Learning that your company is the subject – or worse, the target – of a government investigation can be an alarming and momentous event. Government investigations can disrupt operations, discourage morale, and, in some cases, trigger reporting obligations. If an investigation becomes public, it can undermine consumer trust, scare investors, and unnerve lenders. For government contractors and others in highly regulated industries, the exposure can multiply quickly as government agencies can suspend or debar a subject based solely on the allegations in a complaint.
These days, government investigations are affecting businesses large and small. The Department of Justice (DOJ) has been announcing record-breaking settlements with public companies over alleged violations of the Foreign Corrupt Practices Act (FCPA) and False Claims Act (FCA) – two of its preferred tools for investigating fraud. Small companies are being targeted, too, with an increased focus on businesses that have received preferential treatment.
And yet, government investigations often begin without any warning. Federal agents may swoop in with a search warrant, approach unsuspecting employees at their homes, or even tap phone lines. Rarely does a company anticipate a fraud investigation or even believe that its employees could be accused of such conduct. In fact, investigators often use surprises to get what they believe are more candid assessments of a company’s operations and culture. As a result, how you respond to that initial contact is critical to setting the right tone for interactions with the government and minimizing any further exposure.
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Source: metrocorpcounsel.com
By: Roderick L. Thomas and Mark B. Sweet
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