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What are the Signs You May Be Under Investigation?

Posted by Dmitry Gorin | May 15, 2024

Are you aware of the signs that could indicate you're being investigated for a federal white-collar crime, such as fraud, embezzlement, insider trading, or similar offenses?

These often involve complex investigations by federal agencies and can sometimes go on for years, often "under the radar," so to speak.

White-Collar Investigation
There are common signs that you may be the target of a federal white-collar crime.

In some cases, federal agencies will send a "target letter" as a courtesy, specifically notifying you of their investigation, but they are not obligated to do so.

Numerous federal agencies investigate criminal activity. The common ones are the Federal Bureau of Investigation (FBI), Alcohol, Tobacco, Firearms and Explosives (ATF), Drug Enforcement Administration (DEA), and the Internal Revenue Service Criminal Investigations Division.

White-collar crime generally encompasses nonviolent crimes that are usually committed commercially for financial gain. It is a broad term encompassing a range of nonviolent offenses typically committed in commercial settings for financial gain.

Some of the most prevalent 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 and their implications is crucial for anyone potentially at risk of being targeted for white-collar crimes.

Many white-collar crimes are especially difficult to prosecute because the perpetrators use sophisticated means to conceal their activities through complex transactions. Whistleblowers are helpful to prosecutors of white-collar crime because they report internal wrongdoing.

What are the "Red Flags" to Watch For?

It's a harsh reality that some individuals only become aware of being targeted when formally indicted. This leaves them scrambling to build a defense while the prosecutors have had years to prepare their case.

Recognizing early signs of a possible investigation can empower you to act proactively, hire legal counsel, and strategize your defense. Let's delve into some common 'red flags' to watch for.

Unusual Communication from Financial Institutions

It could indicate an investigation if banks or other financial institutions start inquiring about your transactions with increased frequency or intensity.

Federal agencies often begin their inquiries at the source of financial activities. Enhanced scrutiny over seemingly ordinary transactions may signal that these institutions have received requests for information about your accounts.

Subpoenas and Requests for Documents

Subpoenas and Requests for Documents

Receiving subpoenas or requests for documentation related to your business operations, financial records, or personal finances is often a clear sign of legal scrutiny. Such requests typically mean that an investigation has advanced to a stage where formal evidence is being gathered.

Changes in Colleague Behavior

A sudden shift in how colleagues, partners, or employees interact with you may indicate that federal investigators have approached or interviewed them. This might include noticeable avoidance, hesitancy to engage in regular communications, or direct disclosures of their interactions with law enforcement.

Interviews and Questioning of Associates

Federal investigations often involve interviews with individuals connected to the person being investigated. If you learn that federal agents have interviewed business associates, friends, or family members, it is a significant indicator that you may be the focus of an investigation.

Withdrawal of Business Opportunities

If business partners suddenly withdraw from deals without clear reasons, or if you find yourself unexpectedly excluded from professional opportunities, it could be due to whispers of an ongoing investigation. In the corporate world, even unfounded rumors of legal trouble can cause a swift reevaluation of business relationships.

Federal Surveillance

Surveillance and Unexplained Presence

Noticing unfamiliar individuals in public places or vehicles parked near your home or office for extended periods can be a sign of surveillance, a common technique in federal investigations.

While this may be more difficult to substantiate, a persistent unexplained presence should not be discounted, especially if some of the other warning signs above are present.

Direct Contact by Federal Agents

Perhaps the most unmistakable sign of an investigation is if you are contacted directly by federal agents. This may come as a visit to your home or office, during which agents may ask to speak with you or inform you of your rights. Any such interaction should be taken very seriously.

What To Do If You Believe 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 Immediately

Before engaging in any form of communication with investigators, consult with an attorney with specific experience in federal white-collar criminal defense. An experienced lawyer can guide you on how to proceed and represent your interests during the investigation.

Target of an Criminal Investigation

Preserve Documents and Evidence

Maintain all relevant documents and electronic data pertinent to the case. This includes any potentially incriminating evidence (destroying these constitutes another federal crime). Your legal counsel will need access to this information to build a strong defense on your behalf.

Avoid Discussing the Case

Refrain from discussing the investigation or any related topics with anyone other than your legal counsel. Unintentional disclosures can compromise your defense strategy.

Review Your Company's Compliance Protocols

Continue complying with all legal obligations and maintain regular business operations as much as possible. If you don't have compliance policies, establish and enforce them. Conduct regular audits to ensure compliance. Even if charges are filed, the steps you take now to come into compliance can demonstrate good faith and potentially minimize penalties.

Prepare for Possible Outcomes

Working closely with your attorney, develop a comprehensive understanding of the potential outcomes and the steps necessary to mitigate adverse consequences.

What are the Penalties?

The penalties for white-collar offenses include fines, home detention, community confinement, paying the cost of prosecution, forfeitures, restitution, supervised release, and imprisonment.

The Federal Sentencing Guidelines suggest longer prison sentences whenever at least one victim suffered substantial financial harm. However, punishments can be lessened if the defendant takes responsibility for the crime and assists the authorities in their investigation.

Contact our federal criminal defense lawyers for more information. Eisner Gorin LLP is based in Los Angeles, California.

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About the Author

Dmitry Gorin

Dmitry Gorin is a licensed attorney, who has been involved in criminal trial work and pretrial litigation since 1994. Before becoming partner in Eisner Gorin LLP, Mr. Gorin was a Senior Deputy District Attorney in Los Angeles Courts for more than ten years. As a criminal tri...

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