Federal Investigation

What Happens When You Are Under a Federal Criminal Investigation? 

Are you familiar with the signs that might indicate you're under investigation for a federal white-collar crime, such as fraud, embezzlement, insider trading, or similar offenses?

These cases often involve intricate investigations by federal agencies and can sometimes last for years, often remaining unnoticed.

Sometimes federal agencies may send a 'target letter,' formally notifying you of their investigation and explaining your rights.

Understanding this letter's significance helps you recognize when an investigation has officially begun, allowing you to seek timely legal advice.

White-collar crime generally refers to nonviolent offenses committed in commercial contexts for financial gain. It is a broad term that encompasses various nonviolent crimes typically committed in business settings for monetary gain.

Common Federal White-Collar Crimes

Common white-collar crimes include antitrust violations, bankruptcy fraud, bribery, internet fraud, counterfeiting, credit card fraud, embezzlement, healthcare fraud, insider trading, insurance fraud, wire fraud, money laundering, securities fraud, tax evasion, telemarketing fraud, and public corruption.

Understanding these offenses is crucial for those at risk of white-collar crimes, which are hard to prosecute due to perpetrators' sophisticated hiding methods. Whistleblowers help prosecutors by reporting misconduct.

What Red Flags Should You Be Alert to?

Some people only realize they are under investigation when they are formally charged. Recognizing early warning signs can help you feel more in control and prepared to take action, such as seeking legal advice and planning your defense.

Here are some common 'red flags' to be aware of.

• Contact by Federal Agents: A clear sign of an investigation is if federal agents contact you directly. This might involve a visit to your home or workplace, where they could ask to speak with you or notify you of your rights. Such interactions should be handled very carefully.
• Questioning of Associates: Federal investigations frequently include interviews with people connected to the person under inquiry. If you discover that federal agents have spoken with your business associates, friends, or family members, it suggests you could be the subject of an investigation.
• Messages from Financial Institutions: If banks or financial institutions investigate your transactions more often or intensely, it could signal an investigation. Federal agencies often begin by examining transaction sources. Increased scrutiny of routine activities may indicate that they received information requests about your accounts.
• Subpoenas and Document Requests: Receiving subpoenas or requests for documentation about your business, financial records, or personal finances usually indicates legal scrutiny. These requests generally indicate that an investigation has progressed to a phase in which formal evidence collection is underway.
• Changes in Colleague Behavior: A sudden change in how colleagues, partners, or employees communicate might indicate federal investigators have contacted them, shown as avoidance, reluctance in conversation, or disclosures about law enforcement interactions.
• Business Opportunities Withdrawal: If partners abruptly pull out of deals without explanation or you're unexpectedly left out of opportunities, it might be due to rumors of an ongoing investigation. In business, even baseless gossip about legal issues can lead to a quick reassessment of relationships.
• Surveillance: Unfamiliar individuals lingering in public spaces or parked near your home or office may indicate surveillance, a common investigative method. While hard to confirm, a persistent, unexplained presence warrants attention, especially when combined with other warning signs.

Steps to Take If You Are the Target of an Investigation

If you suspect you are under investigation for a white-collar crime, taking immediate and deliberate action can strengthen your position and give you more time to prepare a defense if federal charges are filed against you. Here are some steps to consider:

• Seek Legal Representation: Before communicating with investigators, consult an attorney who specializes in federal white-collar criminal defense. An experienced lawyer can advise you on the proper steps to take and represent your interests throughout the investigation.
• Preserve Evidence: Maintain all pertinent documents and electronic data related to the case, including any potentially incriminating evidence, as destroying them is a federal offense. Your legal counsel needs access to this information to build a strong defense on your behalf.
• Avoid Talking About the Case: Do not talk about the investigation or related matters with anyone except your legal counsel. Accidental disclosures could damage your defense.
• Review Company Protocols: Continue adhering to all legal obligations and keep your business operations running smoothly. If you lack compliance policies, create and enforce them. Perform regular audits to verify compliance. Even if charges are brought, acting now to achieve compliance shows good faith and can help reduce penalties.
• Prepare for Outcomes: Collaborate with your attorney to gain a thorough understanding of possible outcomes and the actions needed to reduce negative effects.

What are the Possible Penalties?

Penalties for white-collar crimes include fines, home detention, community confinement, payment of prosecution costs, forfeiture, restitution, supervised release, and imprisonment.

The Federal Sentencing Guidelines recommend longer prison terms when at least one victim experiences significant financial loss.

However, these punishments may be reduced if the defendant admits responsibility and cooperates with authorities during the investigation.

For more information, contact our federal criminal defense lawyers. Eisner Gorin LLP is located in Los Angeles, California.