Government Pressure on Employers
October 30, 2006
A white-collar criminal investigation, a business entity seeking to cooperate, and individual employees talking to the prosecutors ' all familiar scenarios to anyone experienced in federal criminal law. Recently, however, these elements combined to produce an unusual result: the suppression of the employees' statements to the government as involuntary under the Fifth Amendment. U.S. District Judge Lewis A. Kaplan issued this ruling in the KPMG tax shelter prosecution, finding that the prosecutors, through their pressure on KPMG, economically coerced the company's employees to speak with the government in violation of their privilege against self-incrimination. Once again, the government's overly aggressive interpretation of the Thompson Memo has come back to haunt it.
DOJ Pressure to Cut Loose Employees Under Investigation
October 30, 2006
Two months ago, the American Bar Association House of Delegates adopted a 'recommendation' stating opposition to prosecutors' and other enforcement officials' taking into consideration 'any of the following factors in making a determination of whether an organization has been cooperative in the context of a government investigation: 1) that the organization provided counsel to, or advanced, reimbursed or indemnified the legal fees and expenses of, an Employee; 2) that the organization entered into or continues to operate under a joint defense, information sharing and common interest agreement with an Employee or other represented party with whom the organization believes it has a common interest in defending against the investigation; 3) that the organization shared its records or other historical information relating to the matter under investigation with an Employee; or 4) that the organization chose to retain or otherwise declined to sanction an Employee who exercised his or her Fifth Amendment right against self-incrimination in response. This article discusses the recommendation and the events that led to it.
Blackmail and the CEO
September 27, 2006
You got up yesterday morning and went to the front door of your house to take in the morning newspaper. That's when you saw it. A sealed manila envelope with your name typed on the label. You figured that it must be work-related, so you opened it. When you did, what you saw made your heart jump. Inside was a plain piece of paper with these typed words: <i>'I Know What You Are Doing. Shame On You. Stop The Cheating And The Lies Or I Will Tell The World. You Will Be Disgraced. How Could You Hurt So Many People?'</i>
Kick That Sleeping Dog!
September 27, 2006
Many months ago, federal grand subpoenas arrived on your client's door step. Their unexpected arrival and broad scope set off typical alarm bells and suddenly displaced a good deal of ongoing business. Your client immediately turned to you to undertake an investigation of the matter and a response. Your client's Information Services Department swept all electronic databases, and you directed phalanxes of young lawyers to conduct interviews and review documents for responsiveness. Now what?
The Thompson Memo Ruling
September 27, 2006
Judge Lewis Kaplan's eloquent and eminently correct decision striking down the Justice Department's policy embodied in the 'Thompson Memo' that pressures corporations, by threat of indictment, to cut off legal fees to 'culpable' employees, was widely publicized and acclaimed. But it may ultimately produce little change in the real world of white-collar criminal defense.
Reduced Qui Tam Exposure for Firms That Fail to Self-Report?
August 30, 2006
A recent decision of the U.S. District Court for the District of Columbia limited the reach of the 'reverse false claims' provision of the civil False Claims Act, 31 U.S.C. ' 3730(a)(7). This opinion, if followed by other courts, will reduce the risk of civil False Claims Act liability for companies accused of failing to self-report regulatory violations in settings where self-disclosure is required.
