Most business owners and executives think that because they are good people who do their best to follow all laws and rules, they are immune from worrying about criminal business investigations and issues. However, nothing could be further from the truth. Everyday conduct and occurrences can be construed as criminal like the following:
• Forgetting to include income on a tax return
• Misstating your income or expenses on a financial statement when applying for a bank loan
• Using loan proceeds for a purpose other than that for which you applied
• Bouncing a check
• Talking to competitors
• Making a mistake on an application for a federal grant, funding or certification
Without exception, the most serious legal disaster that could befall your business is a federal criminal investigation or indictment of you, or any other manager, officer or the company itself. Individuals or the operating business entity, together or separately, can be named as a witness, suspect, or target in an investigation. Enron and Arthur Anderson are the most recently famous of such business crime cases which resulted in the collapse of the businesses themselves and imprisonment of the executives. Many national business and legal experts have concluded that the demise of those two giant companies was not caused by the illegal activity of which they were accused, but the damage to their reputations that immediately drove their investors, lenders, and customers away in a panic.
The following business practices can help protect you and your company from being wrongfully accused or convicted of a federal or state crime:
1. Adopt a Government Investigation Policy
This policy should state unequivocally that your company and its employees will cooperate with any government investigation, but only with the assistance of a qualified lawyer. This policy should be adopted at a time when there is no threat of an investigation or hint of any problem. Write the policy down and include it in all company documents, employee handbooks and materials.
2. Hold a Government Investigation Seminar
Conduct an annual, required in-house seminar on business criminal issues, just like safety seminars and courses, for your employees. The seminar should be conducted by a criminal lawyer to instruct employees on individual constitutional rights and how to protect those rights, to explain the workings of a government investigation, and to suggest ways to handle government investigators and law enforcement officers in the context of an accident, a worksite death, a search warrant, and other investigations.
3. Understand and Utilize Your Constitutional Rights
You, your business and your employees have a constitutional right to a lawyer's counsel before answering or cooperating in any investigation. It is known as the Sixth Amendment. You also have the right to remain silent when questioned by investigators or prosecutors to protect against self incrimination. This is the Fifth Amendment guarantee. It means that you have the right to decline to answer questions that might tend to incriminate you. Use these rights aggressively whenever the circumstance warrants them.
4. Understand that Lying to a Federal Agent or Officer is a Federal Crime
Lies to officials are generally referred to as "false statements." To be a crime, the lie does not have to be given under oath and can be oral or written. Nor does it have to be made in the context of a formal or court setting. Any statement given to a federal officer that can be said to be false, even if mistaken, meets the very low bar of the offense. Most often, the only evidence of the statement is notes or testimony of the federal agent. It is not a requirement of the offense that the government or officer be misled, deceived, or persuaded by the false statement. All that is required for the crime is that the statement have some connection, even though tenuous, to some matter within the jurisdiction of the United States. Today, in America, lying is a federal crime in just about any business context and every business person or executive must be aware of this state of affairs.
5. Contact your Criminal Business Lawyer Immediately
If your company receives a business records subpoena from a grand jury, receives a call from a government investigator or gets raided by a government law enforcement team, call an experienced expert criminal defense lawyer before you answer a single question or do any other thing.
These simple actions can go a long way toward protecting you and your company from criminal business investigations.
Marjorie Jobe is the author of Business Law Battle Plan for Entrepreneurs: Protect Your Company from Lawyers, Lawsuits and Legal Disasters and is a practicing attorney in El Paso, Texas