Risk Mitigation in Private Investigations

Recent remarks by U.S. Attorney General Merrick Garland underscored the Justice Department’s commitment to strengthening its enforcement against corporate malfeasance. Garland’s speech underscored the DOJ’s emphasis on holding individuals, not just companies, accountable for corporate wrongdoing.

In 2021 alone, the DOJ charged 5,521 people with white-collar offenses, a 10% year-over-year increase.

Garland’s emphasis on white-collar enforcement and individual accountability was echoed by Assistant Attorney General Kenneth Polite Jr.’s remarks regarding the department’s increased standards for a company to receive full co-op credit.

Polite noted that when allegations of corporate wrongdoing arise, “to receive credit for cooperation, a company must inform the Department of all relevant, non-inside facts and evidence regarding the misconduct and all individuals concerned. Our policies clearly serve our purpose of obtaining evidence of individual wrongdoing because of the high priority we place on holding wrongdoers accountable. »

The result of the DOJ’s renewed emphasis on white-collar law enforcement and individual accountability is that, to achieve the most favorable outcome, it will be crucial for companies to uncover all facts related to the misconduct. allegedly involved, including the involvement of individuals at all levels of the company.

Unless a company is able to demonstrate a thorough investigation and full disclosure of the facts regarding those involved, Deferred Prosecution Agreements, Non-Prosecution Agreements and other desirable corporate resolutions may well be discarded.

Accordingly, the company and its attorney will need to undertake a credible and thorough investigation that probes the roles of the individuals. The lawyer may find it useful to hire private investigators to help with the investigation of the facts.

The role of private investigators

Investigators are skilled in open source research, locating witnesses and physical evidence, tracing assets, and identifying sources with relevant information about events and key participants.

For example, in cases under the Foreign Corrupt Practices Act, investigators who are experts in gathering information from various public records may identify evidence of holdings held by employees or representatives. government, or their family members, in entities that may serve as conduits for abusive transactions. Payments.

External investigators can also be a resource for developing information from “human sources”. This may include interviews with industry sources who can provide information on the subject matter.

Although lawyers generally conduct interviews with current employees themselves, it is useful to turn to outside investigators for external interviews (e.g. former employees, litigation opponents and other third parties), given people’s reluctance to speak with lawyers out of concern for their own interests. It also limits the risk of the lawyer becoming a fact witness.

Investigative work must be ethical and admissible

Whether the evidence developed by the investigators is used in the context of the company’s cooperation, or in the preparation of its defense, it is important that the investigative work is done in an ethical and legal manner so that the information is actionable and acceptable.

When the company responds to allegations in a courtroom, it is crucial that evidence can be presented without fear that it was obtained through illicit or unethical means. Otherwise, the court can hold the company and its attorney liable.

A private investigator will likely be considered an agent of the company’s attorneys and any unethical or illegal conduct by investigators may be blamed on the attorney. Under the ABA’s Rules of Professional Conduct, attorneys are responsible for the conduct of non-attorneys they hire.

Thus, when hiring and supervising an investigator, the lawyer must invest time and effort to guard against any impropriety. For example, in today’s technological world, recording a conversation is as easy as pressing a button on a smart phone. But the law concerning the making of such recordings must be respected.

Another potential landmine for lawyers when hiring investigators is the use of pretense – impersonating or creating the impression that you are generally someone else in an effort to obtain information. . Under federal law, it’s a crime to obtain a customer’s financial information by misrepresenting it, and you can’t use another person’s identification without permission. (To see 15 USC §§ 6821, 6823 and 18 USC § 1028, 1028A.)

Pretext is also a critical factor when an investigator (or attorney) comes into contact with people through social media and other internet tools. For example, lawyers (and their investigators) cannot impersonate or deceive when they become friends with someone via social media for the purpose of gaining access to non-public areas of the media account. social of that person.

Conduct by attorneys and their agents involving dishonesty, fraud, deception or misrepresentation is generally prohibited and would compromise the integrity of the investigation. (See Model Rule of Professional Conduct 8.4.) Further, in addition to exposing the attorney to potential disciplinary action, it may expose businesses to the common law tort of invasion of privacy and material invasion of privacy. reputation. An investigator who ignores these ethical safeguards frustrates the company’s goal of getting full credit for its cooperation.

An unethical investigation is a failed investigation. Reputable investigators will know the laws and ethical rules applicable in all jurisdictions and conduct their investigations accordingly.

Investigators should be familiar with searching public records, data privacy laws, and ways to obtain information through legitimate means. Conducting an investigation unethically or illegally will only lead to more problems for corporate clients and less favorable results with regulators or in courtrooms.

This article does not necessarily reflect the views of the Bureau of National Affairs, Inc., publisher of Bloomberg Law and Bloomberg Tax, or its owners.

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Author Information

Michael Ramos is a partner and director of risk and compliance for Nardello & Co., where he manages litigation support investigations in multiple jurisdictions involving fraud, defense against RICO actions and criminal defense matters. Prior to joining the firm, he was an Associate United States Attorney in the Eastern District of New York.

Warren Feldman is a Partner and General Counsel of Nardello & Co. Prior to joining the firm, he spent over 30 years defending corporations, other entities and individuals in all phases of white collar litigation, including investigations, trials, appeals and regulatory matters.

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