Frequently Asked Questions
IRS agents have shown up unannounced and want to talk to me. What should I do?
First, if you have not received any prior letters from the IRS concerning one of your tax returns, the odds are very high that these are IRS Special Agents. It is important to fully realize that these agents are not investigating a mere civil matter. Special Agents only investigate criminal cases. Special Agents who want to ask you questions about your tax returns– personal or corporate–is a loud and clear signal that you are under criminal investigation!
Since agents are normally asking questions about matters that occurred years ago it is easy to be honestly mistaken when answering their questions. Agents will, however, assume that you are lying. As Martha Stewart found out, any statements made to federal agents that the government believes are false can be an independent basis for criminal charges. You do not have to answer any questions and it is wise that you don’t until you have retained an attorney to determine what the focus of the criminal investigation is. Politely tell them that you want an attorney present and completely stop the interview. Then you should immediately retain an experienced white collar attorney to determine the best defensive strategy for you.
It is also important to remember that any statements you make to your CPA or tax preparer are not confidential in any way. Likewise, any statements made by you to friends, business associates or relatives are not confidential. That person can be subpoenaed by the government to appear before a federal grand jury or a court. If you tell that person anything that the government could view as inculpatory, that person will be a witness against you. The only conversations that are privileged and confidential are the ones you have with your lawyer or someone working for him.
Finally, it is important to make certain that you get all of your personal records back from your tax preparer. If the government subpoenas those records from the tax preparer, there is normally no privilege that can be asserted. However, if the personal records are in your possession, privileges could likely be asserted.
What exactly is a federal grand jury investigation?
A federal grand jury is comprised of twenty-three (23) citizens selected from within the judicial district in which it sits. Courts have held that sixteen (16) of the grand jurors must be present in order to constitute a quorum. Twelve (12) grand jurors must vote in favor of the return of allegations contained in the indictment for it to be returned.
The burden of proof in front of a grand jury to get an indictment is much different from the “beyond a reasonable doubt” standard required in order to convict at a trial. In front of a grand jury, the federal prosecutor must only present evidence which shows probable cause that the offenses alleged in the indictment were committed by the party or parties alleged.
When you hear that a federal grand jury investigation is underway, it essentially means that an Assistant United States Attorney (AUSA) is using the grand jury to gather documents and secure testimony regarding the allegations under review. The process is somewhat analogous to a deposition or a motion to produce in a civil case. A major difference, however, is that an individual subpoenaed to a federal grand jury cannot have his attorney present with him inside of the grand jury room. The lawyer must remain outside.
The AUSA will prepare an indictment for review and approval of the grand jury. It is very rare that any indictment presented by a federal prosecutor to a federal grand jury is not approved. In fact, there is a saying among lawyers that a federal prosecutor “could get a ham sandwich indicted” if he wanted to.
Why have I received a grand jury subpoena?
Subpoenas are issued by federal prosecutors under the authority of the grand jury in order to obtain the testimony of individuals or to obtain documents. The receipt of a grand jury subpoena means that the prosecutor believes that the person or entity receiving the subpoena is in possession of information that could be relevant to the investigation being conducted.
In some instances, the subpoena may be merely issued for records that are kept in the normal course of the business and amounts to no implication that the individual or entity is under any kind of investigation. However, it is important when a federal grand jury subpoena is received to have an experienced white collar attorney carefully review it and determine the factual context of the investigation so that the appropriate legal advice can be given with regard to the subpoena. In certain cases, individuals may be able to assert one or more privileges concerning documents that have been subpoenaed. Assertion of these privileges may be necessary to protect the individual’s rights.
I don't think I've done anything wrong. Why do I need a lawyer?
The simple answer to this question is this: perception is reality. Many times a federal prosecutor will have in his possession information which may either be erroneous, exaggerated or distorted. That information could lead the prosecutor to believe that you and others have been involved in criminal wrongdoing. In the context of white collar cases, the facts are generally complex and there can be acts that appear to be suspicious or criminal which are in reality totally innocent if the whole story is known.
It is imperative to retain a proactive white collar attorney to fully investigate and develop all favorable facts so that the prosecutor has an accurate view of your actions before he makes the decision to go to the grand jury for indictment. Such an investigation should normally include obtaining any and all favorable documents and interviewing individuals with information concerning the facts of the case. If this action is not undertaken, the prosecutor will only hear the information developed by federal agents. Thus, favorable or exculpatory evidence may not be presented to him and an indictment might be obtained against you.
FBI agents want to talk to me. Should I talk to them?
The answer to this question is one that cannot be answered without a careful review of the underlying facts and circumstances that give rise to the request for the interview by the FBI or other federal agents by an experienced white collar defense attorney.
There is no legal requirement that forces individuals to talk to federal agents. However, if you do talk to them and they think you have made a false statement to them, you can be charged with a federal criminal offense for this!
It is important to know that standard operating procedure for the FBI is to have two agents present for any interview of an individual. Thus, there are always two federal agents to testify as to what an individual said during an interview. Because of this, it is very important to consult with an experienced white collar criminal defense attorney prior to making the decision as to whether or not to talk to the federal agents and it is highly recommended in almost every case that the attorney be present during the interview.
If I am indicted and convicted, what sentence will I receive?
Under federal criminal law, the sentence received in any given case is largely determined by the Federal Sentencing Guidelines. The computations necessary to determine the range of punishment for any given indictment is rather complex and is based on a number of factors. The principal factor in most fraud cases is the amount of loss involved. However, in order to obtain an accurate estimate of what the range would be, consultation with an experienced white collar attorney is necessary.
What charges are normally sought in a white collar case?
Generally speaking, allegations of fraud are at the heart of the complaints in a white collar case. Prosecutors generally will use mail fraud, wire fraud, bank fraud, securities fraud, conspiracy and/or money laundering.
The essence of a fraud case are allegations of a scheme or plan to defraud by either misrepresenting facts or omitting material facts which results in money being paid by the alleged victim(s). In the context of wire fraud and mail fraud, each use of the mail or wire constitutes a separate offense. Thus, it is normally possible for a prosecutor to easily obtain a large number of charges in this context. It is also very easy to add money laundering charges since any funds derived from wire fraud or mail fraud can give rise to a money laundering charge if such funds are withdrawn or deposited in a bank account. Prosecutors will typically add the money laundering charges to an indictment in order to increase the punishment range under the Federal Sentencing Guidelines. In order to properly assess the potential charges in any given factual setting, consultation with an experienced white collar attorney is necessary.
I have heard that federal agents are asking questions about me. What does this mean?
To be very direct and blunt: this is not good news at all. What this usually means is that there is a federal grand jury investigation underway and you have somehow been associated with the criminal allegations under review. Implementing a defensive strategy to maximize protection for you can be very sensitive from a timing standpoint. Thus, it is imperative that you immediately retain an experienced white collar attorney to investigate and evaluate this situation for you to determine from a factual standpoint why the agents are asking questions about you so that you can be protected.