The line between “white collar crime” and “street crime” is often blurred as prosecutors and investigators deploy all of the tools at their disposal against white collar and regulatory offenses. Principal among these tools is the search warrant. While the execution of a lawfully-obtained search warrant cannot be stopped, a company’s reaction to the search and to the agents conducting it can have a significant impact on the course of a government investigation. A well-executed response may yield intelligence about the nature and scope of the investigation and may limit the amount of information the government obtains.
Understanding the element of surprise
Government investigators correctly see search warrants as their one chance to use the element of surprise. They make every effort to use it effectively. Long before a warrant is served, agents spend weeks or months on pre-search surveillance. They serve warrants simultaneously at all of a company’s offices. They conduct interviews of key executives at their residences early in the morning before attorneys are available. They use whistleblowers present during the execution of the warrant wired to record employee conversations of the employees. They interview employees on site before company attorneys can inform them of their rights or contact the lead prosecutor. They engage in surveillance of key individuals after the search is executed. They even search nearby dumpsters for evidence. Several weeks later, they may issue a grand jury subpoena requiring the company to produce email and text messages sent during and after the search.
Investigators have the process down to a science, while the company at the center of the investigation likely will be going through it for the first time. Preparation and training on the process will help level the playing field. Here are the five basic elements that should be addressed in an action plan for responding to a search warrant.
1. Initial response
Often the first person to learn of a search warrant is a receptionist or security guard. Their first action should be to request a copy of the search warrant and to inform the individuals designated to lead the company’s response. An experienced attorney or a trained manager should arrive on site as soon as possible to interact with the lead agent. There should be a designated lead and an alternate for each one of a company’s facilities.
The designated employee should meet with the lead agent and try to obtain as much information as possible about the search. What is being investigated? Who are the investigators conducting the search? What agency do they represent? Who is the prosecutor leading the investigation? The lead agent is legally required to provide a copy of the search warrant. The agent may decline to answer questions about the investigation, but there is no downside to asking and the responses may provide valuable information. Even learning which agencies are behind the search can help determine the government’s focus.
2. Review the search warrant
Search warrants are presented on Standard Form AO093. The search warrant must describe the scope of the search and the premises subject to the search. If the agents want to search multiple buildings, make sure that all of the buildings are listed in the warrant. Do not consent to the search of areas or the seizure of items not authorized by the warrant. If the agents insist on searching areas or seizing items that the company representative believes are not covered, the company should inform the agents and document its objection. Under no circumstances should the company or any of its employees interfere with the search.
3. Address employees affected by the search
Employees are not required to speak to the law enforcement agents executing a search warrant, but they often do. The execution of a search warrant is inherently coercive. People tend to talk when they are nervous, particularly when the people making them nervous carry badges and guns. From years of watching television legal shows, some employees may mistakenly believe that if they are not read their rights, their statements cannot be used against them or the company. Employees sometimes volunteer information that the government could not obtain through other means. To capitalize on this, search teams will often include agents whose only role is to interview employees. A discussion of this practice and the consequences of volunteering information to agents conducting a search appears in the April 2013 decision in United States v. Lockhart, No. 12-CR-00009 (E.D. Ky. Apr. 4, 2013) [pdf].
Because most employees do not know their rights, the company should tell them. The details of this advice must be prepared ahead of time and should be provided in writing, either in hard copy or email, to prevent any misunderstandings. Oral briefings can be confusing to employees and to investigators. In some cases, the confusion may lead to an allegation that the company is obstructing justice.
Employees should be informed that the company requests its counsel to be present if they agree to speak to the agents. Counsel representing the company should immediately contact the prosecutor overseeing the investigation. In addition to advising the prosecutor that the company is represented, the company’s attorney should request that all contact with employees go through counsel. Employees need to know that they should not communicate with each other during or after the search outside the presence of counsel regarding the facts being investigated.
While the search is being conducted, the company should consider sending employees home and directing any employees who have not yet arrived not to come to work. The search is likely going to be very disruptive. More employees at work means more interaction with law enforcement. A small number of employees should remain to observe the search, but often the rest of the employees should be released until the search is concluded.
4. Observe the search
As long as they do not interfere with the search, company representatives are permitted to observe. Information obtained by observing the search can be invaluable. Conversations between the agents may be the company’s only source of information about the investigation.
Company observers should document what the agents search and what is seized. They should take detailed notes of any conversations between the agents. The observers should pay particular attention to which electronic files are seized. Agents may attempt to engage the observers in conversation or seek their assistance in locating items or documents. The observers should not volunteer substantive information to the agents, but they should make note of all agent requests.
The observers should be on the lookout for agents attempting to seize classified or privileged information. The company cannot prevent the government from seizing classified documents, but it should advise the agents that the documents are classified so that they can be treated appropriately.
The company is entitled to object to the seizure of privileged information. It will be easier to convince the agents that documents are privileged and should not be seized if they have been segregated from non-privileged records in the ordinary course of business. If agents continue to seize privileged records over the company’s objection, the company should insist on speaking to the prosecutor overseeing the investigation. If the prosecutor is unwilling to stop it, the company should attempt to isolate the privileged records and seal those boxes so that the records are not reviewed until the company and the government have resolved the issue or agreed on a review protocol.
Depending on the nature of the company’s business, the warrant may authorize the agents to seize samples for testing. If so, the company should request that the agents take split samples, which allow the government and the company each to have a portion of the same sample. This permits the company to perform independent testing or analysis. If the agents refuse, the company should consider taking its own sample from the same item or location following the search.
The agents are required to give the company a receipt for what is taken. The agents generally satisfy this requirement by providing a copy of their inventory. Because the government inventory will likely be short on details, you should attempt to observe the agents as they make their inventory so that you can take detailed notes of what is seized.
5. After action review
After the agents leave, company counsel should debrief the observers while the events are still fresh in their minds. Company counsel should collect notes taken by the observers.
There are real benefits to developing an action plan for responding to a search warrant. All companies should consider establishing a written protocol for responding to a search warrant and training key employees on the process. It will require a small investment today, but it may be worth many times the investment when federal agents arrive with an unexpected search warrant.