Accounting

Responding to Department of Justice Investigations (Portfolio 5515)

  • This Portfolio discusses the issues that companies and individual officers may face when the Department of Justice conducts a federal investigation of potential criminal violations.

Description

Bloomberg Tax Portfolio 5515-2nd, Responding to Department of Justice Investigations (Accounting Policy and Practice Series), discusses the issues that companies and individual officers and employees may face when the Department of Justice conducts a federal investigation of potential criminal violations. The investigative process can be intimidating and the potential threat of criminal liability could be significant. A company must view a criminal investigation as a serious issue for its continuing operations that must be resolved expeditiously. For individual officers and employees, their conduct may be scrutinized. In recent years, there has been an increase in the number of senior officers, including CEOs, charged with crimes related to their work at a corporation.

While the government usually must establish an individual’s involvement in a crime, including the intent to commit an offense, a company can be held vicariously liable for the conduct of its employees and officers, even if they are acting for their own personal benefit. This Portfolio analyzes in practical terms the range of criminal offenses that a corporation might encounter that can trigger a government investigation. The potential for a criminal investigation does not depend on the size of the organization, and a large number of statutes can be the basis for a criminal prosecution in addition to parallel civil enforcement proceedings.

This Portfolio discusses the structure of the Department of Justice and notes how different offices can become involved in an investigation. The process by which a criminal investigation may unfold is discussed in detail. The Portfolio also discusses the issues that can arise in the internal investigation, and some important steps a company needs to take to protect itself and its employees in that process.

While there are a number of nuanced issues involved in any criminal investigation, this Portfolio provides thorough, practical analysis of the process so that corporate officers and counsel can comprehend the potential liability a company faces and the variety of means available to conduct an investigation. Experienced counsel should be consulted in any case in which there is potential criminal liability for the organization or its employees.

The co-authors are former federal prosecutors, having represented the government in investigations of corporate crime. Professor Henning has written extensively on issues associated with corporate criminal liability and white collar crime. Mr. MacKay serves as the Vice President and General Counsel of Lockheed Martin IS&GS and has extensive experience representing clients in internal investigations and dealing with federal prosecutors and civil attorneys.

This Portfolio may be cited as Bloomberg Tax Portfolio 5515-2nd, Henning and MacKay, Responding to Department of Justice Investigations (Accounting Policy and Practice Series). Within the Accounting Portfolio Series, however, references to the Portfolios will include only the Portfolio numbers and titles.

Table of Contents

I. Introduction
II. The Section 7525 Privilege
III. Limitations on the Section 7525 Privilege
IV. The Kovel Doctrine: Privilege When Accountants and Other Non-Attorneys Assist Attorneys
V. State Law Issues
VI. Work Product Doctrine

Jack Paul
Jack Paul
Director, Master Of Science In Accounting And Information Analysis Program
Rauch Business Center
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