit witnesses or targets for interviews, the law enforcement agents already possess some information that they believe may relate to the violation of a criminal law. Often the agents will not tell you precisely what they are investigating or why. The focus of their investigation could be the business, it could be an individual in the business, or it could be someone or something completely outside the business. Even if the agents do explain what they are looking for, they often will leave critical facts out as to the precise nature of their investigation. They do not have to tell you what they are investigating or why, and they can even lie to you. The purpose of withholding critical information – and even providing misleading information – is to elicit statements and evidence that they believe may constitute admissions or otherwise provide useful information that will further their investigation.
How can you be sure that the federal agents are telling the truth or that you are not a target of their investigation? You can’t. Ever.
It is for this reason that businesses and business owners should institute policies relating to interactions with law enforcement and effectively communicate them to all employees. Some of the most effective policies advise employees that they are never required to speak with law enforcement and guarantee that the business will provide representation to employees for communications with law enforcement in investigations relating to the company. Understandably, any business owner might bristle at the thought of guaranteeing such a debt without knowing ahead of time how much it will cost. On the other hand, providing legal counsel to employees for law enforcement interviews relating to the business can, in many circumstances, ensure that accurate information about the company and its activities is conveyed properly to law enforcement. If there is a problem for the business because of some inappropriate conduct by an employee, independent employee legal counsel can often assist the business in identifying the problem and resolving the issue before there is significant financial and reputational damage to the business.
No one ever thinks that they or their business will be involved in a criminal investigation, until they are. A minimal amount of preparation, along with effective communication, can save time, money, heartache and a good reputation.
William J. Hughes, Jr. is a partner at Cooper Levenson Attorneys at Law based in Atlantic City. He concentrates his work on Complex Commercial Litigation, Federal White-Collar Criminal Defense, corporate investigations, and cyber liability and cyber risk management.