The Boston Globe recently reported that a team of agents from the I.R.S. Criminal Investigative Service had descended upon the offices of a major plumbing and heating contractor in the Greater Boston area. The use of search warrants by federal agents in corporate criminal investigations has increased markedly in recent years. Given this new reality, a business is well-advised to prepare in advance for the possibility that it will be the recipient of a warrant. Adequate preparation is relatively simple. A team of senior executives should be designated to serve as the company’s crisis management team. Employees should be advised to call a member of the team in the event that federal law enforcement agents appear at the company’s place of business. The team should be instructed to take the following ten steps upon being informed of the agents’ presence. The team members should also be advised to treat the situation as an opportunity to obtain information relating to the investigation that may be of use to the company’s defense counsel.
Identify the Supervising Agents. When a search warrant is executed, there are usually one or two agents assigned to supervise the process. The senior member of the crisis management team should identify these agents at the outset. The supervising agents should be informed that the senior team member is the only person authorized to speak for the company and asked to refer all inquiries relating to the search warrant to the senior team member.
Check Credentials and Agency Affiliation. The senior team member should examine the supervising agents’ credentials and write down their names and agency affiliation. Knowing which agencies are involved in the investigation is valuable information for the company’s defense lawyer.
Obtain and Read a Copy of the Search Warrant/Inquire as to the Nature of the Investigation. The senior team member should also obtain and read a copy of the search warrant. By law, the warrant must describe both the area to be searched and the items that the agents are authorized to seize.
Inform the Employees. Federal agents often use the execution of a search warrant as an opportunity to interview company employees at a time when they are unprepared and intimidated by the agents’ presence in the workplace. While the senior member of the crisis management team is meeting with the supervising agents, another team member should assemble the employees who work in the area to be searched and advise them that:
- Law enforcement agents are on the premises to execute a search warrant.
- All inquires relating to the search should be addressed to the senior team member.
- The company is presently unaware of the precise nature of the investigation or whether any of the company’s employees are targets of the investigation.
- While the agents may wish to interview the employees, they are under no obligation to submit to an interview.
- If an employee does wish to submit to an interview, the employee has the right to consult with an attorney beforehand, and to have the attorney present during any interview.
- The company may wish to offer to pay for legal counsel to advise its employees in connection with any interview. This encourages the employees to seek counsel prior to an interview and minimizes the likelihood that they will submit to an interview during execution of the search warrant. Company counsel will often suggest that the company enter into a joint defense agreement with any employee being interviewed by the government. A joint defense agreement allows the parties and their counsel to share information without waiving the attorney/client privilege. This arrangement allows company counsel to stay abreast of the progress and focus of the investigation.
Send Non-Essential Employees Home. After the employees have been provided with the information set forth above, all non-essential employees should be sent home. There is simply no benefit to the company from making its employees available to be interviewed by the agents.
Discuss the Logistics of the Search with the Supervising Agent(s). The senior team member should discuss the logistics of the search with the supervising agents with a focus on minimizing further disruption to the company’s business.
Document the Activities of the Agents. Members of the crisis management team should observe as the agents execute the warrant. They should take notes on what areas are searched and what items are seized. They should also document any dialogue among the agents that may provide insight into the nature of the investigation.
Do not Consent to Any Search. The warrant establishes the scope of the agents’ authority. The senior team member should not consent to a request to search any particular area, container or file. This preserves the company’s right to seek suppression of any evidence seized in contravention of the warrant.
Do Not Sign Anything. The senior team member should not sign anything, including the inventory that will be provided when the search is complete. Doing so can only work to the detriment of the company.
Debriefing by Defense Counsel. As soon as possible after the search, defense counsel should meet with the crisis management team for a debriefing. Information obtained during the execution of a search warrant can be extremely helpful in devising a strategy to defend the company.
Being on the receiving end of a federal search warrant is not something that most business executives want to contemplate. But taking the simple steps outlined above can minimize disruption to your business and insure that your company has preserved its legal rights to the greatest extent possible.
If you would like more information on this topic, please contact Denis M. King of our Litigation Group at (617) 574-6432.
This advisory should not be construed as legal advice or legal opinion on any specific facts or circumstances. Moreover, the advisory may not be applicable to companies operating in industries regulated by the government. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer concerning your situation and any specific legal questions you may have.
Pursuant to IRS Circular 230, please be advised that, this communication is not intended to be, was not written to be and cannot be used by any taxpayer for the purpose of (i) avoiding penalties under U.S. federal tax law or (ii) promoting, marketing or recommending to another taxpayer any transaction or matter addressed herein.
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